3 Degrees of Freedom

Ep 20 - Randy Langenderfer - On the Difference Between Investing and Speculation

• Derek Clifford • Season 1 • Episode 20

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An absolutely genuine talk with Randy Langenderfer. We talked about the difference between investing and speculation how he was able to carry some of his natural talents from his W-2 work into the investing space and what the conversations were like at home when he was investing while starting off with his wife.

Randy is the president of InvestArk Properties LLC, focusing on creating investor value and passive income returns for the busy professional. He's been in multifamily real estate since 2014 as both a general partner, a key sponsor, and has had 250 doors and a limited partner exposure of over 4000 doors. His company offers the busy professional who wants to include multifamily and their portfolio partner with experts who are aligned with investment goals. He was previously a private money lender in remodeling single-family homes in Florida, Ohio, Texas, and much of other markets across the state. And he started with the values of $2.5 million, which he grew in the single-family space. He has since then represented over $11 million in assets managed in multifamily and serves as the Chief Compliance and audit officer for a large academic medical institution in Houston. He's got a bachelor's degree in accounting information systems and an MBA in finance and is also a non-active CPA. But most importantly, he's a husband and a father of four adult children spending his free time analyzing deals and networking with others.

You can best reach out to Randy and his firm, InvestArk Properties, by visiting his website at www.invest-ark.com. Look him up today!

  • What book has had the biggest impact on you and why?
    The Bible, Business perspective, 21 Law of Leadership by John Maxwell, Master in the Market by Howard Mark, understanding the cycles.

  • If people wanted to be JUST like you, what is the first actionable thing they could do to follow in your footsteps? 
    Education, educate yourself. If you're not gonna invest your time, it's just purely speculation. Be an active-passive investor.

  • What small thing do most people not know about you?
    Passion for this and the desire to help others along their journey.  

  • How do you like to unwind and restore your own creative juices? 
    Walking long walks. I walk 4 or 5 miles a day and playing golf. Spending time with family, enjoy getting together with them and with my grandchildren, and spoiling them a little bit just to recharge. 

  • Is there something special that you and your spouse like to do together?
    Melanie and I walk and talk a couple of times. Getting together and being together and spending time together.

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Derek Clifford:

Thank you so much for coming on the show, it's a pleasure to have you here. How are you today,

Randy Langendefer:

Derek and Sophie I am great, it's a pleasure to be here. Thanks so much for having me, and look forward to hopefully adding some value to your listeners,

Derek Clifford:

of course, thank you so much. First of all, we always like to start off with our guests on how they got started investing in real estate and, you know, I've already introduced you to the audience and you have quite an extensive background that goes back for quite some time, but maybe give us a taste for how you got interested in real estate in the beginning, and, and we'll go from there.

Randy Langendefer:

So yeah, I've been at it seven years now. Started in seventh year and I got started when I came to Houston in 2000. I'm currently based in Houston came to Houston in 2013 and I came from the Cleveland Ohio market and at the time, I had a brother in law who had gotten displace. He was a JD and MBA and a very intelligent man and he came to me and wanted me to start flipping houses with him in South Florida, and kind of an entrepreneurial spirit and I always had a bet and I said, You're crazy. You're going to give people money in South Florida to buy a house, and we're going to trust him to do this. And then he proceeded to tell me that well to really leverage this you really need to develop a self directed IRA, and I remember looking at them a second time and saying, you're doubling nuts, I'm gonna not gonna put, you know, that's an from an investment philosophy that's not something people would recommend you do so long and short of it is I get partnered with him we became very comfortable with flipped 15 Plus houses down there made some really good money, and I came to Houston. I looked at real estate investment groups in Houston and they were like, at the time, 13 different real estate investment groups in Cleveland, Ohio, there was one and just showing the difference in the metro markets and so my family was still in Ohio as we transitioned down here for business purposes I went to every one of them every night of the week, and I fell into basically lifestyles, and I went to their Expo. Expo in Expo. I heard Brad some rock talk about multifamily there. And I fell in love with non recourse the fuck I looked at buying businesses and doing some of that. but the non recourse aspect was the big aha moment for me that I can buy multimillion dollar assets and not have any personal liability, and from there I never looked back. So that's the start of it.

Derek Clifford:

That's great, thank you so much it's it seems so natural that you'd step into it. Now I know that a long, a lot of these points in the road, there must have been many many points in time where there were internal resistance, right, you're thinking there's no way this could work or how can this work like this just seems too good to be true and, You know, if you come from an engineering background like I do, when something sounds too good to be true, it often is. And so can you talk us through how you overcame some of those obstacles early on in the path.

Randy Langendefer:

Yeah so I think you're right, you're an engineer, I'm a finance guy at heart and we're both very analytical risk adverse, I would say that I'm a risk averse person. So I think there's the two learning points for me was when I was in the Brad some rock organization he draws a triangle, and you may have heard of the mindset at the top of the triangle, methods, and mentorship, are his three big bullet points, and for me it was that mindset piece. It was the mindset piece to see that this is something I can do. This isn't something that requires a lot of intelligence because I don't mean that negatively, but there are many have been many go before us on this path. And as one mentor told me it's not, it's not brain surgery it's just following the recipe and consistency and persistency, and staying at it. So that was, that was the, the first big intellectual hurdle I had to get over that I guess the next one was in my mind when I invested in my first passive investment of writing that check in my hand shaken. For $50,000 Being a risk adverse person to say, you know, but I had done the education I had been involved. I had taken the right steps and so, you know, and my day job I talked about risk mitigation and so you take those risk mitigation steps you educate yourself, you're buying with an executive sponsor who's done it before, you're getting long term debt, you're not buying in the hood in some of those fundamental things to reduce your risk. And so that was, those were the two big hurdles for me. I think it's probably most people would do right in that first check.

Derek Clifford:

That's fantastic. What, what would you say during those times right where you felt those two specific points in time. Was there any type of emotion that you could put your finger on that was coming up or any memories or anything specific that was really, you know, causing you to question your decision at the time.

Randy Langendefer:

I think the first one when I heard the the mindset the triangle with a mindset, methods and mentorship, You know, because there's a lot of self help going on and that thinking that I can conquer anything, and that's a hurdle that because of my analytical mindset, I probably wouldn't buy into. I was an athlete as a kid and did a lot of the rah rah stuff and athletics. Kids athletics but as an adult I tend to steer away from those emotional rah rah moments of, let's go get them. But you really have to see yourself with a mindset for me it was, it was the mindset that this is something I can do. You have to see it's the it's the visualization of you owning an asset. It's it's the visualization of you being your name on the dotted line and you being the person that's getting the calls, and that didn't scare me that piece of it, but that was the that was the big hurdle of realizing that I can do this. Maybe I didn't have a good self image or I have a poor self image, but I think it was more or less just evolution, writing this check was just pure fear.

Derek Clifford:

Yes, of course, I think we've all had that right and because you're, you have the fear, you have knowledge right but you don't actually like you've heard it in theory, but you never, it's people tend to trust more the experience right because if you've done it before then it's, it makes sense but if this is your first time doing it, especially, you know $50,000 is quite a bit of money for most people, right, especially when they're getting started in the space that often represents a significant part of their net worth or their nest egg for saving right and when you hand it off to someone, and you don't know exactly like you know what it would be like in theory, but you don't actually know for sure you're like this is what it should be like. It's a very, it's very hard, it's very difficult to kind of overcome some of that so I have to commend you for making that first step, and I'm a little bit of chicken I

Randy Langendefer:

get interrupted just to say I'm a little bit of a chicken because that first one I remember that I am a risk mitigation mean I learned that you can, I was using a self directed IRA, and so you can create a trust for investors within an IRA, or an LLC, that you don't have to have$50,000 You can have two people with 25 or five people with 10. There are ways to achieve that investment without the 50,000. So my first ACCION was 2525 but still, it wasn't I wasn't gonna be on the breadline if I lost it, but it's still, and that finance risk mitigation. Line it was not something that I had readily done a lot in my life but that way.

Derek Clifford:

Of course, yeah. No, that makes that makes perfect sense. Well thank you for sharing that.

Sophie:

Yeah. And so Randy You know, as, as I heard you talk about earlier you were, you were going to these real estate investing, meetings and clubs like you said, every day of the week, when you were first starting out, How you know How involved was your wife and what kind of conversations were you guys having and what does she think of your love affair with real estate at the time.

Randy Langendefer:

That's a great question. So at the time, it was, it was very convenient for me as I said because I was living in Houston, she was still in Ohio we had about a three, four month process, temporary living while we were getting situated so it was really easy for me to just head headfirst into real estate. While she wasn't around, but she is, she is very supportive. You know, I kind of envy YouTube that have the relationship and both love real estate, she has other interests. And we've been married a long time but she is very supportive of me, and allows me to spend a lot of nights, weekends, and other times without questioning Matt doing this stuff, underwriting deals go and visit properties, stuff that syndicators do, so I couldn't do it without her, because I tell you, I know there are people that simply spouse situations aren't as amicable and real estate isn't worth a marriage in my mind so if she didn't, I wouldn't do it.

Derek Clifford:

Yeah, that's, that's very well said and that's exactly what we, what we, that's something that we really really expand on here and really tried to emphasize is that the common vision right like having a vision between husband and wife whoever's doing the investing or whoever's even supporting the investor, it's really important that both spouses are on the same page, maybe can you take us to a time where maybe you two had a conversation about that maybe was there a light bulb moment that you both had that said, Boy, you know, if we started investing, we can create this passive income, or we can create the lives that we want. Maybe can you take us to what that position was like and how early on was that,

Randy Langendefer:

I think that probably started back in the single family days but it transitioned as the numbers got bigger and investments got bigger and multifamily but I think for me it was always wanting to make sure my wife's name is Melanie that Melanie understood what we were doing, and that she, she bought off on, at least in theory, she was never going to look at a spreadsheet, she was never going to calculate IRR or look at cash on cash returns. But I, as a marital guys married a long time. I want her approval, I want her directional approval that she buys into it, you know, and I found that quite honestly, ladies have a lot more instincts than do guys, or at least this guy sometimes, Especially when it comes to relationships, partners, so I trust her a lot to go out to dinner with somebody or whatever and just say yeah are really, I don't think shit. And I'm like, what are we talking about, Well, she instinctively has that because guys, this guy sees what he wants to see. And I think I want to, I see the return, I see the IRR I see the payback, etc, etc. And she looks more at the quality, the person or their integrity. Reading through that she's just much better at it. So for us, the bottom line is is I look at it as me for a way to market the deal to Melanie. And if I get her approval, which she always pretty much has because she, she basically is very kind and listens and she asked a few questions and then she goes, Well it sounds like you've crossed all the T's and dotting the I's and you know why. I have nothing further to add and, fortunately, as I find some with that background we haven't had any, any, any ones that really have gone sour yet so. But it's that it is it really, really important for me and I know you guys agree whether your spouse, man or woman is actively or passively supporting you. It's, it's both of your monies. If I lose it, she's got to live with consequences.

Derek Clifford:

That's right.

Randy Langendefer:

It's very important.

Derek Clifford:

Yeah. Now, I want to drill into this a little bit more, maybe when. Okay, this is actually two part question, I can't help myself. The first question is, is, has there been any time where she's prevented you or prevented like a potential, you know, bad, bad type of investment, or was there something that she was able to help curb or like, change the direction of an investment to, to avoid some pitfalls, that's one. Actually you know what, I'll start with that and then I'll ask the second question after I get your response.

Randy Langendefer:

You're gonna challenge my memory here today. I'm a feeble man. I don't remember her ever saying no, I don't remember ever saying no, because she knows I'm a very analytical person and gonna and very risk adverse. So I think that's the foundation of a lot of her trust. Over the years we've developed plus as I said there haven't been any losers. I think she has asked questions, off and on over investments. I remember the first the first multifamily deal I invested in, I dragged her to Port Arthur, Texas, which is about two hours east of Houston, you know, so we made a Saturday road trip to go visit the property we're gonna visited. And, you know, it was b minus c plus area. And if you know anything about Port Arthur, it's a very blue collar town very transit I didn't know any of this at the time I was new to Texas and my first multifamily I just knew the sponsor, you know, and I remember asking questions about the neighborhood, the quality who would live here, and I tried to preempt her honey. Trust me, this is a place that we would never live in before we got there, you know, it's just, it's not going to be that kind of place that's a Class A, this is the class b minus c plus. She asked very probing questions and she asked about the relationship with a sponsor and how I knew them and how I've come to gain comfort with them. And, you know, to me it's, it's practicing the marketing of the pits that as a GP you're going to do with every investor. So I found that if I can't convince her then. Something's wrong.

Derek Clifford:

Yeah, that's great, I love that. Thank you and I think that being able to do that in the safety of your guys's relationship is good, especially if you have a foundation of trust built up which, you know that takes time to build up right like there's deeper things beyond fat right that that comes in because sometimes in some unhealthy relationships there may not be the trust there and maybe there's fear, like maybe one spouse is afraid of the other or one can steamroll over the other. Or maybe there's just a dynamic there where there's just no, no, like there's no one cares, right or the other partner just doesn't care, right or doesn't understand the consequences.

Randy Langendefer:

And so I think you've seen some examples of that.

Derek Clifford:

Yeah, yeah. And so, and so I think it's really important to have that, that solid foundation to where you can have that conversation about things that will, that may potentially happen to your guys's money, and your guys's future so I think, I think that's really great that you guys have that so I want to acknowledge you for for building that because that, that is not something to take for granted.

Randy Langendefer:

But like you, Derek, I married up in life. That's right.

Derek Clifford:

This This right here is my far better half, there's there's no choice, one question before I let Sophie take over some questions because I know she wants to ask some as well but okay for me. What did that look like when you were pitching a property to your to your wife. What did that look like because many people on that I'm listening to, are asking the question how can I how can I get my spouse to buy in, and they may have found a property but what does it look like, what are some of the basic things that you say during the pitch to your wife, that maybe some of our listeners can take what he's asking

Unknown:

for, for his own notes.

Derek Clifford:

I'm gonna go ahead. I'm not an expert at the constitution but there's the Fifth Amendment right now. Well,

Randy Langendefer:

well, let me tell you first how not to do it there.

Unknown:

Okay perfect

Randy Langendefer:

things not to do, I can tell you that I'm talking about things to get the things not to do are to get off the phone at nine o'clock at night, after your head on a call with a bunch of opportunities and you've done five hours of spreadsheet analysis and the IRR is at this and the cash flows at this in the multi equity multiplier that is to run out into the room and want to talk about right away and say, Can we talk again it's great deal and this is what, this is what it's all about and at night 930 At night, you know, we're all, at least, we are on our house fairly comatose. And that is not the way to do it, nor the other way to do it is to wake up the first thing in the morning, when you haven't brushed your teeth yet, and try to try to talk about it. So those are, those are two lessons, not that I had done either of those. But I would advise your listeners not to do that. So I think the way I, we, as a couple have just worked it out is it's, we go for a lot of walks together. That's our. I used to be a runner my knees deteriorate and so now I go for long walks and and we truly enjoy walking together. That's the optimal time for me to discuss something like that, is to bounce it off or when there's no distractions or out of the household. She doesn't have our son to worry about are the dynamics of that and that's optimal. Other times would be. You know, I have called her midday from work, and said because I have a W two job still been on and and the W two job talking while I have a 10 or 15 minutes and she's got 20 minutes at least laid the foundation for a later discussion. But those are, those are some of the principles that I concentrate more on the don'ts than that. Find your own sweet part of the do's and what's, what's Sophie's love languages that you know, eight o'clock in the morning or noon or or whatever so

Derek Clifford:

yeah I'm still trying to find the language at any language at eight in the morning. But anyways, no I what I, what I would, what I wanted to ask though is like, you know, let's say that you have the conditions there, You guys are on the walk, you've created the space, what are the actual questions like where do you start with that with the conversation Do you talk about, oh, you know, there's, there's this deal that I'm looking at or there's this property that I'm looking at I think it's got potential because x y z, you know, how would you just generally, you know, approach that, not to drill down even further, but I think this is something that most listeners really want to understand.

Randy Langendefer:

And so and I've been, I've been married a long time for those who haven't been married as long I would say one it's important, whatever time it takes, whether it's a day or a week or three months, And if you lose the deal the opportunity. There's always another deal right behind it because if you don't get that mutual support, at least in my personal life I would say there's, there's just no deal worth that bridge that gap that you can build between two people. But what I think when, when we're on the walk and I would, I would start out with really just a very high level just talking about where the deal is and who the deal sponsor is. So I've been, I've talked about several but they know. And over the time she has begun to pick up names of who I'm dealing with and what I'm, what I'm doing so she gets the names. She knows once there's a name like I'll say Do you remember xx and oh yeah, well he's got this deal or she's got this deal and, you know, in Arizona, Phoenix, Houston, wherever. And then it's just really a high level discussion about why it's a good deal. What I like about it. I do talk about some of the returns, I try to draw out to her. I recently got as an investor I got involved in a fund a self storage and a mobile home park fund versus a multifamily syndication. And so I was trying to explain why that was good, why I thought that was good, she if she were on the phone tonight she here on that podcast she would never admit it, but she's gotten a lot of knowledge about multifamily, just through osmosis in our discussions. So she asked, then she asked some questions and it's not, it's not a 20 minute drill down, it's more like a seven to maybe 10 minute conversation at a high level, because you know that we all have our personalities are all different husbands and wives, generally, opposites attract, and, and we're in that category, but our, our, we're much more like than we are different, so.

Sophie:

Yeah, thank you so much Randy for giving us a sneak peek behind the curtains, I think this is really valuable for our listeners simply because, again, a lot of them are couples, and new investors and so oftentimes, you know as you as you kind of alluded to earlier, like you know, finances, and if we're not on the same page can be the origin of a lot of a lot of, you know, future issues. And so, again, just hearing this from, from someone who has such a successful real estate career and in such a successful marriage I think it's very, very valuable. And the question that I wanted to ask was, well, you know, looking back in your real estate journey. What, what were some of the toughest moments you face and I know we touched upon mindset, earlier on. And I, you know if you can talk about how you like what that tough moment was and how you really push yourself through it.

Randy Langendefer:

I think the I think Sophie the, I would just say I really, maybe I had a poor self image but I just didn't, you know, you go to these conferences and you see all these people that are rich and successful and got 20 deals and they can raise $5 million an hour on a phone call or whatever and I you know I had to remind myself that you have to walk before you can run and, Yes. And there's a lot of people that want to get educated and never invest in any deals and so I, to me the basis of getting over that, that mindset hurdle was education. Hanging you know hanging in big educational groups. There's so many wonderful meetups today there's books. I just got really engrossed in education and I still do, I've been doing this rice. I'll read. I mean, I read anything real estate. Before I read that, you know, a fiction book or something like that. And so, in that education continues on forever. So it's not something that you ever arrive at because, and the piece for me was the next piece was really when I became a GP for the first time that had to get really involved in operations. Most of the big mentor groups, they don't really, they don't really teach a lot about operations. How to asset management, we had a catastrophe. And so the short story there I would share is that back to the spousal thing to like. We bought a 1965 flat roof chiller boiler property. As our as our first deal and that was the one that everybody would tell you never to do now, listeners, don't buy a flat roof chiller boiler property, or have you already, Derek.

Derek Clifford:

Yes, so we did. We did do that and that was back in 2018, so luckily we had the momentum of market forces behind us to kind of save and pick up the slack a little bit, but we'll, we'll get into that a little bit later, I don't want to detract from your story. Now, but it's

Randy Langendefer:

so you had the same lesson I had we had a very positive story but in the middle of winter when the boiler goes out and people are worried about heating in Texas when there's not a lot of heat to have and your spouse says, you know the right thing to do and is you got to get heat to in the matter what the cost. She's absolutely right. And we did but you know there's a, there's another spousal reminder to do the right thing versus the analytical guy thing who may want to start reducing expenses. But there is a, there's a responsibility to the tenants as well as to the investors and so the investors may have to wait a little bit if their distribution isn't going to be as happy because we had to get some other means in there to heat but anyhow, that's the short

Derek Clifford:

stories. I think that this, this is one of the cool things about real estate investing right I mean, I guess it depends on your perspective but the you're, you basically have the livelihood of many, many families in your, in your hands. And when you're given that responsibility, it's something that you've got to do right so I'm completely in alignment with at one time I was in alignment with you on that decision, and then now I'm completely in alignment with what your wife was saying there and I think that that's the growth mindset that's the mindset that really Foster's sustainable growth. Because if you have upset tenants and you have that the way that you treat your tenants is also going to be the way that you're going to treat your staff, if it came down to it, and if your staff are treated that way, then the entire, then your investors will eventually start getting treated that way. And so there's no line that you're willing to draw so you know by having the integrity to step up and say this is something that if I was in their shoes. It's unacceptable. We have to do that just to be good stewards of people's family experience and being, you know, their lives, then you can see right now how it's that perspective, even though it hurt at the time, is generated returns for you, right, because you've learned it. You went through the hard times you've, you said okay, I won't make that mistake again. And now you can take that lesson to increase your returns later because now people know who you are as a person and what your product is. Does that make sense. Sure does.

Randy Langendefer:

Sounds like you've lived with a few children when their properties, probably.

Derek Clifford:

Yeah, that there was, there was some issues I had the property that we picked up in 2018, that was D class property in a, in a c plus b minus area, and it took us two years to read to stabilize that thing, but once we did were able to refinance and pull out all of our original cash and pay off the original lender and some private eyes he took out and it was just a it was a real real tester for sure. And it was also a flat roof that we had to replace. And so yeah, there was a lot of stuff there that that we had to do but we had to do it because the people that were living in there are human beings and we have to treat them with respect and we got to treat you know all of our people that we work with in every function of the building, with respect, is that will expand outward and who you are. That is the most important thing, it's your values that you're carrying with you from property to property.

Randy Langendefer:

You know you and I can sleep in, I mean I went through the great freezer in Texas without heat for two days, but, you know, tenants will give you a lot of slack if they know you got their back and you're trying to do things and so the point of that story is is. Yeah, we were able to spend the money and get the heat back on short answers we returned we doubled the investors money in 21 months. And it all had a positive ending but you're right you could that greed factor can kick in and it's more about more than just money,

Derek Clifford:

right 100% Thank you. Oh,

Sophie:

I'm just curious, Randy, and that you can take this, you can answer this in any way you like, but is there anything about real estate investing in you know in all the time that you've done it, that still surprises and delights you.

Randy Langendefer:

Ah, surprises and delights me. Good question, I think.

Derek Clifford:

Oh, yeah, yeah we're I think something happened with your video.

Randy Langendefer:

Yeah, hang on a second. Let me see if it comes back. Hang on a second. No problem.

Derek Clifford:

There we go apologize for that. No, that's okay. Nope, no problem. So,

Randy Langendefer:

I think delights me and surprises me. Still, after all

Sophie:

these years.

Randy Langendefer:

Well I gonna have to confess I'm kind of a nerd, so when I get a penciling to work on a property they when I'm penciling something and trying to make finding an opportunity that that still gives me kicks and giggles truly does because you know that's like, we can make this happen. It's like a little kid in a candy store. It's, you know, writing, the thing that I was one of the greatest joys for me was writing checks back to investors. That's way cool paying them back to off top

Unknown:

of things like,

Derek Clifford:

Yeah, that's amazing. I can totally visualize that as well. Right now I've been doing a bunch of jayvees and I dream of the day that I'm able to refinance a property, and you know you put it under a bridge loan and then you refinance the property and give the investors back 70% or more of what they put into the property. At the end yep they keep their equity, that's, that's really something special, you know once you hit that, that infinite rate of return mark for the investors, that's what's really, really cool for me.

Randy Langendefer:

Yeah, you've got you've got an investor for life then.

Derek Clifford:

That's right, 100%. Excellent. So let's, Um, let's talk a little bit more about another side that you briefly mentioned but I want to make sure we gave credit to because this is something that also a lot of people can relate with. You have a W two job. You're still working a W two. I know that in some of the conversations that we had before this podcast I can unders I understand why, but maybe we can dive into a little bit behind the balance between working the W two and doing all this amazing thing that you're doing and you're you were flipping houses back seven years ago. And then now you found yourself into multifamily investing so you're there's an educational hurdle, and you're you have kids at home, so you have all these things going on at the same time, let's talk a little bit about the balance and how you're able to work W two and study up. Maybe you can say a few things about maybe advise the audience on how to make that balance happen if there is any

Randy Langendefer:

more, my smart alec answer is when I think I share within the past I have a high energy level and a low IQ. I truly, I truly still enjoy my day job. And I generally mean that I won't do it forever, but I do enjoy, no matter. I'm at a position where I lead a team and so I truly enjoy that. I often said that when I coach in the Radcliffe's organization today and I, you know people want to go full time go big go fast and that and that's great but I generally try to encourage them you don't quit your day job until you can replace that income. And so that may be you know if you're making 50,000 and you're making $200,000 That's the big hurdle there a difference. And so, what's, what's, what's your objective and I think I truly think this is something you can do both. Yes, I work a lot of nights and weekends. That's my choice. That's not anybody telling me I have to my w two guy, but you know we all work in your W two today you're carrying a phone your, your network. I mean, if I wasn't doing real estate I probably coming home and doing my w two stuff. So it's just, I enjoy work, I don't ever really want to retire, yes I want to change directions from the corporate world and do this more full time, but I enjoy it and I think it's just a matter of, I go back to the spouse I realized there's many times I'm working late magnet SSE okay you got to sit down and go spend some time with Melanie, because back to the basics that's important for us, and me, and then it's a matter of, you know, can I get in three more emails before I go home from the office or I'm in the office and connected to one more spreadsheet or wait one more phone call and using the time when I'm in the car to call them brokers and talking to brokers, I have a like everybody use and I have a commute. So I try to maximize that time, but you know if you if you enjoy it. It's not work. No when I was a kid I love to play basketball. I play basketball all day every day I didn't, I wasn't work, and neither is this so my father once said, you know, find something you love to do and you never have to work a day in your life. And so, whether it's real estate or some other hobby. Find something that you're passionate about and and chase it.

Derek Clifford:

Yeah, thank you for explaining that. I definitely can relate with this because when I first started learning about real estate investing it kind of became all consuming for me because, in my book I mentioned how real estate investing, especially passive when you buy houses are like little Lego blocks right like you spend the money to buy these little Lego blocks, And as soon as you have it you can start to use it to build things right, you can build a wall you can build whatever you want and you can stack them up and as soon as you get more these Lego bricks will help attract more Lego bricks and so you can start to build whatever you want to build right. But what happened there is that I got to a point where that was, I got more in love with real estate investing, than spending time with Sophia at the time or at least that's that's the way that Sophie had had pictured it right. And, yeah, yeah. And so how, so in your case, how were you able to say, okay this call is is that like I'm that that's enough. It's time to cut it off, like, was there an internal voice that kind of goes off, or do you look at your clock and say this is too long, or, you know, maybe you can speak a little bit about how to pull the plug.

Randy Langendefer:

I generally try to cut off by nine o'clock at night is the one because after 810 hours in the day job and then coming home. My mental capacity just doesn't have the focus that it once did much past nine o'clock. So that's kind of my cut off and then I really try to make it. We try to find time for a walk. whether it's five minutes. Tonight we just you know I was, I was working a job until about 530 And I had this phone call at 737 o'clock I said let's, let's go out and grab a bite to eat. Let's just, you know, she was doing stuff all day and I was doing stuff and Anyhow, let's grab a bite, so there's no secret recipe, it's just a matter of following your heart and making sure that that's a priority for you. You know and I, if I can just take a moment to speak to the guys in the audience, the guys in the audience are the ones that I relate to the best because I, and we're all, and I go back to we see the deal we love the chase. We love the thrill of victory. And we go after at sometimes our costs, and it's not to really look back and see some of the damage that you, you've inflicted that you begin to develop some of that balance, as you said so, guys, particularly I think need to be cautious. Maybe just because I'm a guy, but take care of your spouse's.

Derek Clifford:

I can totally relate with that, is there anything you want to say

Sophie:

thank you for that Randy, thank you.

Randy Langendefer:

You can pay me later Sophie for saying, No, that's all genuine. It really was from a guy that's made many mistakes in life as well.

Sophie:

And I think, again, for the, for the young couples for the new couples for, Or you know, people have been married, however many years, so I for personal experience, I understand because I did take it personally. And now you know years later I'm like oh, wait a second, to understand the male mindset, and the fact that you know if you if you're going, if you're trying to protect and build a vision and you're doing it at all costs, then it's really for the sake of family and for the sake of the relationship so it took me some time to even understand that perspective.

Randy Langendefer:

So guys are also really great at justifying their own behaviors. And so we justify that I'm doing this for the family. I'm doing this for you, Sophie or Melanie or our kids or our future kids or whatever, what do you what do you mean I'm doing it for you. No. But

Unknown:

yeah, what do you guys do it for.

Randy Langendefer:

There's again guys see what they want to see, and are sometimes have these blinders on that are just tunnel visions, at least, and again, I'm speaking to this guy, maybe not all guys but be aware of your, be aware of your vulnerabilities, I guess is not another thing there and to be aware of. If you have that relationship as a high priority. It's going to be much easier to do you have, you know, What's your why, in real estate. If your why is to be filthy rich. There's going to be some damages along the way in your relationships. If your Y is more modest whatever that might be. You're gonna be much more successful in a balanced successful way.

Sophie:

Yeah, thank you, again, there's so much wisdom, because this is of course you know when we talk, when we talk to our investors, it's more than just the, the front facing transactional nature, it's, it's really understand, understanding the, the Richard journey, behind the investor, and that, you know, you've again thank you you've shared a lot of like personal stories and vulnerabilities and we really really value and appreciate you for being so open with us and our audience, because it, it goes, you know there's many layers of, of just, there's just many layers of the whole investing journey. And, yeah, you know, and

Randy Langendefer:

it's and you've used that key word in my mind but it it's a journey. So it's a marathon, it's so many people get into it and want to quit their W two job and six days, six weeks or six months or, you know it's a journey. It's a marathon, take the long view. You don't have to get rich quick overnight you just have to get rich quick over a lifetime.

Derek Clifford:

Yeah 100% That's something that we all teach our investors is that, you know, the, the way to wealth in real estate is like a crock pot, not the microwave, you got to sit there and you got to let all the components kind of sit there and marinate for a very long time, but the longer you let it marinate the better it's going to taste right so that's, that's always, that's the way that I like to put it. Now, I wanted to I wanted to back up a little bit and I wanted to ask you guys, we've been talking about vision and why we've been talking about balance and W two and, you know, trusting your spouse and that foundation, they're in the relationship to gain success. What is your what is Randy's big why or vision for the next three to five years what is moving you through to do all this action.

Randy Langendefer:

I guess it starts with the why of my migrator wise just for that I want to give back and create a legacy, and maybe commitment to some big charitable commitments that I want to honor. In the why is because I have that high energy and low IQ that I want to continue on working. I'll step away from the corporate world. One day, but I want to do this full time. And for me full time, you know, I can probably relate there if I did something 3035 hours a week, that would be part time for me. Compared to the W two job and other things today so to me. There's just plenty enough space in it. I play golf. I love golf, but I can't imagine playing golf three or four times a week that would just bore me. And to those who play golf three or four times a week that's great if that's your passion, if that's what you enjoy, but I hope, I hope for a long time to come that I'm out chasing deals, building more relationships, and it's just not working. So if you have the investor's mindset and you have to invest, I think, I think, as a GP when I put on my GP I'm a much better GP because I have been an LP, and so many opportunities, and I seen, good, bad and ugly. And I just take other people's money very seriously.

Derek Clifford:

And that's great. I think people understand that too. People respect that they understand that, especially when you're talking with them and you sit down with them and teach them, like what you imagine you do when you sit down with your investors and you say well, this might not be the right fit for your investment right now or for your personal journey. You know there's those conversations that need to be had and people can feel that that's when you really earn a very loyal customer very loyal investor. And that's where it all is like this is all about relationships and something that, that I've learned and maybe you can comment on this, is that when you start investing in real estate in this way, you're really looking to build relationships, and the the very cool thing about this is that you get to invest with people that you enjoy being with. If you're going to be a lead investor who is cutthroat and doesn't play well with others, then this is a team sport and it's probably not the right fit right because you got to be someone that gets along and wants to help other people genuinely because you all win together right. So I wanted to hear your, your comment on that if you agree with that, and maybe how you've been able to integrate that in some of your offerings.

Randy Langendefer:

Oh absolutely, yes 100% agree and I, as you started out. People invest with those they know like and trust, very simply, as you've heard, you know, back to your illustration I think the way we've all gone to a car mechanic where you feel they're upselling you to something or then you've gone to another car mechanic who is telling you that you really don't need this fix now in the last another 50,000 miles. And I don't know about you guys but I certainly respect them go back to the one who told me, I didn't really need to fix it now. So that translates into invest in the same thing he just said he's talking to investors in the same way. After you talk to him. You know I don't I one guy told me you know, Randy all's I need is either news or five or 6% return I don't need the high the the two three multiple at the end, to which I want kind of went really, but he had, He had maintained there he had achieved financial success, and he was just looking for a return. And so that's, you know, that's one type of investing so, you know, and that's why you have a lot of different capitalist stacks evolving today for different types of investors, but yeah you have to have to understand. I just had a call with one before this podcast who reached out to me something totally different. She want to talk about backdoor Roth. And so I spent 15 minutes talking to her about backdoor Roth and said let's you know when can we do lunch again just to get reacquainted I haven't got a deal on the table yet want to make sure you're there so relationships are key. It's a huge teams, it's a huge team sport. And I've also been as an LP I've talked to a couple of sponsors that were too busy to take my calls are too busy to answer my questions. That's okay, that's fine. But, you know, that's not for me. To your point, as your passive investors out there, there is no dumb question. And if a GP or a sponsor, doesn't want to take the time, or doesn't have the time to answer your questions, that's a red flag. And you ought to have. Think about what you want. I also had a conversation as an LP with another person and I consider myself above average maybe have an intellect, financial intellect that now, And he would have had the most convoluted capital stack I've ever seen. And I had to get a piece of paper and I'm drawing lines and I just thought, this takes too much thought. My brain hurts thinking about this, why would I want to invest in this. And so, you know, back to the know like and trust. It's just that I'm sure the guy's gonna be very successful in that he'll make tons of money. Finally, but develop your own investment strategy and stick to it, find your sweet spot, whatever it is, maybe it's a high yield maybe it's a value add. Maybe it's a short term play, maybe it's a long term play. Maybe it's Dallas Fort Worth versus Shreveport, Louisiana, or something like that. Everybody's got to develop their own investment strategy.

Derek Clifford:

Yeah, this is fantastic Randy like I think many people when they start out looking to invest in real estate, there's a sense of impatience. And what I'm hearing you say is try to fight that resistance because if you jump on board with the first person that gives you an offering or you're, you know you're not educated, you're moving around and trying to jump ahead of yourself. That's a potential to get set up for either getting hurt or getting alienated, you know, all these different types of things and so I think that that's super super wise advice for those listeners out there to just make sure you take your time, and then to go complete circle back to what you were talking about before, there's always another deal right there's always another investment opportunity. And so there's no reason to rush. I personally have had problems with impatience and trying to get things going and trying to force the butterfly out of the cocoon before it's time, right, and you know how that ends up. And I think that's really really important to re emphasize so thank you for, for bringing that up.

Randy Langendefer:

You know it's still there are people out there that want to go big go fast, I want to go slow, go steady. Go back to the hare and the tortoise Slow, Slow and steady wins the race over a long period of time, that's, that's, You know the difference between investing in speculation. What's the difference in investing in speculation well for me. Speculation is chasing the shiny object syndrome, it's when somebody offers me hey here's a 25% IRR or here's a 19% IRR or a unit, and you have and I can create a spreadsheet to make any deal look good. Right. And it's it's a matter of chasing that shiny object versus finding your comfort zone of what you're interested in investing in, and you have a relationship, a relationship with a lead that you can ask questions to. And don't be afraid to ask questions, send emails make appointments, ask for, you know, half hour, make two half hour appointments if necessary.

Derek Clifford:

Yeah, absolutely. Very very good advice. Thank you so much for all that good stuff. I do want to ask you one more thing before we head into the Rapid Round here. And it's because, because you're working a W two still, and obviously we know your background is in finance. What superpowers. Would you say that you've been able to translate from your W two and into the multifamily real estate investing world because there's a lot of different facets, you can go down, right, as people start to learn you are, you understand how broad this, this whole investing, you know, investing mechanic is, what would you say has helped leverage you from your W two into real estate investing success.

Randy Langendefer:

I don't, I don't know that I have any superpowers. But I would say that, I will tell you the things I gravitate to as a passive investor. And I gravitate towards investments with sponsors who I really gravitate towards people with a corporate background. That doesn't mean somebody doesn't isn't good, that just means that I think that corporate background gives structure gives credibility gives discipline gives you know, anybody who's worked in corporate worlds not to have not afraid to have somebody look over their shoulder or ask questions because it happens all day every day to us. So I gravitate towards somebody that has been in the corporate world, I gravitate to people that are have done that I've known for a long time now, and I've got a couple of people that I've invested in multiple times with gone full cycle and they send me stuff and quite honestly I don't even I don't do the due diligence that I probably should, because I've got to trust with them. And I know their character. I gravitate towards. Today I'm gravitating toward yield place, versus, you know, I'll take a seven year I and I gravitate towards those yield play options that just give me slow and steady, and at the end if we pay down debt, And even if we you know, even if after seven minutes. Everybody projects them on five year old, but if it lasts seven or eight, who cares as long as it's, as long as it's cash flow and the equity is still there and the deal and you pay down the, the prepayment penalties and stuff like that. I gravitate towards sponsors that are, you know, give the LPS some rights. I've seen many deals where the sponsors have all control. That's something that I, it's kind of a red flag where they can decide when to buy and sell how much to buy and sell for. There's no LP vote or anything. So I, you know I we. I'm a nerd I read the TPMS and the OEMs the operating agreements for each deal, if I invest in it, because there's no two alike.

Derek Clifford:

Yeah, that's that's great I think that that right there is the answer I think your you know everything that you're talking to, talking about that perspective, came from your corporate world right came from your background like all the things that you just said that you what you look for including reading the ppms and doing your due diligence and then you know getting to a point where eventually you trust the you trust the individual not having to do due diligence, it's like gates right the way I would say it is that you've, you've set up gates, and you're taking that from your corporate lifestyle, doing due diligence and then each time, you know, shaving down on the due diligence as you build the trust. Do you think that that would be an accurate, an accurate way to

Randy Langendefer:

describe that I never thought of it that way but I think it is very true. I think and I think to me it goes back to where I kind of started out there between investing in speculation speculation is, here's a great deal just throw some money at, I just I trust this person unequivocally that to me is speculation, versus investing, an investor knows the deal parameters knows the risk can determine the probability of success with some accuracy, I mean nothing's guaranteed, but that's investing versus speculation and yeah that comes from a corporate mindset.

Derek Clifford:

I love that. Thank you so much. This is great. Okay, cool. Well I think we are rounding the end of the show here and what we're going to do is we're going to head into our Rapid Round, and it's actually five questions that we ask every single one of our guests, so if you haven't listened to the podcast before, this will be a surprise to you.

Randy Langendefer:

And one other one but let's go I can't remember more I can tell you that but okay,

Derek Clifford:

these are pre prepared so these are really tough. These are really tough, you're going to be racking your brain with these. Do you want to read them.

Sophie:

All right, Randy so first question is what book has had the biggest impact on you and why and it doesn't have to be business.

Randy Langendefer:

Well, that's a really easy one the most had the most impact in my life is the Bible, from a business perspective, I really read anything John Maxwell on leadership is, it's an old book now but the 21 Irrefutable Laws of Leadership by John Maxwell is his classic and it's a really good one so I read anything leadership, and I'm just trying to find that the book that I have mastering the market cycle by Howard Marks mastering the market cycle by Howard Marks so look at my shelf is one I've recently devoured and really enjoy because understanding of cycles is really important and we, they're all cycles through that book,

Unknown:

we don't. Oh, okay,

Sophie:

let's, let's note that, yeah, yeah,

Randy Langendefer:

the disappointing thing is he doesn't tell you, you know what to do but he generally points you towards the macro cycles and how overtime, they all go in cycles, and he was a mutual fund manager for I think it was, poke me now, and very successful and good read, highly recommend.

Sophie:

Excellent yeah we're gonna grab it. Alright. And the next question is if people wanted to emulate your success. What is the first actionable thing that they could do to follow in your footsteps.

Randy Langendefer:

Shoot your sights a lot higher than me. But I think, I think the thing I would hang my hat on is education. Educate yourself, if you're not willing to invest the time and it's strictly speculation, you need, whether you're a passive as being an active passive investor, understand the deal. The risk parameters, and the only way to do that is by educating yourself there's a ton of opportunities out there today that are free, they're low cost they will require some time, some reading some listening, but there's a ton of opportunities and the rewards are there. I think over the period of time. I've only known, I'm sure there are more but I'm most aware of Warren Buffett who made his money off of, you know, the stock market but there's, I can think of 10 or so right off top my head that have made their fortune through real estate. Yeah,

Sophie:

yeah, I love that too, that you said Be an active passive investor.

Randy Langendefer:

Great, yeah that's really important all your listeners, I mean it's, otherwise it's just speculation in my mind, or maybe you have a great friendship that you just really liked the person that you can throw $50,000 at um but

Sophie:

yeah. And then, what next question is What small thing, do people that most people not know about you.

Randy Langendefer:

What small thing, do people not know a lot of things people don't know about me. What small things. I guess just. Hopefully it's coming through but I think their passion for this, and the desire to help, help others along their journey. So I became a coach and ride police organization I mentioned because I make a few bucks but it's not the money, it's really just, there have been many people who build into my real estate journey and my professional career, and I truly just want to give back and it's the old Zig Ziglar comment that I can get almost anything in life I want if I help others get what they want.

Derek Clifford:

Yeah that's a good, that's great, yeah that's that's fantastic. Thank you. Number four, how do you like to unwind and restore your creative juices individual, or by as you're by yourself.

Randy Langendefer:

I do a lot of walking, long walks, you know, I walk four or five miles a day. Generally, try to, so I get a lot of alone time doing that if Melanie's not with me. Sometimes a lot of times we go together but it's not every night when I'm at work I do it, try to take a 10 or 15 minute break. I do enjoy the game of golf. I get a lot of pleasure out of going out and play in the round of golf, that's enjoyable to me, recharge to was doing, spending time with family. For me I have adult children, and really enjoy getting together with them and pampering my grandchildren and spoiling them a little bit. Recharge.

Derek Clifford:

That's great. Yeah I was gonna say for this one that I know that since you live in Houston that taking a walk outside is sometimes not that simple. You know I've, I've lived there for four years so I know exactly what what it's like sometimes in the summer in August and July, so that can be a challenge, you know,

Unknown:

it becomes a workout. It does. Yep,

Randy Langendefer:

it's like, take two steps and sweat but yeah learn to walk either early in the morning or late at night so

Derek Clifford:

that's right and then you walk into a building and then your jacket because the AC is so turned down so. Alright, number five, is, is there something special that you and your family, kids like to do together I think you may have already mentioned it but just in case, we'll ask the question here again.

Randy Langendefer:

Melvin I was talking about that a couple times kids to to adopt kids in Denver one in Seattle, it's just getting together and being together and, and spending time together for us whether we go to Denver or Seattle or they come here. It's just, it's a lot of fun to just spend time with your adult children and and see them growing and maturing and becoming adults.

Derek Clifford:

Now of course, of course. Well, alright ready thank you so much for being on the show, that is the end. But what we would like to do is we'd like to give you one last opportunity to just open forum, just go ahead and let people know how they can find you, what you have going on right now and, you know, anything that the audience can do to interact with you more and just, just add value to them.

Randy Langendefer:

Appreciate that. Sophia, first of all, again thank you for allowing me to be on your show. It's been a pleasure. People can easiest way to get a hold of me is invest. I am VST hyphen arc AR K comm that's my website invest hyphen arc.com There's a contact us page on there. There's a calendar under there to make an appointment, love, love to chat with you about anything real estate or anything else for that matter, it can add value. So, just want to expand the network and I'm always looking at deals and you know if there's a possibility that she may be interested in investing that I'd love to talk with you too.

Derek Clifford:

Excellent. That sounds fantastic and I think all of that is available on your website as well as the portfolio that you've invested in and managed properties so very impressive what you have built out there so I would encourage all the listeners to go out there and take a look as well. And for those of you who have listened to all the way to the end, we want to thank you specifically Sophie and I, for listening, because we really think that this is a very powerful way to create passive income and start living a life of choice. And so, people like Randy is a living example of how to do this. And so, please get yourself educated, we at Elevate equity we have so much material for you we have other podcasts, we have books we have blog posts, we've got all these things ready to go, and we may actually be coming out with a course, sometime soon, as well. And so we really want to help you we want to engage with you and so if you guys like please go to elevate equity dot o RG, and then also wherever you're listening to this podcast, please like and subscribe it, because as we like to say, we want to get those algorithm gods to give us some move us up the chain so that we're able to get more exposure to more people so please engage with us and please be honest too We want your honest feedback so we can get better. And with that being said, I think that's everything for today's show. So,

Sophie:

And this is Sophie,

Derek Clifford:

we are signing off. Thank you so much for listening, you guys, take care.