In this episode of the BigMikeFund Podcast, Mike Zlotnik sits down with Dr. Axel Meierhoefer — founder of Ideal Wealth Grower and host of the Ideal Investor Show. A former German Air Force pilot turned real estate mentor, Dr. Axel shares his extraordinary journey from flying F-111 fighter jets to helping investors achieve financial freedom through turnkey and build-to-rent (BTR) properties.
Together, Mike and Dr. Axel unpack the fundamentals of the “IDEAL” framework — Income, Depreciation, Equity, Appreciation, and Leverage — and explore how everyday investors can grow secure, cash-flowing portfolios even from afar. He also breaks down his “GROWER” coaching model, his philosophy of building clusters for efficient property management, and his community’s transition toward BTR homes as a long-term wealth strategy.
Whether you’re a new investor looking to start your first turnkey property or an experienced one exploring BTR projects, this episode offers deep, actionable insight on scaling your portfolio, structuring your business for protection, and creating lasting wealth.
HIGHLIGHTS OF THE EPISODE
01:33 – Dr. Axel’s Early Journey: From Aviation Dreams to the U.S. Air Force
03:19 – Transitioning from Military Life to Entrepreneurship
04:16 – Discovering Real Estate & the Power of Turnkey Investing
05:16 – Building a Boutique Mentorship Community
07:46 – What “IDEAL” Stands For in Real Estate Wealth Building
09:46 – Coaching with the “GROWER” Model
14:00 – Setting Up for Success: Business Structure & Asset Protection
15:58 – Why Every Investor Needs a Coach
16:52 – Turnkey vs. Commercial: Staying in Your Lane
17:38 – The Cluster Strategy: Managing 100 Properties in 10 Hours a Month
20:21 – Why He Avoids Commercial: Mastering One Discipline
23:23 – Turnkey Property Challenges: Repairs, CapEx & Management
25:44 – Dr. Axel’s Approach to Maintenance & Reserves
29:10 – The Evolution of Turnkey Providers into Build-to-Rent (BTR)
32:27 – BTR Case Studies: Oklahoma, Alabama, and Dallas
35:18 – Legacy Planning & Portfolio Conversion
36:25 – Closing Thoughts & How to Connect with Dr. Axel
If you found this episode substantial and want to dig deeper into real estate, or maybe you want to discover better investment opportunities, be sure to check out www.tempofunding.com.
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CONNECT WITH THE GUEST
Website: https://idealwealthgrower.com/
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Podcast: Ideal Investor Show
Full Transcript:
Mike Zlotnik: Welcome to the BigMikeFund Podcast.
I’m the Big Mike, Mike Zlotnik, and today it is my pleasure and a privilege to welcome. Should I call you Dr. Axel or just Axel?
Dr. Axel Meierhoefer: Whatever you like best.
Mike Zlotnik: I appreciate your flexibility. And he hails from sunny Spain. How are you, Dr.?
Dr. Axel Meierhoefer: Mike, yeah, I’m good. Thank you. And thanks for having me.
Mike Zlotnik: So let me make the formal introduction. Dr. Meierhoefer, host of the Ideal Investor Show is an Air Force vet, turn real estate investor using strategies like 1031 exchanges. Turnkey investing and more. Axel now owns multiple properties in different countries and states. Very interesting. Not just states or cities, different countries. You, we have some properties in Ohio, Idaho, Illinois, Florida, Belize, Panama, Spain, and more. He currently serves his clients as a mentor and value. Asset expert. You prepare folks for the age of abundance, and you live with your wonderful wife, Heidi in Spain. Welcome to the show.
Dr. Axel Meierhoefer: Yeah, thank you, Mike.
Mike Zlotnik: I hope I didn’t butcher it up. I apologize. But tell us a little bit about you. What’s been your journey? Where are you originally from? What country? Just for the record, I’m originally from Moldova, former USSR.
Dr. Axel Meierhoefer: Okay. Yeah. That’s very cool. By the way, we have beautiful wine and beautiful wives, so it’s both true. So yeah, my journey is actually quite, unique.
I think I am, or originally from Germany, was born in Northern Germany. Had an uncle that was, an executive at Lufthansa and kind of gave me the buck I desperately wanted to fly. I never in the, when I was little, understood that he wasn’t the pilot. I just knew that he was flying all the time with Lufthansa.
So that’s what got me wanting to get into aviation. So I basically wanted to fly for Lufthansa, but that was in the early eighties when the, inflation was bad, economy was bad, so they just weren’t hiring. The question was, okay, if you still want to fly, what can you do? And first went to the Navy recruiting center and they said, yeah, you can fly, but you first have to learn how to drive a boat, which I didn’t want to do.
And then they said, well, if you don’t wanna do that, then go to the Air Force. You don’t need to do that. The, and so I went to the Air Force, I did the whole application process, everything, and I made it through that. Went through pilot training in the United States, came back to Germany and started flying there.
And then a few years in, I got to know that there is a flight test program for a new aircraft, which I enrolled, applied for, and then enrolled and got to fly. And that kind opened the door for me to participate in an exchange program that at age 32, brought me to the United States to fly for the US Air Force F1 elevens.
And to make it short, when you fly military jets, there comes a point where the physical strain that you have on your body is just getting too much. So I had a contract that said if I can’t physically do it anymore, if the flight surgeon said, Hey, you’re reaching the end of the line, then I can decide if I want to stay in or want to retire.
And I saw after 22 years, I decided to retire and I was immediately recruited. Buy a software company from California who gave me a green card and you know, helped me with housing and all kinds of things so that basically instead of going back to Europe and back to Germany, we stayed in the US and then that the normal stuff happens.
You know, daughter is in school, there is better in English. Then in German, I had a job. Then I went to school to get a master’s degree and ultimately a doctorate. And then I decided to open my own business, which the United States is really a, a great place to do that and gives the opportunity. And so in 2005 I started that, and as part of that I started looking at where can I invest for some kind of security in retirement?
Because as Europeans, I don’t know if moldavians are that way too, but as a German, you always think like, okay, where is money gonna come from if I ever retire? So that’s was my thinking too when I started my own business and looked, and stocks weren’t the great thing at the time. So I discovered real estate, started investing in real estate, and I’m somebody, I mean, that’s why I also, as you said, and have a podcast, I really like to talk to people and about stuff that I’m interested in.
So whenever somebody said, Hey, Axel, what you doing? Or What are you into? Or What have you been working on? Or stuff? My answer almost always was, well, I’m looking at this deal or I’m analyzing this, or I just got a house in this state or that state, and sooner or later people were saying, well, can I do this too?
Is this just for you or is this, you need to be special, or whatever. And so I kind of started getting into mentoring and coaching people. Then in 2015, turned it into a real second company that I opened, and ever since I have like in a way, like a boutique shop, mentored people in how you can invest in residential real estate relatively far away from home.
Because I was living in Santa Barbara, really, really expensive, and you, I couldn’t find any deer that made any sense Pencil out. So I discovered turnkey investing in different states in the us. Then I discovered investing internationally, and I’ve been doing it ever since. And I’m always saying from a credibility perspective, there is something different when somebody tells you.
What you should do or what somebody can show you. Here’s exactly what I did. Here are the properties, here’s the process. Here are all the relationships. So that’s, you know, I don’t have hundreds or thousands of people at any given time. We are relatively small boutique community, but I am very proud to say rarely ever does anybody leave that initially started in the program because we are just kind of growing together.
We are sharing part of our life journey and I really love that.
Mike Zlotnik: That’s a great story. I really, really enjoyed, listening to you how we went, from from Germany to the US under the military. Flying program and it’s just amazing. you, you had, you had a great career, sounds like 22 years, if I heard you correctly.
Yes. Which is long. not that many people stay in the, military that long. I, I know a number of pilots who served, in, in, in, in military, in Air Force for, for a while, and then they go to civil aviation. Go to Delta or United or one of these, you know, Hanza, one of these big airlines. So it’s kind of interesting how you spend your entire career in the military and then you retired and then you got into, you said software company in California, and then you.
Basically came to the same conclusion. I live in New York City, you can’t invest for cash flow in these, coastal markets. You get no cash flow. Right. So you discovered, I guess, turnkey properties. That’s, that’s an amazing journey. And, so tell a little bit about the community and your coaching. So, I know you have a, you have a show called Ideal Investor Show, but what is your community called h How do you coach people under what company?
Just just a couple more words on that.
Dr. Axel Meierhoefer: Yeah, absolutely. So the organization is called Ideal Wealth Grower. And I basically called it that because wealth is basically the anchor point that we are, building individually, but also in a sense together. And then I had developed those two aspects. The first one is not really something I came up with, it’s just the fundamentals of residential real estate investing.
And the other one is the approach. So if, if you’re okay with it, I can tell you about what both mean and how they work and what is relevant about them, if that’s okay?
Mike Zlotnik: Yeah, sure. give us a quick commentary of, of how do you think about it? What do you like, just, just curious.
Dr. Axel Meierhoefer: Yeah, absolutely. So idea of the idea Wealth Grower is basically to point out what are all the things that are relevant when you decide you want to join the community of residential real estate investors.
Because what you’re getting is I is for income, D is for depreciation. The government is basically saying your house is like a little engine that only runs so long so you can depreciate it. E is for equity, which means, you know, anything that is basically paying, being paid off or your initial down payment, that’s equity in the property, plus any, increase in value.
Then, you have a for appreciation, which is a different form of, of equity, and then you have l for leverage. Because one of the beautiful things that you can do, and why I actually got into it is because I can take like, let’s say $40,000 and buy a $200,000 house. So that aspect is really important. If you, oftentimes people say to me, well, you will never make as much as you can make with the stock market.
And I always say, okay, well that’s cool. Show me the stock that I can get $200,000 worth if I give you 50. And nobody has ever been able to show me that. So those are basically those different aspects of the idea and why we call it idea grower. It’s the other part and that comes from my, studies I mentioned I went for a master’s degree and then I kind of always say I was talked into, continue to go for a doctorate in leadership.
And one of the components was how do you engage with people who want to learn how to be a leader? I had a pretty good idea from my military time and from my time in the software company, and I found that. Coaching is a really important and, and helpful thing to do, and a guy that is very well respected, especially in the business community, is a guy by the name of John Whitmore and he wrote a book called Performance Coaching.
The idea was how can employees improve their performance? And within that book, he describes something, he calls the Grow model. And I studied it and I really got deep into it and I really liked it. But one thing that sounds maybe funny to you, Mike, and to anybody listening to us, but for me, that whole grow model really only works for the very first session.
And let me tell you why real quick. So the G stands for what is your big, hairy, audacious goal, and what are your sub goals? Then the R stands for what is your current reality? You know, how does your life, your work, and everything look like in relation to that goal? Then the O for, growth stands for what are the obstacles and opportunities that you’re facing?
And the W is a little bit of a stretch that stands basically for what actions will you take to change your current reality. And that’s a beautiful conversation. If you and I or anybody listening would have that, and then maybe you say, okay, I will go home and sit down with my partner and think about in which location do we want to invest.
Then grow ends. And I said, well that sucks because I want to talk more than once with people, so we need to have something else. So Mike comes back two weeks later and said, let’s have our second session in the Ideal Wealth Grower System. And I asked you first thing, Hey Mike, what was your experience when you actually started looking at which locations you want to contemplate and go after?
And you will tell me your experience, which by the way is the E. So we are grow E. And then I will ask you after you describe that, so now that you have narrowed down where you want to invest, what is the result? Do you want to go with Ohio? Do you want to go with law? And whatever it is. So you pick something that’s the result.
And then I would ask you, and which is by the way, the R, the second R for grower. How does that result impact your goals? Quick example. Let’s say you had originally thought, I want to try to invest somewhere in New York or New Jersey, and you find out you would have to run around with a hundred to $200,000 down payment, and then you do some research and you find out you can actually find a pretty nice investment property for $200,000 in Ohio.
Now you have the option to say, Hmm, if I really had 200,000, I could buy that thing for cash. Or you could say, okay, if I do have 200,000 and that’s what one property costs in Ohio, I could actually get five for that. So instead of starting with one property, you could start with five properties for the same amount of money.
Now, obviously from your goal to, for example, have a certain passive income portfolio, if you can buy five right away, the time that you originally thought it would take to get a good portfolio, which was your goal, assuming which is making it up, would be much, much shorter. So now this thing becomes a cycle, and that’s what happens.
You ask me what is actually going on when you’re doing your mentoring and coaching in the community. that’s what we are doing, right? Like we are looking at where are you right now? What do you have, what do you want to accomplish? And then we go session by session through this cycle and work our way.
To the goal, and just to finish up on this two main things is what we’re doing in the program. Number one is to find properties for you that perform really well in the locations that you like. And the second thing that’s very important for me, and if you like we can talk a little more about it, is I am a very big advocate that you should separate your private stuff from your business stuff, even if you’re an employee.
So I advocate that anybody who comes in our program sets up a business. For the purpose of investment. And that business then collects the rents and pays the mortgages and stuff like that. And if you buy that $200,000 house, you put it in a little LLC that is managed by that business and you buy the second one, the same sec, third one, and so forth.
So you ultimately build a structure that protects you, but it’s also separated from your private stuff. So those are the two main things. Learning and helping each other to invest and build a security structure that saves, saves you from lawsuits, but also allows you ultimately to put it all in a trust if you ever want to give it to the next generation.
Mike Zlotnik: Yeah. thank you for sharing that. This is all pretty cool. I, I have certainly seen plenty of people who have done the turnkeys, and I’ve, I’ve done enough of them myself. It is a. Of course it’s a business and the fact that you are helping folks set up a business structure is very important for one, for asset protection, two for a number of other reasons, obviously accounting a number and, and so on, so forth.
So, yeah, I, I completely understand. And the coaching these pro the, these, the explanation of what IDEAL stands for and growth stands for makes a lot of sense. People need a little bit, everyone at every level. Could use, a coach. This is the truth. Even the greatest, most successful, players in the world, whatever sport they’re in, even investing, they all have a coach.
I’ve gone through coaches myself, so I have to say that I think it’s important for everyone to have a coach. At every stage of their journey. So all that makes a lot of sense. I appreciate you sharing and, you mentioned some really basic and really cool and fundamental, benefits. I mean, I, I’m a big proponent of real estate.
Real estate is. The most tax advantage asset class in the United States. It’s got all the things that you mentioned. You’ve got the leverage of bank financing, amortization, appreciation, depreciation, and now bonus a hundred percent is back. So if you, if you wanted to run a cost set when you rental portfolio, you could.
Obviously cost segregation is used quite a bit on commercial properties, but you can do it with the residential too. I even spoke with co segregation experts. They, they have methodology, how they can do it kind of on paper without going to every property. So anyway, let’s continue the discussion. So let’s really cool.
obviously you invest a little bit internationally. I’m just, I’m just curious. You’re stick in with residential because it’s very easy to understand, or you’re stick in with residential for any other reason. Have you looked into commercial real estate? We, I personally evolved over the years from residential and turnkeys having portfolios of turnkeys to commercial.
Because of the complexity of, managing many assets as a, in commercial property, you can have 200 doors, right? And just using an example, and if you wanna do 200, turnkey houses, that’s a large portfolio of assets to manage. And even you can manage the manager, but you still have to manage that 200 assets per se.
Just curious. Any, any, any thoughts on that?
Dr. Axel Meierhoefer: Yeah, well, a couple of thoughts. One is. I believe very strongly in the turnkey model, partially for the reason that you just brought up. I am also a big fan of what I call building clusters, which basically means, okay, let’s say like we started our conversation and you decide, okay, my first state that I want to invest in is Ohio.
And then you pick a metropolitan area. You can say, I want to go Cleveland, or Columbus, or Dayton or Cincinnati or Toledo, whatever, area you pick. Then my next step, and suggestion for anybody listening would be to say, okay, let’s build a cluster and let’s determine how big should the cluster be. And in my opinion, it’s always anything between three and eight properties.
And you can obviously have more if you want. But just to make an example, so when you scale, and let’s just say for an easy calculation, you were to say, I go up to 10 per cluster and I build 10 clusters. So I have a hundred properties. If I take my own example, I speak to my property managers who manage literally these clusters for me every month for anywhere between 30 to 45 minutes.
So if I had 10, I would literally, let’s be generous and say it’s an hour for each, which they would get bored if I talked to them for an hour. But just for the sake of argument, I would literally on a hundred unit, portfolio spend 10 hours a month. And I personally think this is absolutely acceptable, to do that.
And if you schedule it out, you could literally say, okay, I do two and a half hours a week or something like that. Now, if you had a hundred units, even if they’re not performing very well, you’re talking like significant five figure passive income. That’s when all hundred are finance. They still have plenty of years to go.
You’re still like 20, 25, $30,000 income a month for that. I think you can do 10 hours of work, right? That’s a pretty good hourly rate just from that perspective, but it really only works when the turnkey providers manage your cluster or manage your properties and you have a trusting relationship.
There’s one little twist that I want to give for the audience, for our community. So I am typically the first person who has one or more properties with a, with a provider. But when I bring our clients in, a provider can rather quickly go to 5, 10, 15, 20, 30 properties. And so we as a community become a relatively strong and valuable client.
Right. And so what they’re basically going to do is if something goes wrong, they’re much more likely to help us out or do something or fix something, than if you have one house here and one house there, and one house there. So that’s one thing. The other one, to answer your question, why have I, or has our community never gone to larger commercial office buildings and stuff.
And please, you did this and you’re probably much smarter than me, but my analogy is what I use is to say, I believe I’m a pretty good electrician and I really don’t want to become a really good plumber, and I don’t want to really become a pretty good carpenters. That’s for me how different it is. The financing is different.
The managing is different. The financing is different. The way you calculate what your returns are is different. Everything, all the rules are different. So for me it’s literally like you’re learning a different profession. Now, does it help if you have already background in residential when you go to commercial or when you go to office or when you go to storage space or any kind of other exotic stuff?
Now, the latest, craze is data centers, right? If you want to go real big, and, and data center funds and stuff. To me, each one of those is like a profession within the overall real estate industry. And I just made a, Decision. I want to be good in this one area. I want to be a really good electrician, and if anybody wants to rather go into plumbing or carpentry or whatever the other things might be called, I’m helping them.
I know you. I know a bunch of other people that I would refer them to. Well, I just sticking to my electric electricity stuff.
Mike Zlotnik: Yeah. Yeah. I, I completely respect this. Don’t be a jack of all trades and master or none. So that is an absolutely good truth. I, I’ve actually, I know a number of folks just like you with our own communities and all.
We do focus on one strategy and the turnkey strategy is, has been around for a long, long, long time, and it’s a game of, very simple specialization. And if you get very good at that. You can do. Well, there’s, there’s no argument. And you, you are right. It was kind of interesting example that you said, you know, you 10 property cluster, you’re speaking for an hour, or you have 10 of them a hundred properties.
You, you have basically a monthly, I don’t wanna call it portfolio management, but you have a monthly portfolio management of. 10 hours a month. Yeah. that you have to, allocate. Is it a lot? No. is it, completely passive? No. It’s, it’s, I I’ve had that experience, so I have to say that, it, it, it, it’s, it’s a function of how good you’re gonna get if you’re gonna get a great property manager, which is very hard to do.
Right. So my observation over the years, and I’m just giving you my 2 cents, this neither right or wrong, you may have great property managers I’ve seen. This is a tough trait to find a great, prominent, long-term property manager. They’re good for a while and they, they call it, let’s just call it, you know, dating.
They’re great, they get married, that they get a little bit, you know, laid back. I mean this with all due respect, right? Yeah. And your property management starts to sort of, you know, soften up. The other thing that I’m just curious, just questions re relevant to what I’ve seen out there and I would love to hear your quick comments.
On these turnkey properties. I, I, I, I’ve seen two primary issues that, that besides the work and the time you have to allocate, I, I see number one, significant need to allocate for, repairs. CapEx tenant moves out, so the cash flow that you actually get, you have to take probably half of it. This is my experience, maybe more, maybe less depending on the property, and set aside the repair bucket.
So you might get a 10% yield, but it’s, in reality, it’s 5% yield because the other 5% has to be for future CapEx when the roof goes. I remember I had a property that I’ve owned for over five years, and I collected great cash flow. Every month. And when the tenants moved out, I, I had a call with property management, you need to spend $40,000.
What? I wanna pull my hair out. I was collecting 1100 a month and I have to spend $40,000 to get a new roof. Knew everything. The tenant just, I don’t know, ran down the property. So that’s my first question. The second question, the. Values have kind of gone up over the years, right? And, but the rents have not kept up with the value increases.
And it depends on the market. Market been marketed different. So years ago used to be 1% rule. So if you collected a thousand bucks a month, you would get a hundred thousand dollars property. assuming again, condition matters a lot, right? You can get a thou a thousand dollars property. Then later you’re gonna spend all your cash flow fixing it up.
So, can you still get really good deals? ’cause today, very hard to get to federation unless you go to a lower and lower quality go smaller. And smaller town maybe condition is not as good. And a lot of people buy on yield and they buy turnkey. They don’t necessarily really. Comprehend where they wind up getting their portfolio, and I’ve seen people wind up with these, let’s just call ’em not big cities, or not necessarily rural, rural, but smaller town America type of portfolios that they still trying to get the cashflow target.
Or they wind up getting more expensive property than they don’t get the target yield. So I’m just curious, on these two topics, any quick comments?
Dr. Axel Meierhoefer: Yeah, the first thing I would say is I, there, there is something that I call the pivot point, and that has to do with the development of the portfolio.
Where if you really think of it, and obviously it is hard when you buy a property that is renovated, it’s not renovated well and very quickly starts having maintenance issues. So, you know, I don’t want to go too deep into what can you do? How deep should your inspections be? How harsh and hard should you be as a negotiator with the seller to make sure that the things that can be found are all fixed and stuff like that.
That’s kind of like a separate conversation, but assuming you do that well, you typically, and working with turnkey providers is a significant advantage here because obviously the turnkey provider has an inherent interest. Because they’re the one who renovate the property, that they don’t have to do massive amounts of maintenance, especially when they deal with my community, because we are always insisting on a warranty upon purchase.
And the argument is, okay, you just renovated this property, so I’m assuming, and if you say no, then I’m not dealing with you that you have some pride in your renovation. So that being said, if you have pride in your renovation, that doesn’t mean you are perfect. It could mean that there are certain things that you couldn’t test because only when you live in a house can you really turn everything on and see if everything really works.
But that’s all a given. That’s all fine, but for the first 12 months, this thing is occupied. If something is found, you fix it on your dime. That’s the warranty that I, and, and I know this is only possible, and at least I’ve never seen it possible when you just go out to any property management company. By the way, I wanna add
Mike Zlotnik: one comment on this.
I, I have seen this every time With every turnkey provider you get, one year warranty, they’ll even buy you a, a policy. From a third party warranty company, right? All that is good. And in the first will 12 months experience for most people on these properties are good. The issue happens usually you go a co after a couple of years.
So everything you said is a function of really good review of the what are you buying? Are you buying KET in a bag that’s gonna be good for one year, but two years down the road, issues start showing up. Even the roof will pass. The formal inspection to get financing, but the roof life may not be, you know, as long as you’d like.
So everything you said makes a lot of sense. It just, it, it, it’s a function of very. Good negotiation and ability to, you know, work with these people who will sell you a decent enough property to pass all these inspections and give you the warranty, but then what happens a few years down the road?
Just a, just a, it, it’s, it’s a mental it know point that I’ve seen this. And by the way, folks that I bought my properties with, they were really good cats. They did good stuff for years. And ultimately what’s really interesting, I’ve seen these, turnkey. providers turn into new construction because the older product has been a little bit more difficult to maintain and, and customers kind of, they realize a, a few years of ownership, the, the target cash flows didn’t exactly materialize.
But anyway, continue with your, with your conversation. I just wanted to add one quick comment. No, no. It’s absolutely true. What you said makes a lot of sense.
Dr. Axel Meierhoefer: Yeah, you’re absolutely right. But the po the other point that I wanted to bring in, and I mentioned what I call the pivot point. That is, if you look at it not just as I am buying one house, nobody is building a passive income portfolio with one house.
Right. So the goal is to go on a journey to build a portfolio that ultimately generates a certain amount of cash flow. And so if you look at it that way, yes, with your first house for the first year, you can basically avoid having to do any maintenance money set aside and so forth. But you shouldn’t. I’m with you to say, you should put it aside.
I don’t want to go another reto, but that what we do and we recommend is. You can either put the money into high yield savings accounts or you can do bonds, or what we also blatantly have done is put it into a fractional real estate where you can basically buy tokens. So you basically investing your savings money relatively liquid into something that is also real estate.
So don’t just have it sitting in a savings account at the bank. But the point is, so you, let’s just say you have that first year and you have. Step-by-step started building a property. What happens is you get to a point where you have to ask yourself, how big do I want to let my reserve reserve get like mine, for example, personally for my 10 unit, portfolio, I have 25,000 at any given time in reserve.
And what that does is basically it has accumulated out of these monthly rental payments and it’s sitting there and it’s getting replenished every time there was some sort of a repair thing happening. So that takes this pressure off that you have to take the money out of your normal cash flow that you’re also using to pay the mortgage and insurance and all this other stuff.
And depending on, I don’t want to say luck or not luck, it has something to do also with how well you choose the properties, how well they are inspected and stuff like that. But assuming you’re building a good, solid po portfolio. All our clients have not really had a problem to get themselves to their pivot point.
And somebody says 20,000, 25,000, 30,000. And when you have that, you have a certain level of, security when something bigger comes up. And it covers all things, it covers both the turn, the, the vacancy turn, it covers the normal, regular, maintenance and it also covers the CapEx. But that’s something that we are building on the side.
Now the other thing, and you kind of already already mentioned it. It used to be that the difference between a freshly renovated property, if you really re renovated it well, and a brand new property, was a huge difference in in price. And over the years what has happened is, in my opinion, in my observation, that these prices have come closer together.
Partially because we had this massive run runup after COVID where prices literally e exploded for everything that was out there. So yes, you mentioned there is the pivot. I’m not so sure that the pivot is because of the maintenance issues. or if it is just a matter of realizing it is more convenient for a turnkey provider.
But what we are doing now, literally, and you kind of took it all the words outta my mouth, in a sense, we are looking more and more to buy into what’s called BTR projects built to rent projects, and I have multiple, I have one for, I give you a few quick examples for your audience. We have one right now for relatively small houses, kind of starter homes.
three bedroom, two bath. They’re not mansions obviously in Oklahoma. 445,000. Brand new build in a community build. We have some between two 60 and three 50 in Alabama, brand new, and then we have like between three 50 and six 50 in Dallas, Texas. And each and every one of those examples is where a developer works with a turnkey provider to develop like a community of 200, 300, 400 houses, but not all at once.
They start with the first 50 and then the next 50 and the next 50, and you can acquire them as an investor individually. And they’re basically the same like turnkey provider properties with the difference that you have all the. New build benefits of insurance and warranties and the fact that the stuff is literally brand new.
And back to your point that you said earlier, if somebody says, okay, I really have a high tax load, like small business owner, or you know, somebody who has a really good income somewhere along the coast or stuff like that. So I wanna significantly lower the tax load on a brand new BTR property. It’s obviously much easier to do the segregation, right?
Because you have literally the bills for everything, what every little thing costs. And because they’re building 300 of three different kinds of four different kinds, they have the bill of goods for everything. So doing a study like that on A BTR project is much, much easier. That doesn’t mean that the assessor is not going to go through and check everything and if it’s really there, but you also know what it really costs, so that those are things that favor more and more build to rent properties.
But I also have to say, I mean, I’ve been doing this for a while. I know you have been doing it for a while. It was. Few and far between that you could say who is actually doing 150 unit brand new building for the purpose of renting it out to invest and, and selling it to investors. It may have existed, but I didn’t know about it until like probably four or five years ago for the first time.
Mike Zlotnik: Yeah, this is very cool. I appreciate you actually came to the same conclusions that I’ve seen many other people come. They, they’ve gravitated to B two R type of newer product, for the reasons of the maintenance on all the product. And, yeah, it’s, it’s, it’s, it’s kind of, it’s an evolution. I mean, we’ve seen this everywhere.
and, yeah, if
Dr. Axel Meierhoefer: I, Mike, if I may, there’s one other component, and this applies to me personally because I am one of those boomers that everybody in the media is talking about. And so when I’m thinking about legacy and turning stuff over at some point to my daughter and maybe to my grandson, it’s obviously makes much more sense.
Let’s say I have another 20 years. And I buy a BTR property today, that’s then a 20-year-old house. If I compare that to the early, turnkey properties that I bought, they were built in like 1960 or maybe 1970, right? In 20 years from now, that would be like 45, so that it’s like a 90-year-old house. That I would basically turn over to to her.
So that’s another consideration. And you mentioned in the beginning there is the 10 31 exchange that is still there, still alive and kicking even though it’s been called that many, many times. So, you know, as long as that’s there, that’s actually my own plan for my own portfolio, step by step to convert my existing turnkey properties to BTR properties.
Just so that I can ultimately in the future, turn over a reasonably fresh portfolio to my, to my family.
Mike Zlotnik: Yeah. I appreciate your sharing. It’s, it was a great discussion, refresher. I haven’t had a guest like this in a while on a podcast, years ago I had absolute experts on this, and then now it’s just a good refresher on turnkeys, turn into more of a B two R newer product, and you’ve got the right approach.
I have to say that. I mean, you, you’ve got this systems and approach. It kind of like a good, healthy, approach. So how would folks reach out to you? What’s the best way to, you know, learn from you and or be part of your community? What’s the easiest way to reach out?
Dr. Axel Meierhoefer: Well, I mentioned earlier that I like to keep what we are doing relatively boutique.
You know, that doesn’t mean that, that I don’t like new clients. So the best way is to just go to ideal wealth grower.com. And if you get to the website, at the top right hand corner of the homepage, there’s a little button that says Discovery call. If you click on that, you get directly to my calendar, your booker time, and that’s a little bit of this kinda close knit community.
I love to get to know people who are interested in what you and I spoke about Mike, and if we then find out we like each other, we like the approach, we, we have. You know, the goals and, and maybe evaluate a little bit, you know, going through that grower cycle the first time. Where are you and where do you want to go?
And if I’m the right person to help you, we figure this out and otherwise we just got to know each other. So there is no real signup thing or anything. For me. The first thing is let’s get to know each other. Then we go see where we going.
Mike Zlotnik: Thank you for sharing. Appreciate your wisdom. Thank you for coming on a podcast and, good luck in your journey.
It, it, it’s, it’s a great journey of, you know, pilot to passive real estate invest. A lot of people have gone through this. It’s, it’s just a, it’s, and then you’re helping others. So it’s great and thank you for your service when, when you were flying the friendly skies or whatever it’s called, or unfriendly skies.
Dr. Axel Meierhoefer: Yeah, thank you for that. Yeah, over Bosnia, they weren’t so friendly, but otherwise they were pretty good.
Mike Zlotnik: Thank you.
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