From Ranching to 400 Units: Joe Rinderknecht’s Multifamily Journey

Joe Rinderknecht (00:00)

So we got like a $500,000 check, which is pretty sweet. Yeah, on a fourplex, it’s pretty sweet. And a cashflow, amazingly, right, as well. And then from there, got into small multifamily, did a bunch of fix and flips, wholesale, you know, all the different kind of exit strategies with multifamily. And then in about 2018, 2019, I was getting ready start a property management company.

Dylan Silver (00:03)

Pretty sweet.

folks, welcome back to the show. Today’s guest is a multifamily and commercial investor based in Rexburg, Idaho. Please welcome Joe Rinderknecht. Joe, welcome to the show.

Joe Rinderknecht (02:09)

Thank you, Dylan. Excited to be here and add some value to the listeners. So, appreciate you putting this on.

Dylan Silver (02:15)

It’s great to have you here, Joe. I always like to start off at the top of the show by asking folks how they got into real estate.

Joe Rinderknecht (02:23)

Yeah, so I’ll do it pretty quick. So for those of you who can see me, I’m wearing a cowboy hat. I grew up farming and ranching. It’s funny, just before we got on, Dylan and I were talking about how German my name is. And my name actually means keeper of the herd in German. So pretty much since the beginning of time, we’ve been ranchers. And, you know, I grew up on the ranch and…

I’m the oldest of my siblings and oldest of my cousins and I just realized ranching, I didn’t want to fall necessarily in all my grandparents shoes but wanted to go out and make a name for myself. And so I opted out of the ranching. Still very involved in horses and what not. Still love it because it’s built who I am, right? Lots of standards and ethics and…

values that we use in our company today and My dad is a he actually got out of ranching for a while too into construction And so that was kind of the next thing I did with him is I learned you know went and I was a laborer right I did concrete and framing and trimming and all the stuff right so I’ve got pretty good, you know overview of the different trades within construction and

See, it was about 2013, okay? I’ll kind of give you an idea of who I was. So, where I was the oldest, and I don’t know if some of you that are the oldest listening to this, but like I was very much a yes man, and pretty much did what everybody else like wanted me to do. I was a people pleaser, right? As a mediator of my family and my siblings essentially.

And I was going to school to be an X-ray tech at that time because that’s what my parents wanted me to do because it’s a safe, secure job and oh wait, it just happened and they had lost a lot on a couple real estate deals that they had done so they wanted something better for me. But then I was in a life-changing incident, I was in a car accident where I lost my brother and my grandma and that’s when I decided to go all in.

that second chance at life if you will, me that, you know, gonna go all in on what I wanted to do which was entrepreneurship and real estate and so 2014, 2015 I joined like an entrepreneurship club up at Utah State in Logan, Utah and I actually founded the real estate club there because there wasn’t any like real estate going on up there and I wanted to learn it and one of my professors

Dylan Silver (04:33)

Yeah.

Joe Rinderknecht (04:58)

professors owned a bunch of apartments in Texas. And so I pretty much just got in at the ground level, right? Started the real estate investment association. And then there was actually one of our resident mentors of the entrepreneurship program who he was a fixing flipper, you know, so I went and did some bird dogging for him, right? Just to learn the business. But my journey really started, I bought a duplex in 2016.

My wife and I house hacked that for five years We used equity from that duplex to buy a fourplex that I owned for seven years and we sold it last year We bought that subject to the mortgage. So it’s probably still my best deal to date Yeah, I mean we bought it for 250 The seller walked away because he was gonna lose it to a foreclosure and we sold it for 740 last year

Dylan Silver (05:39)

Wow.

Joe Rinderknecht (06:39)

So we got like a $500,000 check, which is pretty sweet. Yeah, on a fourplex, it’s pretty sweet. And a cashflow, amazingly, right, as well. And then from there, got into small multifamily, did a bunch of fix and flips, wholesale, you know, all the different kind of exit strategies with multifamily. And then in about 2018, 2019, I was getting ready start a property management

Dylan Silver (06:43)

Pretty sweet.

Joe Rinderknecht (07:04)

Decided that it really wasn’t what I wanted to do residential. So I started going after bigger stuff I just like gave myself permission to like hey just go for it right and 2018-2019 I was actually Is funny because I was driving semi but I learned that Like what you could do with commercial multifamily was significantly more than what you could do with residential I guess far as like other income

Because I had got a budget on a 44 unit I was under contract on and the other income was like, it was, oh what was it? was like 145,000 a year in other income only, right? And it just blew my mind. So for the next three years, I kind of, I went like the apprenticeship route, right? That’s really helped me cut my teeth on commercial multifamily.

is I went to work for a property management company, doing, managing an 80 unit section 42 apartment complex. So any of you that know what Lytec is or low income housing, right? I only got paid like 20 grand a year and this property was like literally on fire. High date delinquency, high vacancy, crime, drugs, you know, the whole thing, you know. You know, so I was there for eight months and we re-stabilized eight in eight months and

Dylan Silver (08:15)

Yeah.

Joe Rinderknecht (08:20)

Then after that, I went and worked for a couple operators around the country, pretty much learning the full deal cycle or life cycle of a deal from finding deals to cold calling to asset management to Dispo, right? The whole life cycle of a deal. And then I bought in 21 is when I really went in, went all in on myself.

bought you know my first bigger property 24 plex that we were going to turn into a 32 unit and You know kind of fast forward today because I’ve really drugged that out Right now we’re closing on a 292 unit in San Marcos, Texas and In the last 12 months so by the end of September my partner and I will have bought four deals We bought a 54 in Missoula, Montana last September

a 48 unit in Boise, Idaho two months ago and then a 25 unit in Missoula, Montana about a month ago and then this 292 units. So by the end of September we’ll be, you know, low 400 units in a year. So, which has been a really good hockey. yeah.

Dylan Silver (09:30)

I used to work in San Antonio. I’m familiar

with that area. Yeah, it’s an interesting area because it’s really in that corridor between San Antonio and Austin. And you’ve got, I believe it’s Texas State right there, if I’m not mistaken. Big college there.

Joe Rinderknecht (09:45)

It is, yep, and we’re right next to it.

Dylan Silver (10:24)

And what’s interesting, your story is inspiring and really sounds like you’ve hit stride in a big, big way in the last year. I wanna dive into that. Let’s get a little bit granular. Maybe give away some of the gold, but not all of the gold here, Joe. When you say four deals in a year, especially with the background that you’ve had, it wasn’t like you were doing commercial deals for a decade. This is…

been something that you’ve ramped up really over the last several years, with primarily the last 12 months. What has been the perspective and then also the method that you’ve used to find these deals?

Joe Rinderknecht (10:59)

Yeah.

Yeah, so I would say I’ve always been very I guess focused on multifamily Right, so I started my multifamily journey about a decade ago roughly Yeah, I’ve been all in on multifamily like pursuing it Really? I mean 21 I didn’t buy a deal though from 21 to Because like that deal started going sideways. I had put a lot more time into that 24 plex. So

Really, yeah, 2024 is when I started actually buying bigger apartment complexes. But what you can see is that the entire 10-year journey has led me to being able to take down a 292 unit today, right? Like everything that I did. And so I think there’s so many people, we talked about this a little bit, are, and I’ve been in these shoes too, where it’s like, I’m ready to be done with this, this sucks, it’s not working.

I’m not getting any deal flow, right? I just stuck with it. I’m a very good long-term, I guess, visionary, if you will, and even the short-term pain, that long-term pleasure that I still in my mind has helped me to get to where I am today and to overcome all of the slumps and the bumps and the stuff that sucks.

in the business. I would just say like being consistent having that overall goal and just the stick-to-it-iveness, if you will.

Dylan Silver (12:29)

Yeah.

Let’s dive into one of these deals. Let’s take the most recent deal in San Marcos. How did you find that deal? How did you and your partner find that deal?

Joe Rinderknecht (12:44)

Yeah, so that deal in San Marcos, my business partner, he was a small general partner on another deal in San Antonio that this guy owned. And to make a really long story short, this operator is going to prison for securities fraud and he embezzled funds, you know the works. And so…

When the FBI started sniffing around, this guy started fire selling pretty much his entire portfolio. He had like 12 assets, right? And so my business partner being a small GP on this other deal, I had no idea what was going on, but threatened to sue him essentially if he didn’t like give the GP a chance to like do a recap or capital call.

But when he sent that out, one of the sponsor’s biggest investors who’s invested like 18 million in the last nine years came and said, hey, Levi, you should look at this deal. It’s a much better deal. And so that’s essentially how we were able to get this deal that we have now. And we’re getting it for a couple million less than what the buyer bought it for in 2023.

And we really mitigated a lot of like risk on that deal. So to bring it back down to its, you know, core is like if you’d asked me a couple years ago if I’d have been ready to take on a turn 92 unit, I’d have probably said, sure, let’s try. But, you know, with the equity raise and the headache of assuming a loan, it’s been a tough deal for sure. But it’s

it’s been a really, it’ll be a really good deal. And I think a lot of it came from the relationships, you know, that we’ve had through the years. think that’s another big piece here because I’ve got, yeah.

Dylan Silver (15:12)

To fund this deal, are you syndicating? Are you taking on additional capital? Are you taking out, you have capital partners or lenders that you can use to close on these deals?

Joe Rinderknecht (15:24)

Yeah, so we’re assuming the existing loan, we’re fixing, we’re getting a little bit better terms than the seller has, we negotiated with the bank, but we are doing a syndication and we’re raising only about $6 million. Actually, our total raise is $6 million. And the really cool thing about this deal that makes me like really proud as far as like why, you know, you don’t look a decade back, right? Again, is

I’ve got one investor that’s investing over a million with me on this deal that I cold called them to buy a 20plex that they owned when I was getting started in the business eight, nine years ago. My wife and I were talking about that this morning because I was on the phone with the investor and he’s like, know, it’s really cool how…

to watch progression from when you very first started of trying to buy this 20plex from us to now we’re investing with you on this 292 unit. You know, and that was a relationship that I started, you know, eight years ago. And then I’ve got an investor who’s bringing in $2 million that I started the relationship with them as like seven, six, seven years ago, right? And, you know, this is the first deal both of them have done with me and they’re bringing, you know.

Dylan Silver (16:22)

Right.

Joe Rinderknecht (16:38)

seven figure checks.

Dylan Silver (16:40)

Incredible, you know, it’s one of these things where if you take out any piece of the the time continuum you might not have the the same end result but along the way it doesn’t necessarily point to the end I’ve certainly experienced that it’s like wow this one person this one connection this one deal didn’t seem like it was gonna be you know life-changing at the time but then fast forward several years later and it’s

you know, the effects have compounded. We are coming up on time here though, Joe. Where can folks go if maybe they have a deal that they’d like your feedback on or if they’d like to get in contact with you?

Joe Rinderknecht (17:19)

Yeah, yeah, so my email is joe@cowboycapital.us. That’s our email or our website, cowboycapital.us. I’m on Instagram, LinkedIn, so you can hit me up in either of those as well.

Dylan Silver (17:33)

Joe, thank you so much for coming on the show here today.

Joe Rinderknecht (17:36)

Yeah, thank you, Dylan. I appreciate it.