Unlock Generational Wealth: Real Estate Mastermind in Wisconsin

Michael Stansbury (00:25.922)
Hello everybody, welcome to the Real Estate Pros podcast. I’m Mike Stansbury, special guest all the way from Wisconsin. Derek Dombeck, how are you, sir?

Derek Dombeck (00:34.845)
so tickle to be here, Mike. Tickle to be here.

Michael Stansbury (00:37.486)
tickled. That’s excellent. Well, Derek, got to pay the bills real quick. I want to let everybody know about Investor Fuel. They are the sponsors of the Real Estate Pros podcast at Investor Fuel. We help real estate investors, service providers and real estate entrepreneurs, 2 to 5X their businesses to allow them to build the businesses they’ve always wanted and allow them to live the lives they’ve always dreamed of. Derek, you’re in Wisconsin. Let me ask you, are you a Chicago Bears fan?

Derek Dombeck (01:04.822)
Yeah, every time they lose, I’m a huge fan of theirs. Definitely.

Michael Stansbury (01:07.502)
That was one of the best things about the draft this year, how they played the Bears. It’s funny. I’m a Cardinal fan, so I have no love for any kind of Chicago sports. But Derek, you’re in real estate in Wisconsin. Let me ask you this. When did the yellow brick road start for you in real estate? Were you doing something beforehand and you were like, hey, I’m enticed by this. How did it all happen?

Derek Dombeck (01:33.368)
The yellow brick road had some potholes along the way, but it started back in 2003 and I was in my early 20s early to mid 20s Started like everybody else does bought a couple fixer uppers and the difference is I don’t really do anything halfway so I bought two fixer uppers and I started two new construction projects within the first 60 days in business and You know, we we rode the boom up until 2007 built up a

pretty nice little portfolio. And then we, hit the major potholes in the golden or the yellow brick road, should say, got our butts handed to us and quickly learned all the mistakes that we made. And we thought we were God’s gift to real estate investors when we really didn’t know nothing. And so that was the turning point. That was either learn alternative methods to buy and control real estate. Cause my banking relationships were in the toilet.

Michael Stansbury (02:09.975)
Yep, yep.

Derek Dombeck (02:33.784)
My credit was in the toilet and ultimately, I eventually after several years, I did get forced into bankruptcy. So, so from that point forward, which is about 2010, 2011, um, I’ve never used institutional financing for a real estate investment since I raised private capital. do people, I do business with real people and that’s my preference. Never say never. I may use an institution here and there, but it’s not my goal.

Michael Stansbury (03:03.118)
I bet the bank likes you now. bet they would be knocking down your door more than likely. One of the things I always tell people, your journey, the potholes are necessary, aren’t they? You’ve got to be humbled in this business. The first time I ever bought and flipped a house, I lost $10,000 and I had to turn to my wife and say, hey, we’re going do this again. It was either that or what. Go back to

Derek Dombeck (03:07.969)
Yeah.

Michael Stansbury (03:32.686)
some job that I probably would have hated at that time. 2011, 2012, so have you been consistently doing the same thing since then or kind of what else have you got into as far as real estate is concerned?

Derek Dombeck (03:49.942)
Yeah, I would say consistency is not a word that goes synonymous with me. shiny object syndrome for a long time. Definitely. But no, I I’ve always primarily been in residential real estate of one way, shape or form. We’ve, we’ve done some commercial projects. I’ve been involved in a couple of mineral quarries. one I still own and, and some other stuff, but we, I took on a business partner in 2012 ish.

And we were raising private money for our own transactions. And we got to a point where we had more money than deals, but we had now started building a network. That was my first mistake in the first five, six years in business. had no network. obviously now there’s the internet and ways that people can plug in remotely all the time. But back then that wasn’t really a thing. And.

You know, now with masterminds and all that stuff, it’s awesome. We have people to turn to and that’s, that’s key. Right. But at that point we were finally starting to grow a network and we started just dabbling in the lending business and that grew organically over time. So we had a coaching program. were teaching people how to flip properties, but we were also bringing the funding. So we’d make a little spread.

And what in reality, what we were doing was we were teaching our future future borrowers, which was awesome. And we kind of figured out, yeah, we like the lending business more than we like the coaching newbies business. So, um, I, I exited that my business partner bought me out of it about a year and a half ago, but you know, through 2020, 21, 22, 23, were doing 20 to 25 loans a month, which in our market is about three to three and half million dollars.

so why is that important? Well, I did the valuations for every loan. So, so I’m looking and we were lending statewide in the state of Wisconsin. So we would probably take in 60 applications on average to close 25 loans in a month. But I’m vetting 60 deals, doing the comps, looking over everything every month across the entire state. So you want to keep your finger on the pulse of the market.

Michael Stansbury (05:47.168)
Right?

Derek Dombeck (06:10.252)
That’s a great way to do it. You don’t have to be a lender to do it, but you know, watching average days on market and seeing all the little sub pockets of, of investor activity versus homeowner activity. And, and then along the way we, started our own mastermind. I, I run what’s called the generations of wealth. have a podcast called the generations of wealth and we started putting on.

A networking event on a cruise ship did that for the last few years and yeah, shiny objects, but these things all presented themselves and we, we jumped on them.

Michael Stansbury (06:50.382)
Well, it sounds like there’s a couple different shiny objects. There’s the shiny objects that get you maybe off into a different industry, maybe off kilter a little bit. But it seems like every time you’re on the highway and you just took another turn maybe to maybe a better highway in some of these instances where you just described, I had a coaching program and it turned out that I really enjoyed and was more profitable with the lending side.

and now you’re doing the mastermind. tell me about generations of wealth. I can understand it just by the name of it, but what does it mean to you? What does it mean to the people that are in that mastermind? How is it helping them?

Derek Dombeck (07:30.294)
Yeah. So the generations of wealth, that platform, it’s, it’s really about not just money, right? You want to have generational wealth in health and relationship and finances and just all encompassing. And all of that comes down to having a clear vision. So my tagline is live your vision, love your life. And that’s something I was introduced to about, I don’t know, probably 10 years ago.

Cause I was like every other entrepreneur out there that was working seven days a week thinking, well, someday I’ll get to enjoy all this, but you know, someday doesn’t always come. And so what I do, like as far as the podcast, I interview people from all over the country and in mostly real estate, but I bring in other genres as well. And, it’s incredible way to, to, you know, have a different perspective. and then.

Our masterminds themselves, I mean, they’re, they’re peer to peer, meaning it’s small group. We go and, rent a really nice house, usually somewhere warm and tropical and, and. Well, Wisconsin in July, maybe on a Tuesday. but it’s, it’s peer to peer, right? Like everybody’s got their, their time in the hot seat and, and it can be health, wealth, business.

Michael Stansbury (08:41.068)
not Wisconsin.

Yeah, yeah, gotcha.

Michael Stansbury (08:49.742)
Right.

Derek Dombeck (08:55.288)
relationship doesn’t matter and, everybody’s pouring into them. And, the secret sauce is that we’re all staying together for several days. So there, there’s no downtime. Like, like when you go to a hotel mastermind, which I was just at one three days ago and it’s awesome, but you know, people can kind of escape, right? You have dinner together, but then everybody can escape. And when you’re under the same roof for a few days, it, it, yeah, it’s it’s.

Michael Stansbury (09:15.597)
Right?

Derek Dombeck (09:24.458)
It’s very, very exciting and interesting to watch the dynamics and the little conversations going on all over the place.

Michael Stansbury (09:32.066)
It’s interesting, I have that same type of experience whenever I’m at a mastermind is I get a lot out of the program, but I get more out of the relationships afterward. And so there’s always a smaller group of people if it’s in a large mastermind. It seems like yours is, hey, we start.

Derek Dombeck (09:42.178)
Mm-hmm.

Michael Stansbury (09:53.514)
small peer to peer and that connective tissue of those relationships because we’re all in the same place is fortified. That’s what it sounds like to me. So how long have you been doing the mastermind and is it local too? Is it national or is it people from all over or just Wisconsin?

Derek Dombeck (10:14.582)
No, it’s national. In fact, I don’t want people from my backyard because they’re not going to be open and honest with each other and vulnerable with each other. So we’ve been doing it for about seven years and started off just as a group of friends, honestly. That’s how the original group started. And then we had people asking, how could they join? And the answer was, you can’t. It’s invitation only.

Michael Stansbury (10:23.244)
Right?

Michael Stansbury (10:33.592)
Right?

Derek Dombeck (10:43.032)
It’s, not really designed to be some big money making venture. It’s, it’s designed to grow solid relationships and, and network with incredible people. but in, in, answer your question directly, no, I, I, I don’t feel a local mastermind gives you the same results. Not that that’s not important, right? RIA meetings and having, certainly there, but

Michael Stansbury (11:08.973)
Right.

Derek Dombeck (11:13.206)
the depth that we go is you’re all in. mean, if you’re holding back, you’re only hurting yourself. And that just doesn’t work real well when you’re dealing with your neighbors.

Michael Stansbury (11:25.24)
So you’re coaching and mentoring people in those masterminds. Is there a coach or mentor that has had a big effect on how you operate your life or what does that look like? Who are the big influences in Derek’s life?

Derek Dombeck (11:37.804)
You know, I’ve had a lot of them over the years, specifically on the education side and the creative deal structuring, which I love so much. Peter Fortunato, Dykes Bodford, Bill Cook, these guys are all part of my network. Dykes passed away this last year. If anybody knows him, he was an incredible man. and, and that’s actually part of how we came up with the name generations of wealth because

Michael Stansbury (11:56.012)
Right?

Derek Dombeck (12:05.248)
Those three guys used to put on a cruise called the captains of the deal cruise. And when they decided to, to no longer host it, they voluntarily told me and my wife that we were taking it over. So it was one generation handing it to the next generation. And that was part of how we came up with the name. So, so they have been really, Bill, you know, if anybody’s listening to us that knows Bill cook,

He’s kind of a pain in my ass and great guy. And I’ve learned a lot from him, but he’s the guy that, you know, we’ll call each other weekly or semi-weekly and just give each other a lot of trash talk. so if you ever get a chance to run into Bill Cook, you say you heard Derek Dombak on, on this podcast and said that, you know, Bill Cook is, and you fill in the blank with whatever you want and I’ll go with it.

Michael Stansbury (12:46.648)
Right.

Michael Stansbury (12:50.434)
Right?

Michael Stansbury (13:01.486)
Okay, yeah, okay, so I’ve got permission there to do that. I will do that to Bill when I see him. I may run into him. All those guys I know, they’re OG guys and very, very well known and just helped a lot of people in the real estate space and we’re the guys that started marketing and educating people back in the day. So, Derek, now that you’ve, and I’m curious, so you’ve sold out of the lending business.

What are we doing, are we active now in real estate, are we still doing creative deals or ha, okay? Tell me about a fun, I always like people choose your own adventure. can tell me about, the latest deal I’ve done or man, this was the wildest deal I’ve done.

Derek Dombeck (13:36.559)
yeah, 100%.

Derek Dombeck (13:45.322)
Okay. I’m going to do one. I’m going to try and do it as fast as I can because I know we only have so much time, but, I just resold this property two days ago. So that’s, that’s the spoiler alert on the backend, but, day after Thanksgiving, I, met with a guy who was losing his home to foreclosure 10 days later. Okay. I met with him at his home and this was a 25 year old house.

four bedroom, three bath, full walkout basement, 5,000 square feet. And it is full on hoarder, but it’s hoarder with papers, books, boxes, like clean stuff, nothing dirty. So he was, he’s from Germany. He was brought to the university of Wisconsin, Madison as a scientific researcher. And he learned after two or three years that

University of Madison really wasn’t all that interested in supporting his thesis, which was on how to stop the inevitable nuclear Armageddon that is going to wipe out the world, to which he has a solution. And so, he left the university, convinced his wife to support them financially for a couple years so he could do his research from home. After a couple years, she left and went back to Germany, gave up her green card, said, I’ve had enough of this. And

So even 10 days before Sheriff’s sale, his primary focus was finishing his research because he’s trying to get letters out to the 10 nuclear super king or the 10 nuclear superpowers, the UN, the Pope, right? And I even said to him in that two hours timeframe, we were together. We talked about the house for 10 minutes. That was it. Everything else was his research. And he backs it all up with biblical passages.

but only the ones that support his narrative.

Michael Stansbury (15:37.95)
Alright. Okay.

Derek Dombeck (15:39.64)
So I said, this was a Friday night. I was leaving to host an event in Mexico on Monday morning. And I said to him, I said, I need an answer from you if we’re going to work together to stop this foreclosure. Cause he owed $397,000 on a 700 plus thousand dollar house. We could pay it off. We could reinstate it with about 65 grand, you know, bring the loan current. Like we had, we had things we could do. And I said, I need to know by Sunday night.

Michael Stansbury (15:56.686)
Mm.

Derek Dombeck (16:08.344)
because I have to get my title company going on this immediately. And I’m talking real fast because this is a long story. So, nuclear, yeah.

Michael Stansbury (16:14.914)
No, go ahead. We’re good. When you said this guy’s got the cure for nuclear disarmament, I’m like, okay, yes, bring it.

Derek Dombeck (16:23.86)
Absolutely. I’m telling you brother. So this is all still in the first night, right? That I’m in his house. okay. So I said, I need an answer by Sunday night. And as I’m walking out the front door, he said, well, Sunday night, does that mean midnight? And I said, his name is Lawrence. said, Lawrence, you have until Sunday night, 9pm central standard time to give me an answer. He texted me at 8 53 PM central standard time, Sunday night with this.

bullshit list of demands. And I said, good luck. I’m out. And I went to Mexico. Two days later, I get an email addressed to me and three other people, one of which I know the other two I don’t, that was wondering if we could all collaborate to save his house. Cause he’s hoping somebody would buy it and let him stay there. Right? This is his research lab. And by the way, everything is God’s will. Now I’m a Christian man. I’m not judging anybody or any way or anything.

Michael Stansbury (17:16.995)
Right?

Derek Dombeck (17:22.872)
But you know, I had made the comment to him cause he said, I really need to hear from God as to what I should do. If it’s God’s will that this, this house has taken from me, that’s, that’s the way it’s going to be. I’ll get my Prius and I’ll drive away from all this research. And I said to him, said, well, what do think me being here? Is that a sign from God? He said, well, you could be my salvation or you could be my last temptation. I’m not sure yet. Okay. So that’s when I was still at his house. So Tuesday, he sends us email. He’s, he wants.

You know, four of us to collaborate with five business days left to see if we could save his house. We put that email into a word doc to see how long it was. It was 32 pages long. everything he does is he’s, he’s 80 Ds off his meds. It’s crazy long. Right. So I didn’t even respond. However, I was the only person that had been in that house that could go to the sheriff’s sale and know what I was bidding on. So I went to the sheriff’s sale the following Tuesday.

Um, I was going to bid up to $510,000. I had 51,000 in my pocket and it went for 535. And he was at the sheriff sale. There’s about 30 people in the room. He asked the lieutenant that was conducting a sale, if he could address the room before the sale to talk about his research. And the lieutenant told him, uh, to kick rocks. Can’t have you influencing the sale. So he thought I was there to buy the house for him.

I didn’t have a contract with him. was there to buy the house for myself, but I didn’t get it. Right. So I sat on it for about three days and it was bothering me. So I called them up. said, you know, in Wisconsin, we have until the confirmation of sale hearing, which is usually 10 to 14 days later, where the homeowner can still pay off their house. It has to be paid in full, but they can still do it and save their house. So Lawrence and I went under contract and I bought the house for $500,000.

Michael Stansbury (19:13.902)
you

Derek Dombeck (19:21.296)
And he was only getting about $20,000 of proceeds at closing and carried back a note for the remainder balance of his proceeds, which was $71,000 at 0 % interest until I resell the house. Okay. Why did I do that? Because I also gave him until February 28th to finish his research, move out, all that stuff. And.

I also gave him an option to buy the house back for me until February 28th for an upsell of course, because he really felt like once the nuclear kings got his information, they would shower him with money for his research and he could buy his house back and save it. And of course I was all for that. If you can do that and save all of us, perfect. I love that.

Michael Stansbury (20:14.872)
Well let me interrupt, I want to just because I’m curious, did he have, so he had the bio, but did he have the connections to get the information to those people? alright. Proceed sir.

Derek Dombeck (20:27.35)
Yeah. Where do you get the, where do you get Putin’s address? Where do you get the Pope’s address? I don’t know. Do you Google that stuff? I’m not sure. And by the way, even before we closed, he was down to zero money. I mean, I had to pay his cell phone bill and his internet bill so he could still communicate with me. You know, so he’s out of money. He’s living in a three quarter million dollar house. And so I’m giving him till February 28th. Now we’ll kind of fast forward through January. We get into late February.

Michael Stansbury (20:31.126)
I know.

I don’t know.

Michael Stansbury (20:40.75)
Okay.

Derek Dombeck (20:57.532)
And it’s coming up on the day and Lawrence hasn’t packed a single thing. He’s not made any plan. He’s going to live in his Prius. Like he’s adamant about that because it’s in revelations, something, something, something about living on, you know, a soldier’s rations. And he’s literally makes his own bread and lives on bread and monster energy. Seriously. So we got to February 27th. I was there because this house is 130 miles from where I live. And so I’m down there.

And I’m like, okay, Lawrence, you got till midnight, Friday night. And he’s like, I can’t stop. I’m just about done with these letters. I’m on a marathon. I’ve got to get this done. It’s God’s will. It’s God’s will. Right. So I said, all right, I’m ordering the dumpsters. And, um, February 28th, five o’clock that night, he offered me the full $71,000 from that note that I owe him to give him a 30 day extension. And I said, no.

Because I would just be enabling him and he would then be broke and homeless. Right? But I did tell him, I said, listen, I’m gone for a week. I’m hosting an event in Dominican Republic and I’ll give you that seven days to move your stuff, but you can’t slow down progress. So we have to get enough moved out so my painters can start. Cause this is literally a paint and carpet. That’s all this thing is. Right? I mean, get all of his stuff out.

Michael Stansbury (22:02.883)
Right.

Michael Stansbury (22:24.108)
All of it, wow.

Derek Dombeck (22:27.084)
which is probably like four 40 yard dumpsters. But now if he’s gonna go rent a truck and get storage units, the more he moves, the less I got to pay to get rid of, right? Right. So I had somebody open the door in the morning, lock it up at night, cause I’m not gonna let him stay there, cause then I’d have to evict him if he squatted. Well, in that seven days, I’m telling you Mike, he didn’t hardly move anything.

Michael Stansbury (22:27.448)
Mm-hmm.

Yep.

Michael Stansbury (22:38.838)
Right, give them that week. yeah.

Derek Dombeck (22:53.942)
because he’s so ADD, he picks up a piece of paper, he’s lost for 15 minutes. And, I came back from Dominican Republic and I said, well, you tried great time for you to get out of the way. And, he said, Derek, said, I really feel like I’m obligated to preserve this research material. Is there any way that, that you will give me more time? And I said, as long as you’re not holding up my project. And at this point,

All he really had was the basement, which was full, right? But there was a walkout, so he didn’t have to come through the main house. He could walk out the backyard and carry stuff around. So I said, what do you offer me? He said, I’ll give you $2,000 a day off what you owe me to let me keep going. So I drafted up a modification of our note. He signed it and 16 days it took him to move that stuff out.

So $32,000 off the 71 I owed him. My total rehab cost, Mike, was 26 grand. Okay. So even paying interest on my private money. So we net, I just had the paper in front of me, $134,023 on the sale of that property two days ago.

Michael Stansbury (24:17.036)
Well, I tell you what, you’re gonna, that’s probably top five that I’ve ever heard. I’ve got my own. Yeah, no, absolutely, let me get out of your way.

Derek Dombeck (24:22.264)
Oh, wait, can I finish it up real quick, Mike?

I got a phone call yesterday that he scared the crap out of the new owner who’s a single woman because he went to see if there’s any mail in the mailbox and then knocked on the door, introduced himself and started talking to her about his research. And this is a 57 year old really scrawny German guy living in his car. She, yeah. So I had to have a little conversation with Lawrence yesterday, but.

Okay, I’ll quit now. That’s…

Michael Stansbury (24:57.036)
No, that is, you know, and so obviously we don’t have the answer to nuclear disarmament. We don’t know what that is. We don’t know what the solution is because he doesn’t know it either. That’s an all-timer. That is an all-timer. So still doing creative deals, still in the game and still helping people, coaching people.

Derek, where can people find out more about you, your mastermind and what you’re doing out here? You look like you’re in an RV right now. you traveling? What are we doing?

Derek Dombeck (25:29.302)
Yeah, yeah. I spent a little time RVing. normally I’m in my studio and I got my backdrop and all my logos and everything else. But, I gotta tell you the platform you use wouldn’t even let me blur my background. So I just, you know, it is what it is. No, it’s cool. It’s cool. But, you know, there’s couples really simple ways, Derek Donbeck.com that that’ll take you and link you up to all kinds of different stuff.

Michael Stansbury (25:42.57)
Sorry about that. Hey, it looks great. I’m excited about it.

Derek Dombeck (25:56.98)
The podcast is called the generations of wealth and it’s the generations of wealth.com, but that’s also found on Spotify and you know, all the other common platforms for podcasts. And yeah, I mean, we’re just really, we love networking. love giving back. If, there’s any listeners listening to this and you’ve got some kind of a possible creative deal. and if you give me 30 seconds, I’ll define what I consider creative.

Buying subject two is not creative. Using leases, using options, seller finance, land contracts, none of that is creative. Creative is how you use all those tools together to solve somebody’s problem. So I bought a house one time that was sub two, she was behind two payments, she needed cash at closing, but she carried back a second mortgage for a remainder of the purchase price. Then I brought in a financial friend for the cash I needed, gave him a…

a participating note in his IRA, then lease option, the property to the end users. Two years later, they exercise their option, bought the house, paid back the, the, participating note, paid off the seller, carry back, paid off the sub two note, walked away with the profit. That’s what I consider creative deal structuring. So.

Michael Stansbury (27:13.622)
Yes, yeah and that was excellent and I love the way that you creatively dealt with your seller of the three quarter of a million dollar house. Well Derek, thanks for being part of the Real Estate Pros podcast. Guys, go check them out. We’ll put that information in the show notes. Thanks for watching the Real Estate Pros podcast. We’ll see you next time.

Awesome.