The Power of Adaptability: Lessons from a Former Commercial Diver

Dylan Silver (01:32)
Hey folks, welcome back to the show. I’m your host, Dylan Silver. And today on the show I have Todd Wetzelberger who brings a vast experience, construction experience spanning decades as well as self-described visionary ⁓ with his approach to business. Todd, welcome to the show.

Todd Wetzelberger (01:54)
Thank you.

Dylan Silver (01:56)
I always like to start off at the top of the show by asking folks how they got into the real estate space.

Todd Wetzelberger (02:01)
Yeah, I think it’s genetic. I always knew I was gonna do real estate and had my last job was I used to be a deep sea diver in the Gulf of Mexico many years ago. We had rental properties then and I knew when I got out of the oil field, we’re gonna do real estate full time. So it was kind of planned. But my grandfather done some development. He had a small business and I think it’s just in my blood and I’d love construction. I’ve done construction. I love just big

construction and that’s what we’ve done a lot of. So anyway, I think it was just kind of preordained.

Dylan Silver (02:34)
Did you see a lot of the business that was going on? mentioned your grandfather. Was that a lot of that passed down or was it one of these deals where you saw it from a distance and you said I’d like to do that one day?

Todd Wetzelberger (02:45)
Great question. Not at all. He died about four years before I was even born. But my grandmother always said I was kind of like him, incarnate. I think it’s genetic. But no, I learned it was all self-taught. And probably like you and most listeners, I’ve probably spent at least $100,000 or more. ⁓

In the old days where they had to to the boot camp on the weekends, whether it was condos or flipping, self-education, know, college was really kind of a waste of time, but a lot of time in education, mentoring. So it was self-taught plus obviously on, you you learn by your mistakes.

Dylan Silver (03:17)
So when you were getting into the business, did you mention oilfield? Were you oilfield?

Todd Wetzelberger (03:22)
Yeah, was a commercial diver. did underwater construction, know, pipelines and out in the Gulf of Mexico. That was kind of like my last job job. That was back in the late 90s, early mid late. Yeah.

Dylan Silver (03:32)
Commercial diver. That sounds pretty

intense.

Todd Wetzelberger (03:35)
Yeah, I get on my fingers and toes I you know didn’t you know came close getting killed a lot of times But it was it was just part of the adventure at the time, but it’s still construction We were basically glorified plumbers underwater. You know you’re putting together pipelines and platforms and doing you know taking down big You know construction equipment. It just it was a lot of it was it was fun till it wasn’t so

Dylan Silver (03:56)
Is that when I’m thinking about offshore oil big rig type of thing? Is that what that was at that time?

Todd Wetzelberger (04:03)
Yep, mostly natural gas, we some oil work, we did some abandonment, abandonment of old platforms, mostly it new construction, new pipeline, natural gas pipeline construction.

Dylan Silver (04:11)
My gosh, so you’re involved in that are you then doing real estate simultaneously because I’m imagining you’re making good money with that or did you get out of that completely to go do real estate?

Todd Wetzelberger (05:11)
Simultaneously, I would come in from, you know, gone for months at a time, when I would come in from a hitch offshore, we had a fourplex, a couple other rentals, and we would, and I was using the rental property, the depreciation, to basically zero out my tax bill from diving.

Dylan Silver (05:26)
going from doing…

diving work and with the offshore oil to then managing these properties. Are you having to wear a lot of hats? Is it like a juggling act? And how are you managing these deals while not always being there?

Todd Wetzelberger (05:41)
Yeah, and if it’s helpful for people listening, one of my first flips I did was in Tampa, Florida, when I was offshore, and it was a nightmare. I remember they stole everything, they broke in. I’m on a bag phone on a heliport at $4 a minute talking to my contractor, and we got a guard dog, they stole the guard dog, it was a flipping mess. ⁓ But that was my first rehab, and trying to do it 100 miles offshore just wasn’t smart.

But after that we had rentals and my girlfriend at the time, now my wife, was on land so she could help with kind like when I was gone in the oil field she would help you know screen the tenants and keep the properties filled and like I was saying I don’t know if it broke up I was using the rental property depreciation to offset and pretty much zero out my tax bill for diving so there was kind of like a planned you know planned thing.

Dylan Silver (06:33)
So you’re I’m imagining you’re acquiring additional properties. You’re seeing this as a potential exit strategy You’re also saying I don’t know how long I can do this diving thing for this is maybe a little Precarious career path, right? And so then you’re seeing this opportunity in the real estate space family background is your mindset Hey, I’m going to go and basically be a ⁓ Landlord and buy as many properties as I can was that the mentality getting out of the business

Todd Wetzelberger (07:00)
It was and rentals. ⁓ And we lived in New Orleans. So there’s a lot of historic property and we specialize. So we would do flips, sell some, keep some rentals, a little bit of wholesaling if we had too many properties. then we, it grew too fast. We had like 20 guys working for us. Cause you need more properties, you need more guys, you have more guys, you need more properties. So it was both, but it just grew out of control because we were just, I took way on way, way more than I should have in the beginning, but it just, you just got to keep on, keep on rolling.

Dylan Silver (07:29)
In those early stages where you’re building a business but you’re also managing assets, was there any growing, I don’t want to say growing pains, but any aha moments where said, okay, this is actually something that I’m really passionate about and that I’m particularly competent in. I want to dive into here.

Todd Wetzelberger (07:48)
Yeah, like just because I like it. I enjoy construction. And I hope this is relevant mindful of time. The first rehab we did when I got out of the oil field, the budget was 50 grand and it was all termite infested. Anybody who lives down south and knows that. And we started taking off the weather boards and the whole back master bath collapsed because it was all termite. You couldn’t see it between the walls. So the budget went from 50 to 100.

I remember sitting on the toilet in this open air bathroom now with all the termites swarming around my head and my contractor’s like, yeah, you’re like at hundred now. And I was like, fuck, I got to go back offshore and get a job again. And that was kind of like, was my first, just anybody listening, it’s things were not smooth, but I just.

Dylan Silver (08:23)
Yeah.

Todd Wetzelberger (08:29)
I ground through it, got another property and I’m not going back offshore again because I was kind of burned out then. And you just grind through it. So, moments was like just keep on grinding and don’t stop. And all of a sudden we did 40 properties in a year and a half. We had 20 guys working for us because I didn’t want to go back offshore. you just, some were rentals and we did lot of Section 8 rentals too for the keepers.

Dylan Silver (08:53)
So you have two strategies working simultaneously. You have the flips and then you have the rentals. And now you mentioned section eight. How are you managing ⁓ this business as, because it’s two separate realms, right? You’ve got the flipping and then you’ve got your rental portfolio. Are you personally managing the rental portfolio as well?

Todd Wetzelberger (09:11)
Great question. I did in the beginning and then my, thank God, my wife who’s an occupational therapist.

took time away from her job to help with the management because I couldn’t. had to really, then we started doing condo conversions too of old historic properties. So I really handled the construction development side and she had, started taking over more and more of the rentals, but we all self-managed for it was per we went through a course called Mr. Landlord, Jeffrey Taylor out of Virginia beach way, back. And I had Carlton sheets on cassette tapes. I’m kind of telling you how old I am, but we self-managed all of her stuff. And, ⁓ but my wife took more, more than on cause I couldn’t, I couldn’t do both without her help.

Dylan Silver (09:47)
And for your flips, were you looking for off market distress or are you making at that time offers to properties that you saw listed on market as well?

Todd Wetzelberger (09:56)
both, but it was so much easier. Anybody listening now, COVID has changed, right? The inventory is so thin. We’re all struggling during COVID because of the inventory so thin. Back then, I did the old stuff, bandit signs, networking. We bought a lot, I mentioned before, we did a lot of ugly properties, like really ugly title issues, construction, half dilapidated, like the uglier the better. And it was just easy to find deals because a lot of people shied away from those.

Dylan Silver (10:21)
Now with title issues, this is a very niche area of distressed real estate, right? And so I think people can easily…

get lost in the title issues that come about. I’ve encountered a couple deals where you get a property under contract, so many different things come up, right? Someone believes it’s their property, they have a document that says that it is, then there’s multiple different heirs involved, then you’re talking like joint tenancy versus the different other types of ways that people can own property, right?

And I’m imagining that this was a lot to take on, but you found a passion for it and you found that you were good at it. How did that end up matriculating? How did you realize, hey, this is something that I can drill down into?

Todd Wetzelberger (11:09)
I think I’m wired to take on a challenge, sometimes to a fault, right? Sometimes your greatest gift can be your greatest weakness. And you know, I’m always hunting for deals and I take on the really hard ones because a lot of people don’t. And then I just learn through experience. I’m going get into it now because of time, but I’d mentioned I had some litigation experience. I was a whistleblower after the 2008 crash, but I understood about title and I really enjoyed going after those harder properties. Louisiana has a very, Louisiana full of Napoleonic civil code, not common law like other states.

So

trying to find errors is a bear down there there could be 20 errors to a property so I had to learn how to litigate and give notice and You know do quiet title suits and and but those can be really gems or gold because you can get them for like You know a couple hundred bucks this have somebody assigned there, right? And but you just got it you got to stand for the long haul and sometimes you can run a property out with I have properties now People deed it to me that bad title, but I don’t care. I don’t care if I ever get cleared title. I’m just gonna rent it out

Dylan Silver (11:56)
Yeah.

Todd Wetzelberger (12:08)
So people think you have to have a clear title, but you don’t have to.

Dylan Silver (12:45)
And so working through these title issues, I mean, there’s so many different ways that you could go about it. I think a lot of it is that like real estate can be a contact sport. Like you might have to be going out and physically talking to these people. How often does that happen or did that happen? And was that something that you saw regularly? Like, hey, I’m having to go out and drive out to these people and see what the deal is here.

Todd Wetzelberger (13:08)
Yeah, in the old days, right, before big data and like now it’s so much easier. Like we have private, like everybody, I guess, used Fiverr and Upwork. We have private investigators. have, obviously, skip tracing wasn’t a thing back then. In the old days, it was door knocking, was hunting them down. I’ve gone to jail, like visited people in jail. you know, you do what you got to do to find somebody to get the deed. ⁓ but it was, it was always like, I’m just trying to solve a problem.

Dylan Silver (13:28)
Yeah.

Todd Wetzelberger (13:35)
You know, if you were you and I was the guy who owned the property, if you bring an offer to me, I’m like, hey man, I can’t give rid of it in their way and you benefit and I benefit. I was treated kind of that way so I didn’t care what people’s circumstance was, I just tried to say, hey, here’s a situation and they either said yes or no and we did the deal.

Dylan Silver (13:54)
The biggest thing that I’ve seen that separates

effective real estate operators from anybody else is the ability to adapt because your strategy may only be valid for a period of time and then it’s got to change and we’re seeing that now. And then also the ability to problem solve. Right. And people don’t think about this enough because people think, well, you have a rental property or you have an Airbnb or you have a corporate housing. But a lot of this is problem solving. And that’s really where you find these good deals because you mentioning Todd, like

these title issues and specifically you mentioned Louisiana being particularly tricky. I’m in Texas, right? But there’s deals that seem a little hairy that no one wants to touch and that’s where all the money’s made. And being able to go and solve those problems, that’s really what separates an effective real estate operator.

Todd Wetzelberger (14:47)
100 % and if it’s helpful, it’s helpful now. I mentioned before we got on here, I’m a deal guy, I’m a hunter, I’m a problem solver, it’s my strength. One thing I learned when Hurricane Katrina hit, it wiped out our business in 2006 I think, our whole business was wiped out overnight by Katrina. I really burned into my brain risk management and figuring out, everybody’s learned from asset classes, like what’s the downside risk? Even though I’m a deal guy, I’m an optimist by nature,

my brain is always wired now what could go wrong what’s a downside risk how can you try to ensure against it or do your best to protect against downside risk and i because i used to lend money i borrowed money i’ve been on both sides i bought notes so i always try to like talk to people if i’m you trying to raise some capital i’m like hey here’s what could go wrong the probability of it is this

I don’t care about the upside, but I’ve really learned about risk management and really taken that a lot more seriously because of Katrina, man, I was on the hook for like $10 million in personal guarantees and it was a flipping nightmare because I didn’t cause the city to be underwater for three weeks, but our whole business wiped out and it was a mess cleaning it up. It’s a whole different topic for different time, but anyway, I hope that’s helpful.

Dylan Silver (15:58)
I mean, you talk about Katrina. So my uncle, funny enough, went to Tulane. I believe this was right around the time of Katrina. So I was down there before Katrina. I was down there before Katrina. And there’s these these, you know, events that happen that people don’t see coming, whether it’s a Katrina, whether it’s a COVID, whether it’s a financial crash, you know, and with Katrina, six, you had the financial crash like two years later or a year later. So you kind of getting hit from all directions.

And a lot of it too is just being, call it, you know, you kind of got to be a entrepreneurial cockroach. You’ve got to figure out how to survive like nuclear wasteland, right? Just get through it. And then once you’re able to do that, where do you start and where do you pick up the pieces? Did your business, Todd, change post Katrina? You mentioned, you know, risk management. there specific strategies that you either looked at differently or that you maybe started taking a look at based on the experience that you had in Katrina?

Todd Wetzelberger (16:56)
Yeah, you mentioned those different things. They call it a black swan event, A black swan event like Katrina, right? Yeah, what I learned was if I don’t have to, never signing a personal guarantee ever again.

and just because I was on the hook for all this money and I want to get into it but insurance companies didn’t want to pay. We probably had like 40 or 50 claims, some of them multi-property claims. Insurance companies fought you. I burned through over 300 grand writing checks on vacant damage properties every month. I should have gave the keys back to the bank and listened to my wife.

⁓ But you don’t know what you don’t know. And I was bringing guys from Baltimore, where I’m originally from, down to Louisiana to finish property. I was moving heaven and earth. And we were still renovating in Baltimore and Louisiana. But what I had to reinvent was like just starting from scratch again and rebuilding back in Baltimore. And you just got to keep on moving. You got to just adapt and don’t stop. And it was rough. mean, but…

Dylan Silver (17:45)
Yeah.

Todd Wetzelberger (17:57)
You just got to keep on moving, And just plan for the downside risk. 2008, I believe it was engineered. I’m pretty certain of it because of my experience. Katrina, who could have planned that? Who knows? they’d been able to weather whatever. But I’m always thinking, what can go wrong? How do we manage against it? And then put your chips down.

Dylan Silver (18:18)
Are you still heavily investing out in that area, ⁓ New Orleans area?

Todd Wetzelberger (18:23)
No, after Louisiana, after we evacuated, we sold a lot of stuff, but I’ve looked again, because we still have contacts there. It’s become very gentrified. It’s kind of sad because there’s… ⁓

And I’m a bounce with real estate with, you people get forced out of their houses and New Orleans has become very gentrified and a lot of people got forced out. But there’s a lot of opportunities, a lot of short term rentals. Right now, we’re focused in Maryland. We’re looking in Charlotte for some co-living. We’re doing some co-living stuff. And when I was buying notes, we ended up with properties like these obscure cities like Rome, New York. you know, so we’ve renovated probably eight different states, but pretty much I’m focused in my central area here.

Dylan Silver (18:37)
Yeah.

Mm-hmm.

Todd Wetzelberger (19:03)
in Charlotte and a little bit in Florida because the market is starting to crash down there now.

Dylan Silver (19:08)
Are you of the mindset where there’s maybe a career trajectory for a real estate entrepreneur? I look at it this way. When I was getting into the real estate space, I knew nobody. I didn’t have friends, I didn’t have family. So I was kind of just networking, started with wholesale, got my real estate license. Now I’m looking at doing my first fix and flip, or my first couple flips.

I’ve heard now many people going from fix and flips to hard money lending or to note buying to commercial. And it seems like you’ve made a progression as well from doing a lot of the single family investing, flips, right? And now talking about note buying. Do you see this as a common trend for people who are aspiring real estate entrepreneurs and investors that, hey, 20 years down the road, you might be buying notes?

Todd Wetzelberger (20:37)
⁓ I think it’s a personal preference, right? I know some guys that do just wholesaling, right? But it is a natural progression. And I enjoy construction. Some people don’t. So I like doing construction. I love construction. Some days it sucks because of all the contractor stuff. But if you enjoy a certain niche, think your best bet is to go to what you enjoy.

And notes was a natural progression after 2008 because my experience as a whistleblower and fighting the banks, I was like, you know what, this is a losing battle. The bankers control the world. And my whole point was to keep people in their houses.

and stop foreclosure. So I just said, well, just be the bank. So started buying notes and it’s a win-win, right? You can do a loan mod. Sometimes you get a deed and do a foreclosure. But my whole goal was because people were getting wiped out after I don’t want to get into it. But notes was a passion of mine. So I’m like, all these people losing their houses, banks are fabricating. I don’t want to get into it. It was a total fraud. So that was my, some people were like, don’t want to get into notes because they’re kind of complicated. But I think if you enjoy a certain niche in real estate, you can do commercial. think, think go where

your interest is because if you’re doing it because everybody else is doing it but you don’t enjoy it you’re gonna burn out I think you’re just not gonna stick with it when the times get tough which which they will you know

Dylan Silver (21:53)
inevitably right ⁓ time we are coming up on on time here working folks go to reach out to your signal

Todd Wetzelberger (22:01)
Good question I’m trying to think about the best we have a landing page. It’s clear capital DMV for Delaware, Maryland, Virginia clear capital DMV comm You can reach me at Todd at clear capital DMV comm and Always reach out to me on Facebook on messenger. I don’t do a lot of social stuff on Facebook, but I’m on messenger you can catch me there and Is it cool to get my number my phone number? Yeah, it’s a 410

Dylan Silver (22:27)
Yeah, go ahead.

Todd Wetzelberger (22:30)
916-8863. That’s usually the best way because I don’t check my email very often and generally if you could text me. ⁓ I have my phone all the time.

Dylan Silver (22:42)
Todd, thank you so much for coming on the show here today.

Todd Wetzelberger (22:45)
Dylan, thank you so much.