Episode Transcript
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SPEAKER_00 (00:40):
What is going on,
everybody?
Corey Raymond, your host of theWisconsin Investor Podcast.
And I'm here today, guys, doinga solo episode.
I'm so excited for this one.
And uh I'm I'm looking forwardto dropping some some of my
experience and knowledge on youguys today.
Um, but before I get into that,I always talk about a
sponsorship.
I'm gonna give you guys a littlegiveaway here at the end of the
(01:02):
podcast.
So hang on, listen to the end ofthis, till the end of this
thing, and I'll give you alittle a little free giveaway
here.
Um if you've listened tosomebody that podcasts, I've
done it on the front of it, butnow I'm gonna make you hang on
to the end here to get this.
This is uh something that weused to sell for$2,000, and you
guys are gonna get it for freetoday by listening to this
episode.
So excited to be here with youguys today.
(01:23):
Um, I was at just at a PaceMorby event who was in town.
He was in Green Bay, he's doinga little tour around.
I've known Pace now for five,six years, something like that.
And uh so it was great to seehim hang out a little bit.
And uh he had a great event,huge, huge show-up.
Um at that event, uh, had a lotof you guys I was talking to
there that um, you know, listento the podcast.
So I appreciate you guyslistening.
(01:43):
And I said, hey, what do youwant to hear on the podcast?
Like what would be a greattopic?
And uh some of you guys broughtup, hey man, I'd love to hear
your story more.
I know I'm you know some peopleknow it, or they've listened to
maybe the first episode.
I think I shared it a littlebit, but they wanted to hear
maybe more of the uh lessonslearned, some stories that we've
had over the years, and andlessons learned from some of the
some of the mistakes we've made,uh, and how did we get to where
(02:07):
we are today, and all that sortof stuff.
And then I was actually justtalking to Ashley from our team,
and we were doing a littlecoaching call, and um, and she
brought this up too.
She said, Hey, it'd be cool tohear your story and how you got
to where you are and all thatsort of stuff.
So that's what we're gonna talkabout today, guys.
We're gonna talk about the earlydays, we're gonna talk about
some mistakes that we made uh inin different areas of real
(02:28):
estate, and we're gonnahopefully be able to shed some
light and give you guys a littlebit more um things to not do,
maybe, or to do based on some ofthese stories.
So to give you guys just startout um what was life like before
real estate?
You know, we'll start there forall the listeners out there.
You know, for for me, I wasalways in sales, and so I knew I
(02:50):
always wanted to be in sales,and um I didn't really know like
what I want to do with my life.
I knew I didn't want to work forsomebody forever.
And you know, if you look at mypersonality profile, uh, it
doesn't matter what personalitytest you take.
Very difficult to rein me in, soto speak.
You know, classic maverickthat's called if you if you know
what a PI test is from thepersonality index test uh
(03:13):
predictive index test, it'scalled.
Um, basically meaning I don'tlike a lot of rules, I don't
like people telling me what todo.
I like to just go out and makemy own way, so to speak.
And so I'd always worked forother people, I was always
successful as a top sales rep ata couple different companies out
of a hundred plus uh reps ateach of those companies for
years.
And um, but I was alwaysmiserable, like hated it.
(03:35):
And then not that I hated thecompanies or the people I worked
with, I just felt like I wastrapped, right?
And like I couldn't get out.
And again, some people'spersonality profiles, great.
They they love their job, theylove what they do, they have no
intention of you know neverneeding to leave that.
And that's great.
That just wasn't me.
I was didn't matter where Ilanded, I'd always get to a
point where I was just burnedout, didn't want to work there
(03:58):
anymore, kind of wasn'tstimulating anymore.
I needed some other challenge togo take to go after.
And um, so Carrie, my wife andI, we got together in 2008.
Great year for real estateinvestors out there, right?
Um, and and we weren't in intoreal estate at that time.
I'd always been interested init, but we we weren't there yet.
(04:19):
And um, I had a personaltraining studio that I had
started just kind of on theside.
I was doing that nights,weekends, and mornings.
And um uh was so I kind oflearned some lessons that way.
What number one, I learned Ineed to work on my hiring
skills.
So this is this is pre um realestate, but it's similar to some
of you guys out there that areare running your own shops right
(04:41):
now and you're in doing a lot ofthe work and you're doing the
labor and all that kind ofstuff.
At some point, depending on yourgoals, you may need to hire some
people to get yourself out ofthat, right?
And this is still a skill that II need to put some more time and
effort into.
Our team right now is amazing,but I've definitely made some
mistakes hiring years overyears, over years, and learned
(05:02):
some lessons in the process.
But early on, uh I was runningthis personal training studio
and uh I I had uh we had ourdaughter Kaylee, who's now 13,
and uh I was like, I can't keeprunning this training stuff
mornings and by the way.
At this point of this story, I'dgotten fired from my sales job
because I was a maverick and Iwas uh I was ruffling a lot of
(05:26):
feathers in the in the office.
Now, as a business owner, Iunderstand why I got fired.
I was bitter for many years, andthen uh now I understand it.
I was not a good cultural fit,probably.
So that being said, uh had thispersonal training studio still
running.
This was gonna be my main incomenow.
And I'm like, well, if I'm gonnagrow this thing, I gotta hire
some people and get out of theday-to-day stuff, right?
And I was pretty cheap at thetime.
(05:48):
I just was like, hey, somebodycome and get me out of having to
do having to physically be hereand do these things, you know,
four or five days a week,mornings and nights.
Like, I need to breathe there.
I want to spend time, you know,with my wife when she's home
from work and all that sort ofstuff.
So I brought a guy in, did zerobackground check on him,
(06:08):
absolutely zero.
Um, but he was fit and he saidhe was a former manager and
personal trainer at an AnytimeFitness in town.
It's like perfect, you're hired,dude.
Actually, before I said that, Isaid, hey, will you work off of
commission?
Because I didn't have a big nestegg to pay this guy.
I didn't know how to pay youknow taxes on you know income,
(06:29):
uh, you know, or payroll taxes.
I didn't know any of that stuff.
So I said, man, if I just paythis guy like kind of like a
1099 contractor and just payhim, you know, commission, cool.
Like, let's let's do that.
And he agreed.
He was like, yeah, that's fine.
I'll work for commission.
Done.
You're hired, you know.
Um, so brought him in.
And uh he was there for a whileand he he was doing okay.
(06:52):
And uh at the same time, hewould get sick every so often,
so I'd have to go in, or he justwouldn't show up once in a
while.
So I'd have to get called up bythe clients, and they're like,
hey, it's six in the morning.
We're out here, and and uh thisguy's not here.
And I'm like, geez, so I'd haveto like rush out of the house,
run over there, give him as muchas I could of a training, credit
(07:12):
him back, you know, that kind ofthing.
And then uh I brought anotherguy in to help out with giving
him a little break and didn't doany check on this guy.
He was in his 40s, rode his biketo the gym because he didn't
have a car, was living with hisparents, and I was like, Yeah,
dude, you're hired.
Of course.
Why not?
(07:33):
A couple red flags there I'velearned over the over the years,
you know.
So uh both these guys, one guy,the the first guy, he was
stealing money from me.
He was having the clients payhim in cash and then just
keeping the cash full full ofmonths.
I'd call him up, I'd be like,hey, you know, you're you you
didn't make your monthly paymenthere for your sessions.
(07:54):
They're like, Yeah, we we paidhim.
I'm like, how'd you pay himcash?
Oh, geez.
The other guy was um was mostlyfemales.
It was mostly females in my gym,and he was messaging a lot of
the ladies afterwards, you know,messages about getting together,
you know, things like that,things you don't do as a
trainer.
So I learned a few valuablelessons there.
(08:15):
A, do some background checks onthese people, call some
references, and still notperfect at that.
We have a little more of aprocess now that we run through
in our company.
But that was uh my firstentrance into trying to grow and
scale a business.
So for those of you out therelistening, you know, if you are
gonna scale, you do have to hirepeople.
You know, you're gonna have toget you're gonna have to get
people in in different seats inthe in your company and get
(08:38):
yourself out of doing theday-to-day work and train some
other folks.
But that was before I was eveninto real estate.
So that was a early lesson.
Uh, I I took some of thoselessons into the real estate
space and have had to learnagain the hard way a few
different times to uh have abetter hiring process that we
came up with now that's beenworking really well.
(08:59):
But um, it it definitely issomething you want, you don't
want to just be desperate tohire, is what I've learned in
that process.
Um, but real estate came in,really, we were doing some
network marketing for severalyears as well.
So being in that in the personaltraining space, there's a lot of
health products out there in thenetwork marketing space.
And so we were selling somehealth products, we were making
a nice little residual income.
(09:21):
And we did that for about fiveyears.
We just didn't really love thebusiness of it as much anymore.
You know, like it was it wasdraining to have to be, you
know, chasing down friends andfamily and trying to get them to
sign up for the products.
And even though we believed inthe products and we thought they
were great for people, we justdidn't love the process of
having to do that.
But we liked the residualincome.
So uh like most people in thisspace, we read Rich Dad Poor
(09:42):
Dad.
And so if you haven't read thatbook yet, you know, maybe we'll
get we'll grab a link and throwthat in the uh in the show notes
here and um you know, go getthat book either on Audible or
or written.
And as soon as we read that,we're like, oh my gosh, this is
our way to residual income toget us out of this job, this job
thing that I was just dreadinghaving to do for the rest of my
(10:04):
life.
Just felt so hopeless.
Like, how am I ever going to getto a point where I can, you
know, replace my income and anddo something different?
And then we found real estate.
And um, it was super exciting.
I remember Carrie when she whenshe kind of caught the bug too,
it was so awesome because wewere just both linked and we're
like, we're doing this together.
You know, she had a set ofskills I didn't have.
(10:25):
And um she, you know, she shedefinitely was a huge piece of
us growing this businesstogether.
But uh we started readingeverything we could read.
Uh we're bigger pockets wasstill like the main thing back
then, and it still is a bigthing nowadays with their
podcasts and all the educationthey put out.
But we started diving into allthat sort of stuff.
We started going to RIA groupsand trying to network and do
(10:48):
everything we could, but westill felt like overwhelmed.
I remember feeling like, oh mygosh, like this is still like
how are we ever going to getthere?
It just seemed like such a toughthing once we started like
looking at properties.
I remember we were going aroundwith our real estate agent who
helped us get our personalresidence, and he was not uh I
(11:08):
would say an investor-friendlyagent.
Great at helping us find nice anice house to live in.
Did a great job at that, greatat negotiating those kinds of
things.
Um, but you could tell when wewould when he would set up these
showings for these duplexes thatwe we were looking at.
We were looking for value addduplexes.
Like he was just not, he was notfeeling it.
(11:28):
And uh he had made a fewcomments over time about really
not loving the rental businessgame.
Uh, and so we we just kind ofknew like maybe this isn't the
right thing.
But I remember at the time goingthrough all these properties
that were on the market, thiswas 2016, and feeling like, how
are people making this work?
(11:49):
Right.
Like I remember looking at thenumbers and you know, we didn't
have a ton of extra cash playingaround.
I think I had like$8,000 in thebank account at that point.
And so we were like, well, howdo people buy hundreds of units?
Or even like one of one of ourgood friends at the time, and
still good friend to this day,meant early mentors, Tony
(12:11):
Breuer, a lot of you guys knowout there from Good Faith
Funding, he had like 50 rentaldoors at the time.
And I'm like, dude, how did youdo this?
Like, you got to put 20% down,sometimes 25% down, sometimes
30% down.
Then you gotta you gotta rehabthese things and you gotta stick
all this money into it.
Where do you get all this cashto like buy 50 doors, right?
(12:34):
And that's when we we started toget a little more hope once we
started asking some of thosequestions and we learned about
the BURR process, right?
And so there's a whole notherepisode um where I do a solo
episode on the BURR process.
So I'm not gonna break that downon this episode if that's
foreign language to you, thatacronym.
Um, it stands for buy rehab rentrefinance.
(12:55):
And it's a way for you torecycle capital so that you
don't have to have that 20, 25%down plus all the rehabs stuck
into the property forever, maybefor a short period of time, but
then you refinance it, you getall that money back out.
Right?
That's the play.
And then you go do that againand again and again and again
and again.
All right.
But the problem was a lot ofthese properties when we were
looking that were on market,even then, once we understood
(13:18):
the Burr process, we we werelike, how are people making
these numbers work?
Right.
Um, we actually did have anaccepted offer on one that was
on market before we startedgoing direct to seller, and uh
it ended up falling apart.
So the the looking back now, I'mlike, dang, I wish I would have
bought that thing because it wasin today's market, it would have
(13:38):
been such a smoking deal.
But at the time it seemed likeit was still kind of a
questionable deal.
And we got an inspection on it,and we went back to the seller
and she agreed to a lower price,which was great.
But then we got a call from thetitle company basically saying,
hey, we ran the title report orthe title search, and the offer
you guys have is less than umwhat she owes, and she doesn't
(14:03):
have any extra capital to bringto the table.
And it was a pretty significantdifference, and so we just took
that as a sign at the time that,gosh, maybe this this isn't the
right, the right deal for us.
Maybe we should just pause andand redirect things.
So that was one of the earlystruggles I remember was just
feeling like we were never gonnaget a deal.
(14:24):
I mean, I think this was like itwent on.
We looked at properties forthree, four months, made offers,
finally had one, and then itfell apart.
And then it was it was kind ofdeflating to get to that point,
and then it fell apart.
So we started again asking morequestions at these Rhea groups,
and we found a uh early mentor,a local guy who was doing some
wholesaling.
(14:45):
And we said, Well, we don't knowanything about that, but it's
direct to sellers, so that's howyou get the best deals, he said.
Like, okay, great.
So coach us, teach us.
So we gave him 10 grand to coachus up, and then we had to split
the first three deals, I thinkit was, with them.
And so we learned some of thebasics.
You know, it was really good touh uh I would uh one of the
lessons I learned from that isyou know, paying for mentorship,
(15:07):
even if the mentorship is not uhmaybe what your expectation was
for it, you know, that was kindof our situation.
We don't feel like we didn'tfeel like maybe the expectation
going into it is quite what wereceived, but just to have to
put that kind of capital downand we didn't have a lot of
money really made us motivatedto make it work.
We're like, okay, there's nogoing back.
It was kind of like burning theships, right?
(15:29):
Like we have to go back.
We can't go back to to not makethis work.
It has to work now because wehave to at least get our 10
grand back, or we're gonna be ina big pickle here financially.
Um, and so we got a few dealsgoing that way, you know, just
from reaching directly out tosellers.
I don't recommend direct toseller for everybody.
You know, that's a it was a lotmore work than I thought it was.
(15:50):
But when we started, we werereally doing it to build our own
portfolio.
Um, you know, we came up withthis goal, we looked at our
finances, then we looked at ourexpenses, and we looked at what
did we want our life to looklike, right?
Well, we wanted to travel.
We wanted to um be able to havethe option to homeschool our
kids at some point so we couldtravel with them and show them
the world through experiencesthat was important to us.
(16:13):
And so we were starting toreverse engineer our life when
we started getting into realestate.
And so part of the way that wethought we would get there is
get get to 100 units as quicklyas possible, get those things to
cash flow of 200 bucks a month,and boom, we are at our goal.
We are financially free.
(16:33):
Like beyond, you know, we wereagain, we had$8,000 in the bank
when we started.
So that to us was seemed like,yes, that's a huge, crazy goal
at the time.
But let's set, let's, let's setthat intention and go after it.
And then we put our money behindit and said, all right, here's
$10,000, teach us how to do thisso that we can we can hit this
(16:53):
goal as soon as possible.
So we started doing that stuff,and we weren't intending to
wholesale anything at the time.
It was just buy and hold.
And through networking, we ranacross a good friend of ours
still to this day, Joe Ullman.
And I remember she had saidsomething at one of the meetups
when I was talking to her thatshe liked unique properties,
like weird ones.
(17:13):
And so we were sending outletters at the time.
We were uh handwriting onenvelopes, which we figured out
better systems later on.
But again, we were motivated,like we'll put the work in.
We didn't have the capital, sowe had to put the sweat equity
in.
And we carry my wife wouldhandwrite on the envelopes to
landlords.
And so there's lists you can getcalled absentee owner lists, and
(17:36):
that basically means it's anaddress or a it's a property
where the owner does not live inthe property.
So their address, their mailingaddress is different than the
property address.
And so we were mailing thesepeople.
I want to say maybe there waslike 600 names or something that
we had on this list.
And we were mailing them, andone of the first ones we got, it
was a one-bedroom, one bath inthe Howard Swamaco area near
(18:01):
Green Bay.
It's a great area, greatschools, all that kind of stuff.
But for our goal, a one-bedroom,one bath, I didn't really have
any need for that.
I didn't really want aone-bedroom, one bath, right?
So, but I went and looked at it.
I said, Oh, come take a peek atthe house, right?
Get some experience walkingthrough houses, talking to
sellers, negotiating, all thatkind of stuff.
So I used it as a learninglesson.
(18:22):
But as I was walking throughthere, I noticed the backyard
sloped down a little bit.
And I thought, well, this wouldbe really a great location if
somebody could, you know, digthis out somehow and put in two
bedrooms down here.
Now you have a three-bedroom inthis neighborhood.
This would be great.
And so Joe came to my head rightaway, just from doing the
networking and I said, Well,I'll give her a call and see if
(18:43):
if she would have any interestin this.
And she brought her contractorthrough, and I kind of painted
the vision for her of what Ithought it could be.
And she saw that vision and sheshe took it and put her own
creative spin on it.
And I remember Carrie and I weredriving across uh uh one of the
bridges here in Green Bay, andJoe called and said, Hey, yeah,
(19:04):
we had my contractor look at it.
I think the numbers work.
You know, what do you want toget for it?
And I think I said like 55,000.
We had it under contract for 50.
And she said, Okay, yeah, we cando that.
And I remember like, oh my gosh,this is incredible.
And Carrie and I are like, highfiving, trying to stay cool and
calm on the phone with Joe andstuff.
And so we scheduled the time tosign the paperwork and get the
(19:26):
cash from her.
And I think she did it in liketwo different installments, once
up front, and then once wheneverything closed.
And um, yeah, we made$5,000 justfrom connecting some people and
helping create some win-wins,you know, which was which was
super rewarding.
And I said, I really like that.
I want to do more of that typeof thing of helping people who
want to do projects and makesome money and help out people
(19:50):
uh who are in in situationswhere they they don't really
want to sell on the market.
And so we started leaning moreinto that that thing.
Um, our next deal we did wasanother wholesale deal.
It was this upper lower duplex.
I don't remember why we didn'twant to buy.
Maybe we didn't have the capitalbecause we had just bought um we
just bought one to buy and hold.
So I think we were maybe holdingoff on adding another buy and
(20:12):
hold when and we we got a littletaste of that that wholesale
deal.
And then it happened prettyquick.
We wholesaled that one, and atthe same time, about a couple
weeks difference um from puttingthem under contract, we got a uh
upper lower duplex in Green Baythat worked for us under
contract.
So then uh the third one, Iguess this would be, was a um uh
(20:37):
another wholesale deal that wewere planning to do.
Now, a lesson learned here ifyou guys are out there
wholesaling and you're listeningto this or you're thinking of
wholesaling, uh, one lesson Ilearned is make sure you're
upfront honest with thesesellers about what you're gonna
do.
You know, now at the time Ididn't really know what we were
gonna do, so I'll give myself alittle grace here that I didn't
I I really truly probably didn'tknow what to do with this
(20:58):
property, if I was gonna buy andhold it or if I was gonna try to
sell it to somebody else.
Um, but the seller was a toughcookie.
It was a uh lady in her probably60s, and she was a boss, man.
Like, I would not mess with her.
She would whip me up.
And uh she we went there, lookedat the property.
She had some tenants in therethat she was arguing with out
(21:21):
the window.
They wouldn't answer her phonecalls, they wouldn't pay rent,
you know, they were just yellingat each other through the
windows and going back andforth, and I was like, holy cow.
In my head, I'm like, this isgreat because she's gonna be
super motivated now to get ridof this property.
Um, she takes us down in thebasement and she's showing us
the water meters, and she hadsplit the water, which is
(21:42):
awesome, because then you can,you know, you can have each unit
pay their own water.
Typically, landlords and a lotof these duplexes just end up
paying the water.
Um, but she had the option to beable to pay both.
Well, she was showing us how sheturned their water off, which is
illegal, by the way.
You can't turn water off on yourtenants.
And what she said was they won'tanswer my phone call, they won't
(22:04):
pay rent.
So what I do is I turn theirwater off, and then I call the
water company and I tell themthat, hey, if you get a call
from the tenant, we're justdoing some maintenance.
It'll just be down for a littlebit.
We'll we'll have their waterback up here shortly.
And that way they answer myphone calls, and lo and behold,
they'll pay rent.
And I just I just startedlaughing.
But that's that's the type oflady that I was dealing with on
(22:26):
this one.
Uh anyway, we ended upwholesaling that deal.
We found a buyer for it.
And she found out that we had adifferent buyer.
It wasn't us closing, and thatthat really upset her uh for
whatever reason.
I don't know if it's justbecause I I I wasn't upfront and
transparent about it or what thecase was, but she ended up
taking the garbage bin thegarbage bin.
(22:47):
She dumped the trash out and therecycling out in the property on
closing day and took the garbagecans.
And I remember calling her and Isaid, Hey, her name was we'll
call her Mary.
I said, Hey Mary, uh I just gotto the property to check on it
and make sure the keys allworked and all that stuff.
And um, I noticed there's abunch of trash in the backyard
and the garbage cans are gone.
(23:07):
Any idea like how that wouldhave happened?
And she said, Yeah, I took thegarbage cans.
And I was like, what?
And uh she said, Yeah, they umthey weren't written into the
offer.
So I took them.
And I was like, okay.
So another lesson I learned inthat case is if you if you want
(23:28):
something that's not fixed tothe property, make sure you
write it in the offer.
Now I've never had that happensince we've done probably a
thousand deals uh since thattime frame, and nobody else has
ever taken the city garbage cansfrom the property.
But uh I I now make sure I orour team write in anything that
(23:49):
a seller is gonna leave behind,right?
That's a that's a value.
So we don't just take their wordfor it, we write it in the
contract, right?
We don't do the garbage cansanymore.
We used to literally for liketwo or three years since Mary,
we wrote in garbage cansincluded in the offers, but we
we don't do that anymore.
Nobody else has has pressedpressed on that and taken the
garbage cans.
But uh that was an interestinguh situation.
(24:12):
So always write in if you wantsomething in the contracts.
Uh in that same time frame,another lesson learned here is
uh I really fell in love withrent to owns as a as a saving
grace, uh as an option.
So if you guys aren't familiarwith rent to own, I'll explain
it to you real briefly.
Essentially, what this is for isuh this is typically the person
(24:36):
who's gonna be a tenant buyer,as we call it, somebody who
can't qualify for a traditionalmortgage for various reasons,
right?
Now you can also do landcontracts with these people.
There's pros and cons to that.
I had Sean St.
Clair on a while back in someepisodes, and I'm pretty sure we
broke this down.
He's an attorney, awesomeattorney here in Wisconsin.
Um he's actually one of PaceMorbies attorneys too.
(24:57):
But we broke down rent to ownsand land contracts and pros and
cons to that.
I tend to go rent to own in in alot of cases, um, just for ease.
That's a little simpler,especially if you have
underlying loans and those kindsof things.
But the uh we had bought aproperty at the same time with
that first real estate agent Itold you that we were going to
live in for our primaryresidence.
(25:18):
We were out in Pulaski, which iswhere I grew up, and we hated
it.
We were in Green Bay every day.
Our kids were in a um preschoolacross town.
We were spending more timedriving to Green Bay back and
forth than we were even enjoyingour property.
And um we just were like, gosh,we should really sell this and
just move back to Green Bay.
Um problem was we paid about$320,000 for this house.
(25:42):
We uh put about$11,000 into someelectrical work into a big
garage that it had.
And again, this is all at thetime where we really didn't have
a lot of extra cash.
So we were like six months in.
The market did not appreciateenough to get us back those what
would be six percent realtorfees if we sold it plus the
(26:02):
eleven thousand dollars.
Like we were gonna take a bathon this house if we sold it.
For whatever reason, I don'tremember why we decided to go
ahead and list it.
But before we listed it, theagent, I talked to him and I
said, Hey, I'm getting into realestate.
I'm gonna also try to findmyself a buyer for this because
I need to save the money onthis, man.
Like I need to try to, I need totry to save these commissions.
(26:24):
So I'm gonna be kind ofcompeting against you to find
myself a buyer.
Uh if I find myself a buyer, I'mnot, I'm not paying any
commission on it.
Do we have a deal?
And he agreed.
Said, that's fine.
If you find yourself a buyer,you know, I'll, I'll, I'll
cancel the contract, the listingcontract.
It's perfect.
So I started, I put it out forrent to own.
And again, I didn't really knowwhat rent to own was, but we had
(26:46):
had a we had hired those thosementors.
And so they kind of helped coachus through rent to own and got
us some of the paperwork at thetime.
Now there's actually a standardWisconsin rent-to-own form that
you can get.
So the state put together, it'scalled an option agreement.
And it's a standard um documentthat you can get right on the
state's website.
(27:07):
Uh, the at this time you had tomake up your own option
agreement.
So we ended up finding just fromputting, I think I put it on
Facebook Marketplace.
And that's still where we put iton.
If we have rent to owns that wewere trying to do, we still use
Facebook Marketplace, and it isa great resource for us as it
could as it relates to rent toowns.
And we ended up selling it for,I believe,$355 or something like
(27:30):
that.
Um, and we again we paid$320plus the$11,000.
So we marked it up a little bit.
Benefit was now we didn't haveto pay those 6% realtor fees.
So instead of losing a bunch ofmoney on the sale of that, we
actually were now gonna beprofiting on that on that
property.
Uh, plus they were gonna bepaying monthly rent, and we were
cash flowing a couple hundredbucks on that monthly rent every
(27:53):
month.
So it was really a greatsituation for us.
We put a couple escalationclauses in there as well.
So if they couldn't buy itwithin, I think three years, it
went up like 15% because webasically said, hey, every year,
you know, properties typicallyappreciate about five percent.
So after if you can't buy itwithin these three years, and
then you want to buy it afterthat, it's gonna be an
(28:14):
additional 15%.
They ended up going up, Ibelieve, five years as a
rent-to-own on that.
But that was an early win forus.
We got pretty lucky in thatcase.
Um, but it really taught melike, hey, if I get a flip now,
we have one right now as I'mrecording this, that we had a we
for whatever reason we did notdo a well and septic inspection
(28:35):
on this thing.
Here's what I'm gonna tell youguys if you're on our buyer's
list going forward, if thisproperty's older, we are getting
well in septic inspections fromnow on.
Okay, so you can rest assuredthat's gonna be in that buyer
resource folder for you becausewe didn't do it on this one.
We ended up going through andand flipping it.
And we had a buyer, they got awell and septic inspection, and
(28:57):
the well needs to be redone andthe septic needs to be redone.
So we went from like makingmaybe 15 or 20,000.
So we're probably gonna loselike 15 grand on this thing if
we sell it the traditional way.
Okay.
So taking that early lesson frommy personal residence back in
2017, we are now eight yearslater doing something similar
(29:20):
where we're gonna put it out asa rent to own.
We'll fix this well on theseptic and all that sort of
stuff.
And even if I do rent to own onthis thing, I don't think I'm
gonna be able to get much morethan still maybe making$15,000
if I do that route.
But now again, I can mark thatprice up because you know you're
providing a premium service forsomebody.
Uh, I don't have to pay realtorfees if I do this.
(29:40):
So I'm saving that, you know, wewe pay about 4% because we're
investors, we do a lot ofvolume, we get a discount on the
listing commissions and all thatsort of stuff.
So we're our net realtorcommission is normally 4%.
Um and so we can go that routewithout having to pay those
realtor fees, and we can marketup.
So we can make a little bit of aspread here now and try to help
(30:03):
somebody who can't qualify for amortgage right now.
Now, what they do when they rentthe owns is they put money down.
Like I don't just put people inthere and say, great, here's
your future purchase price, justpay me regular rent.
Like they have to put down moneyas an option fee.
And so you're able to get atleast some of your cash back and
give yourself a little cushion.
So if they don't perform, theydon't end up buying it, you have
(30:23):
to evict them for whateverreason, their life circumstance
changes, they decide they don'twant to buy the property,
whatever the case is.
Now you at least got a chunk ofcash that you get to keep.
Okay.
So it's not like a securitydeposit.
Like a security deposit, we allknow that doesn't even cover
anything hard.
Anyway, if somebody destroysyour place.
In this case, it's it's prettysignificant.
So we've gotten up to$100,000down on one of these
(30:46):
rent-to-owns on a$270,000purchase.
So people have cash a lot oftimes, but they can't get a loan
for some reason.
And so those people are perfectfor these rent-to-own
situations.
So that's what we're doing rightnow.
But that was a lesson learnedfrom 2017.
Hey, I got a deal here.
I'm going to lose money on it ifI sell it the traditional way.
I'm going to try to do arent-to-own on this thing and
try to make this turd into awin, is what we learned in that
(31:10):
story.
So that was a lot of the earlydays.
The other thing we learned toois I am not handy at all.
And a lot of you guys out therelistening might be handy, but it
might be costing you a lot morethan what you're gaining from
that.
And so here's a couple examplesof that.
Another flip that year, wedecided uh to start flipping a
(31:32):
lot of properties too.
So we were doing, we started outwanting rentals, then we
realized, hey, if we just flipand wholesale more properties, I
can get out of my job a lotquicker than going the longer
term route of the rentals.
And then once I'm out of thejob, then we can start acquiring
properties again.
And so we started shifting tothat model.
And a couple instances where Itry to get in and do a little
(31:54):
bit of work.
I learned a few things too.
I didn't realize buyers havedifferent lending uh programs.
So there's things like FHAloans, there's VA loans.
They have specific requirementsthat they will not lend on a
property if some of theconditions are not met.
So for example, if there'speeling paint or chip paint,
(32:15):
they will flag that and that hasto be fixed prior to closing.
So we had a proper in Algoma,and we were living in Green Bay,
so about 45 minutes away, notthe end of the world.
We had hired a contractor forit.
Um I could do a whole episode oncontractors.
That's a whole nother animal.
(32:35):
I won't get into all of thattoday.
But the point is, we had abuyer.
It's in the year, towardswinter-ish months, fall,
November, December.
We were going to close on thisproperty.
Well, we had some shutters therethat had peeling paint and all
that sort of stuff.
And the contract we had at thispoint, it kind of flaked out on
(32:56):
the job.
He was kind of like gone.
Couldn't really get him to comeback and do anything.
So the day of the appraisal forthis FHA loan, I had to go out
to this property and try tospray paint the shutters while
they were still in the house totry to keep it from getting
flagged by this appraiser.
(33:17):
Meanwhile, it is probably 30degrees and windy.
Like so wind chill is probablylike 10 degrees.
And I'm out there trying tospray paint this stuff, right?
And I'm up on the ladders, I'mspray painting them, doing this
stuff.
And I'm miserable.
I'm not, again, I'm I'm a paperpusher.
I don't like getting out andgetting dirty with this stuff.
(33:39):
So I'm frustrated.
I'm mad because I don't knowwhat I'm doing.
I'm not doing a great job, butit's getting done.
I'm getting done when I need toget done.
And I get back in the car and Iremember I looked in the
rearview mirror and I just hadspray paint speckles like all
over my face.
And I just started laughing.
I took a little picture andthrew it on social media.
I remember, and lesson learned,don't put me in there.
I did another spray painting ofshutters on a property about the
(34:03):
same time of year.
And our contractor on thisproperty was much more reliable.
Um, and brought these, you know,we took them home, took them off
the property, uh, took them offthe house, brought them home,
spray painted them, brought itback to the property, and again
it was like 15 degrees outside,and I'm drilling it back into
the house, and it went too fastand cracked the vinyl on the
(34:23):
shutter.
Like first screw.
And I just brought them into thehouse and gave them to my
contractor.
And I said, Andy, can you fix mymistakes?
And he says, Yes, go home.
Get out of here.
You're messing everything up.
Just go home and do it.
So a lot of lessons learnedthere.
And that's when I startedrealizing it's really, really
important for me to know mystrengths, know what I'm good
(34:44):
at, and hire people foreverything else that I don't
love doing and that I'm not goodat.
And it's it took a while, right?
We're now in 2022 2025, almost2026 here by the time this
episode is going to drop.
And we started in 2016, soalmost 10 years.
Now we started hiring peoplepretty early on, but it took a
while, right?
And there were some otherlessons learned there, as we
(35:05):
talked about through hiring andscaling and growing and all that
sort of stuff.
But that was really a lot of theearly stuff.
You know, we were in doingtrying to do some of the work
and trying to skimp and save andum and and do all that sort of
thing.
And we've we learned some somesome mistakes.
Again, the wells, well, andseptic thing, big mistake.
They're missing out on some ofthose big ticket items that we
(35:27):
went to have gotten.
And um a lot of those havecarried through.
And so it's been quite thejourney.
We now have uh I believe about15 employees in our wholesale
company and and a few employeesin some different real estate
businesses we have for ourholding companies and our
short-term rentals and that sortof stuff.
Um and so that's always we'realways learning lessons through
(35:51):
growing and scaling the companynow, a real company, but that
was the that was the early, theearly days.
And so uh I encourage all of youguys if you're out there
listening to this episode andyou're like, wow, I I feel
overwhelmed.
I feel like I can't, I'm nevergonna be able to get 100 doors,
or I'm never gonna be able toget out of my job, or I'm never
(36:11):
gonna be able to have an extra40,000 a year from from flips or
whatever the case is.
I'm never gonna be able to getthese credit cards paid off.
Just encourage you to stick withit.
You know, get education.
That was some of the big stuffthat we learned.
Get education.
You know, the best asset you canyou can invest in is yourself.
It's your mindset, it's youreducation.
(36:32):
It's all those things.
And get around people that aredoing, you know, that are
further ahead than you and learnthe lessons from them.
So many lessons learned.
You know, a lot of things I Iprobably would have made a
hundred more mistakes I couldhave talked about on this
episode had I have not gottenaround people and learned from
their mistakes.
Or listen to podcasts like thisand continue to learn from what
(36:52):
not to do and what were thethings that you need to do to be
successful.
Learn all that from otherpeople.
That's where I got all thisstuff from.
I just I'm just I just a bigcopycat most of the time.
I just copy what other peopledid that works really well, and
I implement it.
All right.
Um so do that and then get somecoaching.
I tell you what, one of theother big values here, guys, the
(37:12):
thing I'm gonna give away to youtoday is we are doing free
coaching calls.
Okay.
Now, I was talking to Reese fromour team about this today, and
he's so humble, but I mean, hedoes such a great job coaching
people.
I'm happy to coach you as well.
We want to just help you getfrom doing a very minimal amount
of deals to doing whatever dealsare gonna get you to your goal,
(37:33):
right?
Whatever that looks like foryou.
If you're not doing any deals,let's get on a call, let's
figure out how to get you thatfirst one.
Okay, we'll walk you step bystep through it, but we're gonna
do that for free for you guys,okay?
We also, in addition to that,the$2,000 giveaway I was gonna
give you is if you sign up forone of these coaching calls,
we're gonna give you our BurferBeginners course for free.
Okay, so that was normally$2,000, just the course.
We used to do some coachingalong with that.
(37:55):
That was much more expensive,but just the course alone, we
were charging$2,000 for.
And people are getting greatresults.
I got a good buddy Nick Huberty,I think he's been on this
podcast as well.
After going through that course,I think within a year, he got
like 30 doors from following thesteps in that process.
Now, he learned some lessonsthere too in that episode.
So he made some mistakes that wedidn't cover that in the course.
(38:16):
So we can talk through some ofthe mistakes he learned.
But uh get signed up for one ofthose.
So to get that, go to WisconsinDiscount Properties.com.
It says how'd you hear about it?
Put the podcast in there, andthen uh um we'll get you that,
we'll get you the course andwe'll get you set up with some
coaching calls, start helpingyou move forward in the process
and hopefully help you get towhatever that future state looks
(38:37):
like for you.
That's gonna be, you know, thelife that you envision, the life
that you want, living your truepurpose, right?
Not feeling like me where I wassuper depressed and like feeling
hopeless, right?
We want to take you from, ifyou're in that state, take you
from that state to excitement,to hope, to growth, prosperity,
right, to legacy eventually,right?
(38:57):
Where you can leave a legacy foryour kids and your family and
your community, prop nonprofitsthat you like, be able to
travel, whatever it looks likefor you, we we can help you with
that.
And that's all free, right?
Now, if you don't want to workwith us or you're not local here
in Wisconsin and looking to dodeals, um, you don't have to be
local, but if you're not reallylooking to do deals here in
(39:18):
Wisconsin, but you love theepisodes and the podcast, I
encourage you to find somebodylocal or find some somebody
nationally.
You know, one of our earlycoaches was also we pivoted from
the local guy to a nationalcompany that does this on a
regular basis and had a lot ofsystems and processes.
And I mean, we went exponential.
We joined masterminds, and wepay a lot of money to be in
these masterminds.
But I'll tell you what, you lookat the return on investment.
(39:41):
I can tell you every singleyear, I get way more value out
of those relationships, thoseconnections of that education
than what I pay in.
So a couple big tips for youguys.
Hopefully, this has beenhelpful.
I would also love to hear fromyou guys if you have some topics
that you want me to cover on asolo episode, or if you have
some guests you guys want me toget on here for you for future
episodes.
(40:01):
Always looking to drag, I wantto give you guys what you want,
right?
Let me know what you what youneed, and we'll we'll get
somebody on here to talk aboutit.
If it's not me, that's an expertin that area.
So appreciate you guys tuningin.
If you got some value out ofthis, guys, we're trying to get
those ratings and reviews up onall the podcasts.
So please go out, give us arating and review that really
means the world to me.
If you're on YouTube, that'sprobably the most powerful uh
(40:23):
platform right now for anybodyout here putting content out.
So if you're on YouTubesubscribing, commenting, and
viewing those podcast episodes,so helpful.
So again, appreciate you guystuning in.
We'll see you on the nextepisode.