March 18, 2025 • 47 mins
Andy Boehm pulls back the curtain on his 15-year real estate investing journey across Northeast Wisconsin, revealing the counterintuitive strategies that have built his success. What began as a career in real estate sales during the foreclosure boom evolved into a profitable investing operation when Andy noticed a simple truth: the investors buying properties were making substantially more money than he was earning in commissions.
The conversation delivers practical wisdom that cuts through the complexity many associate with real estate investing. "If you buy the property right initially, you can do a lot of things wrong and it's nearly impossible to lose," Andy explains, challenging listeners to focus more on acquisition strategy than perfect execution. This philosophy has guided his approach to both flips and his growing rental portfolio.
Andy shares several tactical nuggets that can immediately improve results for both new and experienced investors. His basement renovation strategy demonstrates how to create significant perceived value without the expense of fully finishing a space - painting walls and floors, adding strategic lighting, and ensuring all lights operate from a single switch. He also reveals his foolproof method for permanently eliminating smoke and pet odors using TSP cleaner followed by oil-based primer, avoiding the rookie mistake of using scented air fresheners that buyers immediately recognize as cover-ups.
The discussion explores the current landscape of new construction opportunities, where Andy estimates 60-75% of properties in the $270,000-$400,000 range are newly built homes. For investors looking to enter this market, he emphasizes finding lots with reasonable covenants and focusing on affordable builds rather than custom luxury projects.
Perhaps most refreshingly, Andy challenges conventional wisdom about property inspections, revealing he's purchased over 50 properties without stepping inside before making an offer. His Monday morning ritual of evaluating wholesale deals from Wisconsin Discount Properties while in the bathroom at 6:30 am speaks to the efficiency possible in modern investing with the right information and processes.
Whether you're just starting out or looking to optimize your existing real estate business, this conversation delivers actionable insights from someone who's mastered the fundamentals in a market he deeply understands.
If you're interested in connecting with Andy and exploring opportunities to work with him, feel free to call or text him at 920-915-6760! 📲
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Hey everybody, we're here with another episode of the
Wisconsin Investor Podcast, andI have another amazing guest
that we're going to be talkingwith here shortly.
Before I get into that, though,as I do in the last few
episodes, I'm going to plugWisconsin Discount Properties
for sponsoring today's episode,and we're going to talk about a
little deal that we had in thegreat town of Oshkosh, wisconsin
.
One of our buyers picked it upand he had sent me a little text
(00:24):
breakdown of how the deal wentfor them.
So I wanted to share this withyou guys today, and if I shared
this on another past episode, mybad, I forget what I do on
these sometimes, so bear with me, but this was one.
I got a little text from himrecently, maybe a week or two
ago from the time we'rerecording this.
On the surface it didn't looklike a slam dunk deal.
It looked like a nice littlebase hit and it turned out they
(00:45):
bought it.
The numbers here they closed in105 days from the day they
bought it from us to the thetime that they ended up selling
it.
And they outsource, theycontract everything out.
They have about seven hoursinto it.
(01:10):
So they made about 3,500 bucksper hour on this deal.
So, even though some folks Ihear out there a lot of times
they want to make 40, 50,000bucks a pop, great, awesome
aspirations.
3,500 bucks an hour isn't toobad, better than a stick in the
eye, as we say.
So those are the type of dealsthat we deliver to your inbox
every single Monday 6 am.
If you want to get on thebuyers, let's go to
(01:31):
wisconsindiscountpropertiescom,put your info in and you'll
start getting the deal sent toyou every single week.
With that, we have one of ourlongtime buyers with us, mr Andy
Bain.
Andy, how are you doing today?
Speaker 2 (01:44):
Hey, I'm doing pretty good, Corey.
How about you?
Speaker 1 (01:46):
I'm doing great man.
I'm excited to get you on here.
You know we've we've talkedmany, many times over the years.
I don't know that we've everface-to-face like had a
conversation so.
Speaker 2 (01:55):
I know this is kind of a semi face-to-face, although
you know we're still talkingthrough computer screens or
whatever.
Speaker 1 (02:02):
Yeah, a little COVID, like bringing us back to COVID
days, maybe a little bit, butthat's okay yeah.
Speaker 2 (02:06):
Yeah, yeah.
Well, I'm excited to have youout man You've been in.
Speaker 1 (02:10):
you've been in the real estate industry in
Northeast Wisconsin for for awhile now.
Tell us a little bit about youknow, give the audience your
background and how you gotstarted.
When did you get started andjust how did you get into this
crazy real estate investingworld?
Speaker 2 (02:22):
Sure, Sure.
Well, I got started in the realestate business probably I
would say 15, 16, 17 years ago,something like that.
I started out in real estate asa real estate agent and really
had no aspirations or whateverat that point in time to buy
property or be a real estateinvestor.
(02:43):
That just wasn't on my radar atall.
It was more trying to finddeals and hustle down, you know,
customers to work with listingsand stuff like that.
So but when I had started inthat in real estate, like that
was the time when foreclosureswere super heavy and there's a
lot of, you know, there's adistressed market and so
(03:06):
investor buyers like that was avery big piece of the business.
You know what I mean.
Like that was a huge part ofthe overall market in those
times where foreclosures and welisted a lot of those
foreclosure properties and solda lot of them.
So that's how I got in tune toreal estate investing or
whatever.
When I started trail, it's like, okay, like these dudes that
(03:28):
are buying the houses are makinga lot more money than I am
selling them.
Speaker 1 (03:32):
You know, it's like that's what the pieces together,
a little bit like maybe they'redoing something I should be
doing well, well, right, youknow.
Speaker 2 (03:39):
And then they rely on me so much for, like, the key
pieces of the deal, right, likewhat, what's this house going to
sell for later?
What can I pay for it now?
What should I do?
What kind of work should I do?
You know, they're leaning on mefor all of that information and
all those questions, right.
And then, like I'm just addingit up for them after I do some
(04:00):
of these flips with these people, I'm like, do some of these
flips with these people.
I'm like, all right, theybought the house here.
I know what they put into itand I know what we sold it for.
And there's just a lot, youknow, there's a lot of room in
there, sometimes For sure, forsure.
Speaker 1 (04:12):
So you started doing that, did you?
Were you involved in any of theshort sale stuff too?
Is that kind of the same thing?
We were dealing with shortsales at the time.
Speaker 2 (04:31):
Not, not a ton.
I mean, I tried to avoid shortsales and the fact just that
they were, you know, superhassle, you know their extra
work and a lot more timeconsuming from an agent
standpoint.
There was deals out there fromthe investor standpoint in short
sales certainly, but from theagent standpoint it was not
worth my time and we usually gotthe short sales, as always
pre-foreclosure, before theactual foreclosure happened.
So when we would take them andthe bulk of the foreclosures,
everything I sold was all realestate owned already or you know
(04:55):
, like bank owned or HUD ownedor something like that, where it
was already through theforeclosure process and you know
, short sale was off the tableat that point it's already done
Too far gone Right on, okay,cool.
Speaker 1 (05:07):
What was your first deal?
When did you get your firstdeal?
What was it?
Take it, let's take us throughthat process and what was going
on at that point.
Speaker 2 (05:15):
Oh man, like the first house I flipped or
something yeah.
Speaker 1 (05:18):
First year, first like dive into it.
So you saw these guys doing it,you ran the numbers and you're
like, dude, I could do this.
Like if they can do it, I cando it right now.
What was that first foray tocross onto the dark side of real
estate investing?
Speaker 2 (05:31):
I'm trying to think I mean I didn't even have to
think back what the first onewas.
I knew that the first, veryfirst house I flipped I did as a
partnership deal.
I had somebody else with methat would have been the
handyman or whatever in theoperation, where that's not my
skill set at all.
It's not what I do, yeah, anypart of that so.
(05:52):
But I'm trying to think I thinkthis would have been a house in
, like in fox crossing I think,maybe barbara avenue or
something like this.
Raise the bell, I couldn't giveyou the exact street number.
I know it's a little ranchhouse, three bedroom ranch
two-car garage kind of thing,sure, um, and it was, you know,
your typical flip.
(06:13):
You got some cosmetics and atleast for me, I don't get into
the into these huge you knowprojects or whatever.
I just handle these cosmeticones and yeah, kind of fell in
that avenue and clean it up andresold it, made some money.
You know this.
You know kind of the start ofthings.
Speaker 1 (06:30):
So okay, cool, so that was it.
You flipped the first one andyou say you don't get into the
big one.
So are you talking like you'renot replacing cabinets, type of
big one, or like you're okay ifyou have to like, redo a kitchen
type thing or what's your?
Speaker 2 (06:42):
cabinets and all that .
Yeah, I would say cabinets andstuff is totally fine, like
that's inside of the wheelhouseit's.
I've done some houses whereit's literally the only thing
that was good was the foundation, you know, and and them are the
ones I try to stay away from.
So if it's that or it's like ifI got to get super creative
(07:06):
with the house, like removingwalls or that's not my specialty
I'll take what's there and putit back together, yeah, but I'm
not the kind of person who'slike let me blast out this wall
and I'm gonna add a secondmaster bath in the house where
there never was one.
You know, know those kinds ofthings, that's.
That's, I guess, where I'mdrawing the line for me
(07:27):
personally.
Speaker 1 (07:28):
Yeah, for sure.
We've done a few of those tooin the past and I'm I'm right
there with you.
Some people that's their spentlike.
They love that creative pieceof it and God bless them, you
know.
Speaker 2 (07:37):
Well, yeah, some people are great at it, you know
, but not me.
Speaker 1 (07:46):
We've had one, one of our first flips, really easy
one like we walked.
It was an mls listed propertyand we walked in the house and
you could clearly see wherethere was like a third bedroom.
Like they had just taken thewall down to make the living
room bigger and we're like, oh,if we just put a two walls and a
door there, now we have athree-bedroom house and the arv
is now this right we're.
This is almost like, what arewe missing here?
(08:06):
Yeah, nobody was offering on it, it just sat there and we did
pretty good on that one.
I think we made like 20, somethousand bucks back in the day,
which was good for us at thetime.
Like I said, we didn't have todo much, just handed the keys to
the contractor and tell himwhat to do.
So it was pretty easy.
But is that sort of like now?
I mean Back then you said theconstruction piece isn't
(08:26):
necessarily your forte.
What's been your strategy andwhat are the lessons learned
through the multiple deals overthe decades that you've done now
as it comes to rehabbing theproperties?
Speaker 2 (08:48):
my mindset on that stuff is always like if you buy
the property right Initially,upfront, if you buy it right and
the deal's correct, um, you cando a lot of things wrong and
literally everything can bewrong, Like you could screw up
the whole flip.
You could screw up the wholedeal, you could overpay on stuff
, and if you bought it right,it's nearly impossible to lose
on these things.
If you buy a property right, oryou have any idea or you're in
(09:13):
tune to the market at all, it'sfairly difficult for things to
go south in a situation likethat.
Speaker 1 (09:21):
That's a really good point.
Yeah, you just nailed it there,I think I see so many people
are so afraid of getting theirfeet in the water, like they're
afraid of losing, right, yeah,but to your point, even if you
just build in a little, you know, build in a buffer or whatever
in your numbers so that youcan't lose unless you're like, I
mean, they would have to likeburn down and you didn't have
insurance on it or something,that's one way you could lose.
Speaker 2 (09:46):
Yeah, like everybody talks about that or you hear
people are always freaking outabout the numbers.
And what are your numbers andwhat is your profit margin and
how much are you going to spendon your budget and all of this?
And I'm just like dude if thishouse, I know, is going to be a
275 house all day long, becauseI walk through them every day
(10:06):
and I see them and I'm paying200 for it or 175 or whatever it
is like I don't need to do anymore math.
Speaker 1 (10:18):
You know what I mean.
Speaker 2 (10:19):
Like there's, I don't .
I don't do any more math.
I don't count anything upanymore.
I did it at the front.
I'll try to be smart about it.
I'm not going to put stonecountertops in a basic house.
There's certain things, right,I'm going to be smart about it,
but it costs what it costs.
I'm going to put it together asreasonably as I can.
(10:40):
There's certain things I liketo do in houses that I think
present well or whatever.
You know, there's some of thatkind of stuff, but I don't add
nothing up until the end orwhatever, until it's time to do
the taxes.
Speaker 1 (10:53):
I love it, man.
That's awesome.
What are some of those things,Andy, from your perspective?
What are some of the key thingswhen you're flipping a property
that you're going to make sureyou're doing?
On all of these, yeah.
Speaker 2 (11:03):
And so I'm like kind of you know there's some things
in the basements right that Ithink you can do a lot of stuff
in basements of houses that youdon't necessarily pay for.
You know you do obviously, butlike not a lot.
But you can present bypresenting an unfinished
basement and presenting it asfinished or doing things to make
(11:26):
it look finished adds a ton ofvalue to the house, okay, and
then you don't have tonecessarily deal with like the
finished basement appraisalstuff.
That can be semi-tricky.
Speaker 1 (11:36):
But what do you mean by that?
Can you explain that a littlebit further?
When you say presented as well,like as like.
Speaker 2 (11:42):
If you finish your basement and as a flipper you
spend 25 000 bucks, whatever, solike a new construction world,
I know it.
You spend 25,000 bucks orwhatever.
So like in new constructionworld, I know it's 50 bucks a
foot or whatever to finish abasement, right?
So if you spend that much as aflipper, I don't know that you
get that back on an appraisalfor lower level square footage.
You're not going to appraisethat back.
A buyer might pay for it, butthat buyer may run into
(12:07):
appraisal issues.
Okay, okay when.
If you take a basement and justleave it as unfinished but
present it a little bit better,make it show a little bit better
, paint the floors, paint thewalls, put recessed, can lights
in there, put a little drywall,you know a wall to separate an
unfinished area, create likethat sort of space can get a
(12:32):
similar effect.
You know like buyers will pay asimilar type price.
You don't have to deal with theappraisal aspect.
As much you know.
And then the house presents andshows almost as like a finished
basement.
Speaker 1 (12:45):
So good, dude, that's a good nugget right there.
Everybody should go back,re-listen to that because, dude,
that's a good nugget rightthere, everybody's go back,
re-listen to that.
Because that's a good littlenugget right there.
We've had that too, where, yeah, you just just paint.
That's why I was hoping that'swhere I was thinking you were
going with.
That was.
You know, we painted the wallsand cleaned it and made it look
not like a scary basement, likea nice, like oh, the wife could
go down here with you, know, andlook.
Speaker 2 (13:05):
No, no offense to the ladies out there, but sometimes
they're a little timid to go inthe basements and, uh, I had,
uh, along those lines, like Ihad an investor guy I worked
with for many, many, many yearsand he used the term barefoot
and pregnant.
So, okay, if you're, if yourwife is barefoot and pregnant,
can she go down the stairs andgo into the laundry room.
(13:26):
If your basement's like, ifyour laundry's in the basement
right or whatever, can she godown in that room and in that
state and be like, okay, yeah,you know, and if you can present
it like that, then it's a hugewin that's awesome and that's a
very inexpensive, uh,improvement to make to the
property to just give it thatextra pop and get more, more
(13:46):
interest in and the buyers andhopefully drive up the price
Right For sure.
Speaker 1 (13:51):
Yeah, awesome, that's a great tip.
What are some other things thatyou give any other?
You know kind of nuggets alongthat line, that people that you
do that you've seen success with, or some of your investor um
flipper guys out there you know,um, not, not too much.
Speaker 2 (14:06):
I mean on the basement side, the recessed can
lights.
That helps.
I'm pretty picky about flippingone switch because I think
about it from a real estateagent perspective all the time.
From showing the houses right.
So like if you flip one switch,go into the basement, it turns
everything on in the basement,the basement and turns
(14:28):
everything on in the basement.
A real estate agent doesn'thave to jumble through a mess
and flip switches, find the pullchain, figure out how the
lights turn on in the basement.
It just like that would ruinthe flow of a showing.
A buyer's not going to viewthat space very well.
Versus you flip a switch andboom, the lights are on, or in
the basement, like I'd alwaystry to stick in the laundry room
(14:49):
.
I try to make the laundry areabecause a lot of the older
houses that are flips and stufflike the laundry's in the
basement, you know.
So if you can make that alittle bit nicer and put a
toilet or a slop sink in there,some counter space in there,
again, the recessed lights paintthe floor, the floor paint the
walls, like those basic things.
(15:09):
One switch, come on, versuswalk into the room and it's
showing and search for literally30 seconds to a minute, two
minutes, try to figure out howto turn on the lights, like yeah
, that makes a huge difference,um, in the buyer's perception,
and can also be like thedifference of like one offer or
(15:29):
four.
Speaker 1 (15:30):
Right, ah, it's so good, that is so good.
What about?
Like, just like smells in thehouse.
Like, are you a believer in?
Like when you're going to showus?
Like having the cookies out andthe candles and all that stuff?
None of that stuff.
Speaker 2 (15:42):
No, everybody just laughs at that shit.
Everybody laughs at it.
Every buyer makes fun of peoplewho do that.
It's just totally stupid.
And like the, the worst thingis the, the, the smells.
If you overdo it, like on theair fresheners, that's an
obvious cover-up, like blatant.
Every real estate agent knowsit, every buyer knows it.
Like that's awesome, everybodygets it.
(16:04):
Uh, but like you can't havesmoke smells and things like
that, there's like you have togo over the top to eliminate
smoke smell.
That's an odor that if youdon't seal that up correctly or
deal with that correctly, thatwill seep through and then every
investor tries to then cover itup with the air freshener.
(16:25):
And like you've hurt yourselfso much by not correcting it up
front.
To correct, you know, rightaway and get rid of it.
But you know, outside of that,just don't have nasty smells in
your house and you know, justleave it.
Speaker 1 (16:39):
Yeah, what is your?
Have you bought properties thathad either pet odor or or smoke
smell or anything like that,and what's been your experience
with staying away from thosethings?
Or are you afraid of thosethings when you see that?
Or is it just something thatyou, you know, work into your,
your numbers?
Speaker 2 (16:55):
No, it's a not, it's not an issue for me, Like I
would.
Just.
So the steps to me, like Iwould use, is um, if it's a
nicotine smell or smoke typesmell, um, you can use a TSP
cleaner.
That's what I've always usedanyways, and you, you know,
scrub the walls up really goodand you know that helps to get
like the layer of soot and grimeand nastiness that's on there.
(17:18):
It also preps it for paint andI guess you know it's good for
that.
I guess I don't know, but ithelps to clean it.
But then I was always told to.
It helps to clean it.
But then I was always told toand I've dealt with this and it
works is to use an oil-basedprimer.
You can't just get regularlatex primer or something.
You get an oil-based primer andthen you go over that.
(17:39):
Once you've cleaned it, thenyou can go over it with an
oil-based primer that helps toseal that smell in and then you
paint it from there to seal thatsmell in and then you paint it
from there.
Okay, um, and that has, in myexperience, like 100 eliminated
like smoke smells and then, likeyou know, pet stains, you know
you get dogs, you know whateversub floors get pissed on and
(18:00):
stuff and like that.
I've always used the oil-basedprimer before I put carpet down
or before I put the LVP oranother layer of subfloor or
whatever it is like seal thatstuff in and cover it up, and I
spent extra time at thebeginning doing that so that I
don't have to use air freshenersor cookies or whatever else.
(18:21):
Like people like to walk into ahouse and it smells like new
carpet, like that's a smell andpeople like it.
You know fresh paint is a smell.
Like that's better than cookiesor better than you know, yeah,
linen breeze, whatever you know,yeah, for sure, for sure, are
you.
Speaker 1 (18:41):
When you say the oil based stuff, are you talking
like the kills stuff killsprimer and all that.
Speaker 2 (18:46):
Yeah, okay, yeah any of those, but they make like
kills or them brands.
They make two different kinds,so they they'll sell them in the
store side by side.
One's a latex type primer andone is oil-based and it's a
difference.
Speaker 1 (18:59):
Okay, gosh, I'm getting so many good nuggets
here today already.
Andy, see, I you can tell Idon't get in and do any of this
stuff.
I just I just sling propertiesor tell people, hey, go fix this
, and then do what's best.
This is good stuff to know sothat if you get somebody a
contractor, painter, whateverdoesn't know what they're doing
you can point them in the rightdirection.
(19:21):
So your investing strategy now,andy are you doing a lot of the
rental side of things or moreflips, or what's your mix in
your strategy now?
Speaker 2 (19:30):
I'm a little bit of both I try to get involved in.
I've always had, maybe a sidegoal of adding a couple of
properties a year.
You know what I mean A few, two, three something properties a
year and just buying those andholding them.
I've been doing that for awhile.
Um, and just buying those andholding them.
(19:50):
You know, I've been doing thatfor a while.
And if I'm bored or somethingyou know, I get some flips.
Or you know something to do, um, I don't do like a ton of flips
just from like the tax purposesand stuff I don't love, but, um
, like I said, sometimes like I,I get bored or whatever, and
then, um, I'll buy some.
Speaker 1 (20:07):
Nice, I love that.
That's your boredom habit, youknow, not playing video games,
it's, I'll go buy a flip, Iguess.
Speaker 2 (20:14):
Might as well, something to do.
Speaker 1 (20:16):
You're a real estate junkie for sure, when you know
your habit is buying propertieslike ah gosh, I'm bored, I guess
I'll just get another property,that's awesome.
Now you also you you representsome people in the new
construction space and you'vegotten involved in some
partnerships.
It sounded like when we werechatting a little earlier talk a
little bit about the newconstruction world and what
you're seeing as it relates topeople.
(20:38):
You know I know some, some guysI know that are that started in
the flip space and nowprimarily just do infill lots
and and new construction type ofstuff.
Speaker 2 (20:47):
But what are what are you seeing on the new
construction stuff?
For somebody who might beinterested in getting into that
world, I think it's a hot market, it's a busy piece of the
market.
I always, every time I've beenin real estate or whatever, I
just find the niche or whateverand ride the wave.
So when I first got in, wetalked about foreclosures was a
(21:08):
niche and you rode the wave andthat was just what the market
demanded at that point in time.
Was the market conditions right?
So?
But now, with interest ratesthe way they were, house prices
spiked the way they did,interest rates now changed and
spiked.
Uh, inventory is ridiculouslylow.
Any anybody who hasn't livedunder a rock and cares about
(21:32):
real estate knows like it'simpossible right to find stuff.
So that's what's created newconstruction.
And then if you look at theoverall market, if you're in a
price point of 270, 000 bucks,like on on the low end to 270,
something like that, and thenyou're going to be to 400, price
(21:52):
wise, go dig around on the MLSor go look on Zillow or whatever
, and you're going to see that Idon't know, I'm making, totally
making this up.
But what is it?
60, 70%, 75, something new, newconstruction in that price
range.
Speaker 1 (22:08):
Yeah.
Speaker 2 (22:16):
Like, especially in the threes, once you get to like
320 or something like that,it's a huge percentage of new
constructions, virtually thewhole market.
So that should tell some peopleif you want to be involved in
real estate, where you want tobe like that's what's selling
and that's what's moving rightnow.
That's what's selling andthat's what's moving right now.
So, uh, but it's also importantwhen you know, when you're
doing new construction is to tobuild and sell what people want
and what's selling and that'sgoing to be something smaller in
(22:38):
size and something moreaffordable.
Uh, I have zero interest inbuilding somebody a fancy house,
you know, some big custom housewhatever, like that's a
different lane or differentwhatever.
But if you can just keep to abasic price and I've had this
with any aspect of real estate,flips or new construction if
(23:00):
you're in the low end of realestate, you don't lose ever.
Yeah, there's always going tobe somebody who needs an
affordable house.
Right, don't lose ever.
The low end is always business.
Speaker 1 (23:09):
Always going to be somebody who needs an affordable
house, right.
Speaker 2 (23:11):
A hundred percent yeah.
Speaker 1 (23:13):
For sure.
Yeah, when you mentioned like270 to the fours, I was like you
can get a new house for that.
Like, that seems low to me.
What are the keys to keepingthe cost low?
And then, what are peopleseeing for margins on new
construction?
Like, what are they?
You, I know, I know what welook at when we're looking at a
(23:33):
flip.
I know how we run our numbers.
There's a certain like I run itas like a certain dollar amount
I want to make sure I can make.
I don't worry about likepercent arv, like some people do
, but like what do you?
what are the guys and what areyou seeing on the and you doing
on the new construction side,like what is their target
typically when they're lookingat doing these projects and then
how are they making surethey're staying within those I
guess you'd say parameters?
Speaker 2 (23:55):
Yeah, I think in each builder is different.
You know some builders I workwith work on percentage basis
and they want to make you know20% or something on a house
right, and they want to make youknow 20% or something on a
house right.
Some people look at it moredifferently and they're just
looking at the overall projectand I can make 30,000 bucks or
(24:15):
whatever you know it would be.
You know slightly different onthat, but I know one thing that
they do a key thing is finding alot that you can build on where
the covenants are not crazy.
So in order to get to a priceof $270, you need to build a
(24:37):
small house and you need to getcreative with how you build a
small house.
So, do you eliminate basements?
Do you eliminate bedrooms?
Do you eliminate garages?
Do you find giveaway lots thatnobody else wants?
Do you find subdivisions wherethe covenants allow you to build
less square footage?
(24:59):
Those are all little avenues orlittle ways in which you could
reduce costs.
You can sometimes work directlywith municipalities and you
might be able to get someassistance or you might be able
to get some kickback from themif they've got, you know, like
aged lots or inventory or stuffthat they wanted to get rid of.
(25:20):
That could be an avenue to helpreduce things.
And then and this is not my laneat all, I don't do this at all,
but, uh, smart people do if isthey understand exactly how much
subs like a new construction,like, yeah, you, you know, if
you're a builder, you betterknow exactly how much people pay
for drywall and exactly howmuch it is to paint.
(25:43):
And that's that's the world.
Where it's a little more mysloppy way of doing numbers and
all that stuff that we talkedabout for ARVs, for flips, like
it's harder to do a newconstruction because you've got
such a big range.
And then, like I wouldn't knowto hire a painter, I wouldn't
(26:05):
know that I can get a painterdown to X price, you know what I
mean.
Like you have to be involved inthat and you have to shop that
and you have to bid that and youhave to negotiate that and you
have to set that up with everysingle contractor.
So I feel like skilled buildersor talented builders are they
get good people, clearly, butthen they you know they'll
(26:28):
either build enough volume orgive them enough work that says,
hey, your price has to be here,I'd love to hire you, but price
is this or I can't hire you,right.
Speaker 1 (26:38):
Yeah, yeah, that seems like that to me has always
been the risk of like no, yougot to know your numbers, cause
you could.
If you got a $30,000 marginthat can get eaten up pretty
quickly with making a fewmistakes with subs.
Or you got a thirty thousanddollar margin that can get eaten
up pretty quickly with making afew mistakes with subs.
Or, yeah, like subs, you gavethe sub the down payment or
something, then they fly, flyaway with it and now you got to
start over and I mean it can.
(26:58):
It can be quite an expensivelearning experience trying to
get into this, this ball game,but I know guys that do it, so
that's why I'm like it seemslike an interesting avenue to
possibly, like you said, ridethe wave right now.
It seems like that's kind ofwhere the hot market is in some
of these more affordable newconstruction type of scenarios.
So buying the lot.
(27:19):
Going back to that, what areyou seeing people paying for
lots and how are theydetermining the price they can
pay for the lots?
What are you seeing as far asthe criteria goes on that?
Speaker 2 (27:32):
A lot of it would be location specific.
The thing with the lots is alot of times those prices are
set in stone from a developerand many times new construction
lots are never MLS listedproperties.
These are all.
Builders get relationships withdevelopers and developers sell
(27:54):
to builders almost exclusively.
So they kind of bypass realestate agents and bypass the mls
.
Um and those the pricing ofthose lots are sort of set in
stone almost.
You know it's hard to buysomething.
You know 60 000 bucks, likeit's almost hard to buy
something for 60 grand, 60,70,000 bucks, depending the area
(28:17):
is pretty difficult, um, prettydifficult to find okay, um, I
just got totally distracted.
My phone was kind of blowing upunder there for a second.
No worries man yeah, uh, butthen it's, you know, like the
infill lots, those things youcan find, those are mls listed
(28:39):
properties but those you canfind at.
That's how you get into likethe 270s.
As an example is if you find atwenty thousand dollar infill
lot in anywhere in the foxcities, you know those can be
twenty to thirty thousand bucksand you make money on those.
There's a little bit extra cost, you know there's added costs.
(29:01):
So those infill lots have to beless expensive than like an
open subdivision lot, justbecause there's, you know, a lot
more like excavation costs andmoving dirt around and all that
kind of stuff.
The cost to build on a lotinfill that has two houses
surrounded by it is going to be,I don't know, 15 grand, more
(29:22):
probably to build a house thanit would be if it's totally open
.
Speaker 1 (29:26):
Okay, got it and that's just like you said.
Just because you're going tohave to be skirting dirt and
doing different things, is thatanything to do with the
utilities?
Are those typically there?
If you're, like you said,between two houses utilities-
utilities.
Speaker 2 (29:39):
Should you?
Should the utility should bethere.
It's mainly like the cost oflike, let's say, you had a
subdivision and you have allthis extra dirt, you can just go
move it to the next lot andkeep moving it around and
there's other builders that needdirt and so like you can move
that dirt around okay if you'rein the middle of two houses,
(29:59):
like not only is it a pain inthe ass to get the dirt out, so
that costs you more money, butthen it's a you have to pay to
get rid of the dirt and thatcosts you more money, you know.
So then all the contractors too,like when you're pouring a
foundation wall, like it's wayharder to get your equipment
around all these other housesand pour a foundation in that
(30:20):
situation than it is when it's awide open lot, so it makes a
lot of sense and I and I thinkthat applies through many of the
steps right.
So, like that's where the pricebecomes, they charge more, you
know.
So everything becomes a littlebit more expensive than if it's
(30:43):
you know, hey, I got this houseright here.
Speaker 1 (30:44):
You know it's easy to work on.
Yeah, yeah, wow.
No, that's good.
This is all really good stuff,because I see some of these lots
sometimes and I'm tempted tolike, should I try to get this?
But I don't know, like thoselittle things like that, like
moving the dirt and getting ridof the dirt and doing these
things, I don't think about that.
Well, there's a lot.
Here's how much they want Cool.
Speaker 2 (30:58):
And the old lots to.
The other thing on the old lotsis the.
You know, like in the flipworld we deal with the old lots
and old houses and stuff wherethey have the lines coming into
the street.
You know the sewer and waterlines and those in older houses
are a lot of times junk or theyhave roots going through them or
they need to be cleaned out allthe time or whatever.
(31:18):
Like that's the same thing thatyou'd have on an old infill lot
too.
So if you're buying a $20,000lot, you're also flipping a coin
, that there's a $10,000 sewerbill that you got to flip.
You know that you're going tohave to redo as well.
So like you know there's'regoing to have to redo as well.
So like you know there'sthere's there's more surprises
and stuff.
And then that's where you know,like you'd be aware of it but
(31:42):
like I could tell people, youknow you spend a lot but by
$20,000 for a lot.
Speaker 1 (31:47):
If you can control your pricing on your contractors
like you can still eat 10,000,you know you can eat some of
that stuff, similarly to whatyou were saying earlier about,
like, as long as you get itright, you buy it right.
You can, yeah, you can.
Speaker 2 (32:04):
You can absorb some potential surprises in there
yeah, yeah, yeah, and I absorbsurprises in volume too, you
know what I mean.
So, like, that's where, if youdo enough projects or have
enough things going on and oneof them kind of sucks, like yeah
, it doesn't matter, I did 15,so three of them sucked, 12 of
them or 10 of them were awesome,and two, you know, like yeah,
it all kind of washes averaginga little bit there and yeah,
(32:28):
yeah, we see that a lot in theflip world or in the uh, in the
rental game too, like we knowsome folks who who bought in one
or two rentals.
Speaker 1 (32:35):
And you know I think that's much riskier than buying
10 to 20 or more rentals,because now you got one vacancy,
you got 50% vacancy.
Speaker 2 (32:45):
If you got two units or you have a single family
house and they're vacant.
Speaker 1 (32:48):
Now you got a hundred percent vacancy, you know and
you need that cash to come infrom the one where, if you'd buy
enough of them and you get onedud, it kind of washes out with
what you did on the other one.
Same with flips.
We have some people that'll buy15, 20 properties from us a
year, plus other propertiesthey're doing and some of them
you're like well, I don't knowhow they're going to make money
(33:10):
on this one, but thanks forbuying it from us at the number
you offered us.
It was great for the.
Thanks for buying it from us atthe number you offered us.
You know it was great.
Uh, and they don't care becausethey just started.
They're keeping their crewsbusy and they're they buy enough
of them that they're gonna winbig on several and they're gonna
lose a cup a little bit on someother ones and overall, at the
end of the year, like you said,when they're going to pay their
taxes, they're gonna have a taxbill because they made pretty
good money.
Speaker 2 (33:30):
You know from doing it.
That's, that's really the nameof the game.
Speaker 1 (33:34):
So you do one flip and you're banking on that one
May or may not knock you out ofthe game, right.
Speaker 2 (33:41):
Yeah, it's definitely easier.
I think the more you have youknow.
Obviously it's easier that youget more experience and stuff
like that, but it's from arental standpoint.
It's easier to deal with thefurnace, it's easier, you know,
whatever comes up, it's justkind of it just simpler once you
get over that hump the initialhump, I guess, like yeah for
(34:01):
sure.
Speaker 1 (34:02):
Now you have a lot of experience just in in all
aspects of real estate which isone of the reasons I wanted to
have you on here today and soyou've bought some properties
from us at Wisconsin discountproperties as a wholesaler.
Obviously, you've done dealsthrough the MLS.
Somebody listening to this?
What are some things theyshould know about the
differences between maybelooking at MLS and working with
an agent to help them find someinvestment opportunities, versus
(34:26):
working with somebody like usas a wholesaler?
What are the things to belooking out for pros and cons?
What are the things if they'relooking for an agent?
What should they be looking for?
If they're looking for awholesale company, what should
they be looking for?
Those types of things?
Speaker 2 (34:40):
I guess the first thing I would say is like, again
, the money's made in the deal,right, the money's made in the
purchase of the transaction.
So any investor should probably, on the purchase side, spend
less time talking to real estateagents trying to buy something
on the MLS.
It's probably a waste of timeto do that and spend more time
(35:01):
getting on wholesaler lists orbuying properties from you guys
or whatever, where it's a offmarket type situation and it's
not competitive Like.
The only reason, like you guys,properties have margin and are
available for investors isbecause they are off market.
It's a unique opportunity forsomebody to get those like.
(35:22):
You're competing with your list, which is a fine list, I'm sure
, but it is not the list of areal estate agent in the mls you
know it's a different, it'sdifferent.
So, um, it's way harder to makethings work and mls properties
and you can spin your wheels andget frustrated where on yours
(35:43):
or any other wholesalers like,still do your due diligence.
You know, I pay attention.
I make my own arv numbers.
I make my own numbers.
I don't rely 100 percent onwhat somebody else tells me.
You know, I do my due diligenceso that I can feel comfortable
knowing that I don't have to dotoo much more math.
(36:04):
You know what I mean.
I know my backend number.
I'm super in tune with that andI'm not ever going to be wrong
in my backend number, and youknow.
So I would just spend all yourtime focusing on that and make
sure your backend number is whatit is and then design your
rehab around it.
Okay, you know what I mean.
Like you can choose to remodela house and spend $50,000 on a
(36:28):
remodel, or you could spend$35,000 and probably get the
same result.
Speaker 1 (36:32):
Yes.
Speaker 2 (36:33):
You know.
So I think that would be like,no, you're back at number and
then be humble enough to changeall your plans and what you
thought you were going to dowith the house or what you want
to do or what you saw on TV orwhatever, and just work inside
of those numbers you know what Imean and just be like, all
right, this guy it's got to fitinside of here.
(36:54):
And then then you know, likethe whole dollar cost averaging
thing, like you don't haveproperties that lose, you just
don't.
If you understand that onesimple concept, you'd never lose
money.
That's so good, um, but that'slike, so on your properties.
Like you would be able toactually see a spread, you'd be
able to see an opportunity tomake money.
(37:16):
Um, I pay attention, like Iwatch some videos that you do
and I'll rewind them and I'llcheck and I'll.
I'll look for little odds andends and stuff that might be
glossed over or whatever.
I look through that stuff.
Yeah, um, I factor in the costfor title, I, you know I I
factor in all the extra costs.
You know, because that'sdifferent.
(37:37):
When you buy MLS, you're notpaying title insurance fees.
You know there's some of that.
So you just got to know thosecosts and pay attention to that
stuff.
You know you guys do a good jobof putting a lot of that out
there, putting the inspectionout there.
There's at least something tolook at.
There's some video to look at.
(37:59):
You got the title search so youknow there's not special
assessments or goofy stuff likethat.
Yeah well, those are all goodthings.
Speaker 1 (38:10):
I think a lot of people take that stuff for
granted.
They don't know If somebody newout there they're like I don't
know, what should I be lookingfor.
And I think those are importantthings.
Like you know, to know.
If you're working with awholesale company, you want to
make sure you're going to getclean and clear title and that
they're actually working with atitle company.
It seems like obvious, but youknow horror stories out there
and some parts of Iling.
You know that here's a deal youcan buy and then they never you
(38:37):
know give me this money andthen you'll get the house and
they don't run it through atitle company.
There's no title insurance,there's nothing.
So that's an important thing toto to point out there.
Andy, you mentioned youmentioned something earlier, but
I wanted to ask you because oneof the things I hear a lot
about is we don't dowalkthroughs right and so with
MLS, a lot of times you're goingto walk through the properties
versus our process.
You're going to get a video andan inspection report.
(38:59):
What are your viewpoints onthat?
Because some people I talk tolove that idea.
They don't have to drive allover the place kicking tires,
like you said, and wasting a lotof time on MLS properties that
are going to be so competitivewith.
You've got everybody on thelist right On an MLS versus.
Our list is still yeah, it's agood list, but way smaller
amount of people you're upagainst.
(39:19):
But some people need to feelthe need to have to walk through
a property in order to feelcomfortable with it.
What's been your approach onthat?
Because you've bought severalproperties from us not walking
through them up front.
How is talk a little bit aboutthat and how that, how you work
that into your system or intoyour process.
Speaker 2 (39:39):
Um, I don't know, I'm kind of old school and I have a
simple mindset that says youwant to buy something super
cheap and below value, likemaybe you can't see it.
You know what I mean.
Like I've bought 50 plus housesthat I've never stepped inside
the door, like that's to methat's how you buy houses.
(39:59):
If you want a good deal, youknow, like, if you want to go
pay retail and investigate everynook and cranny of the house
and have your home inspector inthe house for five hours and
pick it apart and it pay retail,yeah, go, you know, go pay
retail.
That's what it's there for.
But, like I don't know,sometimes maybe you have a house
(40:21):
like from your perspective orwhatever, maybe there would be a
house that is cleaner or inbetter shape than what people
would give it credit for, orwhatever on the video yeah and
then you could maybe get moremoney if people put their
eyeballs on it, um, but on thesame time it's like you know,
sometimes people over and I'vebeen involved in both I've paid
(40:43):
more and I'm like, oh, that's alittle worse than I thought you
know, and I didn't do as good onthat one and I'm like, oh,
shoot.
But then another one it's like,oh, that's a little better than
I thought you know yeah um, Idon't know.
I just have always assumed it'spart of the game.
Like every every short, like ifyou buy any foreclosure, like
through the courthouse orwhatever.
None of those have ever beenwalked through in the history.
(41:05):
You know, unless you'rebreaking in so like I don't know
.
Speaker 1 (41:09):
Yeah, yeah, I'm with you.
Well, I'm glad you brought thatup because that is one thing
that obviously I get atdifferent people's concern
levels and stuff.
And glad you brought that upbecause that is one thing that
obviously I get at differentpeople's concern levels and
stuff.
And we used to do the in-personthing before COVID happened.
And then COVID happened and wewere starting to grow, where we
were starting to get more thanlike one or two properties that
we could put out a week, and itbecame a logistical nightmare
for us to try to like have oneof our representatives at the
(41:30):
house for an hour a week andthen they're also out trying to
get more deals, you know, sothat we can provide more
inventory to the market.
And it just became likesomething had to change, like we
had to just come up with a waythat was going to be sustainable
and allow us to scale the thing.
So that's why we get theinspection reports Now.
We never used to do that.
It used to just become walkthrough it and be your own
inspector.
And a lot of people have saidhey, I actually appreciate you
(41:53):
guys having the inspectionreports versus me trying to walk
through and act like I knowwhat I'm looking at, like I
don't know what the hell I'mlooking for, so having the
inspector go do it, I don't haveto go walk the properties.
You know, when I set up theprocess, when we did this I joke
, but I said I wanted to make itso you can, instead of sitting
on Facebook on your phone whileyou're on the on the crapper,
you can sit and evaluate a dealin that 10 or 15 minutes and
(42:14):
hopefully make some money.
So that was the.
Speaker 2 (42:17):
That was the precipice of going to this
virtual option versus the it'skind of true, though, and I
would I'd be lying to you if ithad never happened that way.
Speaker 1 (42:29):
Andy, you just you just confirmed my wishes and my
dreams.
They have come true, Thank you.
This is what I've been settingup for the last four years.
Speaker 2 (42:42):
Trying to get somebody on the crap.
My internal clock works thatway, so I know.
Speaker 1 (42:44):
Monday morning six, 30, that things and I got to
take a shit right around thatsame time anyway, so like I know
, my Monday mornings scheduledin.
That is awesome.
That just made my day, man.
I appreciate that.
Uh, with that, I think we'll, Ithink we'll go to a wrap.
I don't know if it's going toget any better than what we just
ended on here.
So our last question before wewrap this besides sitting on the
(43:08):
crapper looking at our deals,what's your favorite?
Place to visit in w for yourfavorite Wisconsin tradition.
Speaker 2 (43:23):
Oh my gosh, that's awesome.
Speaker 1 (43:29):
Oh, I'm crying over here.
This is so good, oh man, allright, in all seriousness, andy
gotta, we gotta, try to wrapthis up.
Speaker 2 (43:40):
favorite Wisconsin or place to visit okay, I guess
I'd say I'll go Lambeau Field, Imean that's just, that's like a
little second home, you knowwhat I mean?
You can hang out there and likeeverybody's cool, everybody's
fun to hang out there.
Speaker 1 (43:57):
and like everybody's cool, everybody's fun to hang
out with and spend that wholeday in the parking lot and
having fun and yeah, that's itto me.
Speaker 2 (44:07):
You're going to be at the draft.
Speaker 1 (44:08):
Yeah, for sure.
Yep, awesome, for sure We'llhave to.
We'll have to connect up at thedraft.
We'll be there, should be fun.
Speaker 2 (44:13):
Yeah, that'd be a good time, for sure.
Speaker 1 (44:15):
Yeah for sure.
Well, thanks, Andy.
This has been the most I'velaughed on one of our podcast
episodes.
I think and I'm actually intears over here Cause that was
so funny Appreciate you being onman.
I learned a lot, in allseriousness, and I love having
you on man.
It's been great to sit and chatwith you and I think our
(44:37):
audience is really going toenjoy this episode for a lot of
reasons.
If anybody wants to get aholdof you for you know, picking
your brain or maybe having youhelp on some new construction
lots or anything in thebrokerage side of things for you
what's the best way for them toget ahold of you?
Speaker 2 (44:45):
Probably just my cell phone.
I'm usually like a text personor whatever.
So if somebody wanted to, sendme a text message or whatever.
They can reach me anytime.
That's the best way to get meand I'm happy to like talk real
estate or help them out, help anew investor, help a new builder
.
I love this game.
(45:07):
You know what I mean.
It's just a fun game for me atthis point in time and I like to
see other people win and learn,like learn how to play it, you
know, because it's kind of asimple game, I feel like.
But yeah, you know, you justgot to know how to play For sure
, For sure.
Speaker 1 (45:20):
Is that cool If I put your, your cell number in the
show notes?
Yep, yep, that's cool, awesome,very cool.
Well, andy, appreciate you, man, and obviously, yeah, you love
helping people because you, whenyou're bored, you just do flips
, so why not help somebody elsedo?
Speaker 2 (45:34):
it too.
Speaker 1 (45:35):
You can teach them the best strategy for sitting on
the can, like what's yourapproach?
Where do you hold the phone?
How do you zoom in?
Speaker 2 (45:42):
You only got like 15, 20 minutes before your legs
start falling asleep.
So you gotta be at it prettyquick.
Speaker 1 (45:49):
You better hope it's not a big property that we're
doing with a long video rightwhen you're looking at it.
Yeah for sure, awesome guys.
Well, thanks so much for tuningin for all of you guys
listening out there.
This has been another episodeof the Wisconsin investor
podcast.
If you got some value out ofthis, please share it.
Sharing is caring, as we say onevery episode, and we'll see
you on the next show.
Hey everybody, we're here with another episode of the
Wisconsin Investor Podcast, andI have another amazing guest
that we're going to be talkingwith here shortly.
Before I get into that, though,as I do in the last few
episodes, I'm going to plugWisconsin Discount Properties
for sponsoring today's episode,and we're going to talk about a
little deal that we had in thegreat town of Oshkosh, wisconsin
.
One of our buyers picked it upand he had sent me a little text
(00:24):
breakdown of how the deal wentfor them.
So I wanted to share this withyou guys today, and if I shared
this on another past episode, mybad, I forget what I do on
these sometimes, so bear with me, but this was one.
I got a little text from himrecently, maybe a week or two
ago from the time we'rerecording this.
On the surface it didn't looklike a slam dunk deal.
It looked like a nice littlebase hit and it turned out they
(00:45):
bought it.
The numbers here they closed in105 days from the day they
bought it from us to the thetime that they ended up selling
it.
And they outsource, theycontract everything out.
They have about seven hoursinto it.
(01:10):
So they made about 3,500 bucksper hour on this deal.
So, even though some folks Ihear out there a lot of times
they want to make 40, 50,000bucks a pop, great, awesome
aspirations.
3,500 bucks an hour isn't toobad, better than a stick in the
eye, as we say.
So those are the type of dealsthat we deliver to your inbox
every single Monday 6 am.
If you want to get on thebuyers, let's go to
(01:31):
wisconsindiscountpropertiescom,put your info in and you'll
start getting the deal sent toyou every single week.
With that, we have one of ourlongtime buyers with us, mr Andy
Bain.
Andy, how are you doing today?
Speaker 2 (01:44):
Hey, I'm doing pretty good, Corey.
How about you?
Speaker 1 (01:46):
I'm doing great man.
I'm excited to get you on here.
You know we've we've talkedmany, many times over the years.
I don't know that we've everface-to-face like had a
conversation so.
Speaker 2 (01:55):
I know this is kind of a semi face-to-face, although
you know we're still talkingthrough computer screens or
whatever.
Speaker 1 (02:02):
Yeah, a little COVID, like bringing us back to COVID
days, maybe a little bit, butthat's okay yeah.
Speaker 2 (02:06):
Yeah, yeah.
Well, I'm excited to have youout man You've been in.
Speaker 1 (02:10):
you've been in the real estate industry in
Northeast Wisconsin for for awhile now.
Tell us a little bit about youknow, give the audience your
background and how you gotstarted.
When did you get started andjust how did you get into this
crazy real estate investingworld?
Speaker 2 (02:22):
Sure, Sure.
Well, I got started in the realestate business probably I
would say 15, 16, 17 years ago,something like that.
I started out in real estate asa real estate agent and really
had no aspirations or whateverat that point in time to buy
property or be a real estateinvestor.
(02:43):
That just wasn't on my radar atall.
It was more trying to finddeals and hustle down, you know,
customers to work with listingsand stuff like that.
So but when I had started inthat in real estate, like that
was the time when foreclosureswere super heavy and there's a
lot of, you know, there's adistressed market and so
(03:06):
investor buyers like that was avery big piece of the business.
You know what I mean.
Like that was a huge part ofthe overall market in those
times where foreclosures and welisted a lot of those
foreclosure properties and solda lot of them.
So that's how I got in tune toreal estate investing or
whatever.
When I started trail, it's like, okay, like these dudes that
(03:28):
are buying the houses are makinga lot more money than I am
selling them.
Speaker 1 (03:32):
You know, it's like that's what the pieces together,
a little bit like maybe they'redoing something I should be
doing well, well, right, youknow.
Speaker 2 (03:39):
And then they rely on me so much for, like, the key
pieces of the deal, right, likewhat, what's this house going to
sell for later?
What can I pay for it now?
What should I do?
What kind of work should I do?
You know, they're leaning on mefor all of that information and
all those questions, right.
And then, like I'm just addingit up for them after I do some
(04:00):
of these flips with these people, I'm like, do some of these
flips with these people.
I'm like, all right, theybought the house here.
I know what they put into itand I know what we sold it for.
And there's just a lot, youknow, there's a lot of room in
there, sometimes For sure, forsure.
Speaker 1 (04:12):
So you started doing that, did you?
Were you involved in any of theshort sale stuff too?
Is that kind of the same thing?
We were dealing with shortsales at the time.
Speaker 2 (04:31):
Not, not a ton.
I mean, I tried to avoid shortsales and the fact just that
they were, you know, superhassle, you know their extra
work and a lot more timeconsuming from an agent
standpoint.
There was deals out there fromthe investor standpoint in short
sales certainly, but from theagent standpoint it was not
worth my time and we usually gotthe short sales, as always
pre-foreclosure, before theactual foreclosure happened.
So when we would take them andthe bulk of the foreclosures,
everything I sold was all realestate owned already or you know
(04:55):
, like bank owned or HUD ownedor something like that, where it
was already through theforeclosure process and you know
, short sale was off the tableat that point it's already done
Too far gone Right on, okay,cool.
Speaker 1 (05:07):
What was your first deal?
When did you get your firstdeal?
What was it?
Take it, let's take us throughthat process and what was going
on at that point.
Speaker 2 (05:15):
Oh man, like the first house I flipped or
something yeah.
Speaker 1 (05:18):
First year, first like dive into it.
So you saw these guys doing it,you ran the numbers and you're
like, dude, I could do this.
Like if they can do it, I cando it right now.
What was that first foray tocross onto the dark side of real
estate investing?
Speaker 2 (05:31):
I'm trying to think I mean I didn't even have to
think back what the first onewas.
I knew that the first, veryfirst house I flipped I did as a
partnership deal.
I had somebody else with methat would have been the
handyman or whatever in theoperation, where that's not my
skill set at all.
It's not what I do, yeah, anypart of that so.
(05:52):
But I'm trying to think I thinkthis would have been a house in
, like in fox crossing I think,maybe barbara avenue or
something like this.
Raise the bell, I couldn't giveyou the exact street number.
I know it's a little ranchhouse, three bedroom ranch
two-car garage kind of thing,sure, um, and it was, you know,
your typical flip.
(06:13):
You got some cosmetics and atleast for me, I don't get into
the into these huge you knowprojects or whatever.
I just handle these cosmeticones and yeah, kind of fell in
that avenue and clean it up andresold it, made some money.
You know this.
You know kind of the start ofthings.
Speaker 1 (06:30):
So okay, cool, so that was it.
You flipped the first one andyou say you don't get into the
big one.
So are you talking like you'renot replacing cabinets, type of
big one, or like you're okay ifyou have to like, redo a kitchen
type thing or what's your?
Speaker 2 (06:42):
cabinets and all that .
Yeah, I would say cabinets andstuff is totally fine, like
that's inside of the wheelhouseit's.
I've done some houses whereit's literally the only thing
that was good was the foundation, you know, and and them are the
ones I try to stay away from.
So if it's that or it's like ifI got to get super creative
(07:06):
with the house, like removingwalls or that's not my specialty
I'll take what's there and putit back together, yeah, but I'm
not the kind of person who'slike let me blast out this wall
and I'm gonna add a secondmaster bath in the house where
there never was one.
You know, know those kinds ofthings, that's.
That's, I guess, where I'mdrawing the line for me
(07:27):
personally.
Speaker 1 (07:28):
Yeah, for sure.
We've done a few of those tooin the past and I'm I'm right
there with you.
Some people that's their spentlike.
They love that creative pieceof it and God bless them, you
know.
Speaker 2 (07:37):
Well, yeah, some people are great at it, you know
, but not me.
Speaker 1 (07:46):
We've had one, one of our first flips, really easy
one like we walked.
It was an mls listed propertyand we walked in the house and
you could clearly see wherethere was like a third bedroom.
Like they had just taken thewall down to make the living
room bigger and we're like, oh,if we just put a two walls and a
door there, now we have athree-bedroom house and the arv
is now this right we're.
This is almost like, what arewe missing here?
(08:06):
Yeah, nobody was offering on it, it just sat there and we did
pretty good on that one.
I think we made like 20, somethousand bucks back in the day,
which was good for us at thetime.
Like I said, we didn't have todo much, just handed the keys to
the contractor and tell himwhat to do.
So it was pretty easy.
But is that sort of like now?
I mean Back then you said theconstruction piece isn't
(08:26):
necessarily your forte.
What's been your strategy andwhat are the lessons learned
through the multiple deals overthe decades that you've done now
as it comes to rehabbing theproperties?
Speaker 2 (08:48):
my mindset on that stuff is always like if you buy
the property right Initially,upfront, if you buy it right and
the deal's correct, um, you cando a lot of things wrong and
literally everything can bewrong, Like you could screw up
the whole flip.
You could screw up the wholedeal, you could overpay on stuff
, and if you bought it right,it's nearly impossible to lose
on these things.
If you buy a property right, oryou have any idea or you're in
(09:13):
tune to the market at all, it'sfairly difficult for things to
go south in a situation likethat.
Speaker 1 (09:21):
That's a really good point.
Yeah, you just nailed it there,I think I see so many people
are so afraid of getting theirfeet in the water, like they're
afraid of losing, right, yeah,but to your point, even if you
just build in a little, you know, build in a buffer or whatever
in your numbers so that youcan't lose unless you're like, I
mean, they would have to likeburn down and you didn't have
insurance on it or something,that's one way you could lose.
Speaker 2 (09:46):
Yeah, like everybody talks about that or you hear
people are always freaking outabout the numbers.
And what are your numbers andwhat is your profit margin and
how much are you going to spendon your budget and all of this?
And I'm just like dude if thishouse, I know, is going to be a
275 house all day long, becauseI walk through them every day
(10:06):
and I see them and I'm paying200 for it or 175 or whatever it
is like I don't need to do anymore math.
Speaker 1 (10:18):
You know what I mean.
Speaker 2 (10:19):
Like there's, I don't .
I don't do any more math.
I don't count anything upanymore.
I did it at the front.
I'll try to be smart about it.
I'm not going to put stonecountertops in a basic house.
There's certain things, right,I'm going to be smart about it,
but it costs what it costs.
I'm going to put it together asreasonably as I can.
(10:40):
There's certain things I liketo do in houses that I think
present well or whatever.
You know, there's some of thatkind of stuff, but I don't add
nothing up until the end orwhatever, until it's time to do
the taxes.
Speaker 1 (10:53):
I love it, man.
That's awesome.
What are some of those things,Andy, from your perspective?
What are some of the key thingswhen you're flipping a property
that you're going to make sureyou're doing?
On all of these, yeah.
Speaker 2 (11:03):
And so I'm like kind of you know there's some things
in the basements right that Ithink you can do a lot of stuff
in basements of houses that youdon't necessarily pay for.
You know you do obviously, butlike not a lot.
But you can present bypresenting an unfinished
basement and presenting it asfinished or doing things to make
(11:26):
it look finished adds a ton ofvalue to the house, okay, and
then you don't have tonecessarily deal with like the
finished basement appraisalstuff.
That can be semi-tricky.
Speaker 1 (11:36):
But what do you mean by that?
Can you explain that a littlebit further?
When you say presented as well,like as like.
Speaker 2 (11:42):
If you finish your basement and as a flipper you
spend 25 000 bucks, whatever, solike a new construction world,
I know it.
You spend 25,000 bucks orwhatever.
So like in new constructionworld, I know it's 50 bucks a
foot or whatever to finish abasement, right?
So if you spend that much as aflipper, I don't know that you
get that back on an appraisalfor lower level square footage.
You're not going to appraisethat back.
A buyer might pay for it, butthat buyer may run into
(12:07):
appraisal issues.
Okay, okay when.
If you take a basement and justleave it as unfinished but
present it a little bit better,make it show a little bit better
, paint the floors, paint thewalls, put recessed, can lights
in there, put a little drywall,you know a wall to separate an
unfinished area, create likethat sort of space can get a
(12:32):
similar effect.
You know like buyers will pay asimilar type price.
You don't have to deal with theappraisal aspect.
As much you know.
And then the house presents andshows almost as like a finished
basement.
Speaker 1 (12:45):
So good, dude, that's a good nugget right there.
Everybody should go back,re-listen to that because, dude,
that's a good nugget rightthere, everybody's go back,
re-listen to that.
Because that's a good littlenugget right there.
We've had that too, where, yeah, you just just paint.
That's why I was hoping that'swhere I was thinking you were
going with.
That was.
You know, we painted the wallsand cleaned it and made it look
not like a scary basement, likea nice, like oh, the wife could
go down here with you, know, andlook.
Speaker 2 (13:05):
No, no offense to the ladies out there, but sometimes
they're a little timid to go inthe basements and, uh, I had,
uh, along those lines, like Ihad an investor guy I worked
with for many, many, many yearsand he used the term barefoot
and pregnant.
So, okay, if you're, if yourwife is barefoot and pregnant,
can she go down the stairs andgo into the laundry room.
(13:26):
If your basement's like, ifyour laundry's in the basement
right or whatever, can she godown in that room and in that
state and be like, okay, yeah,you know, and if you can present
it like that, then it's a hugewin that's awesome and that's a
very inexpensive, uh,improvement to make to the
property to just give it thatextra pop and get more, more
(13:46):
interest in and the buyers andhopefully drive up the price
Right For sure.
Speaker 1 (13:51):
Yeah, awesome, that's a great tip.
What are some other things thatyou give any other?
You know kind of nuggets alongthat line, that people that you
do that you've seen success with, or some of your investor um
flipper guys out there you know,um, not, not too much.
Speaker 2 (14:06):
I mean on the basement side, the recessed can
lights.
That helps.
I'm pretty picky about flippingone switch because I think
about it from a real estateagent perspective all the time.
From showing the houses right.
So like if you flip one switch,go into the basement, it turns
everything on in the basement,the basement and turns
(14:28):
everything on in the basement.
A real estate agent doesn'thave to jumble through a mess
and flip switches, find the pullchain, figure out how the
lights turn on in the basement.
It just like that would ruinthe flow of a showing.
A buyer's not going to viewthat space very well.
Versus you flip a switch andboom, the lights are on, or in
the basement, like I'd alwaystry to stick in the laundry room
(14:49):
.
I try to make the laundry areabecause a lot of the older
houses that are flips and stufflike the laundry's in the
basement, you know.
So if you can make that alittle bit nicer and put a
toilet or a slop sink in there,some counter space in there,
again, the recessed lights paintthe floor, the floor paint the
walls, like those basic things.
(15:09):
One switch, come on, versuswalk into the room and it's
showing and search for literally30 seconds to a minute, two
minutes, try to figure out howto turn on the lights, like yeah
, that makes a huge difference,um, in the buyer's perception,
and can also be like thedifference of like one offer or
(15:29):
four.
Speaker 1 (15:30):
Right, ah, it's so good, that is so good.
What about?
Like, just like smells in thehouse.
Like, are you a believer in?
Like when you're going to showus?
Like having the cookies out andthe candles and all that stuff?
None of that stuff.
Speaker 2 (15:42):
No, everybody just laughs at that shit.
Everybody laughs at it.
Every buyer makes fun of peoplewho do that.
It's just totally stupid.
And like the, the worst thingis the, the, the smells.
If you overdo it, like on theair fresheners, that's an
obvious cover-up, like blatant.
Every real estate agent knowsit, every buyer knows it.
Like that's awesome, everybodygets it.
(16:04):
Uh, but like you can't havesmoke smells and things like
that, there's like you have togo over the top to eliminate
smoke smell.
That's an odor that if youdon't seal that up correctly or
deal with that correctly, thatwill seep through and then every
investor tries to then cover itup with the air freshener.
(16:25):
And like you've hurt yourselfso much by not correcting it up
front.
To correct, you know, rightaway and get rid of it.
But you know, outside of that,just don't have nasty smells in
your house and you know, justleave it.
Speaker 1 (16:39):
Yeah, what is your?
Have you bought properties thathad either pet odor or or smoke
smell or anything like that,and what's been your experience
with staying away from thosethings?
Or are you afraid of thosethings when you see that?
Or is it just something thatyou, you know, work into your,
your numbers?
Speaker 2 (16:55):
No, it's a not, it's not an issue for me, Like I
would.
Just.
So the steps to me, like Iwould use, is um, if it's a
nicotine smell or smoke typesmell, um, you can use a TSP
cleaner.
That's what I've always usedanyways, and you, you know,
scrub the walls up really goodand you know that helps to get
like the layer of soot and grimeand nastiness that's on there.
(17:18):
It also preps it for paint andI guess you know it's good for
that.
I guess I don't know, but ithelps to clean it.
But then I was always told to.
It helps to clean it.
But then I was always told toand I've dealt with this and it
works is to use an oil-basedprimer.
You can't just get regularlatex primer or something.
You get an oil-based primer andthen you go over that.
(17:39):
Once you've cleaned it, thenyou can go over it with an
oil-based primer that helps toseal that smell in and then you
paint it from there to seal thatsmell in and then you paint it
from there.
Okay, um, and that has, in myexperience, like 100 eliminated
like smoke smells and then, likeyou know, pet stains, you know
you get dogs, you know whateversub floors get pissed on and
(18:00):
stuff and like that.
I've always used the oil-basedprimer before I put carpet down
or before I put the LVP oranother layer of subfloor or
whatever it is like seal thatstuff in and cover it up, and I
spent extra time at thebeginning doing that so that I
don't have to use air freshenersor cookies or whatever else.
(18:21):
Like people like to walk into ahouse and it smells like new
carpet, like that's a smell andpeople like it.
You know fresh paint is a smell.
Like that's better than cookiesor better than you know, yeah,
linen breeze, whatever you know,yeah, for sure, for sure, are
you.
Speaker 1 (18:41):
When you say the oil based stuff, are you talking
like the kills stuff killsprimer and all that.
Speaker 2 (18:46):
Yeah, okay, yeah any of those, but they make like
kills or them brands.
They make two different kinds,so they they'll sell them in the
store side by side.
One's a latex type primer andone is oil-based and it's a
difference.
Speaker 1 (18:59):
Okay, gosh, I'm getting so many good nuggets
here today already.
Andy, see, I you can tell Idon't get in and do any of this
stuff.
I just I just sling propertiesor tell people, hey, go fix this
, and then do what's best.
This is good stuff to know sothat if you get somebody a
contractor, painter, whateverdoesn't know what they're doing
you can point them in the rightdirection.
(19:21):
So your investing strategy now,andy are you doing a lot of the
rental side of things or moreflips, or what's your mix in
your strategy now?
Speaker 2 (19:30):
I'm a little bit of both I try to get involved in.
I've always had, maybe a sidegoal of adding a couple of
properties a year.
You know what I mean A few, two, three something properties a
year and just buying those andholding them.
I've been doing that for awhile.
Um, and just buying those andholding them.
(19:50):
You know, I've been doing thatfor a while.
And if I'm bored or somethingyou know, I get some flips.
Or you know something to do, um, I don't do like a ton of flips
just from like the tax purposesand stuff I don't love, but, um
, like I said, sometimes like I,I get bored or whatever, and
then, um, I'll buy some.
Speaker 1 (20:07):
Nice, I love that.
That's your boredom habit, youknow, not playing video games,
it's, I'll go buy a flip, Iguess.
Speaker 2 (20:14):
Might as well, something to do.
Speaker 1 (20:16):
You're a real estate junkie for sure, when you know
your habit is buying propertieslike ah gosh, I'm bored, I guess
I'll just get another property,that's awesome.
Now you also you you representsome people in the new
construction space and you'vegotten involved in some
partnerships.
It sounded like when we werechatting a little earlier talk a
little bit about the newconstruction world and what
you're seeing as it relates topeople.
(20:38):
You know I know some, some guysI know that are that started in
the flip space and nowprimarily just do infill lots
and and new construction type ofstuff.
Speaker 2 (20:47):
But what are what are you seeing on the new
construction stuff?
For somebody who might beinterested in getting into that
world, I think it's a hot market, it's a busy piece of the
market.
I always, every time I've beenin real estate or whatever, I
just find the niche or whateverand ride the wave.
So when I first got in, wetalked about foreclosures was a
(21:08):
niche and you rode the wave andthat was just what the market
demanded at that point in time.
Was the market conditions right?
So?
But now, with interest ratesthe way they were, house prices
spiked the way they did,interest rates now changed and
spiked.
Uh, inventory is ridiculouslylow.
Any anybody who hasn't livedunder a rock and cares about
(21:32):
real estate knows like it'simpossible right to find stuff.
So that's what's created newconstruction.
And then if you look at theoverall market, if you're in a
price point of 270, 000 bucks,like on on the low end to 270,
something like that, and thenyou're going to be to 400, price
(21:52):
wise, go dig around on the MLSor go look on Zillow or whatever
, and you're going to see that Idon't know, I'm making, totally
making this up.
But what is it?
60, 70%, 75, something new, newconstruction in that price
range.
Speaker 1 (22:08):
Yeah.
Speaker 2 (22:16):
Like, especially in the threes, once you get to like
320 or something like that,it's a huge percentage of new
constructions, virtually thewhole market.
So that should tell some peopleif you want to be involved in
real estate, where you want tobe like that's what's selling
and that's what's moving rightnow.
That's what's selling andthat's what's moving right now.
So, uh, but it's also importantwhen you know, when you're
doing new construction is to tobuild and sell what people want
and what's selling and that'sgoing to be something smaller in
(22:38):
size and something moreaffordable.
Uh, I have zero interest inbuilding somebody a fancy house,
you know, some big custom housewhatever, like that's a
different lane or differentwhatever.
But if you can just keep to abasic price and I've had this
with any aspect of real estate,flips or new construction if
(23:00):
you're in the low end of realestate, you don't lose ever.
Yeah, there's always going tobe somebody who needs an
affordable house.
Right, don't lose ever.
The low end is always business.
Speaker 1 (23:09):
Always going to be somebody who needs an affordable
house, right.
Speaker 2 (23:11):
A hundred percent yeah.
Speaker 1 (23:13):
For sure.
Yeah, when you mentioned like270 to the fours, I was like you
can get a new house for that.
Like, that seems low to me.
What are the keys to keepingthe cost low?
And then, what are peopleseeing for margins on new
construction?
Like, what are they?
You, I know, I know what welook at when we're looking at a
(23:33):
flip.
I know how we run our numbers.
There's a certain like I run itas like a certain dollar amount
I want to make sure I can make.
I don't worry about likepercent arv, like some people do
, but like what do you?
what are the guys and what areyou seeing on the and you doing
on the new construction side,like what is their target
typically when they're lookingat doing these projects and then
how are they making surethey're staying within those I
guess you'd say parameters?
Speaker 2 (23:55):
Yeah, I think in each builder is different.
You know some builders I workwith work on percentage basis
and they want to make you know20% or something on a house
right, and they want to make youknow 20% or something on a
house right.
Some people look at it moredifferently and they're just
looking at the overall projectand I can make 30,000 bucks or
(24:15):
whatever you know it would be.
You know slightly different onthat, but I know one thing that
they do a key thing is finding alot that you can build on where
the covenants are not crazy.
So in order to get to a priceof $270, you need to build a
(24:37):
small house and you need to getcreative with how you build a
small house.
So, do you eliminate basements?
Do you eliminate bedrooms?
Do you eliminate garages?
Do you find giveaway lots thatnobody else wants?
Do you find subdivisions wherethe covenants allow you to build
less square footage?
(24:59):
Those are all little avenues orlittle ways in which you could
reduce costs.
You can sometimes work directlywith municipalities and you
might be able to get someassistance or you might be able
to get some kickback from themif they've got, you know, like
aged lots or inventory or stuffthat they wanted to get rid of.
(25:20):
That could be an avenue to helpreduce things.
And then and this is not my laneat all, I don't do this at all,
but, uh, smart people do if isthey understand exactly how much
subs like a new construction,like, yeah, you, you know, if
you're a builder, you betterknow exactly how much people pay
for drywall and exactly howmuch it is to paint.
(25:43):
And that's that's the world.
Where it's a little more mysloppy way of doing numbers and
all that stuff that we talkedabout for ARVs, for flips, like
it's harder to do a newconstruction because you've got
such a big range.
And then, like I wouldn't knowto hire a painter, I wouldn't
(26:05):
know that I can get a painterdown to X price, you know what I
mean.
Like you have to be involved inthat and you have to shop that
and you have to bid that and youhave to negotiate that and you
have to set that up with everysingle contractor.
So I feel like skilled buildersor talented builders are they
get good people, clearly, butthen they you know they'll
(26:28):
either build enough volume orgive them enough work that says,
hey, your price has to be here,I'd love to hire you, but price
is this or I can't hire you,right.
Speaker 1 (26:38):
Yeah, yeah, that seems like that to me has always
been the risk of like no, yougot to know your numbers, cause
you could.
If you got a $30,000 marginthat can get eaten up pretty
quickly with making a fewmistakes with subs.
Or you got a thirty thousanddollar margin that can get eaten
up pretty quickly with making afew mistakes with subs.
Or, yeah, like subs, you gavethe sub the down payment or
something, then they fly, flyaway with it and now you got to
start over and I mean it can.
(26:58):
It can be quite an expensivelearning experience trying to
get into this, this ball game,but I know guys that do it, so
that's why I'm like it seemslike an interesting avenue to
possibly, like you said, ridethe wave right now.
It seems like that's kind ofwhere the hot market is in some
of these more affordable newconstruction type of scenarios.
So buying the lot.
(27:19):
Going back to that, what areyou seeing people paying for
lots and how are theydetermining the price they can
pay for the lots?
What are you seeing as far asthe criteria goes on that?
Speaker 2 (27:32):
A lot of it would be location specific.
The thing with the lots is alot of times those prices are
set in stone from a developerand many times new construction
lots are never MLS listedproperties.
These are all.
Builders get relationships withdevelopers and developers sell
(27:54):
to builders almost exclusively.
So they kind of bypass realestate agents and bypass the mls
.
Um and those the pricing ofthose lots are sort of set in
stone almost.
You know it's hard to buysomething.
You know 60 000 bucks, likeit's almost hard to buy
something for 60 grand, 60,70,000 bucks, depending the area
(28:17):
is pretty difficult, um, prettydifficult to find okay, um, I
just got totally distracted.
My phone was kind of blowing upunder there for a second.
No worries man yeah, uh, butthen it's, you know, like the
infill lots, those things youcan find, those are mls listed
(28:39):
properties but those you canfind at.
That's how you get into likethe 270s.
As an example is if you find atwenty thousand dollar infill
lot in anywhere in the foxcities, you know those can be
twenty to thirty thousand bucksand you make money on those.
There's a little bit extra cost, you know there's added costs.
(29:01):
So those infill lots have to beless expensive than like an
open subdivision lot, justbecause there's, you know, a lot
more like excavation costs andmoving dirt around and all that
kind of stuff.
The cost to build on a lotinfill that has two houses
surrounded by it is going to be,I don't know, 15 grand, more
(29:22):
probably to build a house thanit would be if it's totally open
.
Speaker 1 (29:26):
Okay, got it and that's just like you said.
Just because you're going tohave to be skirting dirt and
doing different things, is thatanything to do with the
utilities?
Are those typically there?
If you're, like you said,between two houses utilities-
utilities.
Speaker 2 (29:39):
Should you?
Should the utility should bethere.
It's mainly like the cost oflike, let's say, you had a
subdivision and you have allthis extra dirt, you can just go
move it to the next lot andkeep moving it around and
there's other builders that needdirt and so like you can move
that dirt around okay if you'rein the middle of two houses,
(29:59):
like not only is it a pain inthe ass to get the dirt out, so
that costs you more money, butthen it's a you have to pay to
get rid of the dirt and thatcosts you more money, you know.
So then all the contractors too,like when you're pouring a
foundation wall, like it's wayharder to get your equipment
around all these other housesand pour a foundation in that
(30:20):
situation than it is when it's awide open lot, so it makes a
lot of sense and I and I thinkthat applies through many of the
steps right.
So, like that's where the pricebecomes, they charge more, you
know.
So everything becomes a littlebit more expensive than if it's
(30:43):
you know, hey, I got this houseright here.
Speaker 1 (30:44):
You know it's easy to work on.
Yeah, yeah, wow.
No, that's good.
This is all really good stuff,because I see some of these lots
sometimes and I'm tempted tolike, should I try to get this?
But I don't know, like thoselittle things like that, like
moving the dirt and getting ridof the dirt and doing these
things, I don't think about that.
Well, there's a lot.
Here's how much they want Cool.
Speaker 2 (30:58):
And the old lots to.
The other thing on the old lotsis the.
You know, like in the flipworld we deal with the old lots
and old houses and stuff wherethey have the lines coming into
the street.
You know the sewer and waterlines and those in older houses
are a lot of times junk or theyhave roots going through them or
they need to be cleaned out allthe time or whatever.
(31:18):
Like that's the same thing thatyou'd have on an old infill lot
too.
So if you're buying a $20,000lot, you're also flipping a coin
, that there's a $10,000 sewerbill that you got to flip.
You know that you're going tohave to redo as well.
So like you know there's'regoing to have to redo as well.
So like you know there'sthere's there's more surprises
and stuff.
And then that's where you know,like you'd be aware of it but
(31:42):
like I could tell people, youknow you spend a lot but by
$20,000 for a lot.
Speaker 1 (31:47):
If you can control your pricing on your contractors
like you can still eat 10,000,you know you can eat some of
that stuff, similarly to whatyou were saying earlier about,
like, as long as you get itright, you buy it right.
You can, yeah, you can.
Speaker 2 (32:04):
You can absorb some potential surprises in there
yeah, yeah, yeah, and I absorbsurprises in volume too, you
know what I mean.
So, like, that's where, if youdo enough projects or have
enough things going on and oneof them kind of sucks, like yeah
, it doesn't matter, I did 15,so three of them sucked, 12 of
them or 10 of them were awesome,and two, you know, like yeah,
it all kind of washes averaginga little bit there and yeah,
(32:28):
yeah, we see that a lot in theflip world or in the uh, in the
rental game too, like we knowsome folks who who bought in one
or two rentals.
Speaker 1 (32:35):
And you know I think that's much riskier than buying
10 to 20 or more rentals,because now you got one vacancy,
you got 50% vacancy.
Speaker 2 (32:45):
If you got two units or you have a single family
house and they're vacant.
Speaker 1 (32:48):
Now you got a hundred percent vacancy, you know and
you need that cash to come infrom the one where, if you'd buy
enough of them and you get onedud, it kind of washes out with
what you did on the other one.
Same with flips.
We have some people that'll buy15, 20 properties from us a
year, plus other propertiesthey're doing and some of them
you're like well, I don't knowhow they're going to make money
(33:10):
on this one, but thanks forbuying it from us at the number
you offered us.
It was great for the.
Thanks for buying it from us atthe number you offered us.
You know it was great.
Uh, and they don't care becausethey just started.
They're keeping their crewsbusy and they're they buy enough
of them that they're gonna winbig on several and they're gonna
lose a cup a little bit on someother ones and overall, at the
end of the year, like you said,when they're going to pay their
taxes, they're gonna have a taxbill because they made pretty
good money.
Speaker 2 (33:30):
You know from doing it.
That's, that's really the nameof the game.
Speaker 1 (33:34):
So you do one flip and you're banking on that one
May or may not knock you out ofthe game, right.
Speaker 2 (33:41):
Yeah, it's definitely easier.
I think the more you have youknow.
Obviously it's easier that youget more experience and stuff
like that, but it's from arental standpoint.
It's easier to deal with thefurnace, it's easier, you know,
whatever comes up, it's justkind of it just simpler once you
get over that hump the initialhump, I guess, like yeah for
(34:01):
sure.
Speaker 1 (34:02):
Now you have a lot of experience just in in all
aspects of real estate which isone of the reasons I wanted to
have you on here today and soyou've bought some properties
from us at Wisconsin discountproperties as a wholesaler.
Obviously, you've done dealsthrough the MLS.
Somebody listening to this?
What are some things theyshould know about the
differences between maybelooking at MLS and working with
an agent to help them find someinvestment opportunities, versus
(34:26):
working with somebody like usas a wholesaler?
What are the things to belooking out for pros and cons?
What are the things if they'relooking for an agent?
What should they be looking for?
If they're looking for awholesale company, what should
they be looking for?
Those types of things?
Speaker 2 (34:40):
I guess the first thing I would say is like, again
, the money's made in the deal,right, the money's made in the
purchase of the transaction.
So any investor should probably, on the purchase side, spend
less time talking to real estateagents trying to buy something
on the MLS.
It's probably a waste of timeto do that and spend more time
(35:01):
getting on wholesaler lists orbuying properties from you guys
or whatever, where it's a offmarket type situation and it's
not competitive Like.
The only reason, like you guys,properties have margin and are
available for investors isbecause they are off market.
It's a unique opportunity forsomebody to get those like.
(35:22):
You're competing with your list, which is a fine list, I'm sure
, but it is not the list of areal estate agent in the mls you
know it's a different, it'sdifferent.
So, um, it's way harder to makethings work and mls properties
and you can spin your wheels andget frustrated where on yours
(35:43):
or any other wholesalers like,still do your due diligence.
You know, I pay attention.
I make my own arv numbers.
I make my own numbers.
I don't rely 100 percent onwhat somebody else tells me.
You know, I do my due diligenceso that I can feel comfortable
knowing that I don't have to dotoo much more math.
(36:04):
You know what I mean.
I know my backend number.
I'm super in tune with that andI'm not ever going to be wrong
in my backend number, and youknow.
So I would just spend all yourtime focusing on that and make
sure your backend number is whatit is and then design your
rehab around it.
Okay, you know what I mean.
Like you can choose to remodela house and spend $50,000 on a
(36:28):
remodel, or you could spend$35,000 and probably get the
same result.
Speaker 1 (36:32):
Yes.
Speaker 2 (36:33):
You know.
So I think that would be like,no, you're back at number and
then be humble enough to changeall your plans and what you
thought you were going to dowith the house or what you want
to do or what you saw on TV orwhatever, and just work inside
of those numbers you know what Imean and just be like, all
right, this guy it's got to fitinside of here.
(36:54):
And then then you know, likethe whole dollar cost averaging
thing, like you don't haveproperties that lose, you just
don't.
If you understand that onesimple concept, you'd never lose
money.
That's so good, um, but that'slike, so on your properties.
Like you would be able toactually see a spread, you'd be
able to see an opportunity tomake money.
(37:16):
Um, I pay attention, like Iwatch some videos that you do
and I'll rewind them and I'llcheck and I'll.
I'll look for little odds andends and stuff that might be
glossed over or whatever.
I look through that stuff.
Yeah, um, I factor in the costfor title, I, you know I I
factor in all the extra costs.
You know, because that'sdifferent.
(37:37):
When you buy MLS, you're notpaying title insurance fees.
You know there's some of that.
So you just got to know thosecosts and pay attention to that
stuff.
You know you guys do a good jobof putting a lot of that out
there, putting the inspectionout there.
There's at least something tolook at.
There's some video to look at.
(37:59):
You got the title search so youknow there's not special
assessments or goofy stuff likethat.
Yeah well, those are all goodthings.
Speaker 1 (38:10):
I think a lot of people take that stuff for
granted.
They don't know If somebody newout there they're like I don't
know, what should I be lookingfor.
And I think those are importantthings.
Like you know, to know.
If you're working with awholesale company, you want to
make sure you're going to getclean and clear title and that
they're actually working with atitle company.
It seems like obvious, but youknow horror stories out there
and some parts of Iling.
You know that here's a deal youcan buy and then they never you
(38:37):
know give me this money andthen you'll get the house and
they don't run it through atitle company.
There's no title insurance,there's nothing.
So that's an important thing toto to point out there.
Andy, you mentioned youmentioned something earlier, but
I wanted to ask you because oneof the things I hear a lot
about is we don't dowalkthroughs right and so with
MLS, a lot of times you're goingto walk through the properties
versus our process.
You're going to get a video andan inspection report.
(38:59):
What are your viewpoints onthat?
Because some people I talk tolove that idea.
They don't have to drive allover the place kicking tires,
like you said, and wasting a lotof time on MLS properties that
are going to be so competitivewith.
You've got everybody on thelist right On an MLS versus.
Our list is still yeah, it's agood list, but way smaller
amount of people you're upagainst.
(39:19):
But some people need to feelthe need to have to walk through
a property in order to feelcomfortable with it.
What's been your approach onthat?
Because you've bought severalproperties from us not walking
through them up front.
How is talk a little bit aboutthat and how that, how you work
that into your system or intoyour process.
Speaker 2 (39:39):
Um, I don't know, I'm kind of old school and I have a
simple mindset that says youwant to buy something super
cheap and below value, likemaybe you can't see it.
You know what I mean.
Like I've bought 50 plus housesthat I've never stepped inside
the door, like that's to methat's how you buy houses.
(39:59):
If you want a good deal, youknow, like, if you want to go
pay retail and investigate everynook and cranny of the house
and have your home inspector inthe house for five hours and
pick it apart and it pay retail,yeah, go, you know, go pay
retail.
That's what it's there for.
But, like I don't know,sometimes maybe you have a house
(40:21):
like from your perspective orwhatever, maybe there would be a
house that is cleaner or inbetter shape than what people
would give it credit for, orwhatever on the video yeah and
then you could maybe get moremoney if people put their
eyeballs on it, um, but on thesame time it's like you know,
sometimes people over and I'vebeen involved in both I've paid
(40:43):
more and I'm like, oh, that's alittle worse than I thought you
know, and I didn't do as good onthat one and I'm like, oh,
shoot.
But then another one it's like,oh, that's a little better than
I thought you know yeah um, Idon't know.
I just have always assumed it'spart of the game.
Like every every short, like ifyou buy any foreclosure, like
through the courthouse orwhatever.
None of those have ever beenwalked through in the history.
(41:05):
You know, unless you'rebreaking in so like I don't know
.
Speaker 1 (41:09):
Yeah, yeah, I'm with you.
Well, I'm glad you brought thatup because that is one thing
that obviously I get atdifferent people's concern
levels and stuff.
And glad you brought that upbecause that is one thing that
obviously I get at differentpeople's concern levels and
stuff.
And we used to do the in-personthing before COVID happened.
And then COVID happened and wewere starting to grow, where we
were starting to get more thanlike one or two properties that
we could put out a week, and itbecame a logistical nightmare
for us to try to like have oneof our representatives at the
(41:30):
house for an hour a week andthen they're also out trying to
get more deals, you know, sothat we can provide more
inventory to the market.
And it just became likesomething had to change, like we
had to just come up with a waythat was going to be sustainable
and allow us to scale the thing.
So that's why we get theinspection reports Now.
We never used to do that.
It used to just become walkthrough it and be your own
inspector.
And a lot of people have saidhey, I actually appreciate you
(41:53):
guys having the inspectionreports versus me trying to walk
through and act like I knowwhat I'm looking at, like I
don't know what the hell I'mlooking for, so having the
inspector go do it, I don't haveto go walk the properties.
You know, when I set up theprocess, when we did this I joke
, but I said I wanted to make itso you can, instead of sitting
on Facebook on your phone whileyou're on the on the crapper,
you can sit and evaluate a dealin that 10 or 15 minutes and
(42:14):
hopefully make some money.
So that was the.
Speaker 2 (42:17):
That was the precipice of going to this
virtual option versus the it'skind of true, though, and I
would I'd be lying to you if ithad never happened that way.
Speaker 1 (42:29):
Andy, you just you just confirmed my wishes and my
dreams.
They have come true, Thank you.
This is what I've been settingup for the last four years.
Speaker 2 (42:42):
Trying to get somebody on the crap.
My internal clock works thatway, so I know.
Speaker 1 (42:44):
Monday morning six, 30, that things and I got to
take a shit right around thatsame time anyway, so like I know
, my Monday mornings scheduledin.
That is awesome.
That just made my day, man.
I appreciate that.
Uh, with that, I think we'll, Ithink we'll go to a wrap.
I don't know if it's going toget any better than what we just
ended on here.
So our last question before wewrap this besides sitting on the
(43:08):
crapper looking at our deals,what's your favorite?
Place to visit in w for yourfavorite Wisconsin tradition.
Speaker 2 (43:23):
Oh my gosh, that's awesome.
Speaker 1 (43:29):
Oh, I'm crying over here.
This is so good, oh man, allright, in all seriousness, andy
gotta, we gotta, try to wrapthis up.
Speaker 2 (43:40):
favorite Wisconsin or place to visit okay, I guess
I'd say I'll go Lambeau Field, Imean that's just, that's like a
little second home, you knowwhat I mean?
You can hang out there and likeeverybody's cool, everybody's
fun to hang out there.
Speaker 1 (43:57):
and like everybody's cool, everybody's fun to hang
out with and spend that wholeday in the parking lot and
having fun and yeah, that's itto me.
Speaker 2 (44:07):
You're going to be at the draft.
Speaker 1 (44:08):
Yeah, for sure.
Yep, awesome, for sure We'llhave to.
We'll have to connect up at thedraft.
We'll be there, should be fun.
Speaker 2 (44:13):
Yeah, that'd be a good time, for sure.
Speaker 1 (44:15):
Yeah for sure.
Well, thanks, Andy.
This has been the most I'velaughed on one of our podcast
episodes.
I think and I'm actually intears over here Cause that was
so funny Appreciate you being onman.
I learned a lot, in allseriousness, and I love having
you on man.
It's been great to sit and chatwith you and I think our
(44:37):
audience is really going toenjoy this episode for a lot of
reasons.
If anybody wants to get aholdof you for you know, picking
your brain or maybe having youhelp on some new construction
lots or anything in thebrokerage side of things for you
what's the best way for them toget ahold of you?
Speaker 2 (44:45):
Probably just my cell phone.
I'm usually like a text personor whatever.
So if somebody wanted to, sendme a text message or whatever.
They can reach me anytime.
That's the best way to get meand I'm happy to like talk real
estate or help them out, help anew investor, help a new builder
.
I love this game.
(45:07):
You know what I mean.
It's just a fun game for me atthis point in time and I like to
see other people win and learn,like learn how to play it, you
know, because it's kind of asimple game, I feel like.
But yeah, you know, you justgot to know how to play For sure
, For sure.
Speaker 1 (45:20):
Is that cool If I put your, your cell number in the
show notes?
Yep, yep, that's cool, awesome,very cool.
Well, andy, appreciate you, man, and obviously, yeah, you love
helping people because you, whenyou're bored, you just do flips
, so why not help somebody elsedo?
Speaker 2 (45:34):
it too.
Speaker 1 (45:35):
You can teach them the best strategy for sitting on
the can, like what's yourapproach?
Where do you hold the phone?
How do you zoom in?
Speaker 2 (45:42):
You only got like 15, 20 minutes before your legs
start falling asleep.
So you gotta be at it prettyquick.
Speaker 1 (45:49):
You better hope it's not a big property that we're
doing with a long video rightwhen you're looking at it.
Yeah for sure, awesome guys.
Well, thanks so much for tuningin for all of you guys
listening out there.
This has been another episodeof the Wisconsin investor
podcast.
If you got some value out ofthis, please share it.
Sharing is caring, as we say onevery episode, and we'll see
you on the next show.
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