September 2, 2025 • 48 mins
What if everything you’ve been told about “financial freedom” through rental properties is wrong?
In this episode of The Wisconsin Investor, we sit down with Jimmy Vreeland, a former Army Ranger turned successful real estate investor, to challenge the traditional cash-flow-only mindset.
💡 Jimmy introduces his concept of the “cash machine”
🏡 We share how chasing 100 rental doors taught us hard lessons about the $200–$300 per door cash flow myth.
📈 We break down how real wealth is really built: equity growth, tax advantages, and strategic refinancing.
🔑 Jimmy reveals his “BRRRR Key” method—a smarter path for busy professionals to invest passively while keeping their main income.
💰 We cover cost segregation, bonus depreciation, private lending, and current hard money terms that can help offset taxes and maximize returns.
⏳ And most importantly—we explain why waiting for “perfect” market conditions is costing you more than you think.
Whether you’re a high-earning professional or an aspiring investor, this episode will shift the way you look at real estate forever.
👉 Tune in now to learn how to start your wealth-building journey today.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
What's up everybody.
Corey Raymond, your host hereof the Wisconsin Investor
Podcast, and I got my man, JimmyVreeland here.
Jimmy, what podcast are yourunning again?
The Real Estate.
Speaker 2 (00:11):
Fast Pass Podcast.
Speaker 1 (00:13):
The Real Estate Fast Pass Podcast.
So we are going to I'm bringingyou some heat today, guys, for
my audience and Jimmy, I knowyou're going to be bringing this
to your audience as well andJimmy and I are both members of
a group called the CollectiveGenius and we've known each
other now for gosh five, sixyears probably, been in this
group and seen a lot of thingsover the years, so we're going
to get into some of that today.
(00:34):
Before we do, I always give alittle commercial for our
business, wisconsin DiscountProperties.
So if you are looking to investin properties in Wisconsin, get
on our buyers list.
To do that, you just go towisconsindiscountpropertiescom,
you plug your info in and westart sending you deals in your
inbox every single Mondaymorning.
We'll shoot you a little textas well.
In case you're not a bigemailer.
You can check it out in thetext, and I've been pounding
(00:56):
this on the last couple, but I'mreally excited about some data
that we just put together.
One of the criticismswholesalers get all the time is
your ARVs are inflated.
You guys are inflating the ARVsto try to sell deals.
Well, we put some data togetherto find out how good are we at
ARVs.
Are we inflating them?
Are we accurate?
We did 50 flips that you guysbought from us in a six-month
(01:17):
span and we looked at what didthey actually sell for at the
end of the day and what did wesay they were going to sell for,
and we were five grand short onour ARVs.
So our investors made fivegrand more on average than what
we said they were going to makeon these deals.
And we even included the onesthat were just clean and list.
So these were people who didn'teven bring into the ARVs.
So you can have confidence whenyou're looking at those ARVs
(01:39):
that we're going to be prettydamn close on those areas.
Speaker 2 (01:41):
You're underselling yourself, Corey.
You need to add 10K to all yourdispo prices.
Speaker 1 (01:46):
There we go.
That's what we're doing fromnow on, baby.
That being said, Jimmy, let'sget into it today.
Brother, Tell our audience alittle bit about who's Jimmy
Vreeland and why in the heck arewe talking today, brother?
Speaker 2 (01:57):
Yeah, my name is Jimmy Vreeland.
I'm a real estate investor,small business owner from St
Louis, Missouri.
I'm a happily married father offour and former Army Ranger.
Speaker 1 (02:08):
Love it, boom, that's it.
That's what I love about you,jimmy.
No nonsense, bring it buddy.
So when Jimmy and I weretalking at the last Collective
Genius that we were at at dinnerI'm a big Burr lover, jimmy
loves the Burr, and we were justkind of nerding out at dinner
one night about Burr and Jimmy'sgot a pretty cool program
called Burr Key, which I thinkis pretty cool.
You've been in this business awhile and Jimmy and you've had a
(02:28):
bunch of different iterationsof what you guys have done there
in your market and so I thought, man, this is perfect to bring
you on and get your perspectiveon all things real estate
related, but in particular cashflow.
How do you look at cash flowfor your investors?
Tell everybody a little bitabout what you guys are doing
with your Berkey program therein KC.
Speaker 2 (02:48):
So I'm going to back up a second Corey.
And so it comes down to alittle bit of a problem with, I
think, the real estate educationindustry and there's not enough
distinction and differentiation, like when you say real estate,
real estate is a big big thing,right, right, big umbrella, and
(03:13):
so there's no differentiationbetween someone who has a cash
machine and someone who doesn'thave a cash machine, and I think
it's just, I think it's hurtingpeople.
And let me kind of understandthe way I define a cash machine
is you make 250 K a year.
So if you make 250 K a year insales, you have a cash machine.
If you don't, you don't have acash machine yet.
(03:35):
And so if you have a cashmachine, to direct your
attention away from that cashmachine, I think is very
perilous.
And so does everybody in Americaneed to be in real estate?
They do.
You, at a minimum, need to get20 government, 30 year fixed
mortgages.
It needs to be part ofeveryone's portfolio.
But to get to that and takeyour eye off the ball, I don't
(03:56):
think it's smart.
And so you need someone to helpyou do it passively.
Now, if you don't have 250K ayear, cool, you need to
wholesale and flip if you wantto be in real estate.
Because I see people withoutcash machines start taking on
long-term debt and start buyingrentals when they shouldn't and
then they're in a precariousliquidity position.
Then I see people who shouldjust be buying rentals taking
(04:16):
their eye off the ball andflipping and wholesaling.
I was like wait a minute, thisdoesn't make any economic sense.
Speaker 1 (04:25):
Yeah, yeah.
So what you're saying, jimmy,is let's say I'm in sales, I'm
making 300K a year killing it inmy job, my job in the real
estate space.
I should just be buying andbeing as hands off as possible,
getting the rental businessgoing.
Speaker 2 (04:39):
Yeah, because like okay, so that guy making
$250,000, why does he even wantreal estate?
Like what do you think thatanswer is?
Speaker 1 (04:51):
Passive income.
He wants to get out eventually,be able to surpass that
$250,000, to be able to not haveto work his butt off to be able
to make that $250,000.
Speaker 2 (05:01):
I have a bad.
I'm going to take this podcaston a bad tangent, but I have bad
news for that guy.
I have bad news for that guymaking 250 to 300K.
Do you want to know what thebad news is?
What's that?
There is no way $200 to $300 adoor in what we used to call
cash flow will ever replace yourincome.
(05:22):
Unfortunately, you're toosuccessful and too productive
ever replace your income.
Unfortunately, you're toosuccessful and too productive.
But now, over the course of 10years, those houses will build
you a ton of wealth, but theyare in the traditional cashflow
model.
They are not going to replaceyour income.
Because I was in that situation.
I was making 250K in corporatesales and I remember buying a
few rentals and sitting down andseeing oh, I'm making 300.
(05:42):
300,.
What is a quick math?
If you make 250K a year, youneed to make 20 grand a month.
Okay, and then $200 a door for20 grand.
What is that?
100 houses 100 doors.
Speaker 1 (05:54):
You need 100 doors.
Yep, that was my original goalwhen I got into real estate.
Jimmy, right there, that was it.
Speaker 2 (05:58):
Yeah, and then we're just going to put our head down
and we're going to do it nomatter what, right, corey, yeah.
And then let me tell you astory about my past.
Like I was so sick of corporatemoney and this is how stupid I
was I started a deli so I was inmedical sales and I was always
have to doing office lunches,right, and I had corporate
(06:18):
credit card and I was alwaysswiping that card and I'm like
wait a minute, why am I payingsomebody else to make these
lunches?
Why don't I just make thelunches myself?
Speaker 1 (06:28):
I did not know this about you, jimmy.
I did not know you had a delidude.
Speaker 2 (06:31):
This is awesome and so I, I, um, I did it with a
high school friend who had acheckered past and was like
currently in recovery, and thisdude could cook bro.
His food was excellent, yeah,but couldn't run a business, nor
could I, and you know he endedup stealing from the company
account to get his fix right.
(06:54):
Oh no, but I was in such ademented mental space that
making $1 from the crappy delifelt better than making the
$250,000 I made from corporate.
Wow, dude, but dude, that was ame problem.
That wasn't a corporate problem.
Yeah, that was me beingungrateful for what that job
(07:15):
provided me.
Speaker 1 (07:16):
Right, so was that before you started dipping into
real estate?
Was that like your firstventure into anything outside of
a W-2?
Speaker 2 (07:26):
Dude.
I read Kiyosaki when I was inthe army, got out of the army
and then, around 2016, when Istarted making good money no,
around 13, I started makingreally good money and I started
getting stupid.
And then, you know, kiyosakiconvinced me.
I was in the rat race of, I hada new quota every year and then
I had to chase my bonus right.
(07:46):
Well, my dumb ass, can I curseon this podcast?
Sorry, is this family-friendly?
Speaker 1 (07:54):
You know what Family-friendly but ass is, I
think.
Speaker 2 (07:58):
That's as bad as it will go, Okay.
Okay, this is how stupid I was.
I created a second rat racewhere I would take all my
bonuses, reinvest it in somecash flow scheme, oil wells,
delis, eBay and real estate andthen I would lose all the bonus
money and then have to hustleharder to do it again until I
(08:19):
sat To catch back up yes, untilI just sat and focused and
exclusively started buying realestate.
Speaker 1 (08:26):
Interesting, interesting.
Did you start with?
So taking your advice now thatyou have today, looking
backwards hindsight, jimmy, whenyou started in the real estate
space and got focused, was thaton buy and hold.
What was your?
Because, again, we talked aboutthat's a big umbrella of real
estate how did you enter intothe space while trying to focus
on the cash machine?
Speaker 2 (08:48):
Okay.
So I started buying burrs,right, okay.
And so then I learned I took mysales ability and talking to
rich doctors and I just changedit to I was able to borrow $5
million in private money, right,and I was able to just dude, I
got up to 140 birds.
Wow, I mean I was highly indebt.
(09:11):
No systems, no processes, cashpoor.
And then I hit my hundredthrental and I was like, hey, and
I can finally tell my job to myboss to take this job and shove
it Right.
Yeah, because according to themath, a this job and shove it
(09:34):
right.
Yeah, because according to themath, 100 rentals, I should be
financially free.
Yes, yes, and I so.
Then I joined cg and I I metjason medley, yeah, and jason
was like what do you do, bro?
And I'm like I'm retired, I got100 rentals.
And he's like no, what do youdo?
He's like, look stupid, you arecash poor and house rich.
And now, now you're $5 millionin debt.
When you were a corporate youhad no debt.
And he's like, so you betterfind some active income fast.
And so then I startedturnkeying houses to people.
(09:58):
But he had to give me thedistinction between passive
income and wealth building andactive income.
He didn't phrase it as cashmachine.
I learned that like seven yearslater, yeah.
But I mean, here's anotherthing when I had a cash machine
from corporate, the bankers wereout in droves to lend me money.
Oh for sure, dude, soon, as Igave up my cash machine, guess
how much lending I got?
Zero, zero, yeah.
(10:21):
But I didn't understand thecash machine paradigm.
Speaker 1 (10:25):
Yeah, I see that happen a lot.
Jimmy, I'm glad you broughtthis point up.
We'll get people who do theybang off four or five flips in a
year.
They make a good, nice chunk oneach of them.
They're six figures now, rightyeah.
And they're starting to add acouple rentals to the portfolio
along the way, building thatwealth, which is great.
(10:48):
I think that's a great idea.
And then they go quit that W-2.
And all of a sudden now they'retrying to get lending for that
next flip or rental and they'rescrounging.
Man, they are in a tough, toughspot.
So I think it's a great point,man, what you just brought up
there about your experience andgiving up the cash machine.
Speaker 2 (11:00):
Yeah.
And so, jess, if you're goingto give out that cash machine,
make sure you're highly liquid,highly committed.
And if your thought is thatonce you're a small business
owner, you're finally free,you're sorely mistaken, because
now your bosses are youraccountant, the IRS, and really
you have to continue to become abetter person, to employ people
, because I was kind of a I a uh.
Speaker 1 (11:24):
I was not nice when I was a corporate when you say
you were not nice, you mean topeople who you eventually hired,
or just in general as a humanbeing, to customers, clients and
everybody else.
Speaker 2 (11:37):
The world was all about me, Okay, and then I mean
so I, if I were to take a videoof me, my interactions back then
, I don't think I'd be proud.
Yeah, I thought I was.
I thought I was the bombbecause I made 250K a year.
Speaker 1 (11:53):
Yeah, okay, so the ego was strong.
Speaker 2 (11:56):
Yeah, I mean rude to my wife, rude to my coworkers
and then, if they didn't buyfrom me, rude to my potential
clients.
Speaker 1 (12:06):
What was some of the big talk about that
self-development journey then?
Like, was it just throughexperience?
Did you get some coaching?
Like, what did what helped youcontinually?
You know, become the person youare now that you can employ
people, and continually behumble enough to admit that you?
Speaker 2 (12:20):
had to go.
So I learned, like, all thesegreat lessons in the army, right
, okay and but like after mythird deployment, I was like, oh
hell, no, I don't want to leadanymore.
Leading gets you shot at, I'mdone with that, yeah, yeah.
So I had all these greatleadership lessons and great
experiences that you know.
(12:41):
After my third deployment likespending a lot of time overseas
I was kind of tired, I thinkOkay, and immature, like I
always.
People are like, hey, would youever go back?
I was like, dude, it'd beawesome to go back with my brain
now and my body then.
Ah, yeah, like does that makesense?
Yeah, for sure For sure, and soI will tell you what the recipe
(13:01):
was.
I started listening to a ton.
I started getting punched inthe face a lot with business,
and then listening to JordanPeterson.
Speaker 1 (13:11):
Okay, who is Jordan?
I don't know.
Jordan Peterson.
Speaker 2 (13:13):
Oh my God, I'm writing that down.
He's the man.
Okay, 12 Rules for Life.
Okay, that's got to be yournext book.
Speaker 1 (13:21):
Okay, love it.
12 Rules for Life.
Speaker 2 (13:26):
Jordan Peterson's big thing is the hero's journey.
Okay, life is all about aimingupward and, um, you know, the
hero's journey is this it's ifyou look at every movie, it goes
through this cycle.
It's someone hears a call toadventure, they cross the
threshold, like Bobo leaving theShire, and then, soon as you
(13:48):
cross the threshold, it's just aroad of trials.
Then, once you hit the road oftrials, there's going to be a
moment, a climax, an abyss, thatyou either quit and turn around
and don't change, or you change, get better and get through the
abyss.
And so I mean I'm sure yourexperience is the same Small
business ownership is just aseries of abysses.
Speaker 1 (14:10):
Dude, I'll tell you what.
When we made our first hire,there was so much of that.
I call it imposter syndrome,right.
But it's like who am I to hiresomebody?
Like I don't know.
I don't even know what I'mdoing.
How do I pay this person?
How do I do taxes?
How do I do all this stuff?
Like I don't know how to leadsomebody.
What are they going to do everyday?
How do I coach them?
Right?
And if you're a small businessowner and you're listening to
(14:30):
this podcast and you haveemployees, you know you just had
to kind of power through thatcrap and just do it and you
learn a lot in the process.
Like you said, you're going toget punched in the face quite a
few times.
There's tons of mistakes thatwe in our business have made
with employees and regrets LikeI wish I didn't do certain
things with certain people andthose types of things.
But all you can do is learnfrom it and not make that same
(14:50):
mistake again going forward, andthat's how you grow, I think,
in this, in the small businessworld that we live in, right?
Speaker 2 (14:56):
Yeah, it's part.
So Jordan Peterson convinced methat the only path to gross is
through the abyss.
So if it's unavoidable, youmight as well have some fun with
it.
And so then I started mentallytrying to run to them.
Speaker 1 (15:10):
Okay.
They always say what is it?
Buffaloes run away for a runthrough the storm and cows run
with the storm Be a buffalo yeah.
Yeah, yeah.
Speaker 2 (15:20):
Something like that yeah, yeah, be a buffalo.
Speaker 1 (15:22):
I think that's one of the one of the leadership
concepts out there right nowthat's hot is be a Buffalo, not
a cow, and run through the storm, not with it.
Speaker 2 (15:31):
Yeah, I have a little gratitude that you do have this
problem right now.
Speaker 1 (15:35):
For sure.
Yeah, I think I think that's agreat point.
The gratitude part.
You know, having conversationswith some newer people.
It's really fun for me to whenI get them on the podcast.
It's fun to talk to newerpeople because it reminds me of
that excitement and energy ofwhen I was starting out and how
it was.
And I think you get a little bitjaded the longer you're in this
business, a little bit fromsome of the lumps that you had
to take and you forget how farwe've come.
(15:58):
Jimmy, you and I have been innow probably it sounds about the
same amount of time in thisbusiness and I forget that that
first deal, excitement and stuff.
So talking to newer people, itlike lights me back up like oh
yeah, yeah, this is really fun.
I do need to be grateful forhow far we are.
Like, wow, you know, I wastalking to Carrie on our.
On our we just got back from abig road trip and on the trip I
was like how freaking lucky arewe right now that we get to
(16:20):
drive around the country for acouple of weeks.
We've got a team in placethat's running the show for us.
I take a couple of phone callson the road and the team handles
everything else.
I mean this is incredible.
Like where else can you do this?
But it's almost a decade now ofbuilding that and taking a bunch
of lumps, of trying it and itdoesn't work.
It does work, then it doesn'twork and we're finally at a
(16:46):
point now where I'm sure, if Itake my eye off the ball it'll
change again and it won't be aseasy or, as I say, easy, but it
won't be as self-managed as itis right now, cause I've done
that a few times where I've kindof given up and be like, ah,
you guys got this, and then I'mout in Florida at our house down
there or whatever, andmeanwhile things are crumbling
behind the scenes and I'm I'mjust to it.
But it is amazing, there's alot to be grateful for in
(17:07):
general in this country.
But then to be involved in thisbusiness and get it to a point
where it's matured to now, atleast in our space, it's a
really humbling thing to reflectback on and realize we got a
lot to be grateful for.
Speaker 2 (17:20):
And then that's kind of related back to the cash flow
myth.
Can I pop off about that for asecond?
Speaker 1 (17:26):
Yes, let's talk cashflow.
Myth buddy, I love it.
Speaker 2 (17:30):
So these people who want to step out of their jobs
and not work anymore and get tothe beach.
I always try to remind them weare in the greatest country on
earth, with the most opportunity, with the most technology and
the AI boom coming down the pipe.
It's the most exciting, mostabundant time to be alive.
And you want to Like are yousure about that?
(17:50):
Or why not just buy somerentals so you protect yourself
from inflation, build up yournet worth and then have a nest
egg?
Oh, and also learn the skillset of an investor, which is not
easy, Right, but hey, if youwant to sit it out, that's great
.
Speaker 1 (18:07):
More for me and Jimmy Exactly.
Speaker 2 (18:10):
I try to completely dispel this whole myth of I want
to quit my job.
Speaker 1 (18:15):
Yeah, so you talked about, like you and I have a
very similar experience too withthe rental piece.
Like I did the exact.
It's so interesting because Idid the exact same thing.
I read Kiyosaki.
I'm like I'm getting a hundreddoors as quickly as humanly
possible, that cashflow of 200bucks a door, and then I'm
kicking it on the beach drinkingCoronas and just living the
life right.
Got a hundred doors in threeyears and I was like same exact.
(18:36):
What were you doing?
What was your cash machine?
We started, we were wholesalingat the same time.
So, wholesaling and flipping.
Wholesaling and flipping wasthe cash machine, but I was like
it was only solely and I wasstill working a full-time job
for the first two years,no-transcript.
(19:21):
The nights and weekends thingfor me was like, you know,
having kids.
You got four, I got four.
They were starting to get olderand into stuff and I like
couldn't be at certain thingsand I'm like like, ah, this is
no way to live, you know.
So my intensity level to get outof my job was that like a 10.
I was like I'm doing whateverit takes to get out of this job
because of the time, the timeaspect of it.
And carrie had cancer backbefore we got married, I think
(19:42):
she was like 24.
She had appendix cancer likegot diagnosed with it three or
four months before we weresupposed to get married and she
had to have a major surgery andall this stuff.
So my perception of timeshifted really early in my 20s
of like whoa, we could die, liketomorrow, and be gone, and so
that was a lot of thatmotivation like give me to 100
(20:02):
doors, give me 200 bucks a dooras quickly as possible, because,
who knows, I could die tomorrow, right yeah and then I got
there, I got the 100 doors.
Same exact thing, dude.
I'd look at my bank account.
I'm like um, it says I'msupposed to be making 200, but
oh yeah, that ac unit went outover there, that roof had to get
replaced.
We needed new windows over here.
(20:22):
It just, and even to this dayit's like I think we're at like
140, 150 somewhere in there, andit's still uh, it's still
fluctu.
There's no consistency.
We'll put it that way, likeit's well, you know what is
consistent.
Speaker 2 (20:38):
The wealth building they all, they all appreciate
five percent a year.
Oh, did I lose you, jimmy?
Are you back?
Yeah, you got me.
Speaker 1 (20:47):
They all appreciate yep, go ahead.
Speaker 2 (20:51):
they're all appreciating five percent a year
, and I don't even want to talkabout how much money I know
you've saved in taxes.
Speaker 1 (20:57):
Oh dude, and we just got a nice little big, beautiful
bill this year 100% bonusdepreciations back.
That's ridiculous.
Yeah, it's a huge advantage forreal estate professionals.
Speaker 2 (21:10):
Yeah, Any real estate agent out there.
If you're not buying houses,you're wrong.
Speaker 1 (21:15):
Yeah, yeah, Jimmy.
What does that tell everybodyin the audience?
Just for those that aren'tunderstanding, just simple terms
, if you can.
A doctor is making 500 grand ayear.
Wife's a real estateprofessional.
How does that affect theirincome versus not owning rentals
?
Can you explain that?
Speaker 2 (21:32):
Yeah, I'm not a tax professional, but the quick and
dirty of depreciation.
This is another reason realestate's the greatest investment
ever, because to the IRS, ourhouses are losing value To the
rest of the economy.
Our houses are appreciating 5%a year and so, before Trump, a
regular depreciation schedule.
The IRS said.
And before Trump, a regulardepreciation schedule.
(21:52):
The IRS said, hey, 35% of thehouse depreciates on a
seven-year cycle, the restdepreciate on a 27 and a half
year cycle.
And then so you would have towait for your depreciation.
30% of it you could depreciatein seven years.
The rest you had to wait 27 anda half years.
Now, with the Big, bold,beautiful Tax Bill, you could
(22:12):
take that seven-year cycle andtake it down to zero.
So I'm going to use anautomotive example.
Like, as soon as that billpassed, I bought a new truck
right, $85,000 a year truck.
Now a truck generallydepreciates on a five-year
schedule.
So you would take 85 divided byfive, and then that was your
tax savings each year, right,yeah, 85 divided by five, and
(22:35):
then that was your tax savingseach year, right?
Yep, with Trump's bonusdepreciation, I take that 85 and
condense it down to one year.
So I took an $85,000 tax lossand then I'm in a 40% tax
bracket.
Can I do some math real quick?
Speaker 1 (22:47):
Yep, let's do some math.
Let's show them the numbers.
I think this is important.
When I talk to people, I don'tthink they quite grasp the
actual impact of this.
Speaker 2 (22:53):
A lot of times so I got an instant.
I financed it all as a goodreal estate investor will, and
so I got an instant $34,000 taxsavings.
Speaker 1 (23:04):
That's incredible.
So you are not paying.
So just in layman's terms,because sometimes people miss
this up, it's not a $35,000deduction, right Like you're not
paying $35,000, or it is a$35,000 deduction.
Speaker 2 (23:14):
I got an $85,000 deduction and then, since I have
a 40% tax bracket, I saved 34Kin taxes.
It's amazing.
Now take that back to realestate.
You take all the parts of thehouse, it's 30% of your 60,000.
Let's just do a $200,000 houseexample, right, yep?
So I think it's 30, it could be35.
(23:37):
I'm just a real estate guy, butlet's.
So 60 grand of that house iscan be cost segged and can be
condensed to a one yeardepreciation.
So you could take $60,000 ofthat house and say that's a year
, one loss.
And so what is that?
Now there's going to be somesticklers listening to this
(23:59):
podcast being like his math'snot correct.
My math is accurate.
It's not precise, close enough,but you know what I mean, like
some of the high detail orientedpeople like, oh, I'm
calculating a $24,000 taxsavings but they're like, oh no,
it's actually 20.98.
I'm like, okay, cool, yeah,close enough.
Speaker 1 (24:21):
It's significant.
So my point with the doctorexample I always love this
example because that's activeincome and I think what a lot of
people don't understand is ifyou can consider yourself a real
estate professional or you'remarried.
This is where, if you'remarried or have a business
partner that you guys arebusiness partners in, this is
one of the best hacks out thereto save yourself tons and tons
of money in taxes.
If you've got a really highpaying job or you're that sales
(24:44):
guy Jimmy was talking about,have your spouse be the real
estate professional, now you cantake, let's say, you make 500
grand, you buy enough realestate in a year.
You could potentially wipe outyour entire income to the
federal government and paysliterally zero in taxes.
Now we had a pot we had MarcusKrigler on not too long ago
(25:04):
Jimmy, who you know well andhe's my guy Perfect and he
talked about some reasons whyyou may not want to take it down
to zero, but you want to get itinto those lower brackets,
right and uh.
And there's some strategyaround that, which is why marcus
is the cpa, not us, but um.
But point being, theoreticallyyou could wipe out your entire
income and pay zero in federalincome tax, which, if you're in
a 40 tax bracket, you're making500 g's a year.
(25:25):
That's a lot of money thatyou're selling and now you can
recycle that money right thatyou saved and reinvest that
money in and help it grow likeethically, i'll'll pay 10%.
Speaker 2 (25:35):
So I'm not shooting for zero either.
Like it's the greatest countryon earth, I'm fine with 10%,
yeah.
Speaker 1 (25:42):
Yeah, I'm, I'm at whatever my CPA tells me I
should be at.
So if he says zero, I go zero.
He says 10, I pay 10, whatever.
Speaker 2 (25:50):
For you yeah, for you other stickler types it's like
trying to get to net zero withcarbon.
It's impossible, it'll neverhappen.
So don't try to go to net zerowith your taxes either.
And remember you live in thegreatest country on earth and
they deserve some.
They got to collect revenuesomehow, right?
Speaker 1 (26:06):
Right, that's why we got tariff no 40% 40%.
Speaker 2 (26:09):
That's not acceptable , though, either.
Speaker 1 (26:11):
Yeah.
Yeah, there's a threshold therefor everybody, right, for sure,
for sure, yeah.
So talk about what do you meanwhen you say BRR key?
Talk about that for a minute,jimmy, for people who aren't
familiar with that terminology.
I think you might have coinedthis.
I've never heard anybody usethis terminology before, so I
don't know if you have atrademark on that, but you
should.
Speaker 2 (26:28):
I should means buy, rehab, rent, refinance.
And all the gurus out there areteaching people with cash
machines the privilege of havinga low-paying job in real estate
, finding and fixing those bursso you can be wealthy Like love,
bigger pockets, but they tellthese rich people to take a
low-paying job in real estate.
It's silly.
And so then we had Turnkey fromback in the day, which was an
(26:50):
already rehabbed house, and so Ijust combined the two.
Burrs and turnkey is like waita minute, you don't really want
to pay full retail for a houselike you do with a turnkey.
And then I looked at my holdingcosts and everything and title
costs for transactions and I waslike net, net people taking the
(27:11):
houses down themselves justmakes more sense and it's a
better investment for them.
Speaker 1 (27:16):
Yeah.
So basically what you're doing,jim, is you're finding the deal
, they're buying that deal fromyou at a wholesale fee, yes and
then you're taking care of themanagement and the remodel of
that to get it to today'sstandards.
Speaker 2 (27:30):
Then they're able to refinance that property after
it's done hopefully pull alltheir capital back out or at
least Not all.
Just like not having a zero taxrate, they'll pull most of it
out.
But I had one guy not be ableto pull out three grand and he
got all poopy pants and I waslike, come on, bro, dude, yeah.
Speaker 1 (27:50):
Yeah, and I think that's changed quite a bit,
Jimmy, over the last few years.
Have you seen that where youknow the burr nowadays is,
you're going to be in for lessthan 20% down and you got to be
happy with that?
Speaker 2 (28:02):
Not a hundred percent , plus getting a check at
closing.
Yeah, I mean, it's real.
You're doing this passively.
Like you just see, you just gotan asset that you're like into
for 10% of the ARV value and didit do any work?
Like you can't complain, yeah,so I, as you can tell, I try to
shy away from perfectionism andabsolutes.
Speaker 1 (28:21):
Yes, I've noticed that here recently in the last
three minutes of this podcastyeah For sure, yeah, and by us.
We don't have a providernecessarily doing the whole
process like what you're doing.
So those of you guys here inWisconsin, and especially up
here in Northeast Wisconsinwhere we are, we partner with a
lot of and I say partner looselywe have a relationship where we
(28:43):
personally have properties thatsome of these management
companies rent and fix up for us.
I don't make anything byreferring anybody over to them
or anything like that.
Speaker 2 (28:53):
I just there you go, selling yourself short again.
Speaker 1 (28:56):
Yeah, I know, I know I'm all about bringing value,
jimmy.
I'm all it's all about for thekids.
Do it for the kids.
Dollars follow value, that'sright.
That's right.
So, but what we do is we?
We just recommend, hey, getwith some of these property
management companies them, do,like what Jimmy's saying.
If you want to be prettyhands-off, let them do the
remodel, let them fix it up, andand then you go ahead and do
(29:18):
the refinance.
I just actually this morningand I closed on a refinance.
We did that exact same process.
I gave it to them.
They did the rehab, remodel,everything else.
They got it rented up totoday's market rents.
I talked to the bank, refinanced.
It got all I actually on thisone I got all my money back out,
thank thank the Lord.
That was nice, but now that'san infinite return.
I got like 40 grand of equityin this thing, 50 grand of
equity and I did literally Ispent probably four hours on it,
(29:39):
from getting the loan,transferring money, refinancing.
It is probably four hours allin and about 50 grand of equity.
Speaker 2 (29:47):
And then that's the number to look at is how much
instant equity you run into Ifyou had five grand in there and
then your return now is notinfinite.
Do you really care If you stepinto 30 to 40 grand equity?
No, no.
How do you talk to people,though, jimmy?
Speaker 1 (30:04):
How do you talk to people, though, about this?
Because this is one thing Ithink for people who have the
cash machine, right, this iseasy for us, because it's like
so handsoff it's, you plug it in, boom, boom, boom.
What about for the people whodon't quite have that cash
machine?
Cooking right now Is are you,are you telling them get a
better job?
Are you telling them get intoflips?
You telling them start there?
Like, what's your advice forsomebody on the sidelines
(30:25):
looking to get started in realestate who maybe doesn't have a
big cash machine at this point?
Speaker 2 (30:29):
Those are the people who should be flipping and
wholesaling.
Okay Are, quite frankly, goingto people like you and me and
becoming home buying specialists.
Mm-hmm, because that's thefastest way to a cash machine is
just be a home buyingspecialist and crush it.
Speaker 1 (30:46):
Mm-hmm, yeah, yeah.
Speaker 2 (30:55):
So you just got to get yourself that active income,
like what Medley told you, yeah, years ago, and if you want it,
if you want it in real estate,like I mean to start your own
wholesaling business, I think isjust it's a big thing to fill.
I think people make more moneyas working for bigger home
buyers than starting it on theirown, like throwing up a shingle
and paying for their ownmarketing and cold calling and
all that yeah, well, isn't thatinteresting like we get.
Speaker 1 (31:14):
We get asked that all the time Like, how do you find
your deals?
And I'm like well, if you wantto spend, you know, 50,000 a
month in marketing, you can.
You can get there too.
What is that about?
Where are you guys at as far asmarketing spend in a month?
For acquisitions In the lo Rockwe're 70.
(31:38):
So 150 a month in marketinggoing out, yes, wow.
Well, we got to step our gameup, apparently with our spend.
Speaker 2 (31:42):
Jeez, we're way behind you, dang.
All right, we just did a bunchof numbers.
We're improving stuff with TV,but we got to do more TV.
Speaker 1 (31:52):
Okay, got it.
Yeah, every market's sodifferent too, and the time of
the year is different.
Everything's different.
But constantly looking at thosenumbers, right, yeah, well,
that's part of what, probablywhat you're talking about
Running a wholesale businessit's more than just I got to go
out and negotiate a good deal.
If you really want to run alegitimate business, there's a
lot more that goes into a lot ofKPIs to be watching, a lot of
marketing, to be watching returnon ad spend, all these other
(32:14):
things that go into play on thisstuff.
If you want to be serious, ifyou want to pick off a few deals
a year, you can get away withsending some letters and
probably picking up a few dealsthroughout the year.
Speaker 2 (32:22):
I'd rather buy from another wholesaler.
Speaker 1 (32:24):
Right yeah.
Speaker 2 (32:26):
I mean, that's how I got started, yeah.
Speaker 1 (32:28):
I just had a guy on not too long ago and he's doing
now.
He's doing some of his ownmarketing.
But when he got started he cameto our market, he called me as
one of the guys in the market topick, pick a brain with and I
see he wanted to startwholesaling.
I said you know why do you wantto start wholesaling?
Well, I want to be able to getmy own deals.
I was like, why don't you justbuy rentals from us?
Speaker 2 (32:45):
like well then, so what I?
What I have those people do isI have a, I have an excel sheet
where I show all the timerequired to find one deal, and
then I plug their hourly rate in, and it's always more than the
assignment fee.
Speaker 1 (33:00):
Wow, what is?
Give me some examples of that.
What have you?
What have you seen?
With some examples of somepeople.
Speaker 2 (33:06):
As far as how much time it takes to find one deal,
yeah.
So I would say if you're goingto do a, so let's say you want
to find a deal by cold calling.
Cold calling is a hundred toone, right?
So how long is it going to takeyou to either manage a cold
caller or cold call yourself,right?
Yeah, that's one thing.
Then do the evaluation, theninterview the contractor.
(33:26):
To me, one house is a 20 hourexperience, at a minimum 20 to
30.
Speaker 1 (33:32):
Oh, that's.
That's actually pretty prettydarn good If you can get that.
You're saying under contract 30hours.
Speaker 2 (33:40):
No, I was saying rehab.
No, yeah, yeah, under contract,30 hours, yeah.
Speaker 1 (33:45):
Yeah, I was going to say that's.
That's actually probably prettygood for cold call.
I've I would say I would havethought it would be longer than
that to try to get a deal.
Speaker 2 (33:52):
Let's do the math on that.
Let, I would have thought itwould be longer than that to try
to get a deal.
Let's do the math on that.
Let's say it takes you 30 hoursto find one deal and you make
$200 an hour, which wouldconstitute a cash machine.
Yeah, that's six grand.
Speaker 1 (34:05):
Yeah to get one deal from cold call.
Yeah, yep, yeah, yeah, I don'tknow.
That's interesting.
I've never heard anybodyactually breaking it down that
way, but I like the way thatyou're thinking of that stuff.
That's pretty good.
What are you seeing?
What are your buyers doingnowadays for financing these
bird eels?
Are they people who aren't justcash heavy?
(34:27):
What are they doing to buy andrefinance in your guys' market?
Speaker 2 (34:31):
Hard money Hard money .
Hard money or private money.
Okay, after they do it, afterthey do a few deals, they go to
their friends and family andfind private money.
Speaker 1 (34:40):
Okay, do you guys have community banks there that
do that get pretty creative, oris it pretty, pretty, pretty
scarce?
Speaker 2 (34:47):
Pretty scarce.
I mean the initial purchasething pretty scarce, okay, but
then yeah, I'll also show peoplehow to raise private money.
Speaker 1 (34:56):
It's the easiest thing to do ever.
Let's talk about that because Ilove this conversation I've had
I had all you know jay connor,yeah, yeah, had jay on love jay.
He is a energy machine overthere but he he gave some good,
some good nuggets that somepeople implemented actually from
listening to this and raisesome capital.
What let me hear, let JimmyVreeland approach to raising
private money the pitch, thepitch, how you approach.
(35:18):
Yeah, give me the approach, heyyou either get or you get.
Speaker 2 (35:22):
I'm actually doing you a disservice when I pay you
your interest, because I'mbuying a house at 60% of the ARV
and if I don't pay you, you canforeclose on me and now you
have a house that has 60 centson the dollar.
You have a house for 60 centson the dollar.
So, and when I do pay you, Ipay you 8% and you know I help
(35:43):
you protect your money frominflation in the safest asset
class ever called real estate.
Speaker 1 (35:49):
It's very similar.
Yeah, that's a.
It's the opera You're givingthem an opportunity.
I think is the mindset.
Speaker 2 (35:56):
Yeah, I mean especially with people with
self-directed IRAs, oh yeah.
Speaker 1 (36:01):
Yes, do you see that executive order that was just
signed?
Is that going to change any ofthe self-directed piece of
anything as far as being able tonow open up some IRAs and
things like that to alternativeinvestments, does that change
anything with self-directed?
Speaker 2 (36:16):
I don't think any research on that.
Yeah, I did do some research onit.
I think my theory is that I'mgoing to sell my portfolio to a
hedge fund one day, right, okay,and so I think them allowing
that allows more institutionalmoney to flood into real estate
and create more prices.
And then, quite frankly, doinga self-directed IRA is a pain,
(36:37):
so I think it's going to make itless painful, so I think more
cash is going to flood into realestate.
So, even though they knowthey're trying to make more
affordable housing, I don'tthink that's going to help.
Speaker 1 (36:46):
That's not going to help.
No, no, supply and demandEconomics 101.
Yeah, yeah, doesn't help, doesnot help.
So that's interesting.
So the hard money what are youguys seeing for your hard money
lenders in your area as far as,like, what kind of rates that
they're getting out points terms?
Speaker 2 (37:01):
I think 12 and 2.
Speaker 1 (37:03):
12 and 2.
Speaker 2 (37:04):
Okay, it's pretty competitive, the hard money
things.
That mindset is like if you'regoing to go with this long-term
wealth plan, this inflationhedge plan, you got to set up
your inflation sales.
So I don't care how many pointsyou're paying, I don't care how
much interest, I don't care ifthat eats into your forced
equity.
You got to get 20 of theseassets, mm-hmm, and allow them
(37:25):
to appreciate at 5% a year.
So the faster you get the clockspinning, the better off you
are.
Like all these people waitingfor interest rates to go down,
the opportunity cost on thedeals they've missed out on has
been insane.
Speaker 1 (37:39):
Yeah for sure.
Well, we call it the wealthcone.
I call it the wealth cone overhere.
So the minute you start thatclock, your appreciation goes up
and the debt you owe startsgoing down and you create this
bigger and bigger spread ofwealth over time.
Speaker 2 (37:53):
So my buyer's like, well, how do I know you're
sending me a good deal?
I'm like, dude, I'm sending youthe same deal over and over
again.
We have a certain buy criteriaand it's just the same thing.
Over to get the clock startedyeah, you got to get in the game
, yes, and then you're doing itpassively, so you're not going
to get the deals Jimmy and Coreyget, right.
Speaker 1 (38:13):
Yeah, there's a price for that, but you're building
crazy wealth, like I.
Look at some of the guys thatwork for us or have worked for
us in the past and they got.
You know, we're obviouslyalways doing the same thing.
We're pushing them,no-transcript.
(38:34):
Well, you can learn how to getwealthy or you can get a I can
get you a 401k.
What do you?
Speaker 2 (38:38):
want?
Yeah, and then we looked overtime the people that took action
that on their personalfinancial statements because
they bought real estate and theystarted that clock and they
started working the clock Right.
I mean I wish it was harder.
What do you mean by that?
(38:59):
You wish it was harder?
I wish it was more complicated?
Yeah, but it's so simple.
But then, since it's so simple,no one trusts it.
Speaker 1 (39:05):
Right, that's true, that's true, or what I see, kind
of the guru thing here.
Jimmy, I want to go back tothat guru thing you talked about
.
Sometimes I see, um, where Ithink expectations are
improperly set out there, as faras the you know, you hear
everybody's massive, massivedeals.
Everybody likes to talk aboutthe big, the smoking deals they
got right.
Yeah, nobody's talking aboutthe base hits that are building
(39:26):
them and making them wealthy.
Right, and I think that's whatyou and I are both passionate
about, right, like I think weshare that same sentiment of
just keep taking base hit afterbase hit after base hit and just
keep building that wealth.
Especially, like you said, ifyou've got a cash machine, start
the clock as quickly as you canand get as many as you can,
right.
Speaker 2 (39:42):
Yeah, cash machines create home runs.
You know, passive incomemachines create singles.
Speaker 1 (39:48):
Yep, Yep.
But what do you see when youtalk to some of the people?
Are you seeing the same thingwhere their expectation is?
They have to have, like yousaid, you got a guy who's three
grand in all their money's gotto be pulled out, plus they need
a check at closing.
What are your buyers tellingyou?
What are you seeing from themwhen they're looking at some of
the deals as far as what theirexpectations are for either
equity percentages or return oncash, or what are they?
(40:11):
What are their criteria thatyou're seeing when you're
talking to some of these folks?
Speaker 2 (40:14):
The short answer.
Speaker 1 (40:15):
Yeah.
Speaker 2 (40:16):
I tell them they can have whatever buying criteria
they want, as long as it's theone I tell them they should have
.
I love it.
Speaker 1 (40:25):
I love it.
Speaker 2 (40:26):
So a reasonable buying criteria, because do you
know how many people I see notget in the game because they
have unrealistic buyingcriterias?
This is where I want you to go.
Yep, hey, here's what you canexpect.
You can expect to be all intoyour BRRRR 85%.
That's very reasonable.
You can also count on 5% to 10%in change orders and you could
(40:46):
expect to be cash flow positiveyear one.
5% to 10% in change orders andyou could expect to be cashflow
positive year one.
So back in the day when we wereselling the whole turnkey thing
where they can expect cashflow,people were miserable, I was
miserable.
Yada, yada, yada.
And then you're not going totake a dollar out of this
portfolio for three years.
All your traditional cashflowis going to go to what I call
resident reinvestment, which is,when the tenant moves out,
(41:09):
you're going to take all thatcash and you're going to put it
back into the house, so itcontinues to get a top resident
and it continues to appreciate,like everybody expects real
estate to appreciate, right, butthey don't expect to have to
reinvest at all, and that'sinsane, yeah, and so it's not
your money you're reinvesting,it's your residents money, and
(41:30):
so I think, setting those lowexpectations very, very fast,
and I know I might have soundedlike a jerk that they're my
expectations, but this is thebuying criteria.
I've seen that can create a tonof wealth in a short time and
keep people sane.
Right, yeah, in a short time.
I mean 10 years, yeah.
Speaker 1 (41:50):
Yeah, I was just going to ask you what is a short
time to you, but you answeredthat question.
10 years, because I thinkthat's the other expectation.
I think that I had too is likeI'm like, oh, I got a hundred
doors three years.
Wow, I'm amazing.
Look at me, I'm going to be sowealthy and so rich.
And then I'm like, well, no ofmy bigger deals.
And I was like, oh, oh, wait, Iam rich, this is where you get
your cash flow from.
(42:11):
I got it now, right.
Speaker 2 (42:14):
Yeah, we call that equity milling, okay, so here's
the base plan that I think everyAmerican should do Two houses a
year for 10 years and then atyear 10, they either sell the
house or they take a line ofcredit off the house, and then
they do that for the next 10years.
And so if you buy a $150,000house right now, you could
(42:36):
expect it to be worth $220,00010 years from now.
So you bought two a year.
Basically you could be taking$150,000 a year in equity
milling, tax-free lines ofcredit, and then people are
going back in more debt.
I'm like yeah, yes and no.
Then you hold onto the housefor another 10 years and the
tenant continues to pay off thenew note and you recharge the
(42:57):
equity and then take anotherline of credit at year 20.
Speaker 1 (43:01):
You're saying lines of credit, do you mean like a
loan, a home equity loan, or areyou?
Saying just a line of creditlike a credit card no, a HELOC,
a.
You see, a credit like a creditcard, no a heloc, a heloc so
like a line of credit, so likethey're not using it.
If they don't use it, yeah,okay, what would keep them from
just refinancing the property atthat point, at 10 years, and
pulling that, that cash out that?
Speaker 2 (43:21):
way.
Um, you could, but then you'regonna pay.
What I like, like about heloxis you're only paying interest
if you're using the cash.
Yeah, either way, or sell 10 ofthem, whatever.
Yeah, but, dude, that's it Ijust did a whole oh, go ahead.
So now that I'm hitting likeyear 10 in this, I'm taking
these lines of credit andgetting like 700 000.
Speaker 1 (43:42):
I'm like, oh yeah, I really don't care about 200 a
door yeah, what are you doingwith the 700k that you're
pulling on the lines of credit?
Speaker 2 (43:51):
Using that to flip yeah.
Speaker 1 (43:55):
Yeah, you can also arbitrage too.
So I started to do this alittle bit.
I've got an investment.
I put some money.
I took a HELOC 500K, put itinto a guy I know really well,
trust, right, so you got to havethat trust and relationship and
stuff like that.
But I'm getting charged six anda half percent on the line of
credit and I'm making 10%.
So it's not crazy money, butit's.
(44:16):
It's all passive and it's justfrom equity for my properties
that have appreciated anddepreciated.
It's like free money that Ididn't have to do anything for.
Speaker 2 (44:25):
It's magical, and now you're probably getting your
$200 a door from arbitrage.
Speaker 1 (44:31):
When I do that, I don't have any windows to fix,
or tenants or toilets or any ofthat stuff, right.
It really does become passiveat that point.
But that's the power is.
Once you get the time tickingand you let the time tick, you
have more options, right.
So you and I are having thisdiscussion Do you refinance?
Do you pull a line of credit?
That's a great problem to haveis to figure out.
What are you going to do withall this equity now?
Speaker 2 (44:51):
Yeah, but it doesn't happen unless you start the
clock.
Speaker 1 (44:53):
You got to start it, man.
You got to start it.
I love it.
Well, jimmy, if somebody wantedto get started with you down in
your neck of the woods and theywanted to get some of the
Berkey programs going with whatyou guys are doing because
hands-off they can just get in,they have equity, they're going
to get some cash flow positivestuff Somebody wanted to get
involved with you guys.
What's the best way for them toget in touch with you guys in
(45:15):
your area?
Speaker 2 (45:17):
Just DM me on Instagram, jimmy Vreeland V, as
in Victor R-E-E-L-A-N-D, or goto jimmyvreelandcom.
Speaker 1 (45:24):
Cool, awesome man, and if you guys are listening,
you want to get started inWisconsin and you want to do
some of that stuff I saidearlier, go to
wisconsindiscountpropertiescom.
You can get on the buyers list.
We're here to help walk youthrough whatever you need.
Get you connected to lenders.
We've got a whole bunch of themthat we can connect you up with
.
That'll help you finance thesethings and have you start the
clock, like Jimmy and I havebeen talking about this whole
(45:44):
episode.
Jimmy, any final thoughts forthe audience out here as we're
having this conversation?
Speaker 2 (45:57):
It is your American responsibility and duty to get
20, 30-year government-backedconventional loans and build
your wealth.
Love it, I love it.
Now, if you get the house fromme or Corey, don't care, you got
to get those houses and loans.
You can do it for both of us.
Get 10 for both of us diversify.
Speaker 1 (46:10):
Let's go.
I love it, man.
All right, jimmy.
Well, man, I appreciate youbeing on.
We always ask one finalquestion and I don't know if you
have an answer to this, butthis is always a little fun one
we do for people who are lookingto get started.
Wisconsin have you ever been towisconsin?
Speaker 2 (46:22):
no, I want to go to.
I want to go to a green baychiefs game.
Well, dude, let's set it up.
Are they playing this year?
Speaker 1 (46:29):
Not this year, but I think next year we'll be back on
the docket, Maybe next year orthe year after, but when they do
we'll get a big Chiefs group inCG.
So we'll get the Chiefs crew up, or, if they're down by you
guys, I would love to go to agame of Arrowhead.
Speaker 2 (46:43):
Nice.
I've never been to the tundraat Lambeau.
Speaker 1 (46:47):
I've never been to Arrowhead, so we got to make it
happen.
Dude, for sure, let's go.
Awesome, jimmy, we'llappreciate you guys being on.
If you guys got some value outof this show, please share it.
And again, that, as I say inevery episode, not only helps us
grow the audience, but it helpsyou guys grow your reputation
as a real estate investor or apotential real estate investor.
(47:09):
To help you bring
What's up everybody.
Corey Raymond, your host hereof the Wisconsin Investor
Podcast, and I got my man, JimmyVreeland here.
Jimmy, what podcast are yourunning again?
The Real Estate.
Speaker 2 (00:11):
Fast Pass Podcast.
Speaker 1 (00:13):
The Real Estate Fast Pass Podcast.
So we are going to I'm bringingyou some heat today, guys, for
my audience and Jimmy, I knowyou're going to be bringing this
to your audience as well andJimmy and I are both members of
a group called the CollectiveGenius and we've known each
other now for gosh five, sixyears probably, been in this
group and seen a lot of thingsover the years, so we're going
to get into some of that today.
(00:34):
Before we do, I always give alittle commercial for our
business, wisconsin DiscountProperties.
So if you are looking to investin properties in Wisconsin, get
on our buyers list.
To do that, you just go towisconsindiscountpropertiescom,
you plug your info in and westart sending you deals in your
inbox every single Mondaymorning.
We'll shoot you a little textas well.
In case you're not a bigemailer.
You can check it out in thetext, and I've been pounding
(00:56):
this on the last couple, but I'mreally excited about some data
that we just put together.
One of the criticismswholesalers get all the time is
your ARVs are inflated.
You guys are inflating the ARVsto try to sell deals.
Well, we put some data togetherto find out how good are we at
ARVs.
Are we inflating them?
Are we accurate?
We did 50 flips that you guysbought from us in a six-month
(01:17):
span and we looked at what didthey actually sell for at the
end of the day and what did wesay they were going to sell for,
and we were five grand short onour ARVs.
So our investors made fivegrand more on average than what
we said they were going to makeon these deals.
And we even included the onesthat were just clean and list.
So these were people who didn'teven bring into the ARVs.
So you can have confidence whenyou're looking at those ARVs
(01:39):
that we're going to be prettydamn close on those areas.
Speaker 2 (01:41):
You're underselling yourself, Corey.
You need to add 10K to all yourdispo prices.
Speaker 1 (01:46):
There we go.
That's what we're doing fromnow on, baby.
That being said, Jimmy, let'sget into it today.
Brother, Tell our audience alittle bit about who's Jimmy
Vreeland and why in the heck arewe talking today, brother?
Speaker 2 (01:57):
Yeah, my name is Jimmy Vreeland.
I'm a real estate investor,small business owner from St
Louis, Missouri.
I'm a happily married father offour and former Army Ranger.
Speaker 1 (02:08):
Love it, boom, that's it.
That's what I love about you,jimmy.
No nonsense, bring it buddy.
So when Jimmy and I weretalking at the last Collective
Genius that we were at at dinnerI'm a big Burr lover, jimmy
loves the Burr, and we were justkind of nerding out at dinner
one night about Burr and Jimmy'sgot a pretty cool program
called Burr Key, which I thinkis pretty cool.
You've been in this business awhile and Jimmy and you've had a
(02:28):
bunch of different iterationsof what you guys have done there
in your market and so I thought, man, this is perfect to bring
you on and get your perspectiveon all things real estate
related, but in particular cashflow.
How do you look at cash flowfor your investors?
Tell everybody a little bitabout what you guys are doing
with your Berkey program therein KC.
Speaker 2 (02:48):
So I'm going to back up a second Corey.
And so it comes down to alittle bit of a problem with, I
think, the real estate educationindustry and there's not enough
distinction and differentiation, like when you say real estate,
real estate is a big big thing,right, right, big umbrella, and
(03:13):
so there's no differentiationbetween someone who has a cash
machine and someone who doesn'thave a cash machine, and I think
it's just, I think it's hurtingpeople.
And let me kind of understandthe way I define a cash machine
is you make 250 K a year.
So if you make 250 K a year insales, you have a cash machine.
If you don't, you don't have acash machine yet.
(03:35):
And so if you have a cashmachine, to direct your
attention away from that cashmachine, I think is very
perilous.
And so does everybody in Americaneed to be in real estate?
They do.
You, at a minimum, need to get20 government, 30 year fixed
mortgages.
It needs to be part ofeveryone's portfolio.
But to get to that and takeyour eye off the ball, I don't
(03:56):
think it's smart.
And so you need someone to helpyou do it passively.
Now, if you don't have 250K ayear, cool, you need to
wholesale and flip if you wantto be in real estate.
Because I see people withoutcash machines start taking on
long-term debt and start buyingrentals when they shouldn't and
then they're in a precariousliquidity position.
Then I see people who shouldjust be buying rentals taking
(04:16):
their eye off the ball andflipping and wholesaling.
I was like wait a minute, thisdoesn't make any economic sense.
Speaker 1 (04:25):
Yeah, yeah.
So what you're saying, jimmy,is let's say I'm in sales, I'm
making 300K a year killing it inmy job, my job in the real
estate space.
I should just be buying andbeing as hands off as possible,
getting the rental businessgoing.
Speaker 2 (04:39):
Yeah, because like okay, so that guy making
$250,000, why does he even wantreal estate?
Like what do you think thatanswer is?
Speaker 1 (04:51):
Passive income.
He wants to get out eventually,be able to surpass that
$250,000, to be able to not haveto work his butt off to be able
to make that $250,000.
Speaker 2 (05:01):
I have a bad.
I'm going to take this podcaston a bad tangent, but I have bad
news for that guy.
I have bad news for that guymaking 250 to 300K.
Do you want to know what thebad news is?
What's that?
There is no way $200 to $300 adoor in what we used to call
cash flow will ever replace yourincome.
(05:22):
Unfortunately, you're toosuccessful and too productive
ever replace your income.
Unfortunately, you're toosuccessful and too productive.
But now, over the course of 10years, those houses will build
you a ton of wealth, but theyare in the traditional cashflow
model.
They are not going to replaceyour income.
Because I was in that situation.
I was making 250K in corporatesales and I remember buying a
few rentals and sitting down andseeing oh, I'm making 300.
(05:42):
300,.
What is a quick math?
If you make 250K a year, youneed to make 20 grand a month.
Okay, and then $200 a door for20 grand.
What is that?
100 houses 100 doors.
Speaker 1 (05:54):
You need 100 doors.
Yep, that was my original goalwhen I got into real estate.
Jimmy, right there, that was it.
Speaker 2 (05:58):
Yeah, and then we're just going to put our head down
and we're going to do it nomatter what, right, corey, yeah.
And then let me tell you astory about my past.
Like I was so sick of corporatemoney and this is how stupid I
was I started a deli so I was inmedical sales and I was always
have to doing office lunches,right, and I had corporate
(06:18):
credit card and I was alwaysswiping that card and I'm like
wait a minute, why am I payingsomebody else to make these
lunches?
Why don't I just make thelunches myself?
Speaker 1 (06:28):
I did not know this about you, jimmy.
I did not know you had a delidude.
Speaker 2 (06:31):
This is awesome and so I, I, um, I did it with a
high school friend who had acheckered past and was like
currently in recovery, and thisdude could cook bro.
His food was excellent, yeah,but couldn't run a business, nor
could I, and you know he endedup stealing from the company
account to get his fix right.
(06:54):
Oh no, but I was in such ademented mental space that
making $1 from the crappy delifelt better than making the
$250,000 I made from corporate.
Wow, dude, but dude, that was ame problem.
That wasn't a corporate problem.
Yeah, that was me beingungrateful for what that job
(07:15):
provided me.
Speaker 1 (07:16):
Right, so was that before you started dipping into
real estate?
Was that like your firstventure into anything outside of
a W-2?
Speaker 2 (07:26):
Dude.
I read Kiyosaki when I was inthe army, got out of the army
and then, around 2016, when Istarted making good money no,
around 13, I started makingreally good money and I started
getting stupid.
And then, you know, kiyosakiconvinced me.
I was in the rat race of, I hada new quota every year and then
I had to chase my bonus right.
(07:46):
Well, my dumb ass, can I curseon this podcast?
Sorry, is this family-friendly?
Speaker 1 (07:54):
You know what Family-friendly but ass is, I
think.
Speaker 2 (07:58):
That's as bad as it will go, Okay.
Okay, this is how stupid I was.
I created a second rat racewhere I would take all my
bonuses, reinvest it in somecash flow scheme, oil wells,
delis, eBay and real estate andthen I would lose all the bonus
money and then have to hustleharder to do it again until I
(08:19):
sat To catch back up yes, untilI just sat and focused and
exclusively started buying realestate.
Speaker 1 (08:26):
Interesting, interesting.
Did you start with?
So taking your advice now thatyou have today, looking
backwards hindsight, jimmy, whenyou started in the real estate
space and got focused, was thaton buy and hold.
What was your?
Because, again, we talked aboutthat's a big umbrella of real
estate how did you enter intothe space while trying to focus
on the cash machine?
Speaker 2 (08:48):
Okay.
So I started buying burrs,right, okay.
And so then I learned I took mysales ability and talking to
rich doctors and I just changedit to I was able to borrow $5
million in private money, right,and I was able to just dude, I
got up to 140 birds.
Wow, I mean I was highly indebt.
(09:11):
No systems, no processes, cashpoor.
And then I hit my hundredthrental and I was like, hey, and
I can finally tell my job to myboss to take this job and shove
it Right.
Yeah, because according to themath, a this job and shove it
(09:34):
right.
Yeah, because according to themath, 100 rentals, I should be
financially free.
Yes, yes, and I so.
Then I joined cg and I I metjason medley, yeah, and jason
was like what do you do, bro?
And I'm like I'm retired, I got100 rentals.
And he's like no, what do youdo?
He's like, look stupid, you arecash poor and house rich.
And now, now you're $5 millionin debt.
When you were a corporate youhad no debt.
And he's like, so you betterfind some active income fast.
And so then I startedturnkeying houses to people.
(09:58):
But he had to give me thedistinction between passive
income and wealth building andactive income.
He didn't phrase it as cashmachine.
I learned that like seven yearslater, yeah.
But I mean, here's anotherthing when I had a cash machine
from corporate, the bankers wereout in droves to lend me money.
Oh for sure, dude, soon, as Igave up my cash machine, guess
how much lending I got?
Zero, zero, yeah.
(10:21):
But I didn't understand thecash machine paradigm.
Speaker 1 (10:25):
Yeah, I see that happen a lot.
Jimmy, I'm glad you broughtthis point up.
We'll get people who do theybang off four or five flips in a
year.
They make a good, nice chunk oneach of them.
They're six figures now, rightyeah.
And they're starting to add acouple rentals to the portfolio
along the way, building thatwealth, which is great.
(10:48):
I think that's a great idea.
And then they go quit that W-2.
And all of a sudden now they'retrying to get lending for that
next flip or rental and they'rescrounging.
Man, they are in a tough, toughspot.
So I think it's a great point,man, what you just brought up
there about your experience andgiving up the cash machine.
Speaker 2 (11:00):
Yeah.
And so, jess, if you're goingto give out that cash machine,
make sure you're highly liquid,highly committed.
And if your thought is thatonce you're a small business
owner, you're finally free,you're sorely mistaken, because
now your bosses are youraccountant, the IRS, and really
you have to continue to become abetter person, to employ people
, because I was kind of a I a uh.
Speaker 1 (11:24):
I was not nice when I was a corporate when you say
you were not nice, you mean topeople who you eventually hired,
or just in general as a humanbeing, to customers, clients and
everybody else.
Speaker 2 (11:37):
The world was all about me, Okay, and then I mean
so I, if I were to take a videoof me, my interactions back then
, I don't think I'd be proud.
Yeah, I thought I was.
I thought I was the bombbecause I made 250K a year.
Speaker 1 (11:53):
Yeah, okay, so the ego was strong.
Speaker 2 (11:56):
Yeah, I mean rude to my wife, rude to my coworkers
and then, if they didn't buyfrom me, rude to my potential
clients.
Speaker 1 (12:06):
What was some of the big talk about that
self-development journey then?
Like, was it just throughexperience?
Did you get some coaching?
Like, what did what helped youcontinually?
You know, become the person youare now that you can employ
people, and continually behumble enough to admit that you?
Speaker 2 (12:20):
had to go.
So I learned, like, all thesegreat lessons in the army, right
, okay and but like after mythird deployment, I was like, oh
hell, no, I don't want to leadanymore.
Leading gets you shot at, I'mdone with that, yeah, yeah.
So I had all these greatleadership lessons and great
experiences that you know.
(12:41):
After my third deployment likespending a lot of time overseas
I was kind of tired, I thinkOkay, and immature, like I
always.
People are like, hey, would youever go back?
I was like, dude, it'd beawesome to go back with my brain
now and my body then.
Ah, yeah, like does that makesense?
Yeah, for sure For sure, and soI will tell you what the recipe
(13:01):
was.
I started listening to a ton.
I started getting punched inthe face a lot with business,
and then listening to JordanPeterson.
Speaker 1 (13:11):
Okay, who is Jordan?
I don't know.
Jordan Peterson.
Speaker 2 (13:13):
Oh my God, I'm writing that down.
He's the man.
Okay, 12 Rules for Life.
Okay, that's got to be yournext book.
Speaker 1 (13:21):
Okay, love it.
12 Rules for Life.
Speaker 2 (13:26):
Jordan Peterson's big thing is the hero's journey.
Okay, life is all about aimingupward and, um, you know, the
hero's journey is this it's ifyou look at every movie, it goes
through this cycle.
It's someone hears a call toadventure, they cross the
threshold, like Bobo leaving theShire, and then, soon as you
(13:48):
cross the threshold, it's just aroad of trials.
Then, once you hit the road oftrials, there's going to be a
moment, a climax, an abyss, thatyou either quit and turn around
and don't change, or you change, get better and get through the
abyss.
And so I mean I'm sure yourexperience is the same Small
business ownership is just aseries of abysses.
Speaker 1 (14:10):
Dude, I'll tell you what.
When we made our first hire,there was so much of that.
I call it imposter syndrome,right.
But it's like who am I to hiresomebody?
Like I don't know.
I don't even know what I'mdoing.
How do I pay this person?
How do I do taxes?
How do I do all this stuff?
Like I don't know how to leadsomebody.
What are they going to do everyday?
How do I coach them?
Right?
And if you're a small businessowner and you're listening to
(14:30):
this podcast and you haveemployees, you know you just had
to kind of power through thatcrap and just do it and you
learn a lot in the process.
Like you said, you're going toget punched in the face quite a
few times.
There's tons of mistakes thatwe in our business have made
with employees and regrets LikeI wish I didn't do certain
things with certain people andthose types of things.
But all you can do is learnfrom it and not make that same
(14:50):
mistake again going forward, andthat's how you grow, I think,
in this, in the small businessworld that we live in, right?
Speaker 2 (14:56):
Yeah, it's part.
So Jordan Peterson convinced methat the only path to gross is
through the abyss.
So if it's unavoidable, youmight as well have some fun with
it.
And so then I started mentallytrying to run to them.
Speaker 1 (15:10):
Okay.
They always say what is it?
Buffaloes run away for a runthrough the storm and cows run
with the storm Be a buffalo yeah.
Yeah, yeah.
Speaker 2 (15:20):
Something like that yeah, yeah, be a buffalo.
Speaker 1 (15:22):
I think that's one of the one of the leadership
concepts out there right nowthat's hot is be a Buffalo, not
a cow, and run through the storm, not with it.
Speaker 2 (15:31):
Yeah, I have a little gratitude that you do have this
problem right now.
Speaker 1 (15:35):
For sure.
Yeah, I think I think that's agreat point.
The gratitude part.
You know, having conversationswith some newer people.
It's really fun for me to whenI get them on the podcast.
It's fun to talk to newerpeople because it reminds me of
that excitement and energy ofwhen I was starting out and how
it was.
And I think you get a little bitjaded the longer you're in this
business, a little bit fromsome of the lumps that you had
to take and you forget how farwe've come.
(15:58):
Jimmy, you and I have been innow probably it sounds about the
same amount of time in thisbusiness and I forget that that
first deal, excitement and stuff.
So talking to newer people, itlike lights me back up like oh
yeah, yeah, this is really fun.
I do need to be grateful forhow far we are.
Like, wow, you know, I wastalking to Carrie on our.
On our we just got back from abig road trip and on the trip I
was like how freaking lucky arewe right now that we get to
(16:20):
drive around the country for acouple of weeks.
We've got a team in placethat's running the show for us.
I take a couple of phone callson the road and the team handles
everything else.
I mean this is incredible.
Like where else can you do this?
But it's almost a decade now ofbuilding that and taking a bunch
of lumps, of trying it and itdoesn't work.
It does work, then it doesn'twork and we're finally at a
(16:46):
point now where I'm sure, if Itake my eye off the ball it'll
change again and it won't be aseasy or, as I say, easy, but it
won't be as self-managed as itis right now, cause I've done
that a few times where I've kindof given up and be like, ah,
you guys got this, and then I'mout in Florida at our house down
there or whatever, andmeanwhile things are crumbling
behind the scenes and I'm I'mjust to it.
But it is amazing, there's alot to be grateful for in
(17:07):
general in this country.
But then to be involved in thisbusiness and get it to a point
where it's matured to now, atleast in our space, it's a
really humbling thing to reflectback on and realize we got a
lot to be grateful for.
Speaker 2 (17:20):
And then that's kind of related back to the cash flow
myth.
Can I pop off about that for asecond?
Speaker 1 (17:26):
Yes, let's talk cashflow.
Myth buddy, I love it.
Speaker 2 (17:30):
So these people who want to step out of their jobs
and not work anymore and get tothe beach.
I always try to remind them weare in the greatest country on
earth, with the most opportunity, with the most technology and
the AI boom coming down the pipe.
It's the most exciting, mostabundant time to be alive.
And you want to Like are yousure about that?
(17:50):
Or why not just buy somerentals so you protect yourself
from inflation, build up yournet worth and then have a nest
egg?
Oh, and also learn the skillset of an investor, which is not
easy, Right, but hey, if youwant to sit it out, that's great
.
Speaker 1 (18:07):
More for me and Jimmy Exactly.
Speaker 2 (18:10):
I try to completely dispel this whole myth of I want
to quit my job.
Speaker 1 (18:15):
Yeah, so you talked about, like you and I have a
very similar experience too withthe rental piece.
Like I did the exact.
It's so interesting because Idid the exact same thing.
I read Kiyosaki.
I'm like I'm getting a hundreddoors as quickly as humanly
possible, that cashflow of 200bucks a door, and then I'm
kicking it on the beach drinkingCoronas and just living the
life right.
Got a hundred doors in threeyears and I was like same exact.
(18:36):
What were you doing?
What was your cash machine?
We started, we were wholesalingat the same time.
So, wholesaling and flipping.
Wholesaling and flipping wasthe cash machine, but I was like
it was only solely and I wasstill working a full-time job
for the first two years,no-transcript.
(19:21):
The nights and weekends thingfor me was like, you know,
having kids.
You got four, I got four.
They were starting to get olderand into stuff and I like
couldn't be at certain thingsand I'm like like, ah, this is
no way to live, you know.
So my intensity level to get outof my job was that like a 10.
I was like I'm doing whateverit takes to get out of this job
because of the time, the timeaspect of it.
And carrie had cancer backbefore we got married, I think
(19:42):
she was like 24.
She had appendix cancer likegot diagnosed with it three or
four months before we weresupposed to get married and she
had to have a major surgery andall this stuff.
So my perception of timeshifted really early in my 20s
of like whoa, we could die, liketomorrow, and be gone, and so
that was a lot of thatmotivation like give me to 100
(20:02):
doors, give me 200 bucks a dooras quickly as possible, because,
who knows, I could die tomorrow, right yeah and then I got
there, I got the 100 doors.
Same exact thing, dude.
I'd look at my bank account.
I'm like um, it says I'msupposed to be making 200, but
oh yeah, that ac unit went outover there, that roof had to get
replaced.
We needed new windows over here.
(20:22):
It just, and even to this dayit's like I think we're at like
140, 150 somewhere in there, andit's still uh, it's still
fluctu.
There's no consistency.
We'll put it that way, likeit's well, you know what is
consistent.
Speaker 2 (20:38):
The wealth building they all, they all appreciate
five percent a year.
Oh, did I lose you, jimmy?
Are you back?
Yeah, you got me.
Speaker 1 (20:47):
They all appreciate yep, go ahead.
Speaker 2 (20:51):
they're all appreciating five percent a year
, and I don't even want to talkabout how much money I know
you've saved in taxes.
Speaker 1 (20:57):
Oh dude, and we just got a nice little big, beautiful
bill this year 100% bonusdepreciations back.
That's ridiculous.
Yeah, it's a huge advantage forreal estate professionals.
Speaker 2 (21:10):
Yeah, Any real estate agent out there.
If you're not buying houses,you're wrong.
Speaker 1 (21:15):
Yeah, yeah, Jimmy.
What does that tell everybodyin the audience?
Just for those that aren'tunderstanding, just simple terms
, if you can.
A doctor is making 500 grand ayear.
Wife's a real estateprofessional.
How does that affect theirincome versus not owning rentals
?
Can you explain that?
Speaker 2 (21:32):
Yeah, I'm not a tax professional, but the quick and
dirty of depreciation.
This is another reason realestate's the greatest investment
ever, because to the IRS, ourhouses are losing value To the
rest of the economy.
Our houses are appreciating 5%a year and so, before Trump, a
regular depreciation schedule.
The IRS said.
And before Trump, a regulardepreciation schedule.
(21:52):
The IRS said, hey, 35% of thehouse depreciates on a
seven-year cycle, the restdepreciate on a 27 and a half
year cycle.
And then so you would have towait for your depreciation.
30% of it you could depreciatein seven years.
The rest you had to wait 27 anda half years.
Now, with the Big, bold,beautiful Tax Bill, you could
(22:12):
take that seven-year cycle andtake it down to zero.
So I'm going to use anautomotive example.
Like, as soon as that billpassed, I bought a new truck
right, $85,000 a year truck.
Now a truck generallydepreciates on a five-year
schedule.
So you would take 85 divided byfive, and then that was your
tax savings each year, right,yeah, 85 divided by five, and
(22:35):
then that was your tax savingseach year, right?
Yep, with Trump's bonusdepreciation, I take that 85 and
condense it down to one year.
So I took an $85,000 tax lossand then I'm in a 40% tax
bracket.
Can I do some math real quick?
Speaker 1 (22:47):
Yep, let's do some math.
Let's show them the numbers.
I think this is important.
When I talk to people, I don'tthink they quite grasp the
actual impact of this.
Speaker 2 (22:53):
A lot of times so I got an instant.
I financed it all as a goodreal estate investor will, and
so I got an instant $34,000 taxsavings.
Speaker 1 (23:04):
That's incredible.
So you are not paying.
So just in layman's terms,because sometimes people miss
this up, it's not a $35,000deduction, right Like you're not
paying $35,000, or it is a$35,000 deduction.
Speaker 2 (23:14):
I got an $85,000 deduction and then, since I have
a 40% tax bracket, I saved 34Kin taxes.
It's amazing.
Now take that back to realestate.
You take all the parts of thehouse, it's 30% of your 60,000.
Let's just do a $200,000 houseexample, right, yep?
So I think it's 30, it could be35.
(23:37):
I'm just a real estate guy, butlet's.
So 60 grand of that house iscan be cost segged and can be
condensed to a one yeardepreciation.
So you could take $60,000 ofthat house and say that's a year
, one loss.
And so what is that?
Now there's going to be somesticklers listening to this
(23:59):
podcast being like his math'snot correct.
My math is accurate.
It's not precise, close enough,but you know what I mean, like
some of the high detail orientedpeople like, oh, I'm
calculating a $24,000 taxsavings but they're like, oh no,
it's actually 20.98.
I'm like, okay, cool, yeah,close enough.
Speaker 1 (24:21):
It's significant.
So my point with the doctorexample I always love this
example because that's activeincome and I think what a lot of
people don't understand is ifyou can consider yourself a real
estate professional or you'remarried.
This is where, if you'remarried or have a business
partner that you guys arebusiness partners in, this is
one of the best hacks out thereto save yourself tons and tons
of money in taxes.
If you've got a really highpaying job or you're that sales
(24:44):
guy Jimmy was talking about,have your spouse be the real
estate professional, now you cantake, let's say, you make 500
grand, you buy enough realestate in a year.
You could potentially wipe outyour entire income to the
federal government and paysliterally zero in taxes.
Now we had a pot we had MarcusKrigler on not too long ago
(25:04):
Jimmy, who you know well andhe's my guy Perfect and he
talked about some reasons whyyou may not want to take it down
to zero, but you want to get itinto those lower brackets,
right and uh.
And there's some strategyaround that, which is why marcus
is the cpa, not us, but um.
But point being, theoreticallyyou could wipe out your entire
income and pay zero in federalincome tax, which, if you're in
a 40 tax bracket, you're making500 g's a year.
(25:25):
That's a lot of money thatyou're selling and now you can
recycle that money right thatyou saved and reinvest that
money in and help it grow likeethically, i'll'll pay 10%.
Speaker 2 (25:35):
So I'm not shooting for zero either.
Like it's the greatest countryon earth, I'm fine with 10%,
yeah.
Speaker 1 (25:42):
Yeah, I'm, I'm at whatever my CPA tells me I
should be at.
So if he says zero, I go zero.
He says 10, I pay 10, whatever.
Speaker 2 (25:50):
For you yeah, for you other stickler types it's like
trying to get to net zero withcarbon.
It's impossible, it'll neverhappen.
So don't try to go to net zerowith your taxes either.
And remember you live in thegreatest country on earth and
they deserve some.
They got to collect revenuesomehow, right?
Speaker 1 (26:06):
Right, that's why we got tariff no 40% 40%.
Speaker 2 (26:09):
That's not acceptable , though, either.
Speaker 1 (26:11):
Yeah.
Yeah, there's a threshold therefor everybody, right, for sure,
for sure, yeah.
So talk about what do you meanwhen you say BRR key?
Talk about that for a minute,jimmy, for people who aren't
familiar with that terminology.
I think you might have coinedthis.
I've never heard anybody usethis terminology before, so I
don't know if you have atrademark on that, but you
should.
Speaker 2 (26:28):
I should means buy, rehab, rent, refinance.
And all the gurus out there areteaching people with cash
machines the privilege of havinga low-paying job in real estate
, finding and fixing those bursso you can be wealthy Like love,
bigger pockets, but they tellthese rich people to take a
low-paying job in real estate.
It's silly.
And so then we had Turnkey fromback in the day, which was an
(26:50):
already rehabbed house, and so Ijust combined the two.
Burrs and turnkey is like waita minute, you don't really want
to pay full retail for a houselike you do with a turnkey.
And then I looked at my holdingcosts and everything and title
costs for transactions and I waslike net, net people taking the
(27:11):
houses down themselves justmakes more sense and it's a
better investment for them.
Speaker 1 (27:16):
Yeah.
So basically what you're doing,jim, is you're finding the deal
, they're buying that deal fromyou at a wholesale fee, yes and
then you're taking care of themanagement and the remodel of
that to get it to today'sstandards.
Speaker 2 (27:30):
Then they're able to refinance that property after
it's done hopefully pull alltheir capital back out or at
least Not all.
Just like not having a zero taxrate, they'll pull most of it
out.
But I had one guy not be ableto pull out three grand and he
got all poopy pants and I waslike, come on, bro, dude, yeah.
Speaker 1 (27:50):
Yeah, and I think that's changed quite a bit,
Jimmy, over the last few years.
Have you seen that where youknow the burr nowadays is,
you're going to be in for lessthan 20% down and you got to be
happy with that?
Speaker 2 (28:02):
Not a hundred percent , plus getting a check at
closing.
Yeah, I mean, it's real.
You're doing this passively.
Like you just see, you just gotan asset that you're like into
for 10% of the ARV value and didit do any work?
Like you can't complain, yeah,so I, as you can tell, I try to
shy away from perfectionism andabsolutes.
Speaker 1 (28:21):
Yes, I've noticed that here recently in the last
three minutes of this podcastyeah For sure, yeah, and by us.
We don't have a providernecessarily doing the whole
process like what you're doing.
So those of you guys here inWisconsin, and especially up
here in Northeast Wisconsinwhere we are, we partner with a
lot of and I say partner looselywe have a relationship where we
(28:43):
personally have properties thatsome of these management
companies rent and fix up for us.
I don't make anything byreferring anybody over to them
or anything like that.
Speaker 2 (28:53):
I just there you go, selling yourself short again.
Speaker 1 (28:56):
Yeah, I know, I know I'm all about bringing value,
jimmy.
I'm all it's all about for thekids.
Do it for the kids.
Dollars follow value, that'sright.
That's right.
So, but what we do is we?
We just recommend, hey, getwith some of these property
management companies them, do,like what Jimmy's saying.
If you want to be prettyhands-off, let them do the
remodel, let them fix it up, andand then you go ahead and do
(29:18):
the refinance.
I just actually this morningand I closed on a refinance.
We did that exact same process.
I gave it to them.
They did the rehab, remodel,everything else.
They got it rented up totoday's market rents.
I talked to the bank, refinanced.
It got all I actually on thisone I got all my money back out,
thank thank the Lord.
That was nice, but now that'san infinite return.
I got like 40 grand of equityin this thing, 50 grand of
equity and I did literally Ispent probably four hours on it,
(29:39):
from getting the loan,transferring money, refinancing.
It is probably four hours allin and about 50 grand of equity.
Speaker 2 (29:47):
And then that's the number to look at is how much
instant equity you run into Ifyou had five grand in there and
then your return now is notinfinite.
Do you really care If you stepinto 30 to 40 grand equity?
No, no.
How do you talk to people,though, jimmy?
Speaker 1 (30:04):
How do you talk to people, though, about this?
Because this is one thing Ithink for people who have the
cash machine, right, this iseasy for us, because it's like
so handsoff it's, you plug it in, boom, boom, boom.
What about for the people whodon't quite have that cash
machine?
Cooking right now Is are you,are you telling them get a
better job?
Are you telling them get intoflips?
You telling them start there?
Like, what's your advice forsomebody on the sidelines
(30:25):
looking to get started in realestate who maybe doesn't have a
big cash machine at this point?
Speaker 2 (30:29):
Those are the people who should be flipping and
wholesaling.
Okay Are, quite frankly, goingto people like you and me and
becoming home buying specialists.
Mm-hmm, because that's thefastest way to a cash machine is
just be a home buyingspecialist and crush it.
Speaker 1 (30:46):
Mm-hmm, yeah, yeah.
Speaker 2 (30:55):
So you just got to get yourself that active income,
like what Medley told you, yeah, years ago, and if you want it,
if you want it in real estate,like I mean to start your own
wholesaling business, I think isjust it's a big thing to fill.
I think people make more moneyas working for bigger home
buyers than starting it on theirown, like throwing up a shingle
and paying for their ownmarketing and cold calling and
all that yeah, well, isn't thatinteresting like we get.
Speaker 1 (31:14):
We get asked that all the time Like, how do you find
your deals?
And I'm like well, if you wantto spend, you know, 50,000 a
month in marketing, you can.
You can get there too.
What is that about?
Where are you guys at as far asmarketing spend in a month?
For acquisitions In the lo Rockwe're 70.
(31:38):
So 150 a month in marketinggoing out, yes, wow.
Well, we got to step our gameup, apparently with our spend.
Speaker 2 (31:42):
Jeez, we're way behind you, dang.
All right, we just did a bunchof numbers.
We're improving stuff with TV,but we got to do more TV.
Speaker 1 (31:52):
Okay, got it.
Yeah, every market's sodifferent too, and the time of
the year is different.
Everything's different.
But constantly looking at thosenumbers, right, yeah, well,
that's part of what, probablywhat you're talking about
Running a wholesale businessit's more than just I got to go
out and negotiate a good deal.
If you really want to run alegitimate business, there's a
lot more that goes into a lot ofKPIs to be watching, a lot of
marketing, to be watching returnon ad spend, all these other
(32:14):
things that go into play on thisstuff.
If you want to be serious, ifyou want to pick off a few deals
a year, you can get away withsending some letters and
probably picking up a few dealsthroughout the year.
Speaker 2 (32:22):
I'd rather buy from another wholesaler.
Speaker 1 (32:24):
Right yeah.
Speaker 2 (32:26):
I mean, that's how I got started, yeah.
Speaker 1 (32:28):
I just had a guy on not too long ago and he's doing
now.
He's doing some of his ownmarketing.
But when he got started he cameto our market, he called me as
one of the guys in the market topick, pick a brain with and I
see he wanted to startwholesaling.
I said you know why do you wantto start wholesaling?
Well, I want to be able to getmy own deals.
I was like, why don't you justbuy rentals from us?
Speaker 2 (32:45):
like well then, so what I?
What I have those people do isI have a, I have an excel sheet
where I show all the timerequired to find one deal, and
then I plug their hourly rate in, and it's always more than the
assignment fee.
Speaker 1 (33:00):
Wow, what is?
Give me some examples of that.
What have you?
What have you seen?
With some examples of somepeople.
Speaker 2 (33:06):
As far as how much time it takes to find one deal,
yeah.
So I would say if you're goingto do a, so let's say you want
to find a deal by cold calling.
Cold calling is a hundred toone, right?
So how long is it going to takeyou to either manage a cold
caller or cold call yourself,right?
Yeah, that's one thing.
Then do the evaluation, theninterview the contractor.
(33:26):
To me, one house is a 20 hourexperience, at a minimum 20 to
30.
Speaker 1 (33:32):
Oh, that's.
That's actually pretty prettydarn good If you can get that.
You're saying under contract 30hours.
Speaker 2 (33:40):
No, I was saying rehab.
No, yeah, yeah, under contract,30 hours, yeah.
Speaker 1 (33:45):
Yeah, I was going to say that's.
That's actually probably prettygood for cold call.
I've I would say I would havethought it would be longer than
that to try to get a deal.
Speaker 2 (33:52):
Let's do the math on that.
Let, I would have thought itwould be longer than that to try
to get a deal.
Let's do the math on that.
Let's say it takes you 30 hoursto find one deal and you make
$200 an hour, which wouldconstitute a cash machine.
Yeah, that's six grand.
Speaker 1 (34:05):
Yeah to get one deal from cold call.
Yeah, yep, yeah, yeah, I don'tknow.
That's interesting.
I've never heard anybodyactually breaking it down that
way, but I like the way thatyou're thinking of that stuff.
That's pretty good.
What are you seeing?
What are your buyers doingnowadays for financing these
bird eels?
Are they people who aren't justcash heavy?
(34:27):
What are they doing to buy andrefinance in your guys' market?
Speaker 2 (34:31):
Hard money Hard money .
Hard money or private money.
Okay, after they do it, afterthey do a few deals, they go to
their friends and family andfind private money.
Speaker 1 (34:40):
Okay, do you guys have community banks there that
do that get pretty creative, oris it pretty, pretty, pretty
scarce?
Speaker 2 (34:47):
Pretty scarce.
I mean the initial purchasething pretty scarce, okay, but
then yeah, I'll also show peoplehow to raise private money.
Speaker 1 (34:56):
It's the easiest thing to do ever.
Let's talk about that because Ilove this conversation I've had
I had all you know jay connor,yeah, yeah, had jay on love jay.
He is a energy machine overthere but he he gave some good,
some good nuggets that somepeople implemented actually from
listening to this and raisesome capital.
What let me hear, let JimmyVreeland approach to raising
private money the pitch, thepitch, how you approach.
(35:18):
Yeah, give me the approach, heyyou either get or you get.
Speaker 2 (35:22):
I'm actually doing you a disservice when I pay you
your interest, because I'mbuying a house at 60% of the ARV
and if I don't pay you, you canforeclose on me and now you
have a house that has 60 centson the dollar.
You have a house for 60 centson the dollar.
So, and when I do pay you, Ipay you 8% and you know I help
(35:43):
you protect your money frominflation in the safest asset
class ever called real estate.
Speaker 1 (35:49):
It's very similar.
Yeah, that's a.
It's the opera You're givingthem an opportunity.
I think is the mindset.
Speaker 2 (35:56):
Yeah, I mean especially with people with
self-directed IRAs, oh yeah.
Speaker 1 (36:01):
Yes, do you see that executive order that was just
signed?
Is that going to change any ofthe self-directed piece of
anything as far as being able tonow open up some IRAs and
things like that to alternativeinvestments, does that change
anything with self-directed?
Speaker 2 (36:16):
I don't think any research on that.
Yeah, I did do some research onit.
I think my theory is that I'mgoing to sell my portfolio to a
hedge fund one day, right, okay,and so I think them allowing
that allows more institutionalmoney to flood into real estate
and create more prices.
And then, quite frankly, doinga self-directed IRA is a pain,
(36:37):
so I think it's going to make itless painful, so I think more
cash is going to flood into realestate.
So, even though they knowthey're trying to make more
affordable housing, I don'tthink that's going to help.
Speaker 1 (36:46):
That's not going to help.
No, no, supply and demandEconomics 101.
Yeah, yeah, doesn't help, doesnot help.
So that's interesting.
So the hard money what are youguys seeing for your hard money
lenders in your area as far as,like, what kind of rates that
they're getting out points terms?
Speaker 2 (37:01):
I think 12 and 2.
Speaker 1 (37:03):
12 and 2.
Speaker 2 (37:04):
Okay, it's pretty competitive, the hard money
things.
That mindset is like if you'regoing to go with this long-term
wealth plan, this inflationhedge plan, you got to set up
your inflation sales.
So I don't care how many pointsyou're paying, I don't care how
much interest, I don't care ifthat eats into your forced
equity.
You got to get 20 of theseassets, mm-hmm, and allow them
(37:25):
to appreciate at 5% a year.
So the faster you get the clockspinning, the better off you
are.
Like all these people waitingfor interest rates to go down,
the opportunity cost on thedeals they've missed out on has
been insane.
Speaker 1 (37:39):
Yeah for sure.
Well, we call it the wealthcone.
I call it the wealth cone overhere.
So the minute you start thatclock, your appreciation goes up
and the debt you owe startsgoing down and you create this
bigger and bigger spread ofwealth over time.
Speaker 2 (37:53):
So my buyer's like, well, how do I know you're
sending me a good deal?
I'm like, dude, I'm sending youthe same deal over and over
again.
We have a certain buy criteriaand it's just the same thing.
Over to get the clock startedyeah, you got to get in the game
, yes, and then you're doing itpassively, so you're not going
to get the deals Jimmy and Coreyget, right.
Speaker 1 (38:13):
Yeah, there's a price for that, but you're building
crazy wealth, like I.
Look at some of the guys thatwork for us or have worked for
us in the past and they got.
You know, we're obviouslyalways doing the same thing.
We're pushing them,no-transcript.
(38:34):
Well, you can learn how to getwealthy or you can get a I can
get you a 401k.
What do you?
Speaker 2 (38:38):
want?
Yeah, and then we looked overtime the people that took action
that on their personalfinancial statements because
they bought real estate and theystarted that clock and they
started working the clock Right.
I mean I wish it was harder.
What do you mean by that?
(38:59):
You wish it was harder?
I wish it was more complicated?
Yeah, but it's so simple.
But then, since it's so simple,no one trusts it.
Speaker 1 (39:05):
Right, that's true, that's true, or what I see, kind
of the guru thing here.
Jimmy, I want to go back tothat guru thing you talked about
.
Sometimes I see, um, where Ithink expectations are
improperly set out there, as faras the you know, you hear
everybody's massive, massivedeals.
Everybody likes to talk aboutthe big, the smoking deals they
got right.
Yeah, nobody's talking aboutthe base hits that are building
(39:26):
them and making them wealthy.
Right, and I think that's whatyou and I are both passionate
about, right, like I think weshare that same sentiment of
just keep taking base hit afterbase hit after base hit and just
keep building that wealth.
Especially, like you said, ifyou've got a cash machine, start
the clock as quickly as you canand get as many as you can,
right.
Speaker 2 (39:42):
Yeah, cash machines create home runs.
You know, passive incomemachines create singles.
Speaker 1 (39:48):
Yep, Yep.
But what do you see when youtalk to some of the people?
Are you seeing the same thingwhere their expectation is?
They have to have, like yousaid, you got a guy who's three
grand in all their money's gotto be pulled out, plus they need
a check at closing.
What are your buyers tellingyou?
What are you seeing from themwhen they're looking at some of
the deals as far as what theirexpectations are for either
equity percentages or return oncash, or what are they?
(40:11):
What are their criteria thatyou're seeing when you're
talking to some of these folks?
Speaker 2 (40:14):
The short answer.
Speaker 1 (40:15):
Yeah.
Speaker 2 (40:16):
I tell them they can have whatever buying criteria
they want, as long as it's theone I tell them they should have
.
I love it.
Speaker 1 (40:25):
I love it.
Speaker 2 (40:26):
So a reasonable buying criteria, because do you
know how many people I see notget in the game because they
have unrealistic buyingcriterias?
This is where I want you to go.
Yep, hey, here's what you canexpect.
You can expect to be all intoyour BRRRR 85%.
That's very reasonable.
You can also count on 5% to 10%in change orders and you could
(40:46):
expect to be cash flow positiveyear one.
5% to 10% in change orders andyou could expect to be cashflow
positive year one.
So back in the day when we wereselling the whole turnkey thing
where they can expect cashflow,people were miserable, I was
miserable.
Yada, yada, yada.
And then you're not going totake a dollar out of this
portfolio for three years.
All your traditional cashflowis going to go to what I call
resident reinvestment, which is,when the tenant moves out,
(41:09):
you're going to take all thatcash and you're going to put it
back into the house, so itcontinues to get a top resident
and it continues to appreciate,like everybody expects real
estate to appreciate, right, butthey don't expect to have to
reinvest at all, and that'sinsane, yeah, and so it's not
your money you're reinvesting,it's your residents money, and
(41:30):
so I think, setting those lowexpectations very, very fast,
and I know I might have soundedlike a jerk that they're my
expectations, but this is thebuying criteria.
I've seen that can create a tonof wealth in a short time and
keep people sane.
Right, yeah, in a short time.
I mean 10 years, yeah.
Speaker 1 (41:50):
Yeah, I was just going to ask you what is a short
time to you, but you answeredthat question.
10 years, because I thinkthat's the other expectation.
I think that I had too is likeI'm like, oh, I got a hundred
doors three years.
Wow, I'm amazing.
Look at me, I'm going to be sowealthy and so rich.
And then I'm like, well, no ofmy bigger deals.
And I was like, oh, oh, wait, Iam rich, this is where you get
your cash flow from.
(42:11):
I got it now, right.
Speaker 2 (42:14):
Yeah, we call that equity milling, okay, so here's
the base plan that I think everyAmerican should do Two houses a
year for 10 years and then atyear 10, they either sell the
house or they take a line ofcredit off the house, and then
they do that for the next 10years.
And so if you buy a $150,000house right now, you could
(42:36):
expect it to be worth $220,00010 years from now.
So you bought two a year.
Basically you could be taking$150,000 a year in equity
milling, tax-free lines ofcredit, and then people are
going back in more debt.
I'm like yeah, yes and no.
Then you hold onto the housefor another 10 years and the
tenant continues to pay off thenew note and you recharge the
(42:57):
equity and then take anotherline of credit at year 20.
Speaker 1 (43:01):
You're saying lines of credit, do you mean like a
loan, a home equity loan, or areyou?
Saying just a line of creditlike a credit card no, a HELOC,
a.
You see, a credit like a creditcard, no a heloc, a heloc so
like a line of credit, so likethey're not using it.
If they don't use it, yeah,okay, what would keep them from
just refinancing the property atthat point, at 10 years, and
pulling that, that cash out that?
Speaker 2 (43:21):
way.
Um, you could, but then you'regonna pay.
What I like, like about heloxis you're only paying interest
if you're using the cash.
Yeah, either way, or sell 10 ofthem, whatever.
Yeah, but, dude, that's it Ijust did a whole oh, go ahead.
So now that I'm hitting likeyear 10 in this, I'm taking
these lines of credit andgetting like 700 000.
Speaker 1 (43:42):
I'm like, oh yeah, I really don't care about 200 a
door yeah, what are you doingwith the 700k that you're
pulling on the lines of credit?
Speaker 2 (43:51):
Using that to flip yeah.
Speaker 1 (43:55):
Yeah, you can also arbitrage too.
So I started to do this alittle bit.
I've got an investment.
I put some money.
I took a HELOC 500K, put itinto a guy I know really well,
trust, right, so you got to havethat trust and relationship and
stuff like that.
But I'm getting charged six anda half percent on the line of
credit and I'm making 10%.
So it's not crazy money, butit's.
(44:16):
It's all passive and it's justfrom equity for my properties
that have appreciated anddepreciated.
It's like free money that Ididn't have to do anything for.
Speaker 2 (44:25):
It's magical, and now you're probably getting your
$200 a door from arbitrage.
Speaker 1 (44:31):
When I do that, I don't have any windows to fix,
or tenants or toilets or any ofthat stuff, right.
It really does become passiveat that point.
But that's the power is.
Once you get the time tickingand you let the time tick, you
have more options, right.
So you and I are having thisdiscussion Do you refinance?
Do you pull a line of credit?
That's a great problem to haveis to figure out.
What are you going to do withall this equity now?
Speaker 2 (44:51):
Yeah, but it doesn't happen unless you start the
clock.
Speaker 1 (44:53):
You got to start it, man.
You got to start it.
I love it.
Well, jimmy, if somebody wantedto get started with you down in
your neck of the woods and theywanted to get some of the
Berkey programs going with whatyou guys are doing because
hands-off they can just get in,they have equity, they're going
to get some cash flow positivestuff Somebody wanted to get
involved with you guys.
What's the best way for them toget in touch with you guys in
(45:15):
your area?
Speaker 2 (45:17):
Just DM me on Instagram, jimmy Vreeland V, as
in Victor R-E-E-L-A-N-D, or goto jimmyvreelandcom.
Speaker 1 (45:24):
Cool, awesome man, and if you guys are listening,
you want to get started inWisconsin and you want to do
some of that stuff I saidearlier, go to
wisconsindiscountpropertiescom.
You can get on the buyers list.
We're here to help walk youthrough whatever you need.
Get you connected to lenders.
We've got a whole bunch of themthat we can connect you up with
.
That'll help you finance thesethings and have you start the
clock, like Jimmy and I havebeen talking about this whole
(45:44):
episode.
Jimmy, any final thoughts forthe audience out here as we're
having this conversation?
Speaker 2 (45:57):
It is your American responsibility and duty to get
20, 30-year government-backedconventional loans and build
your wealth.
Love it, I love it.
Now, if you get the house fromme or Corey, don't care, you got
to get those houses and loans.
You can do it for both of us.
Get 10 for both of us diversify.
Speaker 1 (46:10):
Let's go.
I love it, man.
All right, jimmy.
Well, man, I appreciate youbeing on.
We always ask one finalquestion and I don't know if you
have an answer to this, butthis is always a little fun one
we do for people who are lookingto get started.
Wisconsin have you ever been towisconsin?
Speaker 2 (46:22):
no, I want to go to.
I want to go to a green baychiefs game.
Well, dude, let's set it up.
Are they playing this year?
Speaker 1 (46:29):
Not this year, but I think next year we'll be back on
the docket, Maybe next year orthe year after, but when they do
we'll get a big Chiefs group inCG.
So we'll get the Chiefs crew up, or, if they're down by you
guys, I would love to go to agame of Arrowhead.
Speaker 2 (46:43):
Nice.
I've never been to the tundraat Lambeau.
Speaker 1 (46:47):
I've never been to Arrowhead, so we got to make it
happen.
Dude, for sure, let's go.
Awesome, jimmy, we'llappreciate you guys being on.
If you guys got some value outof this show, please share it.
And again, that, as I say inevery episode, not only helps us
grow the audience, but it helpsyou guys grow your reputation
as a real estate investor or apotential real estate investor.
(47:09):
To help you bring
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