September 9, 2025 • 30 mins
What if you could create $48,000 in equity with just a few hours of effort? The BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat) offers exactly this opportunity when executed properly, as demonstrated in this detailed deal breakdown of a Wisconsin duplex purchase.
Corey walks us through the entire process of a recent BRRRR project from start to finish – from finding the deal through texting campaigns to finalizing the refinance just eight months later. The numbers tell a compelling story: purchased for approximately $152,818, renovated for $39,000, and ultimately appraised at $240,000 after some strategic negotiation with the appraiser. The refinance allowed Corey to pull out $192,000, leaving almost no capital in the deal while creating substantial equity.
What makes this episode particularly valuable is the transparent discussion of both challenges and solutions. When the initial appraisal came in $30,000 below expectations, Corey used ChatGPT to craft a detailed rebuttal that successfully convinced the appraiser to revise the value upward. He also shares his creative financing approach, combining a home equity line with cash value from a life insurance policy to fund the acquisition.
The most thought-provoking aspect? Despite creating significant equity, the property only cash flows $46 per month ($23 per door). This perfectly illustrates why BRRRR is primarily a wealth-building strategy rather than a cash flow play – and why maintaining other income sources remains crucial while building your portfolio. As Corey explains, "This is not a get rich quick thing... but in a few years this thing is going to be worth probably $275,000-$280,000, and our debt will be down lower."
Share your thoughts on this deal breakdown and let us know what other real estate topics you'd like covered in future episodes. Message Corey directly on Facebook with your feedback, and don't forget to rate, review, and share to help spread these valuable insights to more aspiring investors.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
What's happening everybody?
Corey Raymond here, your hostof the Wisconsin Investor
Podcast, and today you guys arestuck with me on another solo
episode.
Before I get into that today,guys, I wanted to give you guys
a little shout out fromWisconsin Discount Properties.
I say this on a lot of theepisodes, but if you aren't
familiar with it or this is yourfirst episode, if you're
(00:23):
looking for off-market deals, weput deals out in your inbox
every single week at 6 am andyou can go out to our website,
wisconsindiscountpropertiescom,put your information in and get
added to our buyers list forfree, no cost to get on there
and we'll start sending those toyou.
Another thing I've talked abouton a few of the episodes but
for my YouTube watchers here, Iactually have our website today
(00:44):
pulled up on the screen shareand I've been talking about
these case studies.
So on our website you can seethese case studies here that I'm
looking at right now and thisis what I was describing to you
guys.
On a few of them.
We have a $5,700 differencebetween what these 50 different
flips have sold for compared towhat our ARV was.
That we put out in our emails,and so Reese from our team spent
(01:07):
a lot of time putting this datatogether and with the help of a
lot of you guys as our buyersout there, who provided some of
the data or some of the publicdata that we got and went back
through and look from Februaryof 2024 up until May of 2025, we
did not put any exclusions inthis.
So that means some people justbought these properties, cleaned
them and listed them.
They did not take them to afterrepair value, they just cleaned
(01:31):
and listed them and made theirspread that way, and so that
would bring our actual ARV downeven further.
So what we're putting out, guysthe whole point of that is what
we're putting out to you guyswe feel is pretty conservative
on on our ARVs and you can beconfident when you look at our
ARVs it's not perfect.
Look through the list.
We put it all out there thegood, bad and the ugly.
Some of them were less, some ofthem were more and again some
of them that are lesser, justbecause people didn't take it to
(01:53):
the full after repair value.
So anyway, you can check thatout on our website.
We've got a lender list, we'vegot our birth or beginner course
, which we're giving away forfree now, and a whole bunch of
other information on there to bea resource for you.
So go check it out when you gotsome time.
Wisconsindiscountpropertiescom.
And with that guys, today let'sget into today's episode.
(02:15):
So I am about to leave hereshortly, from the time I'm
recording this and I am headingover to meet my lender, who's
going to refinance me out of aduplex that we bought, and so I
wanted to do just a dealbreakdown for you guys, take you
through some of the numbers andshow you guys a bird deal that
was put out here in Green Baythat I actually ended up picking
(02:36):
up back in January I think weclosed on this thing.
And so here we are now intoSeptember, we're finally
refinancing this thing.
And so here we are now intoSeptember, we're finally
refinancing this thing.
So a little longer than I wouldhave liked, but we had some
tenants in there.
We had to get the tenants outand then we had to rehab the
units.
Then we now we're in the final,we're in the refinance process.
(02:57):
So I'm going to take you guysthrough everything I can on this
deal.
Hopefully this will provide yousome insights from some
insights from how we found thedeal to the numbers, to what the
numbers look like on thebackend.
And what I'll tell you guys is,when I ran my calculator here,
based off the actual numbersthat we're projecting now that
we have our loan payment amountthat we're going to have to make
(03:19):
, we're only projecting to make$23 per month per door.
So for those of you out therethat love the BRRRR, like me,
you understand this is not a getrich quick game, right?
The BRRRR strategy is a bigtime wealth building strategy.
But, as we said, I think thelast episode that just was out
(03:41):
was with Jimmy Vreeland, who's aBRRRR key investor, as he calls
it, and we talked about keepingthat cash machine and making
sure if you're out therelistening to this and you want
to do the Burr strategy, don'tquit your day job right now if
you've got something spittingoff cash, because these things
are typically not high cashflowproperties.
But I'll explain to you guyswhy.
For me, I think this is still agreat deal, and if you're a
(04:04):
cashflow investor, probably nota great deal for you right now.
But again, how you look atcashflow may be a little bit
different than the way I look atit.
All right, so I'm going to takeyou guys through, those of you
guys that are watching this onYouTube.
I'm also trying somethingdifferent with zoom right now.
This is kind of cool.
I'm like superimposed in frontof the screen, which I've never
done this before.
So I'll take you guys throughhow we got this deal.
(04:26):
So, first of all, theacquisition strategy on this
particular deal this wasacquired through texting and so
recently we've gotten rid ofmost of our texting stuff.
I believe back in April orsomething like that, we said no
more texting and there's a lotof laws and rules and compliance
and things like that thatyou've got to be careful of if
(04:47):
you're going to be out textingfor deals.
But this was one that came inthrough texting, so we had a
list.
I don't know exactly what thelist was, I didn't have that
data but we were our VA at thetime was texting people looking
for people who are interested inpossibly selling their property
, and this is one that that cameup, and so this was the email
(05:10):
that we sent out to the buyerslist.
So you'll see here if you guysare looking at this on YouTube,
we had a starting bid of one 49,nine.
All right, it's a four bed, twobaths, so two beds each.
There's actually like a thirdbedroom in here.
We don't really call it a thirdbedroom, but we probably could
market this lower unit as athird bedroom.
All utilities are split, sothis is actually really helpful
(05:33):
for us in the cashflow piece ofthis.
We would be negative cashflowif the utilities were not split.
I did budget a little bit inhere for utilities, so it
probably is a little bit more,because I actually need to ask
my property manager if we'repaying water or not.
I typically, even if we are notpaying water, I typically still
budget for water.
Water, at least here inWisconsin, is one of the things
(05:57):
that will follow the property,not the user, and so electric
and gas will stay with theindividual.
So if that person doesn't payand they vacate your property or
you have to evict them, thatbill sticks with that person.
Now, water, if they vacate,don't pay the bill, you're still
(06:19):
stuck with it if you're thelandlord.
So I still typically budget forwater, even if the tenants are
paying it.
So here's what this looks likenow.
If I click into this, this willbring us up to a new screen.
And so we had a third-partyproperty inspection.
We had comparables, we had theproperty info, a rent-o-meter.
(06:39):
So we'll see how we did on therent-o-meter too, because I have
not checked this out recently,but we're going to take a look
at that Now.
We did have an ARV of 240 onhere.
So I've got a prettyinteresting situation where
we'll talk about what our ARVactually came back at and then
what happened there.
So that was kind of we'regetting nine, I think we're
(07:07):
getting nine, 95 right now.
So we're in that lowerpercentile.
I believe part of that probablyhas to do with the utilities.
So if the utilities weren'tsplit, we would probably be up
in this 1100, 1150 range, um, sowe might be losing a little bit
that way.
But I typically, if I can getthe utility split, I love doing
(07:28):
that.
It's a better situation in mostcases to do that.
So this rental meter was alittle high compared to what
we're currently getting.
Okay, not saying that they'rewrong, maybe we're just maybe we
accepted too low.
All right, let's take a look.
We're going to go through theinspection report here real
quick and again, if you'relistening to this, I'll just
(07:49):
describe as much as I can here.
So, heating-wise, see, theseare some of the big issues.
This is typically what I'mlooking for.
When I look at an inspectionreport, heating-wise, it says
the boiler was amateurishlywhich I don't know if that's a
real word installed.
The boiler is supported by awood frame platform, so on and
so forth.
I'm not going to read you thewhole thing.
(08:09):
Basically, have the boilerlooked at is one of the things.
And then the upper unit washeated by two space heaters, so
not probably ideal, so we had toreplace those.
And then electrical there wasquite a few double tap breakers
which if you're new to investing, you see an inspection report
(08:32):
and doesn't have double tapbreakers.
Good Lord, that's.
Probably somebody already hadto fix that.
But that's in a ton of panels.
I mean, it's almost just youcan expect to get that back on
an inspection report.
I mean it's almost just you canexpect to get that back on an
inspection report.
So a little bit of electricalfront porch was missing a
mounting block, some littlethings, nothing really crazy
here.
And then windows most of thewindows peeling paint, that sort
(08:55):
of stuff poor condition, needto be maintained or repaired.
I actually don't even know ifwe did that or not.
I should have probably lookedthat up a little bit when I was
uh preparing for this, but I didnot look at that.
And then some maintenance itemsdown here baseboard heating
units got to replace worn anddamaged flooring, scraping paint
, a lot of kind of stuff.
So there was.
(09:16):
It was cosmetically prettypretty rough too.
Inside there.
I mean it not bad, though umlittle sag going on in the main
beam on this thing structurallyand I don't necessarily worry
too much about that.
It can be supported usuallypretty easily.
Um, sometimes that scarespeople away.
(09:36):
Again, it's a rental propertytoo.
So something to um to thinkabout here.
So you'll see, he's got all thepictures of this thing, uh, if
you're, if you're watching this.
So there was quite a few, quitea few things that could be done
to this thing if you reallywanted to.
Uh, so we'll go into now.
Um, we had the comparables.
(09:56):
Okay, we don't need to go intothat.
I'm gonna take you guys over tothe numbers on this thing.
Okay, so we ended up buying theproperty from WDP for 152,.
Uh, eight, 18, I believe, wasthe the number here.
So we're looking at a balancesheet right now.
Improvements we put 39,000 intothis thing.
(10:17):
That was right about what wewere budgeting about 40 grand.
So we came in pretty good rightthere.
Now there's probably still afew other odds and ends, things
that maybe will trickle in hereor there, but so far so good.
So our total cost andimprovements on this thing is
just under 192, which is prettyincredible.
All right, and I'll explain whyhere in a minute.
(10:40):
So liabilities this is justshowing how we finance things.
So what I did with this isshows here that we use Johnson
Financer Group.
So I have a home equity linethat I use for a lot of
purchases so quote, unquote cashpurchases and then I also have
a cash value life insurancepolicy and so I use the
combination of those two things.
I use some things.
(11:00):
Our line of credit was extendedout to some hard money loans we
were doing for some investorsand so we had a little bit left
on that, and so we use thatpiece and then we pulled the
cash value from our lifeinsurance to use that as well.
So we'll probably have somebodyon in a little in an episode or
two, maybe down the road,talking about life insurance and
(11:22):
I don't know if we'll get intothe cash value piece and how you
can utilize some cool toolslike that for your investing but
also provide you with someother stability and other things
, but that was the combination.
So that's what you're seeinghere.
It only shows a $43,000 loan.
I actually have to have thebookkeeper update that to be the
entire amount here that we use,because that's what we funded
(11:45):
this whole thing with, All right.
And then how we funded theimprovements.
Actually, just because we haveso many other rentals with this
management company, they're ableto basically fund the
improvements for us in a lot ofcases, and because they're
collecting rents on all theseother properties, we just don't
get a payout then, which,cashflow wise, we need to budget
(12:06):
for that with the rentalproperties.
Again, this is why having acash machine, like Jimmy talked
about in the last episode, is soimportant, because we don't
necessarily need or rely on themanagement company giving us an
actual payout on those and theyjust are taking and basically
taking all the rents thatthey're collecting and then
(12:27):
utilizing that to fund theseimprovements.
So that was the combination ofour funds and then the
management company covering alot of the improvement costs,
all right, and then what we'relooking at down here.
Guys again, total all in.
Actually, on the asset side ofthings, total all in, just like
I said just under 192.
(12:48):
All right, so now when we lookat this, I want to go over to I
don't know if I have theappraisal.
I should look up the appraisalhere quick.
But our first appraisal I'lljust talk about it here First
appraisal came in at um one, Ithink, or what was it 210.
(13:09):
Okay, so our ARV on this thingwas 240.
And I felt pretty confident.
I thought maybe that was even alittle low.
Arv on this thing was 240.
And I felt pretty confident.
I thought maybe that was even alittle low compared to what
we've been seeing.
And our first appraisal came inat 210.
So I used my good friend over atChatGPT and I went and pulled
my own comps again and I pulledsix different comps and I
uploaded the appraisal and Iuploaded my comps to ChatGPT and
(13:32):
I said, hey, chat, appraisal.
And I uploaded my comps to chatGPT and I said, hey, chat, you
know, go through the appraisaland then go through our comps
and come up with a email we cansend to the appraiser for a
rebuttal and make it nice andpolite and everything else, but
justify why we feel like ourappraised value on this
appraisal is much lower than itshould be and, um, I had to
tweak it a little bit.
It kept kind of picking upactually like things that the
(13:55):
appraiser nice things about theproperties the appraiser picked
like highlights of those.
And I was like, no, no, no, no,we want to focus on the nice
things about the comps that Ipulled.
And so it was great it actuallywent through and analyzed them
all.
It was like, oh, looking at allthe data you've actually pulled
, the comps that are closer andmore similar to the subject
(14:15):
property than what the appraiserdid.
Now it didn't say that when itsaid here's your email to send
back to the appraiser, but ithighlighted some things for me.
So I was like, okay, cool, Iknow I did my job here of
pulling those.
I sent that email and I don'thave the appraiser's info so you
have to send it to your banker.
So I sent it back to the bankeralong with my comps and
(14:35):
justifying why I felt like weneeded a rebuttal.
And the banker called me likewithin an hour and was like, hey
, thank you so much for all thisinformation.
This is so done, so so puttogether so nicely.
You know I'll send it over, noguarantees, but you know, I
think you make a good case hereon why you should at least take
a look at it.
And so a couple like a weeklater, I got a call from from
him and he's like hey, you know,just want to give you an update
(14:57):
.
I heard from the banker or theappraiser.
You know he's looking at it,but the vibe I got, I I wouldn't
expect him to change anythingand I was like all right, well,
we tried.
You know, that's all we canreally do now, what we could do,
those options.
So for those of you out therethat are doing this strategy,
your option at that point okay,is I didn't have a hard money
(15:17):
loan coming due or anything.
So I have time, right, I canjust push this thing out.
I can get another appraiser, Ican do different things.
Now some banks are going to say, no, we're not going to get a
different appraiser at thispoint.
This is our appraisal, we gotto go with this.
Our loan committee is not goingto go for anything different.
Okay, that's fine, I can justgo to another lender.
So for those of you guys thatare in our BRRRR for beginners
(15:38):
course, you know that I'm a bigfan of having multiple buckets
of money right and, within eachbucket of money, having multiple
options if you can.
So, commercial lenders,community banks we're blessed
here in Wisconsin we have a lotof great community banks.
However, some people one of themistakes I see they make is
they just rely on one communitybank.
They love that relationship.
(15:59):
They're loyal people.
God bless them.
That's awesome.
But my advice would be you area business person, so a business
person doesn't mean you can'tbe loyal.
There's a lot of things therethat there's loyalty.
That goes into a lot ofdifferent things where you'll
build relationships with theselenders.
However, that goes into a lotof different things where you'll
build relationships with theselenders.
However, in this case, youwould have a justified reason
(16:22):
for using a different lender,right.
So if you needed that appraisalto come in higher and the bank
was not willing, you send inyour nice rebuttal appraiser's
not willing to change it.
You've got time on your side alittle bit here.
You can go to one of your othercommercial lenders and
basically do the same processall over again.
Okay, now you're going to delaythings a little bit because now
they got to order a newappraisal.
There's no guarantee that thatnew appraisal is going to come
(16:43):
in higher right.
You also would want to let themknow if this other appraiser is
the one that gets selected,because they usually have to do
it through a system they can'tpick the appraiser.
A lot of times they have to doit through like a third party
who picks an appraiser.
But you would have to let themknow.
Hey, if that appraiser comes up, we're not going to move
forward, because what's thepoint?
You already paid for anappraisal from that guy.
(17:04):
He won't rebuttal it.
So you need a differentappraisal company.
But you could go shop that to adifferent lender and try to get
a better appraisal, a more inline appraisal with what you
need that number to come back at.
Okay, luckily for us, theoutcome of this story is a good
one.
Right, we have a positiveoutcome.
This doesn't happen all thetime.
I don't.
I don't know that.
(17:24):
I've won a ton of these againstappraisers, but the guy came
back at $240,000, exactly whatour ARV was.
So gave me even more confidencein our team.
Hey, our team's doing a greatjob on these ARVs.
Um and uh.
You know it was really.
When I looked at the appraisal,I was a little bit shocked
because when I ran my comps.
The guy did use like the threelowest comps possible and a lot
(17:49):
of those weren't really updatedUm, rents weren't even
comparable, they were gettinglower than my rents and they
weren't split utilities.
So I pointed a lot of thosethings out in my rebuttal as
well, and so that probablyhelped.
But it doesn't happen all thetime.
So just be prepared.
That is the risk of doing theBRRRR strategy If you need that
number to come in, where thatnumber comes in.
(18:10):
But here's the magic of this,guys.
So the appraisal came in at$240,000.
80% of $240,000 is $192,000.
So today I am going to meet thelender, I'm going to sign my
loan docs and he's going to handme a cashier's check for
$192,000, guys.
And so if you look at again, ifyou're watching this on YouTube
(18:31):
, I still have the balance sheetup.
Building costs one 52, eight,18 improvements, 39,000 puts me
just under all in at one 92.
Now there's some other coststhat I don't think are showing
up on here, a little bit Likethere's probably some little bit
of closing costs maybe, orwhatever.
I don't exactly know what goesall into what the bookkeepers
got on here.
Regardless, we're going to havelittle to no money into this
(18:55):
deal right.
So now I will take you guysover to the calculator here.
So this is a BRRRR calculatorand again, this is part of the
course the BRRRR for beginnerscourse that you get when you
sign up for that.
And so here's what we have laidout here, guys, we start out
with only changing the numbersin yellow.
So on here, the ARV $240,000.
(19:15):
That's what we came up with onour appraisal and this is what I
would have ran prior to theoffers being due.
Right, it's $240,000.
That means my 80% of that ARV192.
Now why I have 80% in that ARV192.
Now why I have 80% in there isbecause that's what a lot of the
(19:38):
community banks will lend up to.
They'll lend up to 80% of thatvalue, all right.
And then my repairs 39,000.
We saw that in the balancesheet.
So those are my costs.
I put $3,000 in here for loanclosing costs.
I had a pretty high, like theycharged me a pretty good penny
on the appraisal.
I think or maybe that wasappraisal and closing costs.
(19:59):
It was like 2,500 bucks.
But just for fun I just put3,000 in here.
So my max allowable offer, whatI could be all in at to have
all my money back out of thisthing is $150,000, okay.
Now, like I said when we lookedat those numbers, I'm probably
a little bit over being able toget all of my money back out,
(20:19):
but I might be into it for acouple thousand dollars, right,
pretty awesome, okay.
The other thing to think abouthere, guys, on the top part of
this, what we're showing thedifference between 240 and
actually, if I just go back here, the difference between 240 and
actually, if I just go backhere, so $240,000 minus $192,000
(20:39):
.
If my math is correct, that'sabout $48,000.
So just by purchasing aproperty, having the management
company go in there, do all thework, rehab it, get it rented
and then refinancing that thingwithin nine-ish, probably eight
months, is really what we'relooking at here.
We created $45,000 or $48,000of equity by doing that and I
(21:01):
have maybe five hours into thisdeal total from the time I put
the offer in making some callsto get the financing done and
get the you know the cash valueloan, life insurance policy, to
starting the refinance process,to now I got to drive 30 minutes
to meet the banker.
Oh no, you know, terrible deal,gotta go do this, creating
(21:26):
$48,000 guys.
So I always say this I don'tknow if I've said it in a while
on the podcast but really, ifyou're a BRRRR investor, you've
got your main gig going on.
It's paying the bills andspitting off extra cash and all
that sort of stuff.
When it comes to real estateinvesting, this can be pretty
simple.
It's like just really focusingon two activities.
Once you've got a goodmanagement company in place,
(21:47):
it's fine deals and fine money.
That's it.
That's all you got to focus on,right.
Again, I'm a little biased atWisconsin discount properties.
We send you the deals everyweek, but there's certainly
other wholesalers in our marketand across Wisconsin there's
deals on the MLS.
There's all kinds of things thatyou can do.
I know some people.
They hire a virtual assistantfrom overseas.
(22:08):
They have them look at dealsfor like four hours a day.
These people make like $7 to $8an hour and they're paid as
like a 1099 contractor.
So you don't have to worryabout payroll tax or setting up
a payroll system or anything.
You can literally just pay themthrough PayPal or Venmo or
whatever they have over thereand they can go through and
analyze deals on the MLS for youlike literally all day long.
(22:30):
Just teach them this Burrcalculator and stick them, tell
them what you're looking for,what areas, and have them go do
that.
So there's deals all over theplace, guys.
But finding deals, then you gotto find money right, and there's
all different kinds of bucketsof money to find.
And then, like I did, I used acouple of different pieces.
(22:54):
Here I use the cash value, lifeinsurance and a line of credit
those two pieces together.
Now I'm refinancing with acommercial lender of mine.
So those are the two optionsthat you can utilize All right
Now when we look down at thecashflow analysis.
So this is the other piece of it.
Right, you got to figure outwhat's your tolerance on
cashflow and what's your goal.
So for me, my goal right now isbuild assets, get equity, build
assets, build the net worth.
Okay, I need these things tobreak even at least every year.
(23:15):
Um, on the cashflow thing Right, and hopefully interest rates
will come down at some point.
I'll refinance a bunch of themand that cashflow number will go
up, or we'll get a combinationof rents up and that and it'll
it'll be juiced even evenfurther.
Okay, but what we're looking at, our rent right now we're at
1990.
Okay, that's what we're getting.
Nine, 95 per unit.
(23:36):
Again, like I said, we might bea little low on that.
So next year hopefully we'regoing to be able to bump that
and get that up even higher.
Principal interest, taxes andinsurance this is a little bit
of an estimate.
It's pretty close.
Our payment today is going tobe $1,250 for the principal and
interest to the lender and ourtaxes.
I figured out we're just under$200 a month.
(23:57):
I think is what it's coming outto.
And our insurance I estimatedabout $100 a month.
I'd have to actually go get thequote.
It might be less than that, butwe'll figure a little
conservatively at that number.
Okay, management less than that, but we'll.
We'll figure a littleconservatively at that number.
Okay, management for a lot ofpeople you're going to budget
10% For us.
We get a little bit of a deal.
We've got a volume thing goingon.
So we're at about 7% managementvacancy here.
(24:19):
I budgeted 3%.
So we're looking at 59, 70utilities, like I said I think I
talked about this earlier watereven if they pay for it, it,
I'm still gonna budget like 75bucks a month for water.
But heat and gas and electricare covered by the tenants.
So this is just probably alittle bit of padding here for
me.
Of the 75 bucks a month Cap X,we recommend three to 10% people
(24:44):
budget for capital expenditures.
I budgeted on the low end ofthis because we did a lot of
that work.
So that's one of the beautifulthings.
When you, when you guys buy aproperty, that's a big project,
like it's going to need one ofeverything that scares a lot of
people away To me, uh, I look atthose as like great opportunity
to keep your future expensesway down.
So if you have to go in and yougot to replace a lot of things
(25:06):
you got to fix the roof or put anew roof on, you got to do new
windows, water heaters, furnaces, cosmetic everything.
Beautiful part about that is ifyou can make that work in your
burn numbers up front and it'llstill cashflow a little bit,
you're not going to have a lotof unexpected expenses in the
future, right, or things thatyou really have to budget for
replacing a ton in the future.
(25:27):
You should still always budgetfor capital expenditures, but
you can keep your capitalexpenditure budget lower, right.
The same thing for maintenance.
Now, we kept that on a littlebit of a lower side because we
did a lot of the upfront work toit should be lower maintenance.
Obviously that's going todepend on tenant quality there,
but we've kept that on the lowerside, all right.
So now we're looking at here.
(25:47):
Our total monthly expenses are1944.
For those of you guys listeningto remind you, our total rent
here is 1990.
So our total cashflow is 46bucks a month.
Ooh, there we go.
We'll go buy a couple of pizzasand celebrate every month.
There we go.
Per door that comes down to 23bucks a door that we're netting
(26:08):
putting in our pocket.
So again, this is not a get richquick thing.
We're not going to be feedingthe Raymond kids off of the cash
flow of this property, that isfor darn sure.
But I'll tell you what what'sbeautiful about this is.
In a few years this thing isgoing to be worth probably 275,
280, and our debt will be downlower, not a ton.
(26:32):
I think we're on a 30 year onthis thing, so we'll probably
owe call it 185 at some point.
And then, if we want torefinance, we could pull some
cashflow at that point tax-free.
That's a beautiful thing aboutthese.
Or we can just let it ride andlet the thing keep appreciating
and let the tenants keep payingthat debt down.
That's an awesome vehicle here,guys.
(26:53):
It's one of the reasons I lovethe burst strategy.
It's one of the reasons I lovereal estate investing.
It's really tough to go buy$148,000 of equity in the stock
market right now for a couplethousand dollars.
Really tough to do that,especially something that's
going to typically appreciatefour to 5% a year and you're
going to get some debt pay downevery year.
(27:14):
You're going to get some taxbenefits in here.
There's a lot of other thingsto love about what we do here in
the real estate investing space.
So that is my deal breakdown foryou guys on this episode.
I hope that this was valuablefor you guys.
I would love some feedback onthis episode.
If you guys like the dealbreakdowns, I can do a bunch
more of these for you guys inthe future.
Of different types of deals, wecan talk about the good, the
(27:37):
bad and the ugly here.
This one, obviously, for me, isa winner.
Again, I'm not looking to needthe cash flow from this thing,
so it works out great.
I've got a couple of grandmaybe stuck into this thing.
At the end of the day, that'llall be paid back in the net
cashflow here that's coming in.
Actually, it'll take me a whileto get that cashflow back at 46
(27:57):
bucks a month, but we'll getthat money paid back.
It'll be infinite return oninvestment at some point in the
future here, but the taxbenefits alone for me are worth
every penny of it.
And again, the equity is thebig piece of this, one that we
love about it.
So again, hopefully it'shelpful.
Guys, if you got some value outof this I say this on every
(28:18):
episode do yourself a favor.
Share this episode on yoursocials.
It tells people you're intoreal estate investing.
You're going to attract moredeals, you're going to attract
more money.
Those are the two big thingsyou got to be focused on if
you're wanting to build your networth here.
And again, I would love somefeedback on this.
So shoot me a message.
You can message me on Facebookis probably the easiest way to
(28:39):
message me.
I don't really go on Facebook,but I have Facebook messenger
and that'll come directly to me.
So that's just my name, coreyRaymond.
You can find me on there.
Shoot me a message and justgive me some feedback good, bad
or ugly what we can do to bringmore value to you.
Guys, as the audience out here.
We're always looking to improve.
Again, if you haven't shared,I'm sorry.
If you haven't rated andreviewed us yet either, please
(29:01):
do that as well.
That always helps us continueto help us get the message out
there to more and more people,which is our goal here, and
hopefully we're bringing valuefor you guys out there.
All right with that, guys.
We will see you on the nextepisode.
What's happening everybody?
Corey Raymond here, your hostof the Wisconsin Investor
Podcast, and today you guys arestuck with me on another solo
episode.
Before I get into that today,guys, I wanted to give you guys
a little shout out fromWisconsin Discount Properties.
I say this on a lot of theepisodes, but if you aren't
familiar with it or this is yourfirst episode, if you're
(00:23):
looking for off-market deals, weput deals out in your inbox
every single week at 6 am andyou can go out to our website,
wisconsindiscountpropertiescom,put your information in and get
added to our buyers list forfree, no cost to get on there
and we'll start sending those toyou.
Another thing I've talked abouton a few of the episodes but
for my YouTube watchers here, Iactually have our website today
(00:44):
pulled up on the screen shareand I've been talking about
these case studies.
So on our website you can seethese case studies here that I'm
looking at right now and thisis what I was describing to you
guys.
On a few of them.
We have a $5,700 differencebetween what these 50 different
flips have sold for compared towhat our ARV was.
That we put out in our emails,and so Reese from our team spent
(01:07):
a lot of time putting this datatogether and with the help of a
lot of you guys as our buyersout there, who provided some of
the data or some of the publicdata that we got and went back
through and look from Februaryof 2024 up until May of 2025, we
did not put any exclusions inthis.
So that means some people justbought these properties, cleaned
them and listed them.
They did not take them to afterrepair value, they just cleaned
(01:31):
and listed them and made theirspread that way, and so that
would bring our actual ARV downeven further.
So what we're putting out, guysthe whole point of that is what
we're putting out to you guyswe feel is pretty conservative
on on our ARVs and you can beconfident when you look at our
ARVs it's not perfect.
Look through the list.
We put it all out there thegood, bad and the ugly.
Some of them were less, some ofthem were more and again some
of them that are lesser, justbecause people didn't take it to
(01:53):
the full after repair value.
So anyway, you can check thatout on our website.
We've got a lender list, we'vegot our birth or beginner course
, which we're giving away forfree now, and a whole bunch of
other information on there to bea resource for you.
So go check it out when you gotsome time.
Wisconsindiscountpropertiescom.
And with that guys, today let'sget into today's episode.
(02:15):
So I am about to leave hereshortly, from the time I'm
recording this and I am headingover to meet my lender, who's
going to refinance me out of aduplex that we bought, and so I
wanted to do just a dealbreakdown for you guys, take you
through some of the numbers andshow you guys a bird deal that
was put out here in Green Baythat I actually ended up picking
(02:36):
up back in January I think weclosed on this thing.
And so here we are now intoSeptember, we're finally
refinancing this thing.
And so here we are now intoSeptember, we're finally
refinancing this thing.
So a little longer than I wouldhave liked, but we had some
tenants in there.
We had to get the tenants outand then we had to rehab the
units.
Then we now we're in the final,we're in the refinance process.
(02:57):
So I'm going to take you guysthrough everything I can on this
deal.
Hopefully this will provide yousome insights from some
insights from how we found thedeal to the numbers, to what the
numbers look like on thebackend.
And what I'll tell you guys is,when I ran my calculator here,
based off the actual numbersthat we're projecting now that
we have our loan payment amountthat we're going to have to make
(03:19):
, we're only projecting to make$23 per month per door.
So for those of you out therethat love the BRRRR, like me,
you understand this is not a getrich quick game, right?
The BRRRR strategy is a bigtime wealth building strategy.
But, as we said, I think thelast episode that just was out
(03:41):
was with Jimmy Vreeland, who's aBRRRR key investor, as he calls
it, and we talked about keepingthat cash machine and making
sure if you're out therelistening to this and you want
to do the Burr strategy, don'tquit your day job right now if
you've got something spittingoff cash, because these things
are typically not high cashflowproperties.
But I'll explain to you guyswhy.
For me, I think this is still agreat deal, and if you're a
(04:04):
cashflow investor, probably nota great deal for you right now.
But again, how you look atcashflow may be a little bit
different than the way I look atit.
All right, so I'm going to takeyou guys through, those of you
guys that are watching this onYouTube.
I'm also trying somethingdifferent with zoom right now.
This is kind of cool.
I'm like superimposed in frontof the screen, which I've never
done this before.
So I'll take you guys throughhow we got this deal.
(04:26):
So, first of all, theacquisition strategy on this
particular deal this wasacquired through texting and so
recently we've gotten rid ofmost of our texting stuff.
I believe back in April orsomething like that, we said no
more texting and there's a lotof laws and rules and compliance
and things like that thatyou've got to be careful of if
(04:47):
you're going to be out textingfor deals.
But this was one that came inthrough texting, so we had a
list.
I don't know exactly what thelist was, I didn't have that
data but we were our VA at thetime was texting people looking
for people who are interested inpossibly selling their property
, and this is one that that cameup, and so this was the email
(05:10):
that we sent out to the buyerslist.
So you'll see here if you guysare looking at this on YouTube,
we had a starting bid of one 49,nine.
All right, it's a four bed, twobaths, so two beds each.
There's actually like a thirdbedroom in here.
We don't really call it a thirdbedroom, but we probably could
market this lower unit as athird bedroom.
All utilities are split, sothis is actually really helpful
(05:33):
for us in the cashflow piece ofthis.
We would be negative cashflowif the utilities were not split.
I did budget a little bit inhere for utilities, so it
probably is a little bit more,because I actually need to ask
my property manager if we'repaying water or not.
I typically, even if we are notpaying water, I typically still
budget for water.
Water, at least here inWisconsin, is one of the things
(05:57):
that will follow the property,not the user, and so electric
and gas will stay with theindividual.
So if that person doesn't payand they vacate your property or
you have to evict them, thatbill sticks with that person.
Now, water, if they vacate,don't pay the bill, you're still
(06:19):
stuck with it if you're thelandlord.
So I still typically budget forwater, even if the tenants are
paying it.
So here's what this looks likenow.
If I click into this, this willbring us up to a new screen.
And so we had a third-partyproperty inspection.
We had comparables, we had theproperty info, a rent-o-meter.
(06:39):
So we'll see how we did on therent-o-meter too, because I have
not checked this out recently,but we're going to take a look
at that Now.
We did have an ARV of 240 onhere.
So I've got a prettyinteresting situation where
we'll talk about what our ARVactually came back at and then
what happened there.
So that was kind of we'regetting nine, I think we're
(07:07):
getting nine, 95 right now.
So we're in that lowerpercentile.
I believe part of that probablyhas to do with the utilities.
So if the utilities weren'tsplit, we would probably be up
in this 1100, 1150 range, um, sowe might be losing a little bit
that way.
But I typically, if I can getthe utility split, I love doing
(07:28):
that.
It's a better situation in mostcases to do that.
So this rental meter was alittle high compared to what
we're currently getting.
Okay, not saying that they'rewrong, maybe we're just maybe we
accepted too low.
All right, let's take a look.
We're going to go through theinspection report here real
quick and again, if you'relistening to this, I'll just
(07:49):
describe as much as I can here.
So, heating-wise, see, theseare some of the big issues.
This is typically what I'mlooking for.
When I look at an inspectionreport, heating-wise, it says
the boiler was amateurishlywhich I don't know if that's a
real word installed.
The boiler is supported by awood frame platform, so on and
so forth.
I'm not going to read you thewhole thing.
(08:09):
Basically, have the boilerlooked at is one of the things.
And then the upper unit washeated by two space heaters, so
not probably ideal, so we had toreplace those.
And then electrical there wasquite a few double tap breakers
which if you're new to investing, you see an inspection report
(08:32):
and doesn't have double tapbreakers.
Good Lord, that's.
Probably somebody already hadto fix that.
But that's in a ton of panels.
I mean, it's almost just youcan expect to get that back on
an inspection report.
I mean it's almost just you canexpect to get that back on an
inspection report.
So a little bit of electricalfront porch was missing a
mounting block, some littlethings, nothing really crazy
here.
And then windows most of thewindows peeling paint, that sort
(08:55):
of stuff poor condition, needto be maintained or repaired.
I actually don't even know ifwe did that or not.
I should have probably lookedthat up a little bit when I was
uh preparing for this, but I didnot look at that.
And then some maintenance itemsdown here baseboard heating
units got to replace worn anddamaged flooring, scraping paint
, a lot of kind of stuff.
So there was.
(09:16):
It was cosmetically prettypretty rough too.
Inside there.
I mean it not bad, though umlittle sag going on in the main
beam on this thing structurallyand I don't necessarily worry
too much about that.
It can be supported usuallypretty easily.
Um, sometimes that scarespeople away.
(09:36):
Again, it's a rental propertytoo.
So something to um to thinkabout here.
So you'll see, he's got all thepictures of this thing, uh, if
you're, if you're watching this.
So there was quite a few, quitea few things that could be done
to this thing if you reallywanted to.
Uh, so we'll go into now.
Um, we had the comparables.
(09:56):
Okay, we don't need to go intothat.
I'm gonna take you guys over tothe numbers on this thing.
Okay, so we ended up buying theproperty from WDP for 152,.
Uh, eight, 18, I believe, wasthe the number here.
So we're looking at a balancesheet right now.
Improvements we put 39,000 intothis thing.
(10:17):
That was right about what wewere budgeting about 40 grand.
So we came in pretty good rightthere.
Now there's probably still afew other odds and ends, things
that maybe will trickle in hereor there, but so far so good.
So our total cost andimprovements on this thing is
just under 192, which is prettyincredible.
All right, and I'll explain whyhere in a minute.
(10:40):
So liabilities this is justshowing how we finance things.
So what I did with this isshows here that we use Johnson
Financer Group.
So I have a home equity linethat I use for a lot of
purchases so quote, unquote cashpurchases and then I also have
a cash value life insurancepolicy and so I use the
combination of those two things.
I use some things.
(11:00):
Our line of credit was extendedout to some hard money loans we
were doing for some investorsand so we had a little bit left
on that, and so we use thatpiece and then we pulled the
cash value from our lifeinsurance to use that as well.
So we'll probably have somebodyon in a little in an episode or
two, maybe down the road,talking about life insurance and
(11:22):
I don't know if we'll get intothe cash value piece and how you
can utilize some cool toolslike that for your investing but
also provide you with someother stability and other things
, but that was the combination.
So that's what you're seeinghere.
It only shows a $43,000 loan.
I actually have to have thebookkeeper update that to be the
entire amount here that we use,because that's what we funded
(11:45):
this whole thing with, All right.
And then how we funded theimprovements.
Actually, just because we haveso many other rentals with this
management company, they're ableto basically fund the
improvements for us in a lot ofcases, and because they're
collecting rents on all theseother properties, we just don't
get a payout then, which,cashflow wise, we need to budget
(12:06):
for that with the rentalproperties.
Again, this is why having acash machine, like Jimmy talked
about in the last episode, is soimportant, because we don't
necessarily need or rely on themanagement company giving us an
actual payout on those and theyjust are taking and basically
taking all the rents thatthey're collecting and then
(12:27):
utilizing that to fund theseimprovements.
So that was the combination ofour funds and then the
management company covering alot of the improvement costs,
all right, and then what we'relooking at down here.
Guys again, total all in.
Actually, on the asset side ofthings, total all in, just like
I said just under 192.
(12:48):
All right, so now when we lookat this, I want to go over to I
don't know if I have theappraisal.
I should look up the appraisalhere quick.
But our first appraisal I'lljust talk about it here First
appraisal came in at um one, Ithink, or what was it 210.
(13:09):
Okay, so our ARV on this thingwas 240.
And I felt pretty confident.
I thought maybe that was even alittle low.
Arv on this thing was 240.
And I felt pretty confident.
I thought maybe that was even alittle low compared to what
we've been seeing.
And our first appraisal came inat 210.
So I used my good friend over atChatGPT and I went and pulled
my own comps again and I pulledsix different comps and I
uploaded the appraisal and Iuploaded my comps to ChatGPT and
(13:32):
I said, hey, chat, appraisal.
And I uploaded my comps to chatGPT and I said, hey, chat, you
know, go through the appraisaland then go through our comps
and come up with a email we cansend to the appraiser for a
rebuttal and make it nice andpolite and everything else, but
justify why we feel like ourappraised value on this
appraisal is much lower than itshould be and, um, I had to
tweak it a little bit.
It kept kind of picking upactually like things that the
(13:55):
appraiser nice things about theproperties the appraiser picked
like highlights of those.
And I was like, no, no, no, no,we want to focus on the nice
things about the comps that Ipulled.
And so it was great it actuallywent through and analyzed them
all.
It was like, oh, looking at allthe data you've actually pulled
, the comps that are closer andmore similar to the subject
(14:15):
property than what the appraiserdid.
Now it didn't say that when itsaid here's your email to send
back to the appraiser, but ithighlighted some things for me.
So I was like, okay, cool, Iknow I did my job here of
pulling those.
I sent that email and I don'thave the appraiser's info so you
have to send it to your banker.
So I sent it back to the bankeralong with my comps and
(14:35):
justifying why I felt like weneeded a rebuttal.
And the banker called me likewithin an hour and was like, hey
, thank you so much for all thisinformation.
This is so done, so so puttogether so nicely.
You know I'll send it over, noguarantees, but you know, I
think you make a good case hereon why you should at least take
a look at it.
And so a couple like a weeklater, I got a call from from
him and he's like hey, you know,just want to give you an update
(14:57):
.
I heard from the banker or theappraiser.
You know he's looking at it,but the vibe I got, I I wouldn't
expect him to change anythingand I was like all right, well,
we tried.
You know, that's all we canreally do now, what we could do,
those options.
So for those of you out therethat are doing this strategy,
your option at that point okay,is I didn't have a hard money
(15:17):
loan coming due or anything.
So I have time, right, I canjust push this thing out.
I can get another appraiser, Ican do different things.
Now some banks are going to say, no, we're not going to get a
different appraiser at thispoint.
This is our appraisal, we gotto go with this.
Our loan committee is not goingto go for anything different.
Okay, that's fine, I can justgo to another lender.
So for those of you guys thatare in our BRRRR for beginners
(15:38):
course, you know that I'm a bigfan of having multiple buckets
of money right and, within eachbucket of money, having multiple
options if you can.
So, commercial lenders,community banks we're blessed
here in Wisconsin we have a lotof great community banks.
However, some people one of themistakes I see they make is
they just rely on one communitybank.
They love that relationship.
(15:59):
They're loyal people.
God bless them.
That's awesome.
But my advice would be you area business person, so a business
person doesn't mean you can'tbe loyal.
There's a lot of things therethat there's loyalty.
That goes into a lot ofdifferent things where you'll
build relationships with theselenders.
However, that goes into a lotof different things where you'll
build relationships with theselenders.
However, in this case, youwould have a justified reason
(16:22):
for using a different lender,right.
So if you needed that appraisalto come in higher and the bank
was not willing, you send inyour nice rebuttal appraiser's
not willing to change it.
You've got time on your side alittle bit here.
You can go to one of your othercommercial lenders and
basically do the same processall over again.
Okay, now you're going to delaythings a little bit because now
they got to order a newappraisal.
There's no guarantee that thatnew appraisal is going to come
(16:43):
in higher right.
You also would want to let themknow if this other appraiser is
the one that gets selected,because they usually have to do
it through a system they can'tpick the appraiser.
A lot of times they have to doit through like a third party
who picks an appraiser.
But you would have to let themknow.
Hey, if that appraiser comes up, we're not going to move
forward, because what's thepoint?
You already paid for anappraisal from that guy.
(17:04):
He won't rebuttal it.
So you need a differentappraisal company.
But you could go shop that to adifferent lender and try to get
a better appraisal, a more inline appraisal with what you
need that number to come back at.
Okay, luckily for us, theoutcome of this story is a good
one.
Right, we have a positiveoutcome.
This doesn't happen all thetime.
I don't.
I don't know that.
(17:24):
I've won a ton of these againstappraisers, but the guy came
back at $240,000, exactly whatour ARV was.
So gave me even more confidencein our team.
Hey, our team's doing a greatjob on these ARVs.
Um and uh.
You know it was really.
When I looked at the appraisal,I was a little bit shocked
because when I ran my comps.
The guy did use like the threelowest comps possible and a lot
(17:49):
of those weren't really updatedUm, rents weren't even
comparable, they were gettinglower than my rents and they
weren't split utilities.
So I pointed a lot of thosethings out in my rebuttal as
well, and so that probablyhelped.
But it doesn't happen all thetime.
So just be prepared.
That is the risk of doing theBRRRR strategy If you need that
number to come in, where thatnumber comes in.
(18:10):
But here's the magic of this,guys.
So the appraisal came in at$240,000.
80% of $240,000 is $192,000.
So today I am going to meet thelender, I'm going to sign my
loan docs and he's going to handme a cashier's check for
$192,000, guys.
And so if you look at again, ifyou're watching this on YouTube
(18:31):
, I still have the balance sheetup.
Building costs one 52, eight,18 improvements, 39,000 puts me
just under all in at one 92.
Now there's some other coststhat I don't think are showing
up on here, a little bit Likethere's probably some little bit
of closing costs maybe, orwhatever.
I don't exactly know what goesall into what the bookkeepers
got on here.
Regardless, we're going to havelittle to no money into this
(18:55):
deal right.
So now I will take you guysover to the calculator here.
So this is a BRRRR calculatorand again, this is part of the
course the BRRRR for beginnerscourse that you get when you
sign up for that.
And so here's what we have laidout here, guys, we start out
with only changing the numbersin yellow.
So on here, the ARV $240,000.
(19:15):
That's what we came up with onour appraisal and this is what I
would have ran prior to theoffers being due.
Right, it's $240,000.
That means my 80% of that ARV192.
Now why I have 80% in that ARV192.
Now why I have 80% in there isbecause that's what a lot of the
(19:38):
community banks will lend up to.
They'll lend up to 80% of thatvalue, all right.
And then my repairs 39,000.
We saw that in the balancesheet.
So those are my costs.
I put $3,000 in here for loanclosing costs.
I had a pretty high, like theycharged me a pretty good penny
on the appraisal.
I think or maybe that wasappraisal and closing costs.
(19:59):
It was like 2,500 bucks.
But just for fun I just put3,000 in here.
So my max allowable offer, whatI could be all in at to have
all my money back out of thisthing is $150,000, okay.
Now, like I said when we lookedat those numbers, I'm probably
a little bit over being able toget all of my money back out,
(20:19):
but I might be into it for acouple thousand dollars, right,
pretty awesome, okay.
The other thing to think abouthere, guys, on the top part of
this, what we're showing thedifference between 240 and
actually, if I just go back here, the difference between 240 and
actually, if I just go backhere, so $240,000 minus $192,000
(20:39):
.
If my math is correct, that'sabout $48,000.
So just by purchasing aproperty, having the management
company go in there, do all thework, rehab it, get it rented
and then refinancing that thingwithin nine-ish, probably eight
months, is really what we'relooking at here.
We created $45,000 or $48,000of equity by doing that and I
(21:01):
have maybe five hours into thisdeal total from the time I put
the offer in making some callsto get the financing done and
get the you know the cash valueloan, life insurance policy, to
starting the refinance process,to now I got to drive 30 minutes
to meet the banker.
Oh no, you know, terrible deal,gotta go do this, creating
(21:26):
$48,000 guys.
So I always say this I don'tknow if I've said it in a while
on the podcast but really, ifyou're a BRRRR investor, you've
got your main gig going on.
It's paying the bills andspitting off extra cash and all
that sort of stuff.
When it comes to real estateinvesting, this can be pretty
simple.
It's like just really focusingon two activities.
Once you've got a goodmanagement company in place,
(21:47):
it's fine deals and fine money.
That's it.
That's all you got to focus on,right.
Again, I'm a little biased atWisconsin discount properties.
We send you the deals everyweek, but there's certainly
other wholesalers in our marketand across Wisconsin there's
deals on the MLS.
There's all kinds of things thatyou can do.
I know some people.
They hire a virtual assistantfrom overseas.
(22:08):
They have them look at dealsfor like four hours a day.
These people make like $7 to $8an hour and they're paid as
like a 1099 contractor.
So you don't have to worryabout payroll tax or setting up
a payroll system or anything.
You can literally just pay themthrough PayPal or Venmo or
whatever they have over thereand they can go through and
analyze deals on the MLS for youlike literally all day long.
(22:30):
Just teach them this Burrcalculator and stick them, tell
them what you're looking for,what areas, and have them go do
that.
So there's deals all over theplace, guys.
But finding deals, then you gotto find money right, and there's
all different kinds of bucketsof money to find.
And then, like I did, I used acouple of different pieces.
(22:54):
Here I use the cash value, lifeinsurance and a line of credit
those two pieces together.
Now I'm refinancing with acommercial lender of mine.
So those are the two optionsthat you can utilize All right
Now when we look down at thecashflow analysis.
So this is the other piece of it.
Right, you got to figure outwhat's your tolerance on
cashflow and what's your goal.
So for me, my goal right now isbuild assets, get equity, build
assets, build the net worth.
Okay, I need these things tobreak even at least every year.
(23:15):
Um, on the cashflow thing Right, and hopefully interest rates
will come down at some point.
I'll refinance a bunch of themand that cashflow number will go
up, or we'll get a combinationof rents up and that and it'll
it'll be juiced even evenfurther.
Okay, but what we're looking at, our rent right now we're at
1990.
Okay, that's what we're getting.
Nine, 95 per unit.
(23:36):
Again, like I said, we might bea little low on that.
So next year hopefully we'regoing to be able to bump that
and get that up even higher.
Principal interest, taxes andinsurance this is a little bit
of an estimate.
It's pretty close.
Our payment today is going tobe $1,250 for the principal and
interest to the lender and ourtaxes.
I figured out we're just under$200 a month.
(23:57):
I think is what it's coming outto.
And our insurance I estimatedabout $100 a month.
I'd have to actually go get thequote.
It might be less than that, butwe'll figure a little
conservatively at that number.
Okay, management less than that, but we'll.
We'll figure a littleconservatively at that number.
Okay, management for a lot ofpeople you're going to budget
10% For us.
We get a little bit of a deal.
We've got a volume thing goingon.
So we're at about 7% managementvacancy here.
(24:19):
I budgeted 3%.
So we're looking at 59, 70utilities, like I said I think I
talked about this earlier watereven if they pay for it, it,
I'm still gonna budget like 75bucks a month for water.
But heat and gas and electricare covered by the tenants.
So this is just probably alittle bit of padding here for
me.
Of the 75 bucks a month Cap X,we recommend three to 10% people
(24:44):
budget for capital expenditures.
I budgeted on the low end ofthis because we did a lot of
that work.
So that's one of the beautifulthings.
When you, when you guys buy aproperty, that's a big project,
like it's going to need one ofeverything that scares a lot of
people away To me, uh, I look atthose as like great opportunity
to keep your future expensesway down.
So if you have to go in and yougot to replace a lot of things
(25:06):
you got to fix the roof or put anew roof on, you got to do new
windows, water heaters, furnaces, cosmetic everything.
Beautiful part about that is ifyou can make that work in your
burn numbers up front and it'llstill cashflow a little bit,
you're not going to have a lotof unexpected expenses in the
future, right, or things thatyou really have to budget for
replacing a ton in the future.
(25:27):
You should still always budgetfor capital expenditures, but
you can keep your capitalexpenditure budget lower, right.
The same thing for maintenance.
Now, we kept that on a littlebit of a lower side because we
did a lot of the upfront work toit should be lower maintenance.
Obviously that's going todepend on tenant quality there,
but we've kept that on the lowerside, all right.
So now we're looking at here.
(25:47):
Our total monthly expenses are1944.
For those of you guys listeningto remind you, our total rent
here is 1990.
So our total cashflow is 46bucks a month.
Ooh, there we go.
We'll go buy a couple of pizzasand celebrate every month.
There we go.
Per door that comes down to 23bucks a door that we're netting
(26:08):
putting in our pocket.
So again, this is not a get richquick thing.
We're not going to be feedingthe Raymond kids off of the cash
flow of this property, that isfor darn sure.
But I'll tell you what what'sbeautiful about this is.
In a few years this thing isgoing to be worth probably 275,
280, and our debt will be downlower, not a ton.
(26:32):
I think we're on a 30 year onthis thing, so we'll probably
owe call it 185 at some point.
And then, if we want torefinance, we could pull some
cashflow at that point tax-free.
That's a beautiful thing aboutthese.
Or we can just let it ride andlet the thing keep appreciating
and let the tenants keep payingthat debt down.
That's an awesome vehicle here,guys.
(26:53):
It's one of the reasons I lovethe burst strategy.
It's one of the reasons I lovereal estate investing.
It's really tough to go buy$148,000 of equity in the stock
market right now for a couplethousand dollars.
Really tough to do that,especially something that's
going to typically appreciatefour to 5% a year and you're
going to get some debt pay downevery year.
(27:14):
You're going to get some taxbenefits in here.
There's a lot of other thingsto love about what we do here in
the real estate investing space.
So that is my deal breakdown foryou guys on this episode.
I hope that this was valuablefor you guys.
I would love some feedback onthis episode.
If you guys like the dealbreakdowns, I can do a bunch
more of these for you guys inthe future.
Of different types of deals, wecan talk about the good, the
(27:37):
bad and the ugly here.
This one, obviously, for me, isa winner.
Again, I'm not looking to needthe cash flow from this thing,
so it works out great.
I've got a couple of grandmaybe stuck into this thing.
At the end of the day, that'llall be paid back in the net
cashflow here that's coming in.
Actually, it'll take me a whileto get that cashflow back at 46
(27:57):
bucks a month, but we'll getthat money paid back.
It'll be infinite return oninvestment at some point in the
future here, but the taxbenefits alone for me are worth
every penny of it.
And again, the equity is thebig piece of this, one that we
love about it.
So again, hopefully it'shelpful.
Guys, if you got some value outof this I say this on every
(28:18):
episode do yourself a favor.
Share this episode on yoursocials.
It tells people you're intoreal estate investing.
You're going to attract moredeals, you're going to attract
more money.
Those are the two big thingsyou got to be focused on if
you're wanting to build your networth here.
And again, I would love somefeedback on this.
So shoot me a message.
You can message me on Facebookis probably the easiest way to
(28:39):
message me.
I don't really go on Facebook,but I have Facebook messenger
and that'll come directly to me.
So that's just my name, coreyRaymond.
You can find me on there.
Shoot me a message and justgive me some feedback good, bad
or ugly what we can do to bringmore value to you.
Guys, as the audience out here.
We're always looking to improve.
Again, if you haven't shared,I'm sorry.
If you haven't rated andreviewed us yet either, please
(29:01):
do that as well.
That always helps us continueto help us get the message out
there to more and more people,which is our goal here, and
hopefully we're bringing valuefor you guys out there.
All right with that, guys.
We will see you on the nextepisode.
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