The Wisconsin Investor
Each week, we bring you interviews with some of Wisconsin's top real estate investors who share their tips, tricks, and strategies that you can implement right away. This show is dedicated to helping Wisconsin real estate investors elevate their game. Along with interviews, I'll also dive into hot topics in solo episodes and feature experts from various real estate sectors across Wisconsin.
The Wisconsin Investor
Where to Find The Money For Deals With Tony Broullire
Unlock the secrets of the Wisconsin real estate market with our extraordinary guest, Tony Broullire, a veteran investor who has transformed his journey from humble beginnings in mortgage lending to building a substantial property portfolio. Join us as Tony recounts his early days of house hacking and property flipping with his brothers, leading to his rapid portfolio expansion between 2012 and 2015, where he creatively financed and acquired 52 properties. You'll gain invaluable insights into his transition to lending, utilizing a self-directed IRA and starting his own fund, providing a masterclass on real estate investment strategies.
Ever wondered how to establish successful long-term partnerships, especially with family? Tony and I tackle this crucial topic, emphasizing the value of short-term collaborations to test compatibility. We delve into the importance of clear, upfront communication about responsibilities and setting expectations similar to managing employees. Plus, we provide an overview of current lending trends in Wisconsin, sharing strategies to navigate the market despite rising interest rates and other challenges. This segment is packed with actionable advice to ensure smooth partnerships and successful ventures.
Looking for ways to leverage Home Equity Lines of Credit (HELOCs) for your real estate investments? Tony and I outline step-by-step strategies for securing funding from Good Faith Funding, highlighting the significance of professionalism and preparation. We discuss shopping around for favorable HELOC terms, the benefits of using blanket loans on investment properties, and building financial buffers. Whether you're a seasoned investor or just starting, this episode offers essential tips to elevate your real estate game, with practical advice on obtaining funding and making smart investment decisions in the Wisconsin market.
Welcome to the Wisconsin Investor Podcast. I'm your host, Corey Raymond. Oh, hey there, guy. Each week, we bring you interviews with some of Wisconsin's top real estate investors, who share their tips, tricks and strategies that you can implement right away. Oh, crepes. This show is dedicated to helping Wisconsin real estate investors elevate their game. Along with interviews, I'll also dive into hot topics and solo episodes and feature experts from various real estate sectors across Wisconsin, you betcha. So sit back, relax and enjoy the show. Hey everybody, Welcome back to another episode. I'm really excited today because I get the opportunity to interview my good friend and one of my first mentors in real estate, Mr Tony Broullire. Tony, what's cooking today, man?
Tony Broullire:Lots Cor. How are you doing, man?
Corey Reyment:I'm doing good, man, I'm doing good. I'm excited to talk shop with you. We've talked real estate probably a thousand times together, but I don't think we've ever recorded it on a podcast, so this is our first time.
Tony Broullire:Yeah, I would say this is our most of the time. We shouldn't record what we talked about.
Corey Reyment:So I'm just kidding, this is going to be a fun conversation, I think today, tony, for all the listeners out there who don't know you, our audience is mostly folks who are in Wisconsin wanting to invest or are already investing, or people who are outside of Wisconsin who are looking at potentially Wisconsin as a market to invest in. You've been in the Wisconsin market now for a long time. Why don't you just kind of start everybody back like a brief history of who's? Tony Breuer, how did you get into real estate game and your experience and start there?
Tony Broullire:Yeah, so I started doing mortgages right out of college. So in 1997, I started doing traditional mortgage lending. I started buying rental properties in 1999, but did three house hacks. I didn't know what the term house? I never heard the term house hack for about 20 years after that. But that's what I was doing.
Tony Broullire:Owner occupied a duplex, a triplex, a duplex right off the bat, with a buddy of mine, a roommate at the time. We were sitting there and he's like how are we going to make money in this world? We were literally drinking beer, playing Nintendo. I said well, dude, I can finance houses, you can fix them. I said let's buy some rentals, that's can fix them. I said let's, let's buy some rentals, you know, and that's kind of how it started. Nice, um, fast forward a couple years, did some flips with my. I got two brothers in the area. We did some flips. We have a construction background. I have an uncle that we were construction with in high school, a little bit in college. Okay, um, so I can swing a hammer if need be. I don't like to if I'm learning.
Corey Reyment:I'm learning something about I'm just kidding we did a mission strip in mexico together and you were yes, you were you looked. You look like you know what you're doing yeah, it's more than getting kicked off.
Tony Broullire:The trust, trust work I know, I know a few things, but um, and then fast forward to really 2012. I was sitting there and we, um, I called my two brothers up and um. I said, hey, we're gonna buy some rental properties. I said, um, we're gonna have a property manager take care of these properties so we don't have to dink around with the, with the day-to-day stuff. And we bought 52 properties in the next really two and a half years, from 2012 to 2015,. Almost three years maybe, wow, and we didn't come from money. Corey, you know, god bless you If you did those listings. It makes real estate easier, but not impossible. If you don't, I mean can't. Grew up in niagara, wisconsin, 1100 square foot house, six of us, one bathroom, right, yeah, I mean, I shared. I shared an underwear drawer with my brothers. That so, yeah, pretty gross, but yeah is that too much for the podcast?
Tony Broullire:I don't know. There's no holds barred here. Okay, all right. Yeah, I wasn't sure so, but yeah, so we, we bought all these properties. So we had to get very creative with how we utilize equity partners. We had an ice fishing buddy at $100,000 sitting in this checking account. We parlayed that into 11 houses I mean, we'd use the same money over and over again partnering with the banks.
Tony Broullire:I found a bank that did what I wanted them to do 22. I'm not exaggerating. I went to every bank pretty much in northeast Wisconsin and some outside to find banks that would refinance us as quickly as we needed to. So we could buy as many properties as we wanted to Completely different market at that point. Proclosures were rampant. We could go to a realtor and pick up and say say, hey, we want to look at these 10 properties, they're all needed work. We'd put offers in on six and get and get accepted offers on two. I mean it was completely different market than what it is now. Yeah, our problem was we didn't have money. You know I couldn't and hard to find any money. I would have loved to have had a me then, a me now back then. That that has this pool of money now that I can, that I can pull from.
Corey Reyment:So so, yeah, update the audience now. What do you do now, tony?
Tony Broullire:yeah, so fast forward a little bit, even more than not, to this time is that? Yeah, because of long story very, very short. I started pulling money together to invest, to lend to other investors um, rolled over a 401k into a self-directed IRA which we could talk about some other time Um, and started lending that out. I became the bank very, very small bank, um and and started a fund where people invest with me and then I take those monies, they sign a subscription agreement. I take those monies and then lend that out to real estate investors as a first mortgage lien holder on the investment property. So, and I'll fund the whole purchase price, the rehab, all that fun stuff, as long as the loan after repair value is low enough. That's awesome, yeah, so that's what I do, full time, basically. Now.
Corey Reyment:Let's go back to the original properties you bought with your buddy right.
Tony Broullire:How long did you keep those properties? Yeah, good question. Three of those properties have been raised, not since I've had them I didn't have them when they were but we were buying all in the D neighborhoods in Green Bay Really learned a lot of what not to do, what I didn't want to really deal with, a whole lot. But I held one of those properties until two years ago. So I bought it in 2000 and sold it in 2021 or 2022 or something. So I held one of them that long and I held it that long, corey, because I wanted to make money on it. It was just a terrible property and I knew that I had to get some appreciation eventually on it, which I did, and sold it and made, I think, $10,000.
Corey Reyment:It took 21 years to get your 10 Gs.
Tony Broullire:But I didn't lose money on it, man, so that was the key.
Corey Reyment:Yeah Well, I remember when I was getting into this, you were one of my first stops of like. Whenever I'd have a fear, I'd have a fear, I'd be like Tony, what about this? And you're like here's my answer what about this? And one of those was like what if I make a bad purchase? And then you, what would you say to that?
Tony Broullire:Time man hold it. Let it get. Keep it as a rental cashflow. Who appreciates and sell the bad boy?
Corey Reyment:Don't lose money on it.
Tony Broullire:You know time. Time cures a lot of wounds in real estate, a lot of bad mistakes. You can.
Corey Reyment:You can weather a storm, and just hang on and get through it. Yep, yep. Typically on the backside, you're going to end up. Okay, if you hold it long enough, right yeah?
Tony Broullire:Yeah, yeah, typically like to little bit. I have multiple extra strategies going in, so like if I have to get out, I don't have to wait 21 years.
Corey Reyment:That's a good lesson right there, folks listening, take that one from a guy who's been in the game for 25 years here. Talk about partnerships with me, tony, because you know I've interviewed some other people who are in partnerships and it's working well. What are some of the? What are some of the lessons you've learned, cause you've had a couple of partnerships now on long-term holds. You know you and I have done some partnerships on some, some flips and things like that. Short-term pretty easy, a JV agreement together between the two of us and it works out great. Talk about, like, what are some do's and don'ts of lessons you've learned of partnering in the long run, especially with family?
Tony Broullire:Yeah, I would recommend a couple of things real quick on that. Number one is do a. Do a short-term one. First, See how you guys work together. You know everyone works together. You do not have to set up an LLC where everyone's involved and you got all that. You can do a joint venture agreement or have just a written agreement between the two of you. You know, depending on how well you know that person, Do a deal together See if this is going to even work.
Tony Broullire:You know you don't need to be married forever. You know these things. The other thing, though, is if you do decide, hey, this looks like it's going to be a good partner for me. The LLC agreement does a lot of stuff, but it does the big stuff If you get divorced, if someone dies, you know, like that type of things, but it does not really a good job I'm typically is. It doesn't even in the operating agreement of the LLC. It doesn't do the day-to-day stuff.
Tony Broullire:Who's going to deal with the bank setting up the bank account? Who's going to deal with the insurance agent? Who's going to deal with the realtor when you go to sell it or buy the property? Who's going to phone calls on from from anybody when they're, when they're looking at you know, rent or whatever. Who's gonna? Who's gonna manage property? Who's gonna fix the property?
Tony Broullire:Those day-to-day things, corey, are most of the time not in that agreement. Yeah, most time, yeah, so I highly especially well, any partner, sit down, take an hour, grab some coffee, grab a beer preferably grab the beers after you get the agreement, but, but write down hey, corey, you're going to do this, you're going to do X, y, z. Tony, you're going to do X, f, t, q and P, right, and then we so write it all down. Both you sign it. You both have that copy. So when you wake up, corey, four months from now, and say you know what? Tony's not carrying his weight, you can go through that list instead of getting mad. Just go hey, we got to sit down and have another meeting. Go through, listen, shift, shift things around. So you're both doing, doing what you say you're going to do, cause the. I always tell people you don't want to, you don't want to ruin Christmas, okay, but you don't want to ruin a relationship, especially a family relationship, or something stupid like money and real estate. And we see, I see it happen all the time, unfortunately, and it's because people don't set it up correctly. Yeah, okay, and you're not going to know everything, you're not going to see everything. I get that. That's why you have to adjust it. But you can adjust it, you both can sign.
Tony Broullire:Then you can wake up when you have that day when you wake up and you're like man, or he's not holding up, holding his weight, or or, or some sort of lifestyle thing to change. You know, corey just had three kids. He can't. He can't do what he said he was going to do anymore. All right, Then maybe it's time to get old. That's fine too. It's not. It's not again. You're not married. You can. You can totally sell those or buy that other person out or whatever, or shift the ownership to say, hey, corey, you're only going to do 20% of the work now. Okay, you get 20% of the value going forward or 20% of the profits going forward or whatever those types of things. But it's that communication up front, corey.
Corey Reyment:I was just going to say. I think the biggest nugget that I took away from that is it's all up front. So if you can try to forecast all of the potential worst case scenarios and then have a contingency plan in place for all of those that you all agree to, then it's not so harsh coming in when you know I got three kids and I'm like trying to trying to make ends meet and you're coming to me like dude, now you got to take 20%. Man, like if we agreed on that ahead of time, it's like, yeah, totally dude, yeah, I'm not doing it, I don't have the time. Yep, we talked about it, yep.
Tony Broullire:And just have those conversations. You're not going to, you're not going to ever be able to cover everything that could or is going to happen, but if you have the day-to-day stuff worked out, you should be all right.
Corey Reyment:Yeah, we see that with our employees too. It's like if we don't give them clear expectations, there sometimes can be frustration on our end, like why aren't they doing this or why aren't they doing that? And then they're over there like, well, I don't even know what I'm supposed to be doing, so I'm just going to do this because I think that's what I'm supposed to do. Well, I'm not going to do anything because I don't know what I'm supposed to do. And so in a partnership that could easily be the same scenario Like well, they'll take care of it or Expectation setting is really good, actually out of there.
Corey Reyment:We could go down that path, I'm sure today, but I don't know if that's relevant in this case. No, that's really good information. What are you seeing on the lending side of things right now? What are the big trends that are happening? What are you seeing from the investors you're lending to, as far as here in Wisconsin?
Tony Broullire:Well, we are seeing, actually there's still business being done. We're gonna, um, we're gonna have our probably our biggest lending year. Well, we will not. Probably we'll have our biggest lending year ever. Um, we've already closed more loans this year than we closed all of last year and um, part of the reason we expand our territory a little bit but part of the reason, too is is there are we're educating people on how to do this stuff, and there's there's right ways to invest. There's wrong ways to invest, and helping to educate people on that is is huge.
Tony Broullire:The other thing, too, is now there's dscr loans debt service coverage ratio loans where for investors, or we don't even need, you know, don't don't even need your income, it all it's all based off the property itself, and you can do them in an llc or in your personal name. So I mean, that's a game changer that those loans haven't been around. They weren't. They were around years ago. Now they went away and now they're back. Um, and they're a game changer for an investor. Yeah, because you can get get out. You can literally get out of a private money loan or can refinance on a 30-year fixed type mortgage without showing any of your income. That's crazy. So, based on that property, cash flowing is the key.
Corey Reyment:Okay, what do you think is the cause of that? Why are these coming back? Any indication from what you hear or why these loans are making their way back into mainstream?
Tony Broullire:Yeah, I mean before it used to be for owner-occupied and stuff like that. There's no income, no asset loans. I mean, that's part of the reason 2008 was some of these ridiculous loans that were out there. But for investors, they're looking at it like a business. You're taking in $1,500 in rent and your principal interest taxes and insurance is $1,100. Okay, that makes sense. You should be able to cash flow on that. They're looking at it as they should. Hey, this particular property is a business ultimately, in essence. I mean to dumb it down completely so.
Corey Reyment:That's giving access to a lot more people than otherwise. Maybe you wouldn't get that access due to their credit. It's giving access to a lot more people than that Otherwise maybe you wouldn't get that access due to their credit.
Tony Broullire:Yes, yes, it's giving. It's giving people multiple election strategies, corey. So meaning meaning hey, I can either flip this property you know I can sell it, flip it or if that flip doesn't work, I can keep it as a rental and cashflow. This thing is a long-term rental because I can do that. Dscr loan.
Corey Reyment:Are they doing that DSCR loan up front or are they typically refinancing into it?
Tony Broullire:You can do them up front if you have money down, right, if you have a turnkey property or property that you can just walk into, rent it out because everything's fixed up, okay, yeah, you can do it right off the bat. Typically you're looking at at least 20% down in that scenario with the DSCR loan. Otherwise, what people would, what people will use private money or hard money um lending for, is they'll? They'll be able to get the mortgage or get the purchase, maybe some of the rehab or all the rehab costs in the initial hard money loan when they buy the property, get that property fixed up for some equity and do a refinance then and oftentimes have none of their own money out of that into that deal because the refinance goes off the new appraised value based off the work that you did on it.
Corey Reyment:Yeah, that's the key Recycle, then right.
Tony Broullire:You're forcing that equity by doing you're forcing equity building. You're forcing the building of equity because of the rehab that you're doing and you know that going in or have a good idea what that's going to be going in yeah, so that's great, yeah, what, uh, what, uh?
Corey Reyment:what areas do you guys lend in? Are you all over wisconsin now? Yep, yeah, all over. Okay, yeah, we're all over wisconsin, yep okay, um, as far as areas go that you're seeing, are there any particular areas at this time that you're seeing where the the market's really uh scooting up, and are there some areas that are maybe not as hot as maybe they once were a year or two ago?
Tony Broullire:It's a really good question. I mean again where our volume has been substantially up, and partially because we've started to move down in the Milwaukee area a little bit more as well, but we have not. I haven't really seen it slow down in the in the green Bay, fox Valley regions either, and thanks to you know, thanks to wholesalers like yourselves that are finding deals core, you know, though, people are able to go to go to your wholesaler, get that deal at that below market. With the rehab that's needed to force the equity, they're still out. There's still deals out there.
Tony Broullire:You just got to find them different ways now you can't just go to your realtor anymore and say, hey, I want to look at 10 houses and put offers in on six and buy two. It doesn't happen anymore Finding deals on the MLS. And there are people that are still finding deals, that are going to the realtor and finding deals on the normal way. I'll put quotes around that where they're going to the realtor and saying, hey, find me something. But those are few and far between. It's people that are going to WDP and getting on their list finding that deal.
Corey Reyment:Find your dealer.
Tony Broullire:Yep and then rehabbing that property and either flipping it or refinancing at that point.
Corey Reyment:So everything you're seeing in Wisconsin right now, at the time we're recording this, which is July of 2024, market's doing great.
Tony Broullire:There's no indication that we're seeing any kind of slow down whatsoever? No and no, I haven't.
Tony Broullire:I haven't seen that I mean you're seeing maybe a little bit in the in the traditional realm where, because they're just lack of supply, but these houses, there's still people beating up houses, cory, there's still people that need to get out of their houses and can't fix them up. You know, you're well aware, and that's not slowed down. So that piece of it hasn't slowed down at all during this. The caveat now and this is kind of even itself out a little bit I've seen is that when rates shot up there to 7, 8, whatever, it's harder to cash flow. But we've also seen rents go up as well. So you got to really pay attention and run your numbers. Did the rents go up high enough to cover the new rate? And it evens itself out eventually, and I think we're starting to see some of that now too, where it's not every deal by any stretch of the imagination, but I mean there's definitely deals out there. You just got to run your numbers and stick to your numbers.
Corey Reyment:Well, I think what's important about that and I preach this all the time is know what's your goal. What are you trying to accomplish? Because for some people, if they need cash flow to live off of or they need some kind of rate of return on their down payment and rehab and all that stuff, it's going to be maybe a little more difficult with interest rates high. So it's going to be maybe a little more difficult with interest rates high. But if you're in this for the long haul and you go okay, 7%, 8% rate is what it's at currently, probably depending on what banks you're talking to, and you can break even on it for now. But you got yourself some equity in this thing.
Corey Reyment:Tenants are paying that debt down still every month. That thing's still appreciating every month and when rates go back down to 5% or whatever, they end up settling in that. For a while I mean you're going to. Now rents have probably still continued to rise, maybe not as high as the market has appreciated, but they're still going to rise and then you go refinance that thing at that point and now you're really cashflow and now you got all this equity and you know the realized game. Before I think, like in your era of what you're talking about in 2012, was you could probably rent these things and they were cashflow on day one and it was pretty easy peasy. And well, now it might be. The reward is a couple of years down the road for you if you're patient and you're willing to just add assets to your sheet.
Tony Broullire:Yeah, I would say this too, corey, is that you know if, yes, it really depends on what your situation is right. Yes, if you're looking at pure cash flow, it might be a little bit more difficult. Potentially you got to get a better, you just got to get that a little bit better deal, whatever, maybe you're in a different type of market potentially. You know, I look, I tell people all the time. I'm like, hey, in the beginning, this is marathon, not a sprint. Right in the beginning, do not take money. So if you're making, say, five $500 and two doors or whatever, and you're like, all right, I got this extra $500. I'm going to go buy a car, that extra $500. That's foolish.
Tony Broullire:Take that $500, put it in your account, get that buffer built up high enough so that you feel comfortable and can weather any storm. Roof goes bad and you got to replace it. Fine, I take it out of there. I have a tenant that's not in there for three months. Fine, no big deal, I can take it out of there. You can sleep better at night knowing that that buffer is there. Put that money in there until you have a buffer big enough. And that's maybe a little bit different for everybody, but I want to. I personally want, I want a six month buffer in there so that I can weather whatever's happening. So keep that in mind.
Corey Reyment:Yeah, I agree with that a hundred percent. I think the one struggle I see with people is they think they need to have that money right out of the gates in the, in the bank account, or they'll sit there. Ah, then I can't buy the deal and I, yes, you need to have cash, and you need to have or have access to cash, but does it have to come from this exact problem?
Tony Broullire:It might just take a while, like we're saying, to start building up the coffers a little bit and fill the silo, so to speak, of some money. It's for everyone. I talked to him like, hey, do you have equity in your house? You should have a heloc on that thing. You know people that have equity in their house and like, well, I don't want to, I don't want to risk my property.
Tony Broullire:Well, yes, if you're an idiot about use it and take it and go buy a lamborghini with it, yes, it, yes, it's a depreciating asset typically, yeah, problem. If you're going to use that equity, though, as either a buffer or use it as your own, be your own bank, pay yourself back like you would pay me back, as the hard money you can make money on that equity, that's when this becomes really, really fun. Be your own bank and then keep some of it as that buffer, like you're talking about. So you have that twenty thousand dollar buffer, ten thousand dollar buffer, whatever you feel comfortable with in your heloc that you could pull out if need be, if something does go a little sideways, and that way you don't have to wait until you know, you don't have to be scared, because it's sitting there for you right, it's like your emergency fund that you already paid into your house, but you just don't have access to it until you get that heloc going correct get the heloc sitting in the house.
Corey Reyment:I, I think I just heard of a story. I was telling another guy this that's interested in getting a real estate investing. Last week and we were talking and shop and we asked you know, hey, you got some equity in your house. We went through this whole conversation and I said well, you know, you might want to think about getting a heloc all these reasons we just described and he brought up one of his buddies who had a gambling problem and took a HELOC out and went and bought crypto with it and you can imagine how that worked out.
Corey Reyment:Didn't go so well. Volatile asset like that Probably not a good idea to invest your HELOC. So we use it as just like what you described with recycling. When we deploy it, we refinance that property as quickly as we can. We pay the HELOC back down to zero, do it again, do it as many times as we can. We just recycle it. And if we don't use it, it's great. We have access to it. If something crazy comes up, we're not wondering where's the money going to come from and how we're going to survive and feed the kids.
Tony Broullire:And then you might, if it fit your first couple, if you want to do, sometimes what people do and I don't, I don't hate this strategy either is maybe do a couple flips, build that buffer up right off the bat. Your first one, you make 10, 15, 20, 40, 50, well, hopefully 100, whatever. Yeah, it's not hgtv here, people, so you're not gonna make 100 000 every time. But that being said, though, maybe you make that 10 000 or 15 or 20 000 in that house and maybe do that a of times. When you keep that as your buffer, make sure and put money aside for taxes.
Tony Broullire:I see people do that all the time where they're like, hey, I just got $10,000 and they don't put money aside for taxes, do that, put that aside and make sure you have that. That can be a. That can be a big little holy crap moment for you when you get your tax returns and you're do a couple flips and I see people do that all the time They'll do a couple flips and maybe then, if the flip doesn't work, they know it's still going to cash flows long-term and you just keep it and the next one may be doing the flip. It's that multiple exit strategy piece that is so important.
Corey Reyment:Yeah, don't buy an Airbnb and your only exit strategy is overpaying for it, and Airbnb is the only thing. And then the laws change and now you're screwed.
Tony Broullire:Yeah, yeah.
Corey Reyment:We saw a lot around Lambo with other people. They were really excited around Lambo to buy properties and they were paying whatever the seller wanted and over that and the only exit strategy was Airbnb. Yeah, and when the town of Ashwaubenon, village or whatever, changed the rules, there was a big flood of inventory in that neck of the woods. That was all overpriced and people were losing their losing their shit.
Tony Broullire:That's happening all over, so you really have to pay attention to that. And I'm not saying you shouldn't do Airbnb Airbnbs I still have some and I do love them. That being said, though you better be, it's still better to be able to cash flows long term.
Corey Reyment:Yeah, in my humble opinion or what I like to do when I buy my airbnbs if they're single families, is I better have enough equity in that thing so that I can sell it.
Tony Broullire:I can sell it as to a retail buyer and another exit strategy it can be.
Tony Broullire:it can be the, it absolutely can be equity as well. You got to watch that a little bit when you're in, if you're going to go into florida some of the coast, if you're going to go into Florida some of the coast, if you're going to go in there, because the markets can be much more fluctuation excuse me in the market when, yeah, I have equity today, but three months from now something shifts and you don't. So that can be a problem, but make sure you have enough.
Corey Reyment:That's why we love investing in Wisconsin. Man, it's very steady, eddie. Not a whole lot of ups, not a whole lot of downs, just even keel. For the most part, we are the Berkshire Hathaway of real estate, investing here in Wisconsin. Just steady.
Tony Broullire:I know nothing about Berkshire Hathaway, but I'll trust you.
Corey Reyment:Warren Buffett. You know, warren Buffett.
Tony Broullire:I've heard of him, yes.
Corey Reyment:He's a steady Eddie boring guy, just does his boring investments and pulls away. Another thing with HELOCs before we move on from that, something that we've done before is you can shop that around just as well and we look for any kind of HELOC on a primary that's going to be up to 90% of our home value at least that's kind of the minimum we want to shoot for and then no closing costs. That's usually something else they'll do on a primary and then sometimes they'll offer introductory rates. So we had a bank two years ago I think it was three years ago maybe they offered us 2% for a year on our HELOC and I was like, yes, let's do that.
Corey Reyment:And then I gave it to you and you lended out my money for me and I just played bank and I made a spread on the bank's money to what my HELOC was and it was great. I was making money on money that otherwise was just going to sit dead in my house. I didn't really have to do anything. I just had to call you and say, hey, I got a hundred thousand dollars. Where can you put this to work? Boom, you took it and I made a spread.
Tony Broullire:You arbitrage that. It's a word I learned. I learned that word three years ago. I like to use it. It makes me sound smart. But, that's something you can look at too.
Corey Reyment:A lot of these banks will have introductory rates for a certain period of time on these HELOCs, which oftentimes will be cheaper on your primary residence than what you could get if you went to your commercial lender or especially to a hard money lender or private lender. So that's something else to be aware of out there for you guys.
Tony Broullire:A little quick tip and once you start building up your portfolio, if you start to gain equity or force equity because you did rehab, you can also. You can do. You can there are potentially do HELOCs on your investment properties as well. You can do blanket loans. I call them blanket loans or gap or bridge loans or blanket loans I'm trying to blank but where you can buy a property, use the equity and the other one to to, so you don't have to put any money in. I mean, there's different fun things that you can do once you start having enough properties with equity in them. Um, don't want to get too much into that today cause it can get a little bit complex, but yeah.
Corey Reyment:You got to have properties first before you can start playing chess. Yeah, that's the key. So I see a lot of times people sit on their hands and analyze real estate for three, four years, waiting for the next crash. You know what? What is your advice to people that are waiting for the next crash?
Tony Broullire:Tony, no, Does the deal pencil out? Do your numbers work now? Do your numbers work? Does it cashflow right now? Is there, do you have some equity in it right now? If it cash flows right now and you have equity in it right now, what are you doing? Buy the property, don't wait. Don't wait. I mean property values have not gone this way. They did a little bit in 2008, 2009,. Right, fine. Those people who panicked and sold their properties lost their butts. Those people who just held onto their properties during 2008, 2009,. Like myself, rents went up during that time. I actually made more money during then. My point is if they cash flow now and there's some equity in them, buy them, don't wait.
Corey Reyment:Yeah, I did a YouTube video. If you guys go to my channel, my personal channel, it's out there and I used some data from a guy who came in to one of our masterminds a big mortgage guru dude and he had this amazing chart that showed the last 75 years of the housing market. Of the last 75 years, I believe the number is the real estate market is 168 of those 75 years with positive appreciation. So there was only a four year gap between 08 to 2012 where nationally housing prices were negative those four years and then three other times in 75 years other than 08.
Corey Reyment:I mean that's a pretty good bet. That's a pretty safe bet that you're going to get appreciation every year and I beat the drum on this podcast with people about the wealth cone, as I call it. And you buy today and there's not much spread, but each year you get the double effect of the market appreciating and the tenant paying your debt. And it just grows and grows and grows and grows and grows. And the longer you hold that thing, the bigger that spread becomes and the wealthier you get.
Tony Broullire:Yes, Super yeah, it's super important. So just again, if your cash flowing right now at 7% or whatever, the rate's going to be okay, you're probably going to be fine. Five years from now would be my guess. Yeah, exactly.
Corey Reyment:Awesome. Well, Tony, I want to wrap this up. I know you've got a lot of things going on. If somebody wanted to get some funding from you guys or talk about funding, what's the best way for them to go about getting in contact with you guys at Good Faith Funding?
Tony Broullire:Yeah, you can see, we try to make things pretty simple. If you go to my website it's goodfaithfundcom, and then you hit the start here button, I have two big buttons in the middle of the screen. One of them start here and one of them is borrow or portal. Hit start here button. There's a three minute and 18 second video that you can watch. It explains exactly what we do, the hard money process for us, and then, below that, you can just set up a zoom call with me. Awesome, I meet with every meet, with every single one of my borrowers, and we'll spend some time with you and talk to you about you know, hey, what are your goals, what are you looking at? And and then I have a bunch of resources and stuff too that I can send over to you afterwards. And, yeah, just go to the start of your button man.
Corey Reyment:Okay, I said I was going to be the end of it, but I have a question for you now. What are some things that you look for in a borrower? What are important things when you're going?
Tony Broullire:to evaluate whether or not your company is going to fund somebody? Yeah, that's a great question. So I'm looking at I mean, I've done loans for people who have never bought a house before, right, and I've done loans with people who've done, you know, 100 houses before. But when I'm looking, what I'm looking at is, hey, when you come to this meeting, you're really trying to get to know me a little bit, but I'm also trying to get to know you. This is like an interview, right, you're asking me to give you hundreds of thousands of dollars that I have gathered from family and friends and friends of friends for the last 10 years. This money is very, very important to me because this is retirement income and things from people that I care about, right. So I want you to be prepared. I have a couple of questions that I ask you to answer so you can set up the Zoom call. Right, I have a couple of questions. Have correct spelling on it. I have one guy who spelled his name wrong. I'm like, dude, it sounds like you have to be super professional with me. But be prepared. Do a little bit of research about what you're trying to accomplish with your business. That's number one. It's just, hey, be prepared. Do you know what you want with your business? What are you looking to accomplish? And we can talk about that a little bit more.
Tony Broullire:I don't require credit credit reports or anything like that for what I do. That being said, I do want multiple exit strategies. So one of the things that I require it's a little bit different than a lot of lenders out there, a lot of hard money, private money guys is I want you to be pre-approved for the end of financing, meaning for that long-term financing to be able to pay me off. I want that exit strategy set up. So, hey, get your credit scores where they need to be. I mean, and I can help. There's tools and things. There are people that have tools that can help with that stuff. But let's, let's make sure that you're you're ready to rock and roll credit wise too, cause it's important. Can't have, you can't have a, you can't have filed bankruptcy yesterday and then say, hey, I want to now start my real estate business. You know, that doesn't mean that you can't partner with somebody who has good you know, so there's ways around that, yeah.
Tony Broullire:Yeah, there's ways around that. I've had people that have had some credit issues and things, but they had the, they had the knowledge and the wherewithal to be able to do the real estate piece and they partnered with someone who has good credit. So we have that, a second action strategy. So there's ways around that. Those are things that we can talk about, but point is is that to, hey, be prepared. Yeah, do do listen to a podcast now and again, do some research, read rich dad, poor dad, whatever you need to do, which I should read someday.
Corey Reyment:I'd never read it, so it's still fascinating to me that you have never read that. I gotta read it someday I will I will.
Tony Broullire:I promise you, yeah, but be prepared for that meaning and and when you're, when you're answering those questions and things, I mean do it like this is an advocate, like it's important, it's not important to you. And if you can't, if your spelling's off, or if I ask, hey, why do you want to do real estate? You're like, because I want to make money. I mean, yeah, well, we all want to make money I get it right.
Corey Reyment:Why do you?
Tony Broullire:want to do real estate. Put some thought into this.
Corey Reyment:Sell you on it. It's just like you said, job interviews. I've had some borrowers before that with banks in particular. There's a banker they would reach out to, who we recommended as a solid option for commercial loans or whatever, and the banker didn't get back to them or whatever. And it's like they're like, ah well, forget this bank. And I'm like, well, yes, they should have responded to you, but also, they have the money and you need the money. So, like, just like a job interview, maybe they're testing you to see if you how bad do you want the money? Like you are the one that needs the funds, not the other way around 22 banks.
Tony Broullire:Corey, I talked to 22 banks. Do you think I had to badger a couple of them to get a meeting?
Corey Reyment:with them.
Tony Broullire:You're darn right, I did yeah, it's the deal that's what they say, right, yeah, don't be, don't be too squeaky that annoys me too, but whatever, well, you get back to people relatively quickly. So you shouldn't have that issue.
Corey Reyment:Yes, Thank you. I appreciate that You're pretty diligent about your responses. I try to.
Corey Reyment:I try to no, that's. I think that's a great point. I'm glad that you brought that up, tony, because that doesn't just go for meeting with you. That goes for meeting with any lender, anybody you're going to talk to about financing, whether that's friends and family it's probably more important, friends and family that you're prepared but also commercial lenders, all these things. Let me ask you one other thing about the end financing for you. Does DSCR qualify for your requirement on the end financing? Yeah, absolutely.
Tony Broullire:You can get a.
Corey Reyment:DSCR loan on it. You don't have to get the traditional 30-year fixed box rate, dscr.
Tony Broullire:Yeah, yeah, absolutely. And again, you run in your numbers based on those DSCR numbers to make sure that, because DSCR typically is a little bit higher interest rates, you're going to run your numbers based off that. If you can get a little bit better financing or whatever, that's great. Based off that, if you can get a little bit better financing or whatever, that's great. But you don't put your buffers in there a little bit too when you're running your numbers. So rather be pleasantly surprised than a freaking out because I I was pie in the eye and I wanted to deal. So bad I made the numbers work. The numbers either work or they don't. It's numbers. Don't get emotional. Don't don't fudge your numbers. Don't fudge your numbers. Don't get emotional.
Corey Reyment:Don't fall in love with any houses, it's just a house. Okay, yeah, fall in love with your numbers and stick to them. We could we could probably keep this thing going for another 20 minutes on the topic alone. We'll save that. We'll probably have you back on, I'm sure, at some other point in the future here, tony. So thanks for being on the podcast, guys, thanks for listening. If you like it, subscribe, share with your buddies. The more people we get to listen to this, the more guests we can get on here and the more value we can bring to you guys. So if you guys are looking for off-market deals, head to wisconsindiscountpropertiescom, sign up for the buyer's list. If you're looking for funding, head out to Tony's website, goodfaithfundcom, and click the start here button. So with that, tony, thanks for being on man.
Tony Broullire:Hey, thanks, Kurt, Great seeing you man.
Corey Reyment:All right, I'll see you guys on the next episode. Hey, this has been another episode of the Wisconsin Investor. Thanks for tuning in. If you got some value out of the show, please go like, rate, subscribe, share, do all that fun stuff. And if you're new to investing in Wisconsin and you want to have a conversation with somebody from our team, we would love to have that conversation with you. To do that, just go to our website wisconsindiscountpropertiescom, hit the contact us form, put a little bit of your info in there and somebody from our team will reach out and have a conversation, hopefully help you start moving forward in your investing journey here in Wisconsin. Thanks for tuning in. We'll see you on the
