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
Unlocking Wisconsin's Real Estate Market: Networking, Trends, and Opportunities with Jaris from Good Faith Funding
Get ready to unlock the secrets of Wisconsin's real estate market with the remarkable Jaris from Good Faith Funding. Known for his extraordinary networking prowess, Jaris's journey from transportation to a powerhouse in real estate investment and hard money lending is nothing short of inspiring. Join us as he shares insights on creating value and building relationships that thrive in the dynamic Wisconsin landscape. Whether you're a seasoned investor or new to the game, Jairus's unique perspective on market trends and property value creation will provide you with the tools to succeed.
Discover the hotspots of Wisconsin's burgeoning real estate scene, where areas like Manitowoc County and St. Croix are experiencing impressive growth. We'll explore the strategic advantages of these regions, including their appeal to remote workers and the resurgence of local economies. Plus, we'll delve into the opportunities presented by smaller markets like Watertown, where affordability meets high demand. Understanding these trends is key to making informed investment decisions, and we offer the insights you need to navigate this diverse landscape.
Networking and strategic relationships are crucial in real estate, and we highlight how expanding your "buy box" and engaging in local meetups can open doors to new opportunities. With a focus on creative financing and responsible investment practices, we'll guide you on ensuring win-win deals for everyone involved. From the importance of multiple long-term financing options to the dynamics of wholesaler relationships, this episode is packed with valuable advice for both in-state and out-of-state investors looking to thrive in Wisconsin's real estate market. Tune in and take the first step towards elevating your real estate game.
To contact Jaris email him at jaris@goodfaithfund.com or go to www.goodfaithfund.com.
what's up y'all? I am super duper excited today because I have my good buddy over here. Mr jairus likes to get frisky brisky. What's up, jairus?
Speaker 2:I do not like to get frisky, but how you doing, man? Thank you for the intro, I love it.
Speaker 1:I thought I'd throw you a quick curveball there right out of the gates and just see how you responded. Get this audience hooked right out, right right away, get them listening. But oh, I'm excited no, I really am excited to have you here. Man, this is a. This is going to be a fun episode. Your business partner for those of you guys that haven't listened to this, he has a business partner, tony Breyer. He was on an episode with me not that long ago talking more about how to find money and where to get money and that sort of stuff. It's one of our most downloaded episodes, but I think today, jairus is going to outdo his partner. I think this is going to be one of the best ones that we've had so far, so I'm looking forward to it.
Speaker 1:Man Jairus, tell us a little bit about you and your background. You're, with Good Faith, funding One of the things that I really admire about you, jairus, and, I think, the audience. For those of you guys that are interested in getting into real estate, investing in Wisconsin, or are already investing in Wisconsin and have not talked to Jairus, one of the reasons, main things I think you need to talk to him about is he is one of the best connectors of people that I have ever met before. It's like a super talent that he has, so he knows and he networks with people all over the state. But talk about how you got to this point, jared. How did you go from? What were you doing before and how did you get into hard money, lending and real estate?
Speaker 2:Well, thank you, corey, extremely excited to be here. I love the content and love the whole premise and, frankly, love Wisconsin real estate, as I the quick background. I'll try and be brief. The last 10 years I've been involved in real estate but prior to that, in an earlier chapter, had nothing to do with real estate. Didn't come from a family who did real estate, but really spent the first chapter of my career in different industry transportation, logistics but got a chance to see a lot how business is run, the entrepreneurial side, the sales side, the pursuit of the deal, the money side and how people interact with each other to try and get things done, and so that was super exciting and eventually retired from that. But had a few bucks in my pocket and got a chance to know my business partner, tony lent him the money that he lent out and over the last 10 years that relationship has blossomed.
Speaker 2:I've gotten less into my prior career retired from that and more into real estate over the last 10 years and that has really been exciting for me to not only be part of a new industry to me but a very established industry and just try and study and learn it and see where value can be created, because to me, but a very established industry and just try and study and learn it and see where value can be created, because to me, that's the name of the game about creating value, whether it's the property, the relationship, the dollar, if you will. So that's what I do and that's what really motivates me, and being around smart people, that's been the part that's been extremely exciting for me, that's why you're always calling me and wanting to hang out.
Speaker 1:That's exactly it.
Speaker 2:Thank you for allowing me, and I'm begging you, to spend this quality time with you.
Speaker 1:I appreciate that and I think what you said, what motivates you, is providing value. I think that's probably where correct me if I'm wrong but that's where a lot of your networking comes in. You're just connecting people all the time with no expectation of anything in return, which is one of the reasons I think at the end here we'll put your contact info in the show notes and people can figure out how to reach you here at the end. But I think anybody out here who doesn't take me up on it even if they're like I don't ever want to use hard money, I think or just to get to know you personally and try to get into your web of connections is so valuable. So that gives a little insight hopefully the audience of where that networking comes in.
Speaker 1:One of the other things, jairus, one of the things that I wanted to have you on here to discuss and we'll probably try to have you as a regular guest here if you're up for that's just you have a real pulse on Wisconsin as far as the market goes, with you guys lending money. Maybe you can talk about why that's important, that you know what's going on in all the different markets in Wisconsin and maybe talk about some of the trends that you've been seeing recently. This isn't going to age well, so if you're listening to this a year after we've recorded this, this is probably going to be irrelevant when we get to that part. But if you're listening to this while it's freshly dropped, this should hopefully be still relevant for you. So maybe if you could talk just about some of the different markets and what you're seeing happening in some of those different areas throughout the state, yeah, very happy to.
Speaker 2:I'm a person who really likes to understand the source of information, the data, the trends, not only quantitatively but more observationally, with all of the investors and people around it. So I just try and listen and study as much as I can. Part of it is because I've only been at the last 10 years, so I'm just trying to catch up in some cases, but again, great and add value. But in terms of what I'm seeing, I've only been at the last 10 years, so I'm just trying to catch up in some cases, but again, great and add value. But in terms of you know what I'm seeing, I really kind of look at the market in from two vantage points. The first one is for the real estate investor. You know I look at it from their vantage point and then I look at it kind of the whole total market. And let's start with the total market. What I mean by that is it's really all of the real estate activity as recorded at the state or county register of deeds level, so all of the real estate transactions, whether they're on market, mls or off market. So I look at this kind of total market. This data is freely available If anyone ever wants to reach out. I will show you exactly how I get it, how I analyze it. You may be bored in five minutes. I'll just keep publishing and you can check it out by summary. But the point is I look at the total market and I look at those real estate transactions, but then I try and also look at it from the other lens of what does it mean to the investor? So on the total market side, the data is out there for the last seven or eight years and you can dissect it a bunch of ways. But I really look at the residential real estate market and I try and focus on the one to four unit segment as I think that's the most applicable for not only our business but the people I interact with. And as I look at it and please don't bear with me, I'm gonna look down at some of my notes because I spend time with numbers every day, so I can't keep it all straight. No judgment there. So when I look at the state of Wisconsin, that's really where I'm focused.
Speaker 2:By the way, there's a couple of key things. The first is I look at where is the actual the concentrations of volume. Southeast Wisconsin is the largest market in the state population-wise as well as real estate transactions. About one out of every three transactions in the whole state occur in Southeast Wisconsin. Kind of think of that Ozaukee County, you know, kind of Port Washington, all the way down to the state line and west out to Lake Country, as they call it, and so in that area the real estate transactions year over year are really flat, which I thought was kind of interesting.
Speaker 2:Yeah, but there are a couple pockets we're seeing in Osaka County have some growing strength year over year in real estate transactions. And again, that's total market on market, meaning MLS activity, as well as off market, any private transfers, wholesale activity if you will. In the south central part of the state that's about one in five transactions statewide. Think of that as kind of Madison and the surrounding counties. That is also flat, but Dane County, second largest populated county in the state, as actually the strongest volume year over year increase, so a lot of people are flocking, at least from a transaction perspective, to that area in terms of real estate transactions.
Speaker 1:So Dane and Rock County I would not have thought that. I would have thought maybe the opposite. I would have thought maybe the trend would be going more spread out away from Madison, you know, to get away from some of those higher prices. But very interesting, Excellent point out away from the Madison, you know, to get away from some of those higher prices.
Speaker 2:But very interesting, excellent point. Because in general when I look kind of back at the whole state when you see increases in volume outside of the metropolitan areas, so those adjacent counties around Milwaukee are seeing growth but not Milwaukee County, but it's kind of the inverse in Dane County a lot of growth but the adjacent counties not so much. So you're right, that is a little counterintuitive. In terms of the next largest market, northeast Wisconsin, one out of every 10 transactions statewide happen in Northeast Wisconsin. Think of kind of Green Bay down through the Fox Valley and there that actually has been the strongest market in the state in terms of a collection of counties, plus 6% year over year. So a lot of growth there, a lot of it is really an out-of-gaming county. Think of Appleton, for those that aren't familiar. That specific area has been quite strong and the surrounding areas within that county.
Speaker 1:Now what you're saying when you're saying 6%, jairus? Let me just clarify this Is that 6% increase in transaction volume or price? Great?
Speaker 2:question Transaction count. Okay, unit counts that are transacted, you know, transferred from one seller to a different or one entity to a different entity, okay, so great question, they do publish the actual dollar changes, and so that's another cut of the data we could do. I'm really focused at this moment on transaction count. Cool Cool. Maybe just a couple other newsworthy things and then we can move on. But as we look at the rest of the state, there's a couple areas that actually have some strong growth.
Speaker 2:For those that aren't familiar, kind of the Wood County think of Wisconsin Rapids, nacoosa that area is growing substantially year over year 8% the Sheboygan, fond du Lac counties, and kind of the Manitowoc County, those areas are always very strong and have been very strong In fact.
Speaker 2:Manitowoc County is one of the strongest counties in the state, up 20% year over year, which is wonderful and interesting from a lot of perspectives. Manitowoc County is kind of in between two major markets, northeast Wisconsin and southeast Wisconsin, so it's very reachable and I hear a lot of people chat about Manitowoc County. One other one that's lesser known county but still very popular for those that are in the far western part of the state of St Croix County, that's right across the river from Minneapolis. That's seen some tremendous growth as well, likely due to people maybe moving from one state to another or further out into the suburbs can commute etc. And then La Crosse County is always kind of a hidden gem in my opinion in terms of growth and strength. So some pockets around the state growing, some others are more flat. Part of that could be where the population is moving. I did recently kind of share a little bit of what's been the population change over time Dane County number one in population growth. So that does kind of correlate to the real estate activity as well.
Speaker 1:Okay, what do you attribute? I mean, I don't know if you have any data on this or just maybe anecdotal information. Jairus, on the Manitowoc County 20% increase. I mean that's pretty drastic. Was it just a flat year prior and this year would be a normal year? Or is there something happening in Manitowoc County that you're hearing or that you know of that's?
Speaker 2:causing that increase? Purely anecdotal and kind of just more observation with what I'm seeing from not the investors, that they're solely driving the market, but there has been, of all the counties, at least of the people that I talk to, there's been the most chatter about Manitowoc and Sheboygan counties in terms of areas they want to go to In terms of, you know, maybe that's not where they live but they want to. It's a reachable county from, again, northeast Wisconsin or southeast Wisconsin. I think that, as well as you know, there's been some resurgence in that area in terms of some manufacturing and commerce and with the ability to people to, you know, work from home. You know that's a reachable area from a drive about an hour from each of those two major markets, so that could be part of it as well. So, yeah, I think there's just some things going on there that you know getting people excited, you know, at least on the real estate side.
Speaker 1:So when I know, a few years ago, like when we first started in the in the wholesaling and investing off-market business, we started marketing to Two Rivers and Manitowoc and it was like, I mean, people were calling us and they were like, oh yeah, you can come buy the house for 20,000. I'm like what? This is amazing. And I drive out there and I'd look at the house and then I'd look at the comps and I'm like, oh, I got to stick 40 into it. It's only worth 45,000. This doesn't make sense.
Speaker 1:And then it seemed like something happened there in that area where values like maybe this has been a consistent trend, where maybe they started investing back in the community a little bit more and gentrifying it or whatever the case was. But values now are still affordable, comparatively speaking to some of the other markets. You're going to compare it to Madison Anything's affordable, but when we look, even like Green Bay, to Two Rivers or whatever, the prices are more affordable. So maybe that's part of it too is some of these smaller markets. Maybe you can just talk about what you're seeing with that, some of the smaller markets of the mid to bigger markets in Wisconsin. What's happening there? Is that a trend you're seeing investors looking at more now. Is that not necessarily the trend? Are people still trying to focus on the bigger Green Bay, appleton, milwaukee, madison, eau Claire, that type of stuff? What are you seeing on the folks you're investing with or that you're lending to?
Speaker 2:Yeah, great question. I think the mature investor has seen a lot of value in those smaller markets, smaller cities, because let's stay with your Manitowoc example as maybe the after repair value or the future values of those properties, once they fix up, have kind of increased over time, they still can see a lot of value in purchasing properties in those lesser populated, maybe lower demand areas. And so I see the investors thinking about you know whether it's Manitowoc, frankly, wisconsin Rapids, some of the cities and counties that are in between Madison and Milwaukee, you know, from basically 94 south down to the border, people thinking about some of those towns and cities that they're getting excited about. Quick example last week we were at a meetup and there was an investor there who said that she wants to buy everything she can in Watertown, wisconsin. Now, not everyone even knows where that's at, but it is a smaller town in Jefferson County. But she said the demand there for housing is so strong that she's just looking for any rental she can find.
Speaker 2:Wow, you know rehab and and so the smarter investor, I think the mature investor, the one that's willing to kind of think outside of the immediate interstate system, is really gravitating towards where they can find those values and get that property for somewhere in the $40,000 to $60,000 range, maybe Maybe $80,000 to $90,000. But either way, they fix it up and they can still pencil it out as a long term rental or or a flip. Some of those investors are also willing to travel even further distances. Was that a meetup this morning? And one of them talked about really looking at places that are in the 100 mile radius from their home. And you know, surely they need to have their contractors and their relationships set up in those destination markets, but they're really branching out and really trying to target certain areas with their marketing and their connections.
Speaker 2:So there is more of that. But at the same time, some investors, whether mature, smart or newer, still look sometimes inside the proverbial metropolitan area because they still see value in certain neighborhoods, specifically in the larger cities. There are certain neighborhoods that they just know extremely well and they'll focus on those neighborhoods that don't even like. For those of us that don't live there, sometimes we don't even know what those neighborhoods are called, but they know what locally they're called and they focus just on that, get excited about it. But there's a lot more people broadening out and looking elsewhere.
Speaker 1:Yeah, and you know, you and I were talking prior to hitting the record button here and I think one of the topics we discussed was, you know, people's buy boxes a little bit. Can you talk a little bit about like what you're seeing with regard to the people who are starting to expand and why they're doing some of that expansion compared to the folks who are maybe got the smaller buy box, so to speak, of like being really tight on what they're trying to buy right now in the current market conditions?
Speaker 2:Yeah, great question.
Speaker 2:So those that that maybe are lesser known in the state, so they expand their buy box and I think that's I'm glad you bring it up, because I think that's a pretty important thing, not only to define your buy box but to be somewhat creative and maybe think differently about which part of the geography in your buy box could still satisfy your goals and what you can accomplish.
Speaker 2:So a lot of people have been, you know, re-evaluating their buy box as they hear from more people and they hear about different areas. You know, as an example, I brought up the Watertown thing to some other people, and not that they're interested in Watertown, but it started to get them to think about you know, that county that they're in. They're like, oh, I know Jefferson County and I know this municipality or certain other counties along, you know, maybe the southern border that less people focus on, and so people are changing their buy box which I think is important and reevaluating it. But you know I always try and end it with but stay true to your buy box, because as soon as you get outside of it you start to maybe, you know, know less about it, don't have the contractor set up, and so there's some cautions there as well.
Speaker 1:And I think it depends on the person's goal. You mentioned that too, jairus. It's like if your goal is to do, you know, a deal a year for the next 10 years and that satisfies your appetite and your goal, then you probably don't need to get too expansive with your buy box per se. You can be very diligent, but if you have some big aspirations of, hey, I want to have a hundred units or whatever your goal is right, a thousand units, 10,000 units or whatever the case is, at some point you're probably going to have to open the box up a little bit and get a little bit more accepting of certain things. I know one of the things when I talk to people about hey, when I got started, this was my buy box Cause I hear this a lot of times. It's like I want a side-by-side twoplex in Appleton or Madison or whatever and I want it 80% ARV, no rehab, just want a 20% discount right off the top. I'm like, cool, you're never buying a deal, awesome. Well, let me know when you change your buy box and you're frustrated because you can't get it. Okay, somebody probably got lucky and they're going to write me after this and say I did that.
Speaker 1:But for the majority of people. If that is the case, you're going to have a ton of competition. Most likely, right, or a friend or family you got lucky and they decided to give you a gift, right. But when I started, I had a pretty big goals and my goal was give me a property that I can rent out and I can burr the deal so I can get the majority hopefully all of my money back out. And if it nets me a dollar a year, I'm cool, right. So I didn't care if it was upper, lower duplex single family house, side-by-side duplex apartment, like whatever it was, as long as it fit that. So it was pretty broad. Now I had geographical preferences of, like I wanted to be somewhere in the Valley or whatever the case was.
Speaker 1:But I think that's important for those of you listening that are starting out. If you have big goals, it may be something to look at your buy box right now, as we're going into this new year, and say, hey, have I been struggling to get deals Deal flow? I hear a lot of times I can't find deals. That's like, well, maybe there's deals all around. People are buying deals every single day. Maybe it's you, that in your your box that needs to change. Any thoughts on that. You can. You can argue with that. You can give me some other points here, so you can just tell me how smart I am.
Speaker 2:You know you are very smart. No, you're spot on, because ultimately, I think people need to evaluate that and stay true to it and, at the same time, the only thing I would add is that be sure everyone that you, every path of person that you cross, you, let them know what that buy box is, whether it's in person, publicly, online. Come to as many of the real estate meetups and or sessions that are out there and let people know. I mean, I just cited this person who I met just a couple of times and when she was very specific I just filed it away. That person's interested in Watertown. But either way, you let people know and you never know what can come up. And, of course, letting people know is only half of it. Then you've got to still find it. You still have to chase the opportunity and see how you can cultivate those opportunities. Can't just wait back for something to show up in your inbox and say, oh, here it is, here's the property of your dreams and you got to go find it. You got to find it.
Speaker 1:Yeah, and again, once in a while you might get lucky. Blind squirrel finds a nut every once in a while, right, but those of you that have big goals, you're of passive if you're holding, but you know, if you're in acquisition mode it's. It's a lot of work and you can do it part-time if you don't have to do it full-time. But, uh, just important to know that you gotta be always trying to find deals. I tell everybody and you'll hear this on this podcast, if you listen to more than one episode, your most important and highest income producing activities are finding deals and finding money. If you focus on those two things, you're going to be pretty successful.
Speaker 1:So, finding money now talk about that. So I want to talk about all these connections. Like, you guys are a hard money provider and we have another episode where we go all into what is a hard money provider. So if you guys haven't heard the episode with Tony, go back and listen to that. Tony Breuer it looks like Breulier, it's very Italian or French or whatever it is. But talk about how are people connecting out in the marketplace, how are wholesalers and buyers and sellers and lenders? How are you seeing these connections happening?
Speaker 2:Yeah, well, there's multiple methods and and each of them have their merits and sometimes there's some challenges with them. One of the platforms that gets a lot of use these days is Facebook and the Facebook groups. Now there's a bunch of groups around the state. You know, hit Corey or I up if you want to kind of know what's in your market and maybe some. But there's a bunch of groups that are like geographically focused, like like off market deals in Milwaukee or in different markets around the state. There's also groups that have set up Facebook pages. You know that have various real estate. You know connections or meetups that are out there. So Facebook seems to be a very strong platform for connecting with investors, sometimes also good for finding deals. But you have to be, you have to scrutinize very quickly where that deal came from and who is the person posting it and make sure that it's something that you want to pursue and is there enough information there. So connecting people not only through social media is one way. The in-person educational or just networking real estate focused events. I'm a big advocate. You get a chance to meet people I was at one this morning, one last week and you get a chance to really not only see investors but also those that are connected around real estate, and we have people that show up to these, that are, you know, in various adjacent things that you could need, and so you get a chance to meet a lot of people. And oh, by the way, at those meetings you get a chance to share what your buy box is and make sure that people know who you are and what you're looking for. You get a chance to introduce yourself. So those are some methods, but what we try and do and I try and do is try and connect those people. You know People will, and I'm not the only one doing this but if someone is posting something that they've got a property they're looking to sell or disposition in Nealsville, wisconsin not everyone knows where Nealsville is, but I just happen to remember a couple of people that are interested in that market and I'll tag them and try and at least highlight for them what's out there. A lot of time that's on Facebook, or I'll forward an email to them, et cetera, and so you're just trying to connect people that way.
Speaker 2:And again, as you alluded to earlier, do that and we do that, you know, just because we want to. We're not expecting anything out of it, because I just think it's the right thing to do. So that's people trying to connect the buyer and the seller. You know, if a seller's got something, they'll post something, you know, connect it with some buyers and vice versa. So you just try and do that as much as possible, because not everyone can see everything, and I'm not saying I see everything, but in the world we all live in we have so much information it's hard to consume it all. So I just try and highlight what you know may be of interest to someone.
Speaker 2:And the irony is is that a lot of times those people you know get into that deal. And you know, sometimes I hear they're already aware of the deal, which is great. Sometimes this last week I heard, well, they're the ones that sold it to that person and that person's trying to sell it. I'm like, so we get to see it full circle, which is great, you know. And so you just get to see a lot of the activity.
Speaker 2:But through that to see a lot of the activity, but through that you get to kind of see who are the major players, at least the people that are frequently putting deals out or buying deals, and you can kind of start to get the landscape in certain markets.
Speaker 2:So I'm trying to add value that way, whether it's through social media, email, or sometimes I'll just pick up the phone and call someone and say, hey, did you see this? Or are you aware of this new source of deals that are out there? You know investor lift. People are starting to put things out on investor lift, yeah, which I think is kind of interesting and could be another source, you know, for people. But you know, at the end of the day, you have to, of course, look at the source of the information. You know who's introducing you and and make your own informed decision, because there's really not a barrier to entry to, to trying to post or or sell a deal or buy a deal. You know in the marketplace, and so you'd really just have to understand who's involved in the transaction and and just make your best educated decision.
Speaker 1:Yeah, for sure, for sure. Well, and again, I think that's what makes you and Tony so successful too is all of the just connecting you guys do and I've. I used to be in a networking group with Tony and the whole purpose of that group was to just connect each other in the group to other people they needed and it was great Like we got a lot. I got a lot of value out of it. I love giving value to people by connecting them and it just created a nice little ecosystem and I think that's a the people who we do business with. We know like in trust.
Speaker 1:We want to bring you into that network of people so that you can feel confident doing business with some of these folks, especially if you're brand new A lot of times. I don't know that a lot of other markets Jairus and maybe you could talk about this just from experience with people outside of here, if you have any outside of Wisconsin but I don't know of a lot of markets where people are so willing to welcome people into the ecosystem, so to speak, and give them the keys to the kingdom if they want to take action. What is your experience with that outside of Wisconsin? Do you have any relationships outside of Wisconsin where you've had conversations about how they connect people or if they're more tight to the chest, not showing their cards and not yeah, fair question.
Speaker 2:A little bit of experience in some other states. And the experience really is it is more close to the chest. They feel every person they come across they don't want to talk about it because they could be a competitor, you know, and are they going to lose out on the deal. And they all have kind of different channels that they want to get information and or deal flow and they think that that's kind of proprietary but it's really more public information.
Speaker 2:I do find it very welcoming what we see up here in Wisconsin, but I will tell you there's a couple of people I know that do business here and in other states, in particular Texas and Colorado, and there is some similarities in certain markets.
Speaker 2:But Wisconsin is a you know it's not the first state everyone thinks of in terms of commerce or population or real estate or whatever. So we get a little bit less pressure here, whereas other states a little bit more popular. In some cases, you know they get a lot of outside the state pressure and it starts to create this, you know, competition or competition like environment, and that sometimes doesn't bode well for people who just want to share their knowledge freely, like all of the Facebook groups that we have and the real estate meetups that we have that are actively attended and or participating in Wisconsin. I don't see a lot of that in other states. You see some pockets, but it's often very microcosm focused and often motivated by someone who's got something to sell you, and less about just bring people together and be more abundant with your knowledge.
Speaker 1:Yeah, I think that's unique around here. We used to go to some RIAs and I'm not knocking RIAs, I think they're great and that's how we got started in real estate investing. But it's like going to a CrossFit gym Each one's different, it depends who's running it. Right. Some of them they're up there and it's like three hours long and it's people just selling you stuff for a good hour and a half and it's like can we network? Can we just learn something? Like good Lord, you know our attention spans are tick tock now, you know it's 30 seconds, you know this podcast is going to listen to the whole thing.
Speaker 1:They're not even going to hear this part because it's too long, right?
Speaker 2:No, I'm just kidding and no one wants to be lectured to or told you know. But I'll tell you at some of these networking events just pure networking. It's just pure networking. It is not uncommon Like the one we're at this morning. At 90 minutes people were still there talking and chatting and it was only a group of maybe 15 people, but they were cycling around and getting enough value out of it. Where we actually had to move, because they needed the space, the people that were letting us use the space of the coffee shop. So there's people that find value through the network. I think that's where the power is and frankly, I'm a big fan of those that have a big networking component, because I think that's where the value is created.
Speaker 2:There's a lot of educational things great to go to those sessions, but those where you can network. I think that's where the real value is, because you get to look someone in the eye and really see how well they're willing to share the knowledge with you. And everyone, even if you're new in a real estate, has something, I think, to share that others can gain from.
Speaker 1:I agree. One of the groups that we run, as you know, is the REI Success Club in Green Bay, and that's our focus is we do a little education and then we love to just open it up for networking and get to know, people and set up meetings outside and it's it's more of like we want to try to create that club kind of environment of you're in the club, people get to know you.
Speaker 1:If you show up more than once, you know you keep coming back pretty soon. Like there's a gentleman in there very quiet, when he first came in like hardly said two words, but he shows up every month and he's there and he's getting outside of his comfort zone and he's learning and he's growing and the dude just bought his first deal. I mean it's amazing. I love seeing that stuff happen and it's so exciting. And what did he do? He used the networking and the people that he met in the group to get himself to the point where he felt comfortable starting to make offers and then finally getting one and following through on closing the transaction. So that's a lot of the power of these networking groups. I agree 100% for sure. What else are you seeing in the market or just in your conversations? Cause how many real quick. If you don't mind me asking how many deals with you guys lend on this year, like how many?
Speaker 2:how many it'll be in the, uh, probably four or 500 range, yeah, by the end of this year, and and and so that's, you know, in in the proverbial, you know sales funnel that's meeting, you know over a thousand people and how many actually end up being a borrower and how many are repeats and new, new borrowers, and so that gives us. So we're blessed in a lot of ways to just have those relationships, you know, over time and, frankly, get a lot of great people coming to us. Just a quick call back to that and and getting on the road, I mean someone said to me yesterday I was meeting with him like they asked me in a somewhat surprising way, like you drive to milwaukee to go spend two hours and talk to me, like, yeah, every month and every time I leave I'm like that was the greatest two hours that I spent this week in terms of the return on investment of that time, and so there's a lot that goes into it. But you know we're blessed to do it. But in terms of other things, I think the let's just talk a little bit about deal flow Sure, I think the wholesaler community you know WDP being frankly the strongest as far as I'm concerned and I say that, corey, even if you weren't on here. So absolutely.
Speaker 2:But the wholesaler side there seems to be, the quantity of wholesalers seems to be expanding, whether you're in-state and you're marketing properties in-state or out-of-state wholesalers doing various to be, you know, expanding. That's why you just got to be very careful and scrutinize where the deal's coming from. Do they control the deal, you know, etc. So, but the opportunity for off-market deals through the Wholesaler Channel seems to continue to be strong. You can find a lot of those by not only contacting them. Reach out to me, I'll be happy to kind of connect you with who you may be interested in chatting with. But also a lot of good things get posted on Facebook and that's where, again, you got to scrutinize it a little bit. But you can kind of watch the traffic and see who's posting what and just kind of see who may have deals in the markets you're interested in.
Speaker 2:But I think the key thing there is try and find a way to have a personal conversation with that wholesaler somewhere on their team to understand how they work, how they can you as the buyer can portray your buy box to them, obviously, but also portray to them that you're a legit and active and serious buyer, because there's more buyers than there are often are sellers. That's the imbalance, in a good way, of supply and demand here in our state and so how can you as a buyer portray yourself as a desirable buyer to that seller or wholesaler? So the wholesale activity I think it remains quite strong but it is getting. You know there's a lot of players and but there are, I think, a shorter list of those that have a good amount of deal flow, good deals you know, got the process organized and share that out there. Not every deal is posted online. Some just go to private lists. So how do you let that wholesaler know that you are, you know, a buyer in a certain area and hopefully can get a deal you know funneled to you off of their list? So deal flow on the off-market wholesale side remains very strong.
Speaker 2:I mentioned earlier a little bit of investor list. Seems to be a tool that doesn't have a lot but some Obviously just general Facebook posts that you can watch for out there Just talking with other real estate investors, I hear weekly many times where an investor will say I've got this deal in City A, but that they got through whatever means they got it and, for whatever reason, it doesn't fit their buy box or it's just not the right timing, but you let them know that hey, if you ever got a deal that doesn't work for you, maybe it'll work for me, and that people are picking up things from that perspective as well. Heard this morning someone that you know they've got various ways to get deal flow just by talking to people through property managers, title companies, real estate agents believe it or not, you know, you know have some off market things that they're aware of that maybe you can you know, you know get some leads from them. So just a lot of lines in the water, I think, is what it comes down to.
Speaker 1:Yeah, and I think what's what's interesting you've kind of mentioned it now a few different times, jairus, in different contexts, but one of the things you mentioned was telling people what you do and what your buy box is, and I think that's so important. My first wholesale deal I ever did 2017, I got it under contract in 2016. And I was doing some of my own marketing off market and I was at a networking event, a RIA group, and I met a lady there and she told me she likes weird properties, she likes to use her creative brain and, if there's a way to kind of get creative with it and make it work, she likes that, like redoing things. So I come across a one bedroom, one bath house. You know I wanted rentals. I'm like I don't really want to rent this thing. You know no-transcript, I don't want to do it, but I bet somebody could and I called her up.
Speaker 1:She brought her contractor through. Sure enough, I got paid 5,000 bucks for the contract and did my first wholesale deal. But it came from networking. It came from listening to what somebody's, what is somebody interested in buying and then, oh, I have that thing. That's all we're doing as wholesalers is connecting right.
Speaker 2:Absolutely, absolutely.
Speaker 1:We're connecting a buyer and a seller, and there we go and that's, I love it.
Speaker 2:I love it. I just wanted to.
Speaker 1:I wanted to hit hammer home on that point of like tell people what you're interested in and then, if you are a wholesaler or an aspiring wholesaler, listen to what these people are telling you, take notes, do whatever you have to do Jairus, you've mentioned a couple of times you file it away in the file box and then, all of a sudden that's how my brain works too Somebody mentions it I'm like, ooh, I got somebody for that, plug them in. So that's an important point that I wanted to bring up today.
Speaker 2:Maybe one more trend, corey, if I can. Um, maybe one more trend, cory, if I can please. Um, you know there's a lot of chatter about um, how to finance the deal out there, and uh, you know, and, and, corey, you know a lot more about this than I, but a lot of talk about different ways. You know, seller finance, sub two, sub two, um, trying to get creative with, you know, using maybe multiple uh portions of private money, um, I think the so a lot of chatter about that and you know probably, you know is maybe for good reason in general, as they see kind of higher long-term interest rates and they want to get more creative. And also it just people get educated on different ways to do deals.
Speaker 2:I think the part that I hear those that have really gone through that is you really want to make sure you know exactly what you're doing.
Speaker 2:Talk to someone who's smart about it a good title company, maybe someone like yourself, corey, who can really guide you through some of those key aspects, because there could be a good deal there.
Speaker 2:You know seller finance is a pretty common topic, but you know you got to have a seller as well to do it. There's a bunch of caveats there. So how to finance the deal and get creative is something that I think is growing in attention, and the beauty is is there's people like yourself myself, my business partner Tony, and others who are just willing to hear your puzzle and give you some ideas, no matter what it means for us. It doesn't matter what it means for us, but you know, really take heed, is my recommendation to the investor who's thinking about those things. Take heed from those that have walked in your shoes before, because those are not easy transactions. They're complicated, you've got to make sure you navigate it right, paperwork's got to be right, et cetera. And oh, by the way, you've got to have two interested parties that are willing to do this creative deal, which sometimes becomes challenging. But that is a growing trend, people getting excited about that, and I think that's great, but you have to just step very cautiously, you know, through that.
Speaker 1:Yeah for sure we, when we started, we were really interested in everything real estate. I was like, give me all of the knowledge, right and everything. And what I found is trying to get creative with deals really slowed me down when I was starting out of just continuing to find deals. So I was being a deal maker, not a deal finder. That makes sense as we've gotten more deal flow and we've got more season and then we started to slowly add the educational piece of the seller finance piece to it and now it's like, okay, cool, what do I want to do with this deal? Does it make sense as a wholesale? Does it make sense as a flip, as a rental seller finance? How can we make the deal? Work is a little less time consuming now because we've had the repetition, the knowledge, the education.
Speaker 1:There's an episode, if you folks go back I don't know if it's episode five or six or something here but we had attorney Sean St Clair on who spoke at the RAS Success Club one night. He is, as far as I know, the premier guy to go to for seller finance and we're lucky enough that he's licensed in Wisconsin, so he does a lot of stuff down in Phoenix where seller finance has been super popular forever If anybody knows pace more but he's like the celebrity of seller finance that's. He has not confirmed this to me yet, but I've heard through sources that that's who does all his paperwork. So you're going to want to make sure you work with a good attorney on some of this stuff. We've had a couple of deals now where we've run it by Sean and he's done the due diligence piece for us and looked into it, and it's not a good situation for us to do seller finance where either we would be at risk or we would be putting the seller at risk, which I think is important.
Speaker 1:To be a responsible investor and make sure you're not just, oh this deal works for me, so I'm going to do it when you could really be jeopardizing your seller's future because of your own greed. So just be working with professionals, especially if you're getting started. I think that's great, jairus, to put out there that seller finance is a great opportunity to get more deal flow and make some deals work. That can't work just as a cash deal or with hard money or something else, but work with somebody who knows what they're doing. On the attorney side, I would recommend Sean Again. His all contact info is back in one of the other episodes, so go back and listen to that. But I think that's a great point. Man, I appreciate you bringing that up.
Speaker 2:Yeah, great shuttle for Sean. He does a podcast too, I think has a great following, so that's awesome. I think the other trend worth noting here is, no matter what your strategy is as the investor to flip it or hold it, someone's going to hold that property long-term, whether it's you as the investor or whoever you're going to sell it to, and so obviously the property has to be prepared in a way, rehabbed in a way. It's got to have the right numbers so that a bank if that's your strategy, you know is going to do long term financing on this, and so I think you've had someone on kind of on the long term financing side. So I don't want to get too deep into that.
Speaker 2:But I think the key learning for me is is that and it's hopefully pretty obvious to everyone is that you've got to have a lot of long-term financing relationships in order to make sure and I know your team does a great job in this quarter of really kind of educating the buyers to make sure you've got enough people out there that can help you with the long-term financing and a good cross-section. You know, maybe a broker, a brick and mortar, you know traditional bank as well as a credit union and then some others within each of those categories to really help you ensure that you can understand how you can get the deal done, what does it need to look like, and make sure that you can get you know long-term financing. And oh, by the way, you know, is this in good appraise, hopefully, for what you're expecting, so that the ratios work. That's been um, I don't want to say an overlooked item, but not. There's not as much attention put on that sometimes by the investor 100%.
Speaker 1:You nailed it, jerry. You've heard me talk at some of the educational things I do, and you've got to have different silos and buckets of money, because a hard money lender is great for what a hard money lender is great for? You guys are great at what you do, but you are not great at financing that. For 30 years you would not want to work with you guys. For 30 years we don't even do it. Yeah, it'd be impossible. You'd be giving the keys back to you, right. So you got to have different buckets and I've seen some folks, I wouldn't say get in trouble, but they've been in a pickle where they've had to really scramble because they did not heed this advice of they had one lender to acquire maybe a hard money lender, and then they had one potential lender not like lenders in that bucket, but lender in a bucket, and that was it. That's all they had set up. And so when hard money lending time came to pay off the hard money loan and their property wasn't ready yet now they were stuck in a pickle because they didn't go out and source multiple buckets of money. And so I think that's just such an important part if you're starting out or if you're currently working, those buckets of money could dry up real quick. Just look at COVID. Look at what happened to COVID. Look at what happened when interest rates went up. Some buckets of money went sorry, we're going to pull back for a while and people got stuck. So, yeah, I think that's great advice.
Speaker 1:The last question I have for you before we get to a fun question, jairus, I want to go back to the. You mentioned the expansion of wholesaling that you're seeing in Wisconsin and to be cautious. What are some things that you see make a good wholesaler from your perspective when you're advising borrowers, and things that maybe are not up to what a standard should be in your eyes that you could give somebody who's looking at some of these Facebook groups or sees a deal come across their plate that ends up being a wholesale deal? What are the things that they could look for? How do they vet somebody to make sure that they're a good source of deals?
Speaker 2:Yeah, great question. So from my perspective, the investor should look at a wholesaler as a partner in that transaction. The wholesaler is also a partner for the seller, but ultimately that wholesaler is trying to broker that transaction, if you will, to a buyer. That wholesaler or someone on that wholesaler's team, that's more than just focused solely on that transaction. So get to know them. You know, maybe vet them with some other people, other investors like hey, have you done business with this person? How did it go? You know, did the transaction complete? And keep your ears open just to hear what happened.
Speaker 2:Now, if you hear something bad, doesn't mean that that was the wholesaler. A lot of transactions have a lot of sides to the story. Okay, but try and look at it objectively and get to know that wholesaler. That's kind of the first recommendation, not only personally, if you can, but also digitally, like see their activity online, see how they're posting deals, look at a couple of their deals and just do the math and say does it look like it's going to be a good deal? A wholesaler that puts out a deal where there's enough proverbial meat left on the bone, you know, for the next investor, you know is really something that you know is a sustainable business process. So try and study them.
Speaker 2:The things that I would watch for are you know if you're not finding that they've done other deals or you're not hearing enough about them. You know if you're not finding that they've done other deals or you're not hearing enough about them. You know, maybe they're just, you know, an out-of-state person, not that that's bad, but an out-of-state person who's just doing a deal in the state that maybe that's their first deal or their deal count is low. Another question is has someone from the wholesaler been able to walk the property? Or do they have a good quality video? Or maybe they sent in an inspector? You know, give you some feel that that wholesaler has, you know, true knowledge of the property versus you know just something, maybe over the phone or digitally, with that seller. That could give you some confidence in the quality of the information you're getting, as well as the quality of the numbers and or maybe the hopefully, the quality of the transaction. Also, as you're trying to vet them, you know, ask some title companies. Have you worked with them, you know, and not only the other investors.
Speaker 2:I would say also, maybe look at how they're portraying the information to you. There are some that put out literally one line got properties in such and such zip code. You know, let me know. Well, that may not be give you enough information and you may have to understand or wonder a little bit about what's their motivation for wanting to engage you if they really can't give you all this information. But there's various degrees of information that a wholesaler can provide and they have different reasons why they provide a lot versus maybe a little, and it's all valid reasons. But just try and understand what they're providing and what you have to do in order to maybe get more information.
Speaker 2:The last part is what are they asking of you in order to be, you know, a potential bidder on this? Is it a reasonable ask, you know, whether it's you've got to respond within a certain time frame, or earnest money or whatever? Is you know the ask of you in order to properly bid on this or whatever? Is you know the ask of you in order to properly bid on this and is it going to be, you know, in my opinion, done, you know, through a proper transaction, you know, at a title company, et cetera? You know, so that you can be confident that this is actually going to be a legitimate transaction. So I think really trying to vet all of that about the wholesaler you know the references, what they're portraying, what they're asking of you as a bidder I think really will help you understand. You know the quality of what that transaction could be.
Speaker 1:I think the title company was a big one too. Like if they're not going to work with a title company, then you got to be like well, that's shady Right.
Speaker 2:Exactly, exactly, yeah, so if you don't mind me asking you, corey, so like, when you guys do a transaction, if a buyer has to put down some earnest money or whatever, where does that money go and how do you handle that?
Speaker 1:Just as a quick example, deals on the last minute, and then we, as the wholesaler, we still have to close that transaction. If we've given the seller you know we some have we have out clauses in all of our contracts, but we have a relationship where you close, we're going to close it Um, and so we had egg on our face with these sellers and then we had to go to the title company and then they would want us to sign a. We have to sign something, and then the, the borrower, has to sign something in order for us to get that earnest money released to us, and I thought that was garbage, and so I I created a separate account at our bank that only holds earnest money. We don't do anything with it, it just goes in there. It stays in there.
Speaker 1:You know, we might earn 10 cents a year of interest. I don't even know, but that's not the purpose of it. It's just really to eliminate us having to have a title company decide who's going to get that money or try to hunt down that buyer now to get them to sign the thing to get us to release their earnest money. So we do it that way. I don't know, I'm not sure what other wholesalers are doing around the state for earnest money, but that's how we handle the earnest money process.
Speaker 2:I like it Very effective and at the end of the day, you know something, you as the wholesaler could control the process and I think that's very reasonable. So I really think that's kind of how I would advise and have advised people to kind of evaluate. You know, I don't again, we don't claim to know them all we see enough traffic and see enough activity. We'd be happy to give you our opinion, our thoughts or, if you're looking for someone, happy to refer you. But you know I do see enough activity where you know, even I, as I'm not out there actively investing or buying today.
Speaker 2:But I start to wonder a little bit about is that transaction going to be what everyone hopes it will be? Or that looks like a great presentation of the information. You know those that put the information out there. Again, quick shout out for WDP, in a very organized and methodical way, I think, allows you as the investor to run your numbers. You know, in the evening maybe, when you're at home, and you don't wonder about the deal or you don't wonder about a missing piece of information. You've got it all for you because you know, I would think, a wholesaler or a seller would want you as the buyer to have everything you can do, all the information in front of you to evaluate it properly. And I think that's to me one of the key litmus tests as an investor when you're talking with anyone in a transaction, in this case a wholesaler, do you have all the information and not wondering about any part of the transactions?
Speaker 1:Correct. Yeah, and we include inspection reports with 95% of ours. If it's a newer house, we don't. Or if it's like a shell, where you're going to have to rebuild it, we typically don't invest the money because you're going to have to do it all anyway. So I get the inspection, but most cases we include an inspection report because me, I'm an investor, I have 130 units or whatever. If I'm going to buy a property and I'm not, we don't do walkthroughs anymore until you get the property. Just logistically, sellers don't want people walking through the house. That sort of thing is what we found. And then what we found is investors.
Speaker 1:Now, in this day and age when COVID happened, everybody got used to digital Some investors still need that emotional feel to walk through the property and feel the property. But most of the people that are looking at it from a business standpoint have found give me the numbers, give me the rehab. People that are looking at it from a business standpoint have found give me the numbers, give me the rehab, let me see the layout, let me see the location. Here's my offer Boom done, really easy. And so I wanted to make our process where you could sit on the toilet instead of scrolling Facebook, you could run your numbers and evaluate a deal. If you're going to be in there for 20 minutes, you might as well run the numbers.
Speaker 2:Be productive and be productive.
Speaker 1:Yeah, so that was my goal of give you all of the information you could possibly need to make an offer. And, of course, inspectors don't catch everything either, but that's why you're an investor. You have to have some kind of savviness or knowledge to know, like, well, I'm going to budget because of this, or whatever the reason is what you see in the video, or maybe you couldn't see something or maybe whatever the case is, so you just budget for that, but you get as much information in their hands as possible so that the investor keeps coming back to you. If you're a serious wholesaler, you want investors coming back and buying deal after deal after deal after deal. You want them, you want to feed their addiction right, and they need to feel comfortable with the process.
Speaker 2:So well for the investor community. If I can kind of, just for a moment here, the wholesaler, what WDP offers is, I think, in a great way above average in terms of the information that you as an investor could get, the inspection report being one of them. I think that's. That's great. But just to kind of temper the rest of the investor community, not every wholesaler will do that, not every wholesaler will do that right, and sometimes it's a. You know, here's some pictures, here's the address no walk through, buy as is. You can maybe do a drive-by on the street, but you're not getting.
Speaker 2:And in certain portions of certain uh, the state and certain wholesalers, that's all you're going to get. And if you want to, if you want to play, you got to accept that as that's all you're going to get. You have to decide if you're comfortable with that, of, of course. But there are plenty of investors who, you know, for whatever reason, get comfortable with that. I mean, that's their own choice. But I always like more information and I think that's great. And again, if you're not going to get the information from the wholesaler, either you have to get comfortable with it or you have to wonder whether that's a deal. You can even be willing to do if you don't have as many inputs as you would want. So it is just a little bit of the landscape.
Speaker 1:So that's and that's okay. Yeah, yeah, different strokes for different folks, as they say. Right, exactly, that's right. Well, jairus. Last question is we always end this podcast? What is your favorite place to visit in Wisconsin, or maybe your favorite Wisconsin tradition?
Speaker 2:Well, I love our great state, um, and I lived in a few parts of it and traveled a bunch of it and, uh, traveled outside of the state too. I still think wisconsin is top five for me in terms of fun things. But I'll tell you, recently, as a family, we went to the devil's lake area and that is uh, it doesn't feel like you're in wisconsin in terms of it's very different landscape than the rest. You know that western southwestern Wisconsin has a lot more, you know, change in elevation than maybe the eastern half of the state. But Devil's Lake is pretty darn exceptional in terms of just what's all going on there and what's going on in the area. You know nearby is the if you're into biking the Elroy Sparta trail and going through tunnels and just it's a pretty unique experience as well. So love Northeast Wisconsin, but, but that's a pretty cool part of we're a great state. I do love a bunch of other parts. We could talk for another hour, yeah.
Speaker 1:Yeah, yeah.
Speaker 2:For sure, there's other states in the U? S that we've been to, but that's how I would answer it. So I love it, man.
Speaker 1:Yeah, I've been there, I think when I was younger, but it's blurry, I don't remember too much of it. So, but yeah, that's actually now that you said it. I'm like, shoot, I should go back there and just bring the kids and get away or something down there. So that's awesome. Well, man, I appreciate you being on here today, jairus. We had we went longer than I expected and so I apologize for taking up a bunch of your time, but hopefully the listeners got a ton of value out of today. I get, I think they will. I think Tony's going to be jealous because this is going to get more downloads than his, I think. So, uh, I'll keep you both updated on the on this, on the numbers, over the next couple of months here.
Speaker 1:Uh, but for those of you guys listening in, if you got some value out of this, the most helpful thing you can do for us is share this podcast with uh with those people who you think would also get value out of this. Uh, if you are an out of state person looking at Wisconsin as a potential opportunity to invest in, uh, our team would love to have a conversation with you, connect you to great folks like Jairus and his team at Good Faith Funding or any of the other people you need help with. If you're new to investing in general, we would love to have that conversation as well and help you get started in your real estate investing journey. Jairus, for those people who want to connect with you directly, what's the best avenue for them to get in touch?
Speaker 2:You can come to our website goodfaithfundcom. You can come to our website goodfaithfundcom. You can email me, jarris at goodfaithfundcom, or hit us up at any of the real estate meetups. We'd love to chat and just hear your story and love to hear about your goals and your puzzles Awesome, awesome.
Speaker 1:Well, thanks again, guys, for listening and tuning in. We'll see you on the next episode.
