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
Quitting the Day Job: How Greg Neuman Built a 50-Door Empire in Northern Wisconsin
Ever wondered how one becomes a full-time real estate investor? Join us as Greg Neuman, a seasoned investor from the Northwoods of Wisconsin, unfolds his captivating journey from stock market hesitator to real estate enthusiast. Inspired by the book "Rich Dad Poor Dad," Greg embarked on his investment adventure, starting with a foreclosure in 2013 and eventually mastering the BRRRR method. His story illustrates the importance of strategic property investments, learning from each experience, and making tough decisions like selling an asset for practical reasons.
Greg delves into the financial strategies that have paved his way to success, including the use of DSCR loans, personal lines of credit, and navigating commercial banks. He emphasizes the need for patience and adaptability as essential components for long-term success. This episode is packed with practical advice for aspiring investors, highlighting the critical balance between saving, building equity, and selecting the right properties amidst financial challenges.
Dive into the world of property management as Greg shares invaluable lessons on managing a portfolio of 38 doors, the decision to bring management back in-house, and the role of technology in streamlining operations. The conversation extends into the realm of networking, building reliable teams, and the significance of systems in self-management. Whether you're a seasoned investor or just starting, Greg's insights and experiences offer a comprehensive guide to navigating the ever-evolving landscape of real estate investment.
Hey everybody, Welcome back to another awesome episode I think we're going to have today of the Wisconsin Investor Podcast. So I got a rock star in Wisconsin on the podcast with me today, Mr Greg Newman. Did I say that correctly, Greg?
Speaker 2:Yep, you did.
Speaker 1:Awesome buddy. How are you doing today, man?
Speaker 2:Good Thanks for having me. Hopefully you're doing good too.
Speaker 1:Absolutely Excited to have a conversation with you, Greg. I guess for the audience, let's jump right in and dive into it. Give everybody a little background on who are you, Greg, and how did you get into this whole crazy real estate game.
Speaker 2:Yeah, so I live in the Northwoods, so my market is different than some of the other people in Wisconsin. I'm a little bit North of the state and I got into it looking. I've always been a saver, you know. I've always worked really hard and saved my money up. And you know I saved up enough that I needed to figure out a way to invest my money. So I started looking at stock market. I'm like, ah, it's not really for me. And then I discovered the Rich Dad Poor Dad book. About the same time I bought my primary residence and I'm like, wow, my mortgage payment's really low and this book is saying that more millionaires are made through real estate. So I kind of got the wheels turning that I should stick my money into real estate. So my wife and I you know I read a few more books and we just jumped in.
Speaker 2:We bought a foreclosure back in 2013. Okay, Didn't have a clue what we were doing Stuck a bunch of money into it and rented it out and from there we were hooked. Now, my goal was never to build a business out of it or, you know, get rich quick. It was just like an idea to stick my money as an investment retirement tool. So maybe we'll buy one or two a year if we're lucky, you know, maybe one every couple of years and just keep going that way. So that's what would initially spurred our interest and we just we started really slow because we weren't really, you know, gonna build anything.
Speaker 2:Great, yeah, the toes in the water, yeah so you know, once we start getting that first check, you know we're like, oh you know, maybe we can get another one. So I think the next year we bought another, another house and we bought so that foreclosure, we bought conventionally, and then we just I dumped all my money into it and I fixed it up because I didn't know what I was doing Fixed it up. Then the next year I bought another one, put 20% down, did a little bit of work to it, then bought another one, and then a few years went by and we put a line of credit on our primary residence.
Speaker 1:One of my favorite tools in real estate.
Speaker 2:We put a line of credit on our primary residence One of my favorite tools in real estate Yep. So then we jumped into, then using that to start buying real estate, and I want to say a few things that I did incorrectly. It worked out for my benefit, but we use the line of credit to start putting the 20% down on properties Okay.
Speaker 2:So what I did, though, is I bought a few that way, and then I realized I'm like you know, I don't really have a good plan for paying this back.
Speaker 2:So we only had like five or six doors. It wasn't a lot, but then I accidentally figured out the burr on my own, because I'm like no, that very first property we never refinanced. So we went to the bank and started shopping around, and I did a refi on that very first property, paid off the line of credit. I'm like lesson learned only do this method now. I think I can make this work if we buy the deal correctly. So then we got into it, had a few properties, and then that whole BRRRR idea really got into my head. Then I found bigger pockets and bought a few books, and I think then, at that time, we were able to establish another small line of credit with a local credit union on our commercial policy. So now I had two small lines of credit, and then we started buying slowly again, cash fix up, refi and going that way Because I didn't even know about hard money at that time either.
Speaker 1:Okay, okay. So most of your strategy has been buy and hold. Then You're buy, fix up, rehab, refinance, keep it so.
Speaker 2:I've only sold one property so far, and that was in October through Wisconsin Discount Properties.
Speaker 1:actually, yeah, it's a duplex in Oshkosh. That's right. Hey, a little PSA, a little shameless plug here. If anybody's got a property out there, they don't want it anymore.
Speaker 2:It worked out. I bought it. I bought it. I had a lot going on which I'll get into later on what we got going on, and it was just a bigger project than what I wanted to handle. I'll regret selling it in 20 years, but in the here and now it was just something I couldn't do.
Speaker 1:Yeah, absolutely 100%, and that happens sometimes. I've been in that case too, where you know we have, we've done several flips and we've gotten to the point where you know we get our contractor in there. We had one. I remember this was we don't do a ton of flipping anymore, most of our stuff is wholesale. But we had a contractor who was great and we walked into the property and it was just like you know. It was one of those where the narrow stairway going up to the top it was just the layout was funky, it needed one of everything.
Speaker 1:And he goes you know, corey, do you have a buyer that would just buy this thing and get you out of it? Because we could go do another property where I'm going to spend eight to 12 weeks here and what are you going to make on this when I could go spend eight to 12 weeks on something a little more sellable. And I was like, okay, let me see what I can do. And so we found another guy who wanted to take on the project. Thankfully, we got out of it. I think we made $500 on that deal. I essentially broke even on mine too, but yeah, yeah, but I was just glad to have it off my plate and be able to move on Right, so that's awesome. So what does the business look like today for you? What does the rental portfolio look like?
Speaker 2:Yeah, so we're. We're currently at 50 doors, wow, and you know we bought 42 of those doors within the last six years and my wife and I have been working full time almost the entire time. I still am working full time. Well, I'm down to four days a week. She has been at home now because we have a couple of younger children, so she's been at home and she does a lot of the bookkeeping and that kind of stuff. So she's been home for a few years now managing that side of it.
Speaker 1:Okay.
Speaker 2:But yeah, so I have some plans then to actually transition now in 2025, to doing real estate full-time because, we were able to build this and I only was putting a partial effort into it. So the thought is you know, we should be able to do a lot more once we dedicate ourselves to doing this Absolutely, man.
Speaker 1:I see hockey sticks happen all the time, with people who just and then they go. Man, how was I doing this before working full time, Right yeah.
Speaker 2:It gets exhausting. That's kind of where I'm at right now. I don't mind my job, I like my job, but it's it's what makes the most sense for our goals and where we want to go with things.
Speaker 1:Yeah, so should we not release this podcast for a while? So your player doesn't know that you're?
Speaker 2:playing. They actually know I gave them advance. I do have a planned date.
Speaker 1:That's awesome. So when? When is the exit date? When are you doing this so we can hold it?
Speaker 2:Right now we're looking at, may 1st is my exit date and we're doing this full time.
Speaker 1:That's outstanding man. That's great I. What I love about your story, greg, is so many people want to be out tomorrow, right. They're like, oh, I'll start real estate and I'll quit tomorrow, right. And you know, we are 11, probably almost 12 years into the business now from when you guys got that first one, and you'll be probably 12 years by the time this is over, right, but it may, and so it's not a fast burn for you. You did the right thing. You save up money, you keep it, building equity, you're buying properties and then, when the time is right, boom, you're out of there.
Speaker 1:I mine was a little quicker. I I just went fast and just built up a bunch of rentals and I started and I got a lot more transactional income. You know, when you're doing the rental game, it's a slower game, right, but I remember that. That first one, I was going to buy a hundred doors. This was my goal. A hundred doors. They're all going to cashflow. 200 bucks a month, net in my pocket, and then I'm financially free, baby, that was it. I'm going to do this in a year or two years, right. And then I did my first BRRRR and I looked at like, what am I actually netting and I was like, well, now I'm glad I did, cause like the equity buildup was insane. You know, I just I just supplemented with transactional income with flips and wholesales to speed up the process a little bit. But I love what you're doing, man. Just this, just this, you know, slow and steady wins the race right.
Speaker 2:Yep, you know, and it's just been my wife and I, it's just her and I partnership, we do everything. I've only taken a one hard money loan on one property. Otherwise we've financed everything on our own.
Speaker 1:When you say on your own, what do you mean by that? On your own?
Speaker 2:So either the money we've saved or through our, our personal lines. Today I have actually three lines of credit. I'm actually looking to try to establish another one because we have a tremendous amount of even debt equity that I'm not even tapped into yet. So I mean we can buy a lot of projects if we want. I'm being a little more choosy right now just because prices are elevated. Rehab is still up there a little bit, and we have some other things going on right now that we're building within our business, and we have some other things going on right now that we're building within our business.
Speaker 1:That's awesome, so I'm assuming you guys are using some kind of other primary lender though, like a commercial bank or community bank or something, for the first position loan.
Speaker 2:Yeah. So I've used my local credit union a lot, but when interest rates really spiked it wasn't really making sense anymore. So I have another commercial lender in the area that I've been working with, but it's all adjustable rate stuff. So I've done a few DSCR loans and I've documented a few that I've worked with. Now Some of the issues with the DSCR is the minimum loan amount. My area I'm up in the Northwoods real estate values are not as high and they usually want $100,000, $75,000 minimum loan amount. Sometimes it's a stretch for me to hit that and still cashflow.
Speaker 1:So that's one of the challenges I'm still having.
Speaker 1:I got you. Okay, now the D. Let's talk a little bit about your use of the DSCR loan Cause. I think we've talked about it on a previous episode, I think, when I had Tony Breyer on here. So for those of you guys who didn't hear that episode, if you want to hear about financing and money options, go back and listen to that episode. But just for those that are listening now, dscr means debt service coverage ratio. Greg, can you just explain how, like just some of the basic terms of like what somebody would need to do to qualify for this, and I think one of the benefits is, if you're self-employed, like what you're looking to go do to become self-employed, they don't do any kind of income verification on it, so it's good become self-employed.
Speaker 2:They don't do any kind of income verification on it, so it's good for self-employed people. You know every DSCR lender is a little bit different. They might have some seasoning requirement I found some that don't, depending on if you hit certain criteria, and some that are six months. But typically what they'll do is they'll look at the income of the property and again they have different criteria. Some of them want you to have tenants in place with leases. Some of them want, if it's a duplex, one tenant in place and then they'll take a percentage of what you're trying to rent the vacant unit for. So they're all not the same, but that's essentially kind of. What they're looking at is just the performance of the property itself and then generate the loan based off of that.
Speaker 1:Yeah, what kind of ratios are you hearing when you're, when you're looking at these? What kind of ratios are they looking at for a minimum?
Speaker 2:on, the one to 1.2? Okay.
Speaker 1:So those of you guys that don't understand what that means basically is if you're getting a thousand bucks a month for rent, a 1.0 ratio means they want to see your, your principal interest, taxes and insurance at a thousand bucks or less, and that would be a one a. At a thousand bucks or less, and that would be a one a 1.0 ratio. Essentially Awesome, man. Well, that's good. So you've opened up some other avenues for financing. Here You're getting a little bit scrappy. You've gotten out equity because you've had the, the, the time machine working in your favor, it sounds like, which has allowed you to start to unlock some, some cool things. What does the future look like, besides the retirement? You know, when you retire, what are you gonna do with all your time, greg?
Speaker 2:Well, we want to get into more, more real estate. I want to build up a nice portfolio, you know I want. My next milestones are like 75 and a hundred doors. Uh, we want to work on our systems and potentially take that out of state. So we've got a few different retirement type idea states that, um, we want to start investing into and then potentially become snowbirds when our kids are out of school. Yeah, and then the other exciting thing that we decided to do was we surrounded ourselves with some really fantastic people that helped us get into some self-management. Actually, Okay.
Speaker 2:So we actually pulled back 38 of our doors in the Northwoods just because we were struggling with the available management companies up here and as of December 1st we took those doors back.
Speaker 2:So my wife had a big part in that and some of the people that have been helping us along the way had a huge, huge part of helping us stay organized, focused, find the right sources for the legal docs and getting our contractors organized, going through all the different softwares that are available. So we definitely have all of our operating procedures in place. We got the software in place, contractors in place, and so far it's been a smooth transition for the most part. It was messy the ledgers coming in from the management company because that was one of the main reasons why we had to change. The accounting side was becoming a mess.
Speaker 1:I can't imagine. So I don't do any business up in the Northwoods. I can't imagine there's a lot of really big property management companies up there that are too sophisticated. Or am I off on it?
Speaker 2:There's not a lot to choose from and essentially we went through the two major ones that were in the area and what they were doing and what we want to do. It just didn't align that well and, unfortunately, the bigger we became, the worse these problems became. Got it?
Speaker 1:Knowing what you know now, I guess just as a general blanket statement. Greg, I always like to get people's opinions on this. I have my own, obviously, but like, what's your opinion on? You know you've been in the business now for over a decade, starting over again. Would you still recommend somebody brand new starting out to get with property management? Or would you have if you?
Speaker 2:could unwind it, would you have started managing your own right out of the gates? You know, right off the gate it can be overwhelming, because actually that's how we started. We went up to 10 doors, self-management and managing and we didn't have connections and networks and things like that. We could not do it. It was way too overwhelming. So I think my recommendation if it's not built for everyone, that's for sure dealing with tenants directly and coordinating repairs and things like that we actually do enjoy it, but not everybody will. But networking would be a huge thing to find the right resources to put in place.
Speaker 2:Software is also huge. We were doing everything by hand back then too. I mean now all the software, integration and the maintenance requests. It's. You get it set up correctly and you have people to help you get to those places. It's not as scary or as bad, but it's still. You know, showing a property and the whole vacancy thing. That's still the most time consuming part. You're gonna get a lot of people reaching out or a lot of people that aren't qualified, so it will consume time.
Speaker 1:That's for sure. Yeah, for sure, and I love that you answered that, because that's my belief as well is, when you're starting out, your highest and best use is finding deals and finding money. If you do those two things, you're going to be pretty successful. You're going to be able to build at least a meaningful portfolio, if that's your goal. If you're bogged down with tenants toilets is the old adage, right? You hear the naysayers when you're like, oh, I'm gonna get into real estate. You're like, oh, tenants and toilets, go have fun with that. Right, there's truth to it. Though You're like, yeah, if you're self-managing, it does become overwhelming.
Speaker 2:It just takes one tenant that has, you know, a needy tenant that constantly is reaching out for everything.
Speaker 2:It's just something to be prepared for. But you know my wife and I we make a good team. She can do all that computer stuff and handle some of the notices and the tenant stuff. I like crunching numbers and deal hunting. That's what I love and I want to continue to do that. So I think you know, if you have a situation like my wife and I, we have a good combo approach to this where I can still find deals and she can take care of some of that desk work.
Speaker 1:Yeah, when you started out, greg, so this was your idea. After reading Rich Dad, poor Dad. Was she on board at the time or did you have to get her to read the book too?
Speaker 2:No, she didn't. I don't know if she actually read it or not, but she's gone along with a lot of my things. It's been a team thing and we've learned some hard lessons and she will remind me of those lessons, which is always good, because I always. I don't look at a loss as a loss If you don't learn something, and I'm buying myself an education and you know we've gotten through every single one of them so far and I'm going to continue to get through every one. You just try to mitigate what you can learn your lessons and never, never do it again, and it's nice to have somebody to remind me. Yeah, for sure he went down this path.
Speaker 1:Yeah, sometimes ignorance is your best friend. In this business, I've found Sometimes the newest people are the best people. I see that in the church too Some of the newest Christians in our church. They're just on fire for Jesus, right. Same thing when you're brand new to real estate. Sometimes just taking action and just making quote, unquote failures or mistakes is your best way to just get in the game. But, like you said, it's not a mistake if you learn from it and you grow off from it and you just try not to make that same mistake again. But you're going to make mistakes if you're taking action.
Speaker 2:Absolutely. I'll be making mistakes in 20 years from now.
Speaker 1:Yeah, if you're not, you're probably not stretching yourself far enough.
Speaker 2:Exactly.
Speaker 1:Really trying to push yourself far enough. That's great. What were some of the struggles you and your wife had starting out? I had another couple on recently and I asked them the same question. I'm fascinated by it because my wife and I too started the business together and I think husband and wives are some of the most powerful real estate businesses out there because they usually complement each other really well, which is why they're married. But there's also usually challenges with that there's a lot of stress.
Speaker 2:Especially, we did everything. Not only did we try renting them, we were painting them, I was ripping carpet out, we were doing flooring, so we were literally doing everything. Wow, and it. I I think, having those team elements for all, you don't have to do everything. That's that's the great thing is, even when we're taking back some of our management stuff, our plan is not to do everything. I'm not going to do everything. That's the great thing is. Even when we're taking back some of our management stuff, our plan is not to do everything I'm not going to do. The house calls the furnace, calls all that stuff. We want to outsource it and keep the stress levels, because there can be a lot of tension sometimes when you're working on a property and we're working day jobs, we're spending all of our evenings, all of our weekends and finally, I just said, this isn't making sense. We need to find, you know, good people, good team, you know, find contractors. Yep, that was a big one for us.
Speaker 1:Yeah, that's the third. That's kind of the third cog I fee I see with successful investors is they start out, they find deals, they find money or find money, find deals either way. And then once they get that going, then it's finding and building a team right. So like get in, get in the game, you're going to, you're going to hire some bad people, you're going to learn from that, right, so on and so forth. But as long as you're learning from it and growing from it, then it's like then you can start fine tuning your team and become really efficient and really good at whatever lane you're choosing to hopefully focus on in the real estate world, cause there's a lot of distraction too in real estate. How did you guys, how do you guys stay focused on?
Speaker 2:Cause it sounds like you're pretty much in the long-term burr lane residential. Yeah, so right now everything's triplex or smaller for us, okay.
Speaker 1:And how did you guys decide to stay in that lane for 12 years? I know, like entrepreneurial people like yourself, greg, and like myself, I see all kinds of shiny objects in real estate all the time. I actually stopped listening to BiggerPockets for a while because my wife would joke I'd listen to a BiggerPockets episode on mobile home parks or something and we're doing fine wholesale and long-term rentals and I come home like honey. We need to go find some freaking mobile home parks. It's the coolest thing in the world. And then the next week I listened to one and it's like office buildings. I'm like we need to convert office buildings tomorrow. So how do you guys stay focused in a world full of distractions?
Speaker 2:Yeah, so I have shiny object syndrome big time, Like I can get distracted, but I keep going back to the tried and true. We know this is working and we're just going to keep doing what's comfortable. We have done some educational things on short-term rentals and that kind of stuff, but we realized that our time was still fairly limited, especially working full-time jobs, and so that's part of it. So I definitely have. I have a lot of things sketched out at home, of things I want to get into in 2025, 2026. And those are some of the things that we'll actually be able to focus on now and start maybe doing that slow approach again and just getting into something see what works and then build on that as we automate.
Speaker 2:I want to try to automate a little bit better and clean up my systems, for you know to keep my long-term rental business going and then get into all these other things at some point, just kind of find the next thing, get that set in place, and get the next thing, get that set in place. So that's that's where we've stayed focused is we had a goal? We just want to keep building out our long-term portfolio and you know, without having that extra time, we just couldn't afford to get into those things yet.
Speaker 1:Yeah, I got it. That makes sense. So you kind of like, almost by default, you have to just stay in one lane when you're working full time. Yeah, for sure that makes sense. You got the guardrails on what, so what do you see? Do you fit? Do you think that's going to be a big challenge for you may first, when you're out on your own in the wilderness of uh, of entrepreneur land, of being able to keep the uh, the focus on yeah it's.
Speaker 2:I think I, you know, I probably will struggle a little bit until I have my routine. I a little bit until I have my routine. I'm a creature of habit and I'm so used to just getting up, getting in the car, going to work, doing my thing, go home. So I have to develop my own routine and that's what I'm going to start doing here until I'm gone. So I I wake up and I do research, I make phone calls, so I have to have that schedule for myself, otherwise I will wander around and not not get much done. Yeah, that's just me by nature.
Speaker 1:Yeah, that's, I think, a lot of entrepreneurs. I think I heard a stat like and I'm going to make this, 90% of stats are made up, right so, but some crazy number of entrepreneurs are quote, unquote, add, you know, like we all have it.
Speaker 2:Yeah, that's my problem too. I got to put an hour maybe in me and I got to get on to something else. Yeah exactly.
Speaker 1:I want to talk about you and your wife's system here of keeping each other focused on this goal because one of you could steer it sounds like you've got a pretty good influence with. She trusts you and what you do. Is she holding you accountable to staying on the goal and reminding you that? Are you guys meeting regularly to discuss the business? What's your guys' cadence? Is it just like hey, honey, I'm in the kitchen, we're making dinner, Let me talk about it. Do you guys actually have structured sit-downs periodically? How do you?
Speaker 2:guys yeah, so when I'm looking at properties I've been getting her involved and saying, hey, this is what I'm seeing, and then she may or may not have some concerns with it. We're going to start developing better KPIs to track our incomes, expenses and some of our allocations into some savings accounts so we can have some of that stuff in place. So I think we will be more regularly meeting. Right now life's a little hectic with kids stuff and work stuff and church stuff and so we're not regularly doing some of these things. But I have some of them documented on spreadsheets that we're going to start regularly keeping track of and plotting our goals and then also what our role is, for instance, like what, what my wife's role is in the property management side, what my role will be. That way it doesn't become either Neither of us do it, or both of us are doing it, or we're screaming at each other.
Speaker 1:Yeah, that's always a big challenge when you start trying to scale. It's like owning somebody has to own the rock, as we say in our business. Like somebody has own, like we can help, we can get help for it and delegate and that sort of stuff. But, like, at the end of the day, one of us has to be responsible for whatever that initiative is, or the target or the goal, and then how we get there is not as important as like who's, at the end of the day, responsible for that thing. Otherwise there can start to be some like hey, why don't you do this, why don't you do that? It's like, well, I thought you were doing this or I thought you did that. Now just create some tension there, so that's that's. Uh, that's good that you guys have some real. I usually see that with people if you're still married, yeah, and you still have real estate after 12 years, you're doing something right yeah, we joke.
Speaker 2:Yeah, real estate. Then get us divorced. So we're doing something right. No-transcript. And my advice to anyone, even my past self, would have been network, trust, you know, find people, you know, get some good teams together, people that you can trust, work with them. You don't have to go full scale with them and you don't have to be business partners with them, but find these partners, the contractors, the lenders, anybody that can help you. It's something that's experienced and something you don't know, even if you want to learn it. You don't have to do it. But find these people through networking, through recommendations, through whatever means you know. So you know Facebook's a huge one for for finding deals, for finding people, businesses, all kinds of stuff. So I would I would say don't try to do everything yourself. You don't, you don't need to. It'll stress you out and I think that's where some people give up and quit because they try everything. After a few doors they get a bad tenant, bad experience and they swear it off for life.
Speaker 1:Yeah, that's very true. And then they end up selling to us at a huge discount, yep, so don't do that. Yeah, we want you guys to be successful in this, right.
Speaker 2:Yeah, it's okay to be a little stubborn and just tread through it.
Speaker 1:That's right. There's plenty of people that aren't going to listen to the podcast and know this, and so they'll sell us their houses at discount. Right, don't be one of those. Right, make it a t-shirt for that pretty soon. All right, that's great networking. So what are some of the opportunities? So, being in the Northwoods, I don't know much about the Northwoods. For those people who are in the Northwoods that listening to this or maybe want to invest in the North woods, what are some of the networking opportunities that you started to get some some value from? Was it a RIA group or is it? Yeah, so in in.
Speaker 2:Wausau, which is, you know, in the North woods. Here we have a RIA group that's tied to the statewide RIA group. So I do attend that because it's really our only networking opportunity up here currently. Okay, uh, you know there's a few people that I've met over the years. I'll meet with them. We have a little meeting. So we just kind of figure out okay, what are you doing, how can we keep each other accountable? That kind of thing. And just talking with all other local investors, or making friends with some of the realtors in my area, you know, I like to touch base with them occasionally just to see what's going on in the market. You know how things are looking, how sales, that kind of thing too. There's not as many opportunities up here, just because so much stuff is spread out and the city populations are nearly as large as other areas. So it is a little more challenging. But again, the internet, you can network. You can find other groups too. Some of them are available virtually. There's other opportunities.
Speaker 1:Cool. What's been the biggest thing? Because you said that you guys got surrounded with some really good people. That really helped you earlier on to be able to take that management back and in-house. What, well, how did that come to be? Was it just showing up regularly to the same meeting? Was there a different type of connection? Did you pay for some coaching, like talk a little bit about how.
Speaker 2:Yeah, so it was actually at every meeting. It was a no-transcript. So she got a good feeling for us and then she helped us, started building systems and she actually encouraged us to potentially go down the road of self-management. And as we started building those systems we started doing that the middle of this year, maybe the spring of this year, middle of this year and as we started developing the systems and what we wanted to do, we felt more and more confident that, yeah, this is what we want to do, because we still hadn't made up for sure our mind at that point. But as we started getting into it then we said, yeah, this is what we wanted to do. So it was all through networking. And then, uh, facebook, I helped. I found somebody because evictions is a big thing too. You know you don't like them, but it's gonna happen. It's a scale game. If you got 50 doors, you're probably gonna end up with an eviction. Yeah, so we found somebody to help us, uh, do our inspections and eviction process when they occur.
Speaker 2:So I found that on facebook just by posting in one of the real groups.
Speaker 1:Wow, very cool. All right, those are a couple of good gold nuggets right there that Greg just gave you guys. Go back and listen to the last two minutes there, because there was a lot of wisdom in that as far as how to get connected and then even the systems thing. I think what's important to note is, as we're talking here, that's about six months of work that you guys have put into building the systems and things before you really launched it, into building the systems and things before you really launched it, so there's some pre-work here. It sounds like that happened before you guys went ahead and pulled the trigger right.
Speaker 2:Yep, we did a lot of prepping and then we got the confidence and then we'll go back and we'll tweak our operating procedures and things like that as we need to, as we actually get them live and work through them a few times, but for the most part it's been smooth.
Speaker 1:We've had everything that's already could happen happened. So we've tested them. You tested them. Yeah, you're already battle tested here early on making the tweaks. That's great. What? What's the next evolution of what you guys are doing? Is it adding a higher, then down the road to help you guys with the management piece, or what does that look like?
Speaker 2:Yeah, so, like with the management side, we've built out our operating procedures to be position-based so at some point we can either bring on a hire or outsource to like a 1099W2 type relationship where they manage our system for us and then give us the reportals that we want. Realize what that's going to look like, but we're building it out to be either somebody else being able to manage our systems under our direction and what we want to see happen. So that's kind of the direction that we're going with this when we're building it all.
Speaker 1:Awesome. I know a lot of people who are kind of in your guys' shoes as far as on the cusp of like I'm still doing everything type of thing, but I know I don't want to be doing everything type of thing. They have a lot of fears around hiring somebody like that first W-2 or whatever. Do you guys have any of that fear and what are those fears? If you do?
Speaker 2:is am I going to make enough money to pay this person? But we haven't put a lot of thought into that yet because we're still tweaking our systems, but we know that that's the direction that eventually we're going to go. I don't know how many doors we'll be at when we actually decide that, yes, let's push this off and let somebody else handle this. But yeah, we're preparing right now for what that's going to look like, but don't have it fully realized yet.
Speaker 1:Yeah, dude, I think you nailed it with the fear, though I think that was our fear when we were like looking to make our first hire. We had a mentor that was like, all right, you guys need to hire an assistant now. And we're like, oh, like a full-time. He's like, yeah, like hire full-time or just start part-time. Like okay, well, let's just start part-time, I don. And then we got our girl and all of a sudden we're like she's amazing, we have so much work for her to do. And then the money part of it was we saved up, I think it was like three months of her salary, of what her salary would be, to make sure we could cover that. And then if we had to get rid of her or somebody else, at least it was like a three month trial period. So that helped a little bit. But there was definitely the money piece was the big anxiety and like, honestly, for me I don't know if you guys figured this I was like I don't know how to do all the HR stuff.
Speaker 2:Well, actually I didn't even think of that part of it. But yeah, I don't know how to do that, but I do have connections even with my W2 employer. If I had questions, I know that they would be more than happy to give me some direction or a resource to investigate.
Speaker 1:Yeah, and there's. There's a lot of software like we talked about now, like we used a system called gusto or gusto or whatever. I think I see commercials now for it. We still use it for a couple of our LLCs for for the hires that we have there. It's so easy to use and they do all the filing of the. I don't know any of that stuff. I just go in and plug in how much are they making, how many hours they work, and run the automatic payroll every two weeks, and it's easy peasy. So it took a lot of that fear out once. We realized like, oh, we don't have to know all these laws and when to file these reports with the state and all this other stuff. It just does it for you. It's pretty cheap too, comparatively speaking. So one book, I guess, have you guys ever read who?
Speaker 2:how Greg that one I have not.
Speaker 1:Okay, cause, as you were talking about networking, that book was coming to my head. So for those of you guys that haven't read that book, I'd highly recommend who, not how. Essentially, a lot of times we have a who problem, not a how problem. Right Is what the book is saying. You know, it's not, and I still I still have to remind myself of that all the time. I'm like gosh, how am I ever going to do this, this, this? I'm like, oh, I just need a who that's really good at this, and then it's taken care of.
Speaker 2:Yep, I got to take a time out once in a while and do that same thing.
Speaker 1:Yeah, yeah, that's awesome. Last question for you, greg, before we get to the to a little fun question here what's the one biggest struggle you guys had, one biggest hurdle that you guys ran into, and how did you overcome it?
Speaker 2:Yeah, you know, I honestly I think it was some of the management of our Northwoods properties. They were. There was a lot of accounting issues, a lot of financial type things taking place that we still can't fully explain, and it was becoming a significant concern and an issue just in general with, uh, even how tenants were placed and the turnovers. So I mean, that was that was our biggest challenge, I think, to date and like man, like managing your manager kind of a thing.
Speaker 1:Is that what you're?
Speaker 2:yeah, and just getting them to actually do what we need, because I think the issue is up here they get so big, so quick and they don't have the staff either. That's the other issue. You don't have the population to choose your employees from and it just started kind of the wheel started falling off and we had to do something different. There was really not many options for us, but, yeah, getting where we're at now, I feel a lot more comfortable in how our properties will be maintained, going forward and even the accounting side of things.
Speaker 1:Yeah, that's awesome. That's a really good nugget and actually, as you said that, I thought, man, I need to start building some processes just so I'm not backed into a corner and I have to make a change right. So this may be good for those of you guys listening out there that have some properties rolling. You got the third party management going, things are going okay. You might want to just start building kind of a contingency plan, like what Greg and his wife has done here, to make sure if you have to take it in-house. Maybe it's not your ideal situation but, like you said, you're kind of, yeah, backed into a corner here.
Speaker 2:Yeah, and for us my experience was even at 15, 20 doors we didn't have a lot of issues. It was when we started getting up to these higher accounts. Then the problem just exponentially got worse for us. I thought it would be the opposite, you know where things would get better because the management fees go down and whatever. But it just yeah. It just seemed to keep compiling higher and higher and higher issues. Wow.
Speaker 1:Greg, this has been awesome. I want to ask you one last fun question. I ask all the guests on the show this what is your favorite Wisconsin tradition or favorite place to visit here in this great Badger State?
Speaker 2:Yeah. So one of my favorite things to do is I love Friday fish fries. My wife and I we love going out. We used to do a lot before we had kids. Just go get that Friday fish fry Sometimes an old fashioned, you know. With children now sometimes I got to settle for a filet-o-fish, but it's still fun. We take the family, we try to go out to eat on a Friday. Make it a family thing. Nice yeah.
Speaker 1:Friday fish fries and supper clubs. Man, that's Wisconsin all the way. That's some of the most Wisconsinite things you could do it is.
Speaker 1:Awesome, greg. Hey, man, this has been awesome dude. I love it. I'm glad that we've been able to be a small part of it in some way with Wisconsin Discount Properties and I just am so looking forward to catching up with you again after that May 1st break and, if I can help any way and share any other experience, definitely hit me up. For sure I would love to have that conversation with you and for those of you guys listening out there, whether you're at where Greg's at or you're like, hey, I just want to get started in real estate investing, or I'm investing in a different state and I'm interested in Wisconsin investing, you know, hit us up at wisconsindiscountpropertiescom and just fill outa little contact us form and we'll hop on a call with you and just you know, no obligation. We'll just have a conversation and just see if, if there's any way we can help you move forward in your journey, cause we love real estate.
Speaker 1:If you can't tell, greg, I think, is on the same page as me. We love it and we love sharing and helping other people reach freedom through real estate investing. So if we can help you in any way, please reach out to us, greg. Thanks again, man. Thank you all for tuning in. If you guys got some value out of this. Sharing is caring, as we say in Wisconsin. So be a true Wisconsinite and share the podcast if you enjoyed it. Otherwise. Thanks again, guys, for tuning in.
