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
From Duplex to Diversification: Jason Bilbrey's Real Estate Success and Strategy in Wisconsin
Jason Bilbrey's journey from a duplex owner to a 51-unit real estate investor is a testament to ambition and smart strategies. With insights on property management and the BRRRR strategy, listeners receive valuable lessons on scaling their investment portfolios.
• Importance of starting small with manageable investments
• Transitioning from self-management to hiring property managers
• Challenges faced with finding reliable property management
• Leveraging technology for efficient property management
• Exploring the cash flow potential of storage units
• Insights on communication and relationship building in real estate
Hey everybody, we are live back with another episode here of the Wisconsin Investor Podcast. Today I have a rockstar investor with me, mr Jason Bilbrey, and today we're going to be talking about all kinds of funds, things, short-term rentals, storage, residential, a mix of W-2, cost seg. We're going to give you guys a nice little buffet, I think, today as we dive into this. But, jason, what's going on, man, how are you doing today?
Speaker 2:I'm doing great. Corey, Thanks for having me on the show. I really appreciate it. I've listened to all your episodes, putting out some really good stuff. I appreciate that, man. I think it's actually really valuable. It's a unique niche.
Speaker 1:Good. Well, that's what we're trying to be a niche. So if you are just stumbled across our podcast today, really our niche here is we love talking real estate and we love investing in our great state of Wisconsin. So if you're not from Wisconsin and you're like man, I need to park some cash somewhere. I think I listened to all these episodes because we're going to tell you all the great reasons why Wisconsin is awesome. We'll tell you what some things maybe to look out for too. But or, if you are in Wisconsin and you're like man, I'd love to get in the game. This is the show to listen to of how to do that and how to get connected and hear from some studs like Jason who are doing it in your backyard man. So, jason, where are you based out of? Tell the audience a little bit about you, where you're based out of and when did you get started.
Speaker 2:Uh, so I've got. Uh, I guess I'm technically based out of the Appleton area but I've got properties in central Wisconsin and also in northeast Wisconsin Perfect, cool.
Speaker 1:And you got started back in 2018, correct?
Speaker 2:Correct.
Speaker 1:How did you get into the game? Tell us a little bit about what led you to get started in real estate.
Speaker 2:So I got started in 2018, basically out of necessity, right. So I met my wife. She was living in Milwaukee, I was living in Stevens Point and we wanted to kind of meet in the middle and I still had kids in Stevens Point School District, right? So the only way that I could afford to have a house in both Ableton and Stevens Point was to buy a duplex in Stevens Point. Okay, so to make it work, so I could basically have a house in both Ableton and Stevens Point was to buy a duplex in Stevens.
Speaker 1:Point.
Speaker 2:Okay. So to make it work, so I could basically have a house in both spots, because I still work in my W-2 out of Stevens Point, okay, I basically had to buy a duplex and that's really what got me started. A couple years before that I read Rich Dad, poor Dad, yeah, rich Dad, rich Dad, poor Dad, yeah Rich.
Speaker 1:Dad, poor Dad, sorry, like everybody yeah.
Speaker 2:Go on a blank and you know what I read it. I'm like this is amazing and I did absolutely nothing with it, right, because like it just sounds too good to be true, it's whatever you know kind of thing. But what I did was, before I even bought that first duplex, I had been listening to Bigger Pockets. Okay, like, like, voraciously, like I just like discovered that and that's really also the thing that gave me a solid foundation to to really get into it, yep, and then it came along where I I needed to have a way to have a spot in both places and, yeah, the duplex was the start.
Speaker 1:Yeah, so you had like kind of this baseline of knowledge. You already had the idea planted from Rich Dad, poor Dad, and then it sparked your interest it sounds like to get you to listen to the podcast at Bigger Pockets. And then opportunity came and you kind of already knew the direction you had to go. Then it sounds like it was just finding the right type of property or the right spot to make the move.
Speaker 2:Yeah, yeah, it really was, and it was kind of the duplex I think was a really good way to start and it's probably a good way, I think, to start for anybody when you're basically house hacking, living a half, half of it, half the tenants pay for almost all or most of the rent. I mean, when I first bought it, I sold, I took my, I sold my my single family house, bought the duplex, bought the other one for, you know, for the in the Appleton area, but but the duplex, I mean I really took my $2,000 a month payment from my single family and turned it into like a $400 payment for the duplex in Stevens Point, nice, because the tenant was paying everything else Right. So so right away I had $1,600 more of disposable income to do whatever I wanted with kind of thing, and with that I just basically started saving it and then acquiring more properties.
Speaker 1:That's awesome, I love it. So what was the next purchase then? So you did the duplex. Then you were like, ooh, this is like. What was the thing that fed to the next thing? Were you like, did you set a huge goal and you're like, now I'm going to go attack it, or was it just like, hey, let's see if something else comes up?
Speaker 2:The first part I mean, the first part was buying the duplex and then managing the tenant. Right, I had never actually managed. I wanted to kind of get get my feet wet with with the managing of a property. But then then I was on the prowl for more properties. Um, at this point in time I was basically just the mentality of, like you just have to save up, you know 20 down and and buy the properties. And I found I found a six unit apartment building. Uh, almost a year later at the duplex, and then simultaneously I found an amazing deal on a fourplex, wow, and so I I ended up closing on both of them, so I bought 10 more units.
Speaker 2:I went from the one duplex to 10. That's a heck of an escalation about a year later after the very first one.
Speaker 2:Wow, and that was scary because I basically went all in, I researched everything, I ran the numbers every single way that I knew possible, you know figured. I found two different banks that would basically take a chance on me and I put 20% down on both those properties. Actually, the fourplex required 25% down. Wow, but I basically pulled out of my 401k like as much as you could get loaned out. Yeah, I had some savings. I had, you know, basically every single ounce I earned from my my years of just being a w2 you pushed all the, you put all it, pushed all the chips to the center.
Speaker 2:Yes, yeah so it's either going to be all or, you know, all in fail or all in succeed, and thankfully there wasn't like a major roof or some kind of other major capex item that that came along. But um, I acquired those 10 units, so I went from one managing one to 11 and you were self-managing all these.
Speaker 1:You stuck with self-managing. At that point, yeah, I was self-managing, okay, okay, and what is the current? So-managing? At that point, yeah, I was self-managing, okay, and what is the current? So I want to go back to this. But right now, what does the current portfolio look like and what are you currently doing for management?
Speaker 2:Are you still self-managing? I'll tell you about the portfolio first, I've got a total of 51 units. Like I said, about half of that is in central Wisconsin area, the other half is in the northeast Wisconsin region. I've got a total of 28 residential doors Okay. Got 19 storage units slash garages Okay. And then I've got actually four short-term rentals. Three of them are kind of just no frills, whatever my initial short-term. I turned some single-family properties into those because I was either selling them off because I want to scale up my units or go that route, but anyway, I bought those three. And then this last year I acquired a luxury Airbnb-type property Okay. So that's really what my portfolio is right now.
Speaker 1:And management style. Are you managing all the units, or what does that look like right now? Do you have that broken out by different asset class of how you manage it, or what does it look like for you?
Speaker 2:Yeah, so it's a combination of different things right. Initially, through the first 12 units I self-managed Okay.
Speaker 2:And my background, is it? Uh, that's still what my w2 job is today. Uh, so I try and put a technology and automation focus on everything that I do. Yeah, and I was getting to 12, but then I was getting to the point where I realized, like I'm spending a lot of time still, even with automation, um, doing this. I thought, oh, I can hire a property manager. They're going to take that all off. I can focus on basically, acquisitions, finding properties, acquiring them, you know, managing the, the rehab on them, and and continuing to buy more kind of stuff.
Speaker 2:Yeah, and that worked out okay. Um, you know, I had I had a one set of property manager in the central Wisconsin region and then another one in the in the Fox Valley region, northeast Wisconsin side of things, the. I went through actually three different PMs in the Fox Valley before I found one that I really liked, and part of that was like I gave a couple properties, one couple properties to another. In the end, both of them didn't work out and I ended up finding a third one. That was really good.
Speaker 2:And then in the central Wisconsin side. After about two years I basically ditched them because I was spending more time managing the property manager than it was. It would have taken me to manage the properties myself, yeah, so so in today's world right now I've got, like I said, everything is central Wisconsin. I basically started my own property management company. So I got built with property management LLC and we're basically running everything there through that and then in the Fox Valley, for the residential units I'm using I'll call them out because I like what they're doing Titan Property Management. Okay, they're doing a really good job. And then for the short-term rentals.
Speaker 2:I've got three of them that are under management from a specialized short-term rental property manager. Okay, doorway travel, we'll give them a call too, because they do a great job, yeah. And then for the fourth luxury one that we just picked up, that's the one where we're basically teaching ourselves the rope and we're doing that one self-managed under the building property management side of things too Cool.
Speaker 1:Very cool, that's awesome, so a little bit of mixed bag.
Speaker 1:Yeah, you know what we did. The same thing, Jason. I think listeners, if you're thinking of, hey, I'm self-managing and I'm starting to build a portfolio, like Jason did here, and I don't know who to use, obviously use your network number one. I would say right, Like, who are you guys using? Jason just mentioned Titan. There's a lot of other really good property management companies out there. I'll say none of them and I'll tell them this to their face. In fact, we just had Fran on from Vantage Point a couple episodes ago. Nobody's going to manage it like you would. But also, your time is better spent, like what Jason's saying, on acquisitions and finding money and finding deals and that kind of thing. But that's what we did.
Speaker 1:When we started, Jason, we didn't know and we had mixed reviews from a lot of people on what property management company is. So I think I had four different. And then what are the things I don't like? So if I'm going to expand to a new market, like what you're saying, you got central Wisconsin and northeast Wisconsin. If I'm going to go to a different region that that property management company doesn't service, I know the things I like and don't like and I can use those things to interview to find that next property manager to help me out. So talk about that, Like, what are some of the things that you mentioned, a couple of them that didn't work out? What were those issues and what are the ones you know with Titan? What makes them a property manager that you, you're satisfied with at this point?
Speaker 2:I think that you know, property management companies are kind of like dating, right, yeah, you got to kind of date a couple of different property management companies to find out, because otherwise you don't have any perspective, right, right, like if you've only ever used one, that's all you know.
Speaker 2:You have no idea if they're good or bad or whatever kind of thing. So for me, going through, like I said, a total of probably four different property management companies for the, for the long-term rental side of things, right, I really got some exposure to like what was good, what wasn't good. In some cases, like, to me, the number one thing when you're dealing with any kind of vendor is communication, right, um, and the first two that I I got rid of, um, just the communication was terrible, okay, um, it's like you'd follow up, you'd ask a question. It'd be a couple days response kind of thing to get something there. Um, the one in the fox valley that I'm still using, titan, I've got a really good account manager. I mean, I always get a response same day, nice you know, they're not perfect, right?
Speaker 2:um, but they will respond. They communicate, communicate. They're managing tenants, they're doing a good job at keeping the good books, you know. So that's good. So that's that's probably the number one thing I look for when I'm dealing with anything.
Speaker 2:Yep, the other side of it was, and part of the reason why I ditched property managers and just went in house with it in the central Wisconsin side is because, well, first of all, there wasn't the communication there. There were lots of issues with with maintenance, where they just were not doing a good job, overcharging for it, and there was a lot of bookkeeping mistakes. I mean just constantly finding things where they build for something that they didn't actually do to like. Why is this being charged to me versus the tenant, kind of thing, or just I can't even describe all the different things that was there, but like it was just constant and I would have to sit there to be able to prove it to them. Right, I have to spend three hours gathering the information so that they can look it up, respond slowly and then whatever where it would have taken me just 15 minutes to fix the problem myself if I had access to the software, right?
Speaker 1:For sure. So that's a great point. When we started out, too, one of the things that we did with a lot of our property management companies. We grew pretty quickly and it was like a learning curve for us, right? How do you manage your manager, Right? And I don't even know what to look for on these softwares and the books and all this stuff. And so what we would do is, with each property manager, once a month, I would sit on an hour call with them and we would go through the books and we'd look at everything and, hey, what's that fee for? What was that charge? Why is that there, you know, just asking a lot of questions, and they were they were the ones that we still keep were great about. Hey, let's set up a monthly call, let's go through it, Like they wanted us to be comfortable with the numbers, they wanted us to be comfortable with what they were doing.
Speaker 1:And now we're at a point where, like you said, dating wise, like every time I do one of these podcasts and we talk about prevention, I'm like miss some things. But, um, you know, I feel like we laid a really good foundation for the first year of doing these monthly calls and going through the books together, doing a screen share, looking at the books together and that kind of thing, and that really helped me understand, you know how to how they're managing our property. Are they actually spending money on maintenance or not? And are they, like you said, are they overcharging? You know there's a fine balance there, right? Because if they're not taking care of your property, well, you don't want that either, right, when they're not actually doing anything. So just kind of understand, Well, it's not even just like I mean that's.
Speaker 2:I think it's a perfect example, though, of like good communication, right, right, good communication.
Speaker 2:You that two-way communication In your case, set up a monthly call kind of thing, whatever. But I mean, and the other thing I would tell your listeners is, it's not just about making sure that they're billing the right stuff, but are they getting to those maintenance requests in a timely manner, right? Because I actually my final straw for dropping everything in central Wisconsin was like I had, I had, maintenance requests out there when I really started to dig into it and find out, like from the tenants themselves, like they had put stuff in that was 60 days old, like and no action had been taken at all on the items.
Speaker 1:Right, that's rough.
Speaker 2:So when I had my final and that was that was not a unique instance of a of a maintenance request kind of thing, so that doesn't lead to happy tenants who like either rental right, You're going to have a lot of turnover.
Speaker 1:If that's the case, you aren't going to want to stay there for sure. Yeah, that's too bad, let's go back to your 10. So you went 10 units, you went 1 to 11, right there pretty quickly and you put all the chips in right to the table. So how did you grow from there to 51? Tell our audience if all your money was on the middle of the table on those deals and tied up, how did you access cash or what was your financing strategy to continue to grow and what was the next progression?
Speaker 2:for you beyond the 11 units? Yeah, I think for both of those properties it was at this point like I didn't really I kind of knew what BRRRR was but I really didn't, I had never executed it okay. Uh, and both those properties they had value add components like the, the fourplex, uh, basically it didn't have any work that was required for the units themselves. I knew that, like when those tenants moved out I would probably have to touch and do like some flooring and painting and stuff like that kind of thing. But it was very light, cosmetic type stuff. But the property itself had garages in the back. So the tenants have their own garages. But there was a separate building that had four garages like a 24 by 24, 212 by 24s and a 30 by 40.
Speaker 2:Okay, and the the. The previous owner was just using that for his own storage. So for me I'm like perfect opportunity for a value add where I can basically rent out those garages and turn those into storage garages so not only do the tenants have their stuff but theirs. So I immediately added to the NOI on those properties to get that unit basically to increase its value. And the other one, the six unit, was all like 1980s type property. The building itself was solid, but it had a lot of deferred maintenance items. So what I did is, as each tenant moved out over the first 18 months of owning the property, I basically just I did all new flooring, put an LVP, painted everything, fixed anything externally that needed repairs on it.
Speaker 2:Yep, and that's the one that really allowed me to do it for it, because once I had all six units turned yep and the rents substantially increased because now it was much nicer, you could attract better tenants, whatever. I went to my bank and I said, hey, can I pull money out of this?
Speaker 2:yeah and they're like sure, let's get an appraisal. The appraised value that I got out of the property allowed me to pull out cash. Keep the property, keep 20% into the property, right. They let me basically pull out 80% of storage units also attached to it, so it was like a mixed use commercial. And then another fourplex, so the one six unit. Not only did all the money that I put into it right, I got all that back, I still had 20% into it and I had enough to buy two more buildings.
Speaker 2:I love real estate man, and so from there I just basically kept doing that kind of model where I just kept buying and then finding ones that needed some kind of work or had some kind of value add and just did that.
Speaker 1:So, jason, let's do some math real quick on that six unit. And so, for the audience, most of the time when your five units are above, appraisers and bankers consider that a commercial property. If your four units are below, it's still considered a residential property for lending purposes. And so when they appraise it, most of the time what they're going to do with four units or above, they're going to look at your NOI, like Jason's talking about, adding to your net operating income. It's going to increase the value, obviously, but they're typically going to look at comparable sales with four units or below and say, well, this one's sold and it's pretty similar. It's just like a single family house would sell, right, they're going to put a little weight to that net operating income on the appraisal, but when you get to five units or above, it's almost always based very heavily off of the net operating income. So you can really jack up what a property is worth if you can increase rents and decrease expenses and create a bigger gap.
Speaker 1:There's what Jason's talking about, what he did there. But, jason, let's talk numbers on that now. So you had to put 20% down on that one, right? Originally.
Speaker 2:Kind of. But let me tell you I mean the other thing that, like, I think that is a good strategy for people to do too. So I negotiated with the seller. So I had to do the bank wanted 20% down, okay, but I negotiated with the seller cash back at closing also. So I ended up taking like another 15 K off of my down.
Speaker 2:So, like in this case, I think the property was originally like 325. I think I bought it for, okay, and I ended up getting 15K from the seller at closing as part of that Okay. So really, I think I ended up being closer to like 15% down into the property for that one. So I put 15% down of my own money. The rest came from either from the seller itself, yeah, and the rest came from there, okay. And then I had to do, you know, over the course of it actually was only about 12 months before all the tenants kind of eventually their leases came up and I turned the units and each unit required if we're talking numbers, it was it was probably about, and this is pre COVID numbers. I wish I wish rehab like this was was it was probably about 8,000 a unit.
Speaker 2:Okay, to do all six of those units, okay, but over the course of basically that 12 months, I mean the rents practically paid for that. So really it was the rents were already paying for the rehab that I had to put into it, already paying for the rehab that I had to put into it. Um, and by the time you know, I'd let it stabilize for six months, cause I really didn't have that, that concept of the true bird. It was just more of a hope it works kind of thing. And then you have to stabilize and show that you've got solid income or whatever, um, but I basically, yeah, I mean with that I, I, I.
Speaker 2:So, let's see, I'll just tell you like, so, like if I bought for 325 and appraised at 505, 505, okay, yeah, so I got it, so I was able to pull out, or basically, like I had to keep like 404, 000 is what I could get for the ARV minus the current loan amount, right, okay, so I paid off all of that rehab, I paid off all of my um, my initial down payment on the thing, and came out with a I I'm going off the top of my head, I don't remember the exact number, but it was something like 157 K is what I check. I got, still already having 20% of the property that I could then roll into those other properties.
Speaker 2:So I'm basically like, if you look at the actual capital that I put into the thing, I figure it was about a 4X return on my initial capital in 18 months and you got all the capital.
Speaker 1:back in 18 months, I got all of my initial capital. Yeah, so, and you?
Speaker 2:got all the capital back in 18 months. I got all of my initial capital, yeah, so like, basically, I had Forex, the money that I put into it in the first place, and that was all tax-free because I never sold the property, right? Yes, so you're not paying any of the capital gains on it because I still own it. I still own it today.
Speaker 1:It's a loan proceeds, it's not. It's not a sale.
Speaker 2:Yep, yep, and so you just keep rolling at other properties and that's, that's kind of the beauty of Burr.
Speaker 1:I love the Burr I was. I wanted to make that point. I'm glad you told talked the numbers, cause that's where I was trying to lead you to is let's understand the numbers a little bit, cause I think for our audience it audience that's not done a BRRRR yet or understands the BRRRR method once you grasp that concept of like you literally in 18 months, have none of your own money into this deal now. Now what would you say, jason? Here's my follow-up question to that Rough ball number what does that thing spit off? Annually net cashflow after everything, is it more than a dollar?
Speaker 2:Oh yeah.
Speaker 1:Okay. So here's my point to those people Absolutely, I love talking to financial advisors. Oh yeah, you give me all my money back and then just give me an infinite return for the rest of my life on this thing and they'll go. You can't do that. You know whatever? And I just start laughing. I'm like let me show you the BRRRR strategy. Here's how it works, right? Oh, and even better, jason, you got $157,000 check, tax-free on the BRRRR. Come on, man, that's amazing. So I love this.
Speaker 1:And this one deal, this one deal. Imagine now if that's all you did every single year for those of you out there listening, that a hundred thousand dollars is going to change your life or maybe help you retire, retire a spouse. One deal a year, it doesn't take. You don't have to build a portfolio of 51 units. You can just do one deal a year, add it up and just that's all you have to do. That's all you have to do is make a hundred grand a year, find one deal and figure out how to finance it for that 12 to 18 months. Boom, doesn't even have to be your own money.
Speaker 1:Like Jason, put his own money into these deals or lines of credit, equity or whatever else he used, but it could be somebody else's money. You could have a family member or friend who's got money sitting on the sidelines. They're in a high yield savings account making 4%. Right now. You're like hey, bro, I'll give you 10%, let me use your money for 12 to 18 months. Boom, there you go. You don't have to have any of your own money in the deal ever, and now you just refinance that property. In 18 months you pay back your buddy and now you got a free and clear Well, not a free and clear property, but a property. All you owe now is the bank and that's it. And then your tenants pay the bank for you.
Speaker 2:It's great. I mean you're paying down the mortgage right. Actually, I shouldn't say you are, your tenants are paying down the mortgage right. It's appreciating. You get the right off the depreciation of the thing, you're getting cash flow. Hopefully you're getting cash flow. It depends on your area, right? But I underwrite myself very conservatively and I consider cash flow after I call it pure cashflow, right. Yeah, A lot of people are just like well, if it's, if I'm making more than mortgage, I'm cashflow. No, you're not.
Speaker 1:No no, you're not.
Speaker 2:Because you haven't written in like what happens when you need to do a rough at some point, what if you need to do water heaters or whatever kind of repairs on the thing? But like, yeah, it has to be like all insurance, taxes, mortgage, everything, like putting reserves for maintenance, reserves for CapEx, you know, reserves for vacancy, I mean, because you're never going to be 100% occupied. All of my properties, cash flow after all of the reserves, all of the actual expenses, all of everything, and they've all been basically like a snowball where I keep doing it, yeah, or just keep buying stuff that needs it and rehabbing it, and I've gotten better at that as time has gone on, cause 18 months was just because that was the first time I ever did it, right. Um, you know, after, after those initial, what was that? Like 10, 18. Oh well, like 18 plus units there. I mean, that's where I really started then to get into like the wholesale world of stuff, to really find like not only just find, like value add.
Speaker 1:You know there's a whole bunch of kinds of value add right.
Speaker 2:Yeah, so you can find stuff that needs rehab, basically ugly properties. You can find stuff that's just mismanaged, right, maybe the person running it doesn't do a very good job, or they do everything manually and they don't have automation. Um, you can find in in the case of some of my properties, like where there's garages that aren't being rented to someone else. I mean that's a form of value add. There's all kinds of value add, but I mean the other side of it is just how do you find the stuff off market? Yeah, and you can either put in all the legwork to do that, which is a ton of legwork, or you can go to wholesalers, yeah, and and that's really how I discovered, actually, wisconsin discount properties yeah, you know, I, I just got on pretty much every single wholesaler list that I could find.
Speaker 2:Yeah, it was really my next evolution of being an investor. Yeah, because it was hard to find stuff on MLS. You can still find stuff on MLS, absolutely Yep, but wholesalers are just basically constantly finding those ugly properties, yep, and I was completely fine just paying, basically paying the finder's fee, yeah, to find those ugly properties, and I was completely fine just paying, basically paying the finder's fee to find those ugly properties, cause that's really then what kind of fueled my next wave of acquisitions.
Speaker 1:Yeah, for sure I get asked a lot of times as a wholesaler. People are saying hey, man, I want a wholesale, cause I heard it's like the easiest way to get into real estate. And I kind of chuckle a little bit, Cause I'm like it's probably one of the hardest things to do because you have to get it cheaper than the real estate. The landlord or the flipper is willing to get it or willing to pay, and so you have to A be really skilled at sales, you have to be really good at marketing and you have to spend a lot of money if you want to do this at a decent level on marketing. We spend right now $50,000 to $75,000 a month on marketing, so to $75,000 a month on marketing. So you want to spend that money on marketing and that we obviously wouldn't start that way.
Speaker 1:It took several years to be able to build a company, to be able to get to that level. But you know it's it's a lot of legwork. You know way I had some people come in and like I'm going to cold call. They took a course, heard a guy on a podcast, bought the course, did the cold call thing, and then they're like dude, how do you do this Like I've been cold calling for a month and I've got like one decent lead. I'm like I know that's the name of the game Like it's just there's a very small percentage of people that want to sell their house at a discount and so you have to be, you know, basically all over everywhere to make sure that you're top of mind for those people to be able to find you Well and you've got to have the personality for it too.
Speaker 2:I just know that that's not my personality. I don't want to be out there calling a million people trying to do stuff. I'm perfectly happy paying someone else to do that. Yeah, yeah, and that's what wholesalers are good at. They specialize in it and they find stuff.
Speaker 1:Yeah, yeah, awesome Talk about the storage stuff. So we haven't talked a lot of storage. A couple people on here have got storage. It's a smaller chunk. You've got 19. I'm assuming they're all on the same property Two different?
Speaker 2:locations. I've got, like I said, those garages that I mentioned originally. Then in the central Wisconsin area, in Mosinee, I've got another 15 storage. They're actually more like mini storage units, a combination of different sizes, but yeah, that's.
Speaker 1:What made you want to get into that, or how did you? Is this just an opportunity that came up? Or how did you transition from doing the residential stuff to those mini storage? Was it because of those garages that that kind of peak you a little bit and get just a little taste of it? Just a little taste of it a little flavor of it.
Speaker 2:Yeah, I mean I mean I certainly listened to enough podcasts too that when, especially when, storage uh units were kind of like, oh, this is the best investment kind of thing, whatever. So I was interested in I'm, I'm still interested in any deal that makes sense. Where the numbers make sense, I'll buy a commercial property. Um, I'll buy whatever. I, you know, mean looking at some potential businesses that I might acquire here. But to me it was just that right opportunity came up. I knew I wanted to get storage. I didn't have the capital myself to go out and buy one of those 200 to 800 unit type storage properties. And again, it was another way to kind of really dip the toes in the water of storage units to really see how that would work. Right, I wanted to get the automations in place to make sure that it wasn't me constantly having to go on site and visit these things.
Speaker 2:And I was really worried about, you know, constant turnover, right? Yeah, you know, with residential units, a lot of times you're signing one of your leases, yep. When it comes to storage units, I mean most of the time those are month to month, okay, and so you could get a lot of turnover even with just, you know, 19 units, yeah, and so that was really the next. The right property came along and it was the right opportunity, and it was something I was interested in exploring and doing.
Speaker 1:Um, you know, learning from was it a similar, uh, exit strategy for you as far as like a burr type of a method? Like were these burrable? They were mismanaged or what was when you said you making sure the numbers made sense? Is that what you're looking at is making sure that you could burr out of it and and still have a little bit.
Speaker 2:So I like that particular property. Um, I'm actually about to um execute a burr on. I was just holding that one because it was just pure I was making so much I'm still making so much cash flow on that property right now. Um, but my initial one was like the the. It was a mixed use commercial property right. So I had four residential units and they had the 15 storage units immediately, like from day one. All the rents across the storage units and the residentials were all low.
Speaker 2:So I mean day one I just basically bumped up the rents, okay. Um, both on the storage units and the and the actual residential units, okay. Um and then as people started, to move out of those residential units. I did the same thing where I did very heavy rehab on those things because they they needed it. Okay, um, I mean those were more in the ballpark of 30 to 35 K type rehabs because they were partial to the studs type.
Speaker 2:Oh wow, like rehabs okay, storage units, I still haven't all I ever did in the storage units to make them look better was paint all the doors. Okay, like literally, that's all I've ever had to do for the storage units was paint the doors to to make them look nice. Yeah, uh, give it a refresh. I that half of the whatever two-thirds of the building like is is so simple to manage. Okay, um, I was worried about having to manage a million keys but I haven't seen a lot of turnover, even when I just I mean I religiously increase the rents.
Speaker 2:Okay, um, you know, after after 12 months I increased rents people barely leave Okay. And and when there is an opening, I get it rented right away. And you know, the nice thing about that is, like, a lot of times, because it's already empty, I, I, I, put in processes in place. So when someone leaves a storage unit, yep, they have to send me a picture, okay, showing that they've completely cleaned it up.
Speaker 1:Okay, so then I know it's clean right, yeah.
Speaker 2:I basically tell them to leave it unlocked, okay, and then when people inquire about it, I don't even have to go there, nice, because they just go. They open up the unit. If they want it, they take it. If they don't, they close the lid on the thing again. And yeah, I mean that if they want it, they take it. If they don't, they close the lid on the thing again. And yeah, I mean that's. So I, every once in a while I will go visit because I have to do other stuff for the residential side of stuff okay, but I mean, for that side of it it's super, super.
Speaker 2:You know, the scary part of what I thought was like oh, I might have to be going there a lot, kind of thing. Yeah, really didn't turn out to be a whole lot.
Speaker 1:I have heard that from people who have storage. It's a lot of turnover. You get people in and out, but maybe that's on the bigger when you got a bigger facility, you're going to have a lot more turnover. Maybe, I think, part of it too is automation.
Speaker 2:Like I said, I still work at W2. So I'm full-time W2. I right, so I'm full-time w2. Yeah, um, I manage like a global team of it people, so I'm used to managing people um, and being an it background. I want to automate everything, yeah so I think that part of it is that too. Okay, like I've applied software, I've applied scripts, I've applied ai um to do I mean like a lot of stuff, so I barely have have to touch.
Speaker 2:You know, like the, the most of the operations of the property management side of stuff really is, is pretty. You know, it takes care of itself. Okay, even, like you know, people paying rent, like all the properties I acquired, like people were used to sending in checks. As soon as I could get them on a lease, I would switch them, excuse me, I would switch them to basically be like no, it's all got to be online payments. Yeah, I don't take checks, you have to do it through the online portal. Yeah, and yeah, I mean. So that's, I think that's the key. Key, too, is if you really want to do, well, you got to figure out how to get rid of that old red, or yeah. Or if you want to be able to stretch yourself yeah, leverage technology, leverage other people yeah. Um, leverage anything you can to not have to kind of manually do everything right.
Speaker 1:Yeah, the the online automation thing is so key when you're marketing those. Like are you just putting a Facebook ad up? Or like, how are you getting them filled so quickly? Is it just putting a sign back out it says vacancy? Or like, what's been the strategy to get those storage units filled up?
Speaker 2:Yeah, so I leverage, so I use property management software, okay, and so that's automatically got stuff where it will. When there's ever an opening, yep, um, the property management software will basically send that out to, um, you know, like, basically like rentcom to basically to all of your kind of online places where people look to to to rent stuff out, right. Yeah, it'll send it to all those, those online sources, okay.
Speaker 2:The only one that doesn't have an automation is Facebook, okay, and so I still do Facebook marketplace, though, because in in the places where I am, yeah, and this will vary depending on where you are, but probably 95% of my leads come through Facebook.
Speaker 1:Okay, wow, holy cow.
Speaker 2:The next 2% come from like the Zillow network Okay, and then maybe the next like 2% comes from like rentcom type or apartmentscom side of things Okay.
Speaker 2:But, like, the vast majority of stuff comes through through facebook marketplace wow, fascinating um. And you know you get a lot of people who are just inquiring. But I, just, I, just what I do is because I haven't figured out a way and it bugs me to this day still to automate that side of it. That's where I really want to try some ai stuff on there. Yeah, some chat bots or something.
Speaker 2:Yeah, some bots, the message response bots, but yeah, but facebook marketplace makes that really difficult. Okay, by design, because they don't want that okay um, but I just copy and paste. I like people inquire and be like is this still available? And you know when you first get like 50 million of those. You're kind of like annoyed.
Speaker 1:Yes, it's available. It's listed.
Speaker 2:But you know what, Yelling at them doesn't make them rent it any faster. So I just say yes, it's available, and to fill out an online application, you know and providing the information that way.
Speaker 1:So cool, and that's all through that.
Speaker 2:What software?
Speaker 1:do you use?
Speaker 2:for managing the storage. So when I first started, I use a tenant cloud, which is really good for when you're smaller and getting started. Tenant cloud I thought was amazing. I actually being the it geek that I am probably looked at like 10 different ones and kind of made like a spreadsheet of features that sounds like it.
Speaker 1:that sounds like a tech nerd thing to do Make a big spreadsheet.
Speaker 2:So that was when I first was self-managing and then I gave it all to the third-party property managers and then I got to see some exposure to Buildium, to AppFolio and a couple other ones and eventually, when I took stuff back in-house I went with AppFol. It's, it's expensive, okay, but the more I use it the more I see like how nice it is. Okay, that makes it worth it because that's what you use for storage too yeah, okay everything in fact. Yeah, I'm running basically the storage and the long-term rental stuff out of there.
Speaker 1:And I actually run all the expenses for the short-term rentals through there as well, okay.
Speaker 2:So I have one kind of platform that at least does the stuff, even if someone else is doing the management on some of those ones.
Speaker 2:Sure, I still run all the expenses through, because it brings it all into one spot Nice expenses through because it brings it all into one spot Nice. But yeah, so I'm using AppFolio now and it does some things that are very nice. I mean, first of all, it handles all the rent collection, but it's got things like where it will automatically send out the reminders to say rent's due or rent's past due. It automatically applies those charges that are set up in the system, but some other stuff that like, as I, as I've been growing, I never thought I would have to deal with. But uh, I'll just give a recent example um, insurance management side of stuff, right, oh, yeah, so not only tenant insurance, like so that they have the renter's insurance kind of thing, okay. But like I now require all my leases where all the tenants have to have insurance, okay, if they don't the system will automatically put a tenant like a landlord protection policy in place.
Speaker 2:So they don't do it and they don't provide it. I don't have to try. I don't have to track it down, though, because the system automatically does it. They have to go to their portal, they have to upload it. I don't have to try, I don't have to track it down, though, because the system automatically does it. They have to go to their portal, they have to upload it. They don't upload it, and it uses ai to basically like make sure it's a valid policy. Wow, if.
Speaker 2:If it's not, or whatever kind of thing it says, like if you don't provide the evidence within I think it's like four days from the point of your lease starting, we're going to automatically charge you, and it just automatically does it, and so it puts a policy in place for them. So, and then when, whenever those things come due, then it will basically do the same kind of thing It'll make sure that they have a new policy. If they don't, it'll put one in place. That's awesome, but then even on the vendor side of things right, as I'm growing, you kind of start to grow vendors, that who are your trusted vendors, things like that. Yep. But I mean, you all hear like oh well, you should always, you know, you should get their, you know, their proof that they're insured, those kinds of things and I've always used to be sure, but I never collected, like their certificate of insurance.
Speaker 2:Yeah, and then, just like recently I had like the the random, your insurance company wants to get a record of all of your vendors and like, and I, not because I had claims, but just because, like they're doing a rant or they call it a premium audit.
Speaker 2:Oh boy they called it a premium audit, oh boy. And so I never really used the functionality in AppFolio until that came along where I'm like. Okay, I basically clicked a bunch of boxes and sent messages to all my vendors requesting their certificates of insurance. They go to a portal, they upload it portal, they upload it it. It keeps track of it then at that point to know that they're they're, you know that they're they're particular, um, general liability or automobile insurance or whatever kind of stuff, and it will like, at the 30 days before it expires, like, ask them for their new, updated ones.
Speaker 1:Oh, my goodness that's awesome and I don't have to do any of that, right? Yeah, that's huge.
Speaker 2:So then I was able to basically do that and so I hadn't actually used that functionality until just, uh, about two months ago. That's when I had that, because I've never seen, I never even knew that, because the insurance company basically came and said, hey, like we want to make sure that, like the premiums we were charging you were the right amount, because they, of course, they want to get their money, they want more yeah, like wife and if you, you need to prove that all of your vendors have like that, that they were insured.
Speaker 2:Because if they weren't insured and if you can't provide evidence that they were insured, then we're going to charge you as if, as if we were insuring them for you. Oh, and I think that's something like, and I never realized that was a thing, right, I just thought it was like, in case there was a problem.
Speaker 2:Right, you want to make sure they have insurance, but they want to make sure that, like workman's comp, if they're doing like construction work or things like that, those are in place. So it's I think it's really important to make sure that you are using you're not your uninsured uh, joe Schmoe kind of person that you're actually using somebody who has insurance, because you could get into a situation where the insurance company says, hey, provide proof that the so-and-so vendor actually has insurance, because otherwise we're going to charge you, basically as if you there were your employee and you needed to to to cover them for insurance.
Speaker 1:That's crazy. Maybe a lesson I just learned, even after whatever, what are we at?
Speaker 2:I'm at like 2018 to 2024. Yeah, I mean, that's like six plus years, six plus. Never had that come up.
Speaker 1:That's great. Me either, I've never had that, either. I've been in about a little bit. And then 2016,. I've never had that. That's crazy.
Speaker 1:Another thing that along that record keeping wise, I think you bring up. That's an awesome nugget for our audience right there, cause that could save you tons of time. I got audited this year from our friends at the IRS random audit, yep, quote, unquote and you know keep track of all your receipts. It's a pain in the butt. Keep track of all that. And then W-9s.
Speaker 1:I know this is something for a lot of people. If you pay by check or cash or Venmo or anything like that, make sure you grab a W-9 before you pay your vendor. So if they're requesting payment, I'm happy to pay you as quickly as I can. I just need a W-9 from you first and then get that to your accountant or your bookkeeper whoever's going to send out the 1099s for you at the end of the year, because that can be a big pain in the butt to try to hunt those down.
Speaker 1:As people are starting to listen to this episode, this is the time to be collecting all those. A lot of times people are scrambling and they're like crap, crap, crap. Now if you don't have those, depending on your accountant, they may or may not let you write that off, and so you could be missing out on a lot of deductions by not collecting those W-9s before you pay them. Now, if you do credit card as far as I know I'm not an accountant Talk to your accountant, but you don't have to collect the W-9. Probably still just good practice anyway. But, like you said, if you have a software that you can store those, then and then it's just automated.
Speaker 2:You can just click buttons and check it to whoever you want it to go to. I mean, that's amazing and that's one of the things too now when I add a vendor, like besides now checking, I never bothered to check the box for the insurance thing but, I, always check the box to say send me your W-9.
Speaker 2:And the system is actually set up to the point where you can't send a job to them requesting them to do maintenance or whatever If, like it doesn't have a current w9, if it doesn't have the current insurance, you can basically so like you can't even make a mistake, right, and that's something you can tell me w9 thing I knew from, from several years now, I mean yeah, you always want to have the w9 before you make your first payment, because you have to get it, yeah, at year end it took a couple of years.
Speaker 2:Honestly, it took a couple of years of me and scrambling in January to all my vendors and be like can you send me your W-9s? Yeah, yeah. I think, and now, it's just I request it up front, Like, hey, I want to add you to be a vendor and I need your W-9. Yeah, you know boom.
Speaker 1:Yep, get me your stuff. Absolutely. This has been awesome. That insurance nugget for me was a huge takeaway right now as I'm listening to you and hopefully for our audience. That saves them a lot of heartache and issues with their insurance providers down the road if that ever came up for them. But Jason, last question is kind of a fun question. Here we do this on every episode. What is your favorite Wisconsin tradition or favorite place in Wisconsin to spend some quality time?
Speaker 2:I would say probably my favorite Wisconsin tradition is fish fries and old fashions. Oh yeah, that's been a Wisconsin old fashions?
Speaker 1:Yes, not the normal old fashions, not whiskey brandy yeah. Yeah, I love going places and doing any kind of.
Speaker 2:I always order their old fashioned.
Speaker 1:Yeah, we travel a lot now. Yeah, but I was pretty we didn't travel much when I grew up and Carrie and I. We were down in Austin, texas, once, and we saw this big sign it said old fashions, right. And we're like, oh cool, it's like being at home, right, let's go get an old fashioned and I drink it. I was like, oh my gosh, this is like pure gasoline, what the heck. I thought it was supposed to be sweet. I'm so used to my Wisconsin old fashioned and I didn't realize we're pretty unique here in Wisconsin with our, with our old fashions.
Speaker 2:So well, this has been awesome.
Speaker 1:Brandy and you're on the man. This has been a lot of good information. If anybody wanted to reach out to you, to connect in any way, what's the best way for them to get a hold of you? To reach out on facebook do you want an email you don't mind dropping like what do you? What's the best way to get you?
Speaker 2:yeah, I mean, uh, so a couple different ways that that I can be reached. I'll just hand out my cell phone. Maybe I'll regret it, but yeah, seven one five nine six five five one one two. I love talking about real estate, so anybody can can call me, text me, whatever and just talk, talk about real estate. But otherwise my email is Jason at Bilbreyme, just like my name. I've got the domain for it. Yeah, so feel free to reach out anyway.
Speaker 1:Love it. Thank you guys for listening to another episode. If you guys got some value out of this, please share the podcast. As I say almost on every episode, sharing is caring folks and we appreciate when you share this podcast and you get it out in front of some other people who may be able to benefit from this. If you're looking to get started in real estate here in Wisconsin whether you're outside the state and you want to park some cash here, or you're in Wisconsin and you want to just get started in your real estate journey, please hit us up at wisconsindiscountpropertiescom. Fill in a little, contact. Us and myself or somebody from our team will reach out and we'll just do a free call. We'll get to know you, get to know your goals, talk about where.
