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 Dog Hair to Dollars: The Farleys' Investment Story
Ever wondered how an everyday couple from Shawano, Wisconsin, turned their first duplex into a thriving real estate investing business? Meet Cayla and Brandon Farley, whose journey began in 2016 with a house hacking strategy, leading to a thriving investment portfolio. Listen as they recount their early days, navigating unexpected challenges like mountains of dog hair, and how these experiences laid a solid foundation for their future investments. Through a meticulous mix of leveraging HELOCs and securing creative financing, the Farleys reveal their secrets to transforming properties into lucrative assets.
In this episode, we unravel the strategies that propelled Cayla and Brandon to success, from choosing the right financial partners to mastering the art of flipping properties. Brandon sheds light on how he and Cayla divide and conquer their responsibilities, combining their skills to manage both a fence company and a real estate venture. We discuss the strategic choice between outsourcing and hands-on work, and their ambitious goal to replace their income with passive earnings from well-chosen buy-and-hold investments. Their story is a masterclass in balancing entrepreneurial ventures with personal strengths.
But the journey doesn't end there—dive into other compelling real estate tales, including Joey and Chrissy's transformation of a multi-unit property into short-term rentals. Discover the thrill of flipping a fire-damaged house and the unexpected pitfalls that come with it. We explore the growing trend of converting motels into apartments and emphasize the importance of networking in the real estate community. This episode is packed with real-life insights, valuable lessons, and the inspiration you need to fuel your own real estate ambitions.
Welcome back to another episode of the Wisconsin Investor. Everybody, I'm your host, corey Raymond, and today we've got a super awesome episode. I'm so excited for this one. I always love interviewing couples and I have an awesome couple here with me who I'll introduce in a second. But before I do that, I want to talk about Wisconsin Discount Properties, who sponsors these podcast episodes, and tell you about a hot deal we just had guys. So we just had a deal in Watosa. It just got sold the other day.
Speaker 1:But I want to talk about this one. There was a huge spread on it ARV probably around $425,000. Our buyer picked it up for 235,000 bucks. They're going to stick about 40,000 into it. So part of me is kicking myself for not just buying that one myself. But that's why we do things the way we do at Wisconsin Discount Properties because we all win. They make money, we make money, sellers happy. It all works out great. So if you're looking for off-market deals similar to that, one that you can flip or put in your portfolio as a BRRRR or whatever you want to do, just head to wisconsindiscountpropertiescom, plug your information in and start getting access to these off-market deals. We're putting two to five of them out every single week to our buyers list. That being said, let's get into the episode. Today I've got the Farley fam Kayla and Brandon. How are you guys doing?
Speaker 2:Great, good, great. Thanks for the invite. Appreciate it.
Speaker 1:Absolutely Excited to have you guys on. Tell the audience a little bit so they can get to know you guys.
Speaker 2:Where are you located? What's your history with real estate? How did you get into this thing? Kind of, give us just a full. Let's start there. Give us the full background here. Yeah, so we're located in shawnell, a little bit outside the green bay area, where you guys are from, uh, but we have been in real estate for quite some time now uh, 2016, which I hear is when you got in there good year year to get in.
Speaker 2:Yeah, yeah, Um, but a little bit slower than you, I think, but we're still doing uh flips and we got a couple of rentals, Um, so that's about our experience Just kind of still still getting the ball rolling here for us, Awesome.
Speaker 1:What got you into real estate, guys? Cause I always love this question but, like Brandon Kayla, what the heck are you guys doing? You're gonna have to deal with tenants and you're gonna have to do this Right, and they start giving you all the negative stuff. Did you guys experience any of that when you were starting?
Speaker 3:I think, well, we. It wasn't like a big corporate right, we just met her and she was awesome and we're like, oh my gosh, we can do this. So we picked up a couple of books and we were really big into Bigger Pockets. In the beginning we read Brandon Turner's book, which is amazing. He's amazing. Um, we actually just recently met him but, um, nice, so that kind of just laid it out, I mean, and it was pretty black and white. So that's when we went after our first duplex then just across town. So awesome.
Speaker 1:Did you guys live in it? Did you house hack it or was it a straight rental right from the start?
Speaker 2:Yup House hack all the way Nice.
Speaker 3:Yeah, there was about three feet of dog hair everywhere come on a path through it. Oh yeah, definitely some. Uh, some tlc needed in that thing. What?
Speaker 1:like I've been in hoarder houses but never a dog fur hoarder house, that's oh yeah yeah, he wasn't letting it go.
Speaker 2:I don't, I don't get it insulation or something along with a mouse mouse uh infestation, I'm sure right with that right?
Speaker 1:oh my goodness. So what did you guys have to do to clean that out? Because you know pet smells in general can be a a bit of a problem. Was it pretty smelly with the hair or was it just straight like trying to get all?
Speaker 2:the hair on. No, thankfully no. No urine smells or anything like that, just a lot of hair. So we got the place cleaned out and really didn't have to replace any sub floors, but we plan on doing all the flooring already.
Speaker 3:Okay, clean sweep and stuff, yeah.
Speaker 1:Painting carpet, that kind of stuff, yeah nice, and do you guys still have this duplex?
Speaker 3:yes, best property oh yeah, it has come through for us so many times. It's amazing.
Speaker 1:Tell me more about this. Why is this the best one that you guys own?
Speaker 2:We bought it in 2016. So we got a great price on it and then obviously you know, everything came up in price since then. So it's about double what it what we bought it for. Yeah, that helps.
Speaker 3:And HELOC. So HELOC has just been, it's just been awesome.
Speaker 1:So you guys know me and my HELOCs. I love it, did you guys? How did you finance it originally? Was this the 5% down program back then, or what was this? What was the story then?
Speaker 2:Yes, 5% down. Um, I think it was actually less than that. Was that three and a half?
Speaker 3:Yeah, we ended up actually doing 5% down, but then they actually took out like a second mortgage to help with that as well, Cause we were, you know, young and broke and no money at all and um, but we got it and we added some value to it and um ended up refinancing it out of that second mortgage, I believe, Um, and so we've just held onto that mortgage then thereafter.
Speaker 1:So the original first position mortgage Okay, cool. And the HELOC thing. How did you guys get the HELOC? Did you find a lender that would lend on this property but not be in first position?
Speaker 3:Yes, yeah, yeah.
Speaker 1:Can you guys share who that is, or do you?
Speaker 3:know, oh yeah, nicolet national bank here in Wisconsin.
Speaker 1:Really.
Speaker 3:Absolutely. Nicolet National Bank here in Wisconsin Really Absolutely awesome. Yep, we actually work with Nick Chaudry, so I don't know if we're allowed to plug even a name in there, but he's awesome and he's even you know, hey, this is kind of like how some of these other guys have this kind of laid out. You know, what does that sound like to you? Or you know, kind of goes over our goals and structure wise for loans, and it's just been a really awesome working with them, yeah.
Speaker 1:Oh, that is so cool, cause I've never really had a lot of luck with them on investment properties. But I didn't know that they would do a second position. Heloc, if they don't have the first, so they do not have the first. Let me just confirm that.
Speaker 3:Correct, yeah, correct.
Speaker 1:Oh wow, all right, there's your nugget. All right, guys, we can wrap. This has been a great episode. No, that's a big nugget.
Speaker 1:There's only a handful of banks I've ever heard of that will go second position HELOC on a property and investment property that they don't have the first position on there. So for the audience that's listening, if you're new to investing or you're not at the point where you even can think about getting a HELOC yet because you don't have the equity or whatever the case is, typically a bank is only going to give you a HELOC if they have the first position loan. So meaning you go to the community bank, they lend you the money, you buy it, you fix up whatever and you go back to them once you have some equity and you say, hey, I want to pull some of that out and use it for down payments or rehab or other cases. Typically, if you go to another institution that's not doesn't have that first thing, they're going to say, oh great, we'll do it, but we want the whole first position loan. So this is a huge nugget that kaylin brand are sharing with you guys right now.
Speaker 2:so I'm definitely going to write that down and yeah no, we do have other loans for other properties through that bank. So I think you look at it as they still have leverage there.
Speaker 3:Well, our whole business, though, too. I mean all of our business accounts and stuff like that for the company. I mean it's all there.
Speaker 1:So the relationship is strong with those guys.
Speaker 3:It's not just a one-off type of product.
Speaker 1:Yeah, that's. Another important part with community banks is they're a lot of times more relationship heavy versus Fannie Mae, freddie Mac. You heavy versus you know, fannie Mae, freddie Mac, your 5% down loan that you're going to talk about. They don't know who you are, you're just a number in their system. Community banks are going to. The relationships can go a long way and getting some lending.
Speaker 3:Oh, yeah, for sure I mean yeah, I can go on and on, but yeah, yes, yes, talk about like.
Speaker 1:so you, you guys, are mostly into flips now, or you said you guys, earlier we were talking. You have a couple of BRRRRs in addition to that happening. What's the business strategy? What's the big goal for you guys?
Speaker 2:Yeah, I think right now we're really looking at building our base.
Speaker 3:We're trying to get a base of rental properties, mainly through BRRRR, just to keep us held up and make sure that if we do make some risky moves or we want to take some steps here going, some steps here going forward, that we do have that base to fall back on. So cash them in later. I mean whatever you know. More HELOC loans.
Speaker 2:I mean whatever Right I mean we just don't want to bite off more than what we can chew. And yeah, yeah, using the HELOCs has been huge for us. Yeah, making our own bank there.
Speaker 1:What are you guys using your HELOCs for? Cause bank there. What are you guys using your HELOCs for? Because I use mine, maybe differently than you, but I'm curious for the audience how are you guys finding this? It's such a great tool and how are you finding it coming into play for what you guys are doing?
Speaker 3:So right now, we currently are using them for rehab. So instead of taking hard money to pay for the house and rehab in order to obviously save some money there, we're just using hard money to purchase the property and then we're using our HELOC zone for the renovations.
Speaker 1:Very cool. Yeah, that definitely saves a lot of money. Those darn loan sharks out there. They're making their money on those hard money loans, but yeah.
Speaker 3:I wish I met earlier is all I have to say.
Speaker 1:Yeah, yeah, so you guys are primarily. When you're doing the flips or the burrs, you're going hard money HELOC on all of them.
Speaker 3:If we can? Yeah, I mean until we have enough HELOC right and then we don't need the hard money.
Speaker 1:but yeah, sure, yeah, no, that's great. And so everybody listening to this, that's another good nugget. You might want to go back and relisten to that if that's kind of foreign to you. But a hard money lender typically they're going to be higher interest, higher points right, then a community bank would be but they can close quick. They're typically, again, relationship based and they're going to potentially give you rehab money along with it. But, like what Kayla just mentioned, you don't have to use them. You save quite a bit of interest and you can be more competitive on your offers. You can increase your spreads, all those kinds of things. So that's fantastic. Have you guys talked to Nicolet or any other community banks about trying to replace that hard money lender now that you've got some HELOC cash and just work with them on these flip loans or any of that, to bring the cost of capital down even further?
Speaker 3:Being honest, I don't recall. I feel like I've had this conversation with them, but the situation we were in before the timeline wasn't going to work out because they still need that standard 45 plus days to close and so it's definitely now that you say that I might want to revisit that. They very much might do that or like their own form of, like a construction loan. You know, however, they want to categorize that, but I'm not sure right now.
Speaker 1:Okay, yeah, that's something we I usually recommend to people. Once you can kind of get off the hard money piece and get you know, you got a little bit of a, you know, you got a track record. Now you guys have been in the industry since 2016. You guys have enough there that you could go talk to a bunch of community banks and figure out who's going to be the best option for you guys for each deal. Kind of use them like a little chess pieces. Sometimes, right Is what I do is like all right, who's got the best rate? Sometimes, if I'm doing a flip, I don't really care what the rate is, as much as like what are all their loan fees going to be? Right, because that is going to make more of a difference than just half a percent different on interest rate cares in a six month loan. Right, it's like you're going to hit me with a $2,000 loan fee. Well, this other guy's only charging me 500 for that. I'm going to get this dude right.
Speaker 3:Yeah, the little things are like little pet peeves to me, where everyone's like oh okay, so the loan is this much, and then the rehab is that, so then there's your profit. I'm like no, no, no, no. You're not factoring in the points, the closing costs, the holding costs, like all those little things that end up taking a lot more than you think it does.
Speaker 1:Yeah, Did you guys have an experience where, like you, you found out the hard way all this stuff you're budgeting one way and then all of a sudden you looked at it and you were like, oh, I didn't realize there was going to be.
Speaker 2:She's all over it. You got a good wife on your side. You're golden. You don't got to worry.
Speaker 1:How do you guys divvy things up, like Brandon? You just mentioned something and this is one of the reasons I love interviewing couples, because usually couples, I find, are some of the most successful real estate investors. One of you has a strong suit in one area. The other person is strong in another area.
Speaker 2:Like, did you guys ever have a sit down and divvy this up? Did it happen? Naturally, like, how did this all come to be? Yeah, I mean, we also run a fence company in Charlotte called Frontline Fence, so we kind of follow that same dynamic. I'm in the field, I have construction background and she handles all the customer relations, all the financing, all the bank relationships. So it's kind of the same right in real estate where she figures out all the loan information, she figures all the financing out, and then she basically says this is what I want it to look like and I go out and do it. So very easy transition, yeah.
Speaker 1:The honey. Here's your honeydew list. Go, make it look like this.
Speaker 1:I got the rest of it, don't worry about it, baby right, and you don't want me picking colors and stuff I'm right there with you, brandon, I'm, I'm, I'm the kayla of the relationship, though I just, I just push papers and then my wife is like here's the design I want. And then I'm not the guy she's giving that to. That, that's some contractor. You don't want me doing any handy work. I'm going to get fired in a second. So are you in actually swinging hammers, brandon? Are you outsourcing the rehab, or how have you found success on the flips and the rentals that you're rehabbing?
Speaker 2:It really depends on the project and how big it is and the spread. So if if there's not a ton of spread in it, I will probably do a little bit more. Uh, if it's not the entire thing it's, it's doing the prep work for the contractor. So like we need to rip out some floor and cabinets and some of that stuff, I'll go in and clear all that out to save contractor time. But ideally we get where we can have the contractors just go in, do all of the work and then we can sit back and manage and look for more.
Speaker 1:Yeah, yeah, you guys, if you listen to the podcast you've heard me say this 100 times Highest and best use, I think, is finding deals and finding money, not typically in swinging hammers, but you got to do what you got to do, especially if you're just starting out. Sometimes you got to get in there and swing the hammer to start building up that kitty a little bit, right, so you've got some capital to use going forward. So it just depends on, probably, the evolution of where you're at in your real estate investing journey a little bit. So for you guys going forward, what does the goal look like? Like you guys mentioned a little bit building a base, but there wasn't anything specific. You guys have a specific target of like we want X amount of flips a year, x amount of rentals a year?
Speaker 1:um uh, x amount of doors by so many years. Or are you guys just kind of just doing the do and taking them as they come?
Speaker 3:Um, I think right now it's not so many. Um, I think right now it's not so many. So much like the doors or amount of rental properties. It's more just the income replaced, right, Because we could very easily get that with one giant purchase versus 10 smaller homes that we hold on as rentals, right? So we're just trying to aim for a replacement of income, right? So whatever that kind of looks like, Nice.
Speaker 3:Obviously the passive right. That's the goal here. So buy and holds are top priority. Cash is nice, but we do have our you know our company that we're running as well, so that's kind of our bread and butter right now, you know, paying all of our typical expenses, but anything that we can hold onto for long-term is going to be the goal right now. I'm really excited. I just actually I just watched one of your podcasts with a couple of their. Their name is not in my brain right now, but they were the couple in door County that had purchased like an eight or a nine unit and they had turned it into a short-term rental.
Speaker 1:Okay.
Speaker 3:Very, very interesting oh.
Speaker 1:Joey and Chrissy. Yeah, yeah, I'll go on my yep.
Speaker 3:Yeah, yep, yep, yep, yep. So just hearing them and this is a kind of a thought in my brain, you know, for the last several months and hearing them talk about it, I was like, ha ha, like you know, like they've done, it like let's go you know, yeah, and I love hearing that and seeing that because if it's done once it's, you know it's done once, it's just duplicatable. So I'm very pumped to get a bigger purchase like that here, probably this year.
Speaker 1:Oh, that's cool, that's exciting stuff. Yeah, we also had another interesting one of somebody who bought a motel here in Fish Creek One of the early episodes here and it was just a mom and pop. They ran it as the classic innkeeper you show up, you check in with somebody behind a desk type of thing, and they bought it. They had to do a ton of work to it but made it all technology-based and so everybody's remote checking now and they just show up, they punch their code in, they go in, there's nobody there in keeping anymore and they just jacked the NOI on this thing like crazy and I can't imagine how much equity they got in this sucker now.
Speaker 2:So, yeah, that's wonderful. Yeah, I think that's that's, that's her goal yeah awesome. That's stars in her eyes every time she sees a hotel or something up for sale.
Speaker 3:Yeah, yeah, absolutely, motel like come on, let's go.
Speaker 1:I like it seems like it's becoming more and more of a thing. Like you know, listening to brandon turner, I remember when I was listening to bigger pockets back in 2016, 17, maybe 18, I don't remember when it was but he started getting really big into the mobile home thing and the mobile home parks and and then it was storage units where, like, everybody was going after storage complexes and stuff and now I don't know, but I don't follow the campground thing as much anymore, the uh mobile home thing as much anymore. Campgrounds that was another big thing, but uh, the storage seems like that's cooled off a little bit. The returns aren't great. It's tough to find a value-add deal a lot tougher nowadays. Same with multi-families been tougher to find these days. But it seems like I'm seeing more and more people do these motel conversions either into apartments they're converting them straight up to apartments or into short-term rentals.
Speaker 3:So that's great like a rent by the room kind of deal too yeah yeah, yeah.
Speaker 1:So it's kind of cool. We had an opportunity a few years ago with one in algoma and I'm kicking myself that we didn't just close on it. It was 40 units, it was right by the water and I saw the guy relisted it like a couple of years later for like 500 grand more than what we could have bought it for. So I don't know. Yeah, it's one of those things. It's a deal that I sit and think about from time to time and we've had those.
Speaker 2:Yeah, yeah.
Speaker 1:You're like, oh, I could have been me. Yeah, yeah, what is what has been the biggest struggle for you guys in real estate? Is there a particular deal that's been the biggest challenge that you guys can share? Has it been just some type of trying to figure a certain thing out, like what's been the biggest challenge for you guys so far? And maybe each of you could answer individually, if you each are like, hey, this is what is what I'm thinking and you got something different.
Speaker 3:but I think, honestly, it's getting out of our own way. Like number one, I oh yeah, you've got a great interview, cause we were talking about this the other day, didn't we? But I think, just getting out of our own way, like again, we purchased the duplex back, you know way back 2016 or 17, whatever it was, and, you know, it just kind of cooled off from there because it was like analysis, paralysis. It was just like, oh, we don't know enough. Well, we don't know enough. Well, we don't know enough. And it's like you do it, you get out of your own way and you just do it and you're like, really Like I could have been doing this for how long I could have taken advantage of the COVID market. You're like, oh, you know, yeah, along those lines.
Speaker 2:Like we said, we started in 2016. It was a great market back then and we're consuming all this knowledge, consuming all this education, and one of the big things that they told us was go to the REI't do. Okay, and we just went nowhere. We were stuck with this knowledge. We have to get 20% down. We had no idea what our money was. We didn't know where to get the cash for the next deals. Okay, so we just sat like well, we need to come up with more capital to buy more properties.
Speaker 3:In comes the fence company, insert company. We were on.
Speaker 2:So we figured we have an opportunity to start more properties. In comes the fence company, insert company we run, so we figured we have an opportunity to start this company. This will be a capital generator to allow us to buy more properties and in turn just becoming more busy. So that more or less just took up all of our time, and now we're so swamped with everything else that we can't even think about buying more properties.
Speaker 3:Go after the actual goal here. Yeah, right.
Speaker 2:So we purchased um education just a couple years ago and one of the first things he says is go to your rei meetups, go and meet your network, you know form, you know this network of people around you so that they, they give you advice. And and that's when I came to the rei success group and it was immediate, yeah, I met, met people, learned everything that I was missing, and it all just kind of now. So now in the last year or so, everything is just skyrocketing oh that's fantastic, like, fantastic.
Speaker 2:Like I said, we have two BRRRR properties we're working on now, whereas a couple of years ago that was unfathomable. That's so awesome.
Speaker 1:I love that. I remember that's how we met Brandon. Weren't we messaging back and forth? Just met through one of the Facebook groups and then I was just asking you a little bit about what you do and then I think I called you because I was driving to the RAS success meeting. I remember that night. And to the RAS success meeting. I remember that night and I was like dude, why don't you come out? And you're like I live in channel. But yeah, what the heck? I'm like oh, this dude's serious about real estate.
Speaker 1:Like he's going to just drop what he was doing at like four in the afternoon and be there by six. This guy wants to buy some real estate man.
Speaker 2:Yeah, and that was my first meeting. That was fantastic.
Speaker 1:Oh, that's awesome dude, that's awesome Well.
Speaker 2:I'm glad we could get you in there. It didn't take much arm twisting to get you there, it just took a little invite.
Speaker 1:I was hungry, I was ready. Yeah, you were on your way, that's right, just needed somebody to invite you. So anybody listening come to the REI Success Meetings fourth Tuesday of every month, green Bay. Shameless plug, but not really, because Brandon just told you how much it changed his business.
Speaker 3:No, for real and I've never met a community like it. I don't even go that often and Brandon's really the one that goes, but we're running a new company. We've been in obviously different industries and the corporate up in the bigger cities near us and there is no community like the real estate community that you find. I mean talk about people truly bending over backwards to help you or give you advice or literally anything. It's, it's amazing and we're the same way you know.
Speaker 1:Yeah, you know what I think is interesting, as you were saying that here, the thought that came my head is yes, the group is awesome. However, you have to engage the group too. You can't just show up in a meeting and just sit there and be, you know, in the back of the room not talking to anybody. You're not asking questions, Like the thing that you guys do really well at networking is you come in with thoughts, questions, intentions, things. You need to get relationships, you need to get things. You can give the. You know you guys are always there too to give if you can. Right, and I think that's why you guys benefit so much from networking events. So I've seen it the other way. Where people come, they come one time they don't engage with anybody, they're gone right after we wrap, they're not sitting around networking and then they never come back and I just I feel like sad for some of those people because I'm like gosh, you were so close, Like you've got the door. It's like going to the gym and never, never hitting the equipment.
Speaker 3:Don't even see the dumbbell rack. What do you?
Speaker 1:got there, you got there. You put your tennies on. You just never went and pushed, pushed any weights, dang it. You were so close, right.
Speaker 2:And so all it takes is dip your toe, go out on a limb, talk to somebody you know be the first one to approach somebody else, and you're never going to regret that, regret that that's right, that's right.
Speaker 1:And I think what's what's really cool is like the group is so good but like just put your like you said Brandon, put yourself out there and it's not comfortable, not not many people, like walking in a room of 50 people and not knowing a soul and then going like uh hi, you know, but you just start talking to people, you ask them about their business. Just you ask them like what, how long have they been in it? You know some basic questions to get the conversation started and have some idea of maybe somebody who you need to meet there, like a lender or a contractor or something, and you'll find like that's all you need and just asking a few questions to some people and they'll everybody's happy to introduce you to somebody else. So at least in the Northeast Wisconsin, you know, I know there's some other networking groups I've heard of that aren't so open, maybe in some other parts of the state, but for the most part a lot of the community around here is pretty open to helping people succeed. So now that's great, great nugget.
Speaker 1:Kayla, you were talking about your struggle. What was the struggle? Again, I want to go back to that because there was a thought I had. What was your biggest struggle? I got off on brands there.
Speaker 3:Getting out of your own way. I think again the analysis paralysis, where you just think that it's you're missing something. You think that there's just something in it that you're missing and you're not going to do right, and that you just have to have all of the answers and all of the ducks in the row before you even get started and it's just, it's not like that, it's like don't get wrong, do your research Like I'm not sitting here, just like blindly go forward, but at some point in time you just have to pull the trigger, you know.
Speaker 1:You and I were just talking about that before we hit record with I was just at a charity hunting thing down in Texas with a guy who's been doing seller finance and creative finance and you know, selling seller finance notes to the secondary market and all these other things that are like way out of my head right now, and I think you said that to me. It's like, well, you just got to do one and I'm like, dang it, she's right, I just got to stop getting in my own damn way and go do one.
Speaker 1:That's true, and then I'll be like that'll be an episode in a couple months of me talking about how great these things are, I'm sure. So, anyway, no, that's awesome. What has been the biggest success for you guys besides that duplex, and what were the things that made it so successful? So we know why some of the market conditions for you guys helped with the duplex, but talk about maybe another deal that you guys have done. That's like, man, this was a slam dunk and everything went right. Here's what happened and here's why it was such a success.
Speaker 2:I think it's probably the house we're sitting in right now. Yeah, last year we flipped this house that we're in right now. We got a. It was a firehouse, okay, had a fire in it. The homeowner got paid out by insurance, so we got it dirt cheap, needed a ton of work. It was a huge mess, but it really taught us a lot. I mean, we got a great group of contractors out of it and really our first big flip, I mean we stuck 120,000 into this, wow.
Speaker 2:So it was a lot of work and a lot of making sure that everybody's coordinated and that everything goes right, and we did our first hard money loan Um right, yeah.
Speaker 1:Yeah, okay, make sure I'm getting got to check with the person who did it.
Speaker 2:Yeah, so we got the hard money through good faith. So that was our first time working with those guys Great, great bunch of guys there and, yeah, everything just really fell into place.
Speaker 3:Well, and the best part about it is you know, five bedroom, three bath, the thing's huge right. This isn't some small little like right.
Speaker 1:It's a little two bedroom bungalow here.
Speaker 3:Right, Exactly, and shout out to Preston. I'm sure you know everybody around here knows who Preston is, but I got to say a shout out to him because he was just awesome with helping us out as far as walking it and just giving us confidence and again, that community that you find in those relationships that you build. But we had an ARV for this thing at like what 220?
Speaker 2:235.
Speaker 3:235?.
Speaker 2:Yeah, originally.
Speaker 3:Yeah, and it ended up appraising for 300.
Speaker 1:Oh what.
Speaker 3:Yeah, and it ended up appraising for 300.
Speaker 1:Oh what yeah? What happened? Was it just like because you guys did such a great job in the market, you know the timing? Or were you just so off on comps at the start, super conservative, or what happened?
Speaker 3:There really weren't a lot of comps to go off of, honestly. So that was I mean, it was like a nail biter Cause. We're like we're going to get screwed over here, like there are no good comps. And the appraiser like she walked around and, you know, she complimented me on like the design of everything and I asked, I mean, I like it was my first time, right, so I'm like asking all the questions like what would you do differently? Like what are your thoughts on this? You know, and and she's like, honestly, she's like I wouldn't change a single thing. This is something. Yeah, like this is something. Oh, yeah, you're like, oh, praise the lord, yeah, I was like okay, but that's, that's such a great feeling of knowing like I didn't screw something up, you know so for sure you can tell when you're walking with an appraiser.
Speaker 1:If you guys have never done this before audience, when you do a refi or something like that, go with the appraiser and do exactly the case I was talking about, like ask them every question. You possibly you're paying for it. You might as well ask them right and then you could tell You're paying for it. You might as well ask them and then you could tell if they're digging it. You're like oh yeah, it's going to be sweet, yeah.
Speaker 2:That's awesome. It almost didn't happen because we actually tried to wholesale this property first before we flipped it and we've learned some. We took the most horrible pictures and tried to shop it and it just scared everybody away, yeah.
Speaker 1:Firehouses. I'll tell you, as a wholesaler, they are tough to sell.
Speaker 3:So now, if I get a firehouse.
Speaker 1:I know who to go to.
Speaker 3:Yeah, for sure.
Speaker 1:Random firehouse people. Right, that's it. What were some of the biggest challenges with a firehouse? Because I immediately go structure problem, oh right.
Speaker 3:The deck.
Speaker 2:Oh yeah, unexpected things, okay, things completely unrelated to the fire, okay, well, cause, when you, you know that's a good point you know, when you walk in, that's all you're staring at, you're looking at that fire damage and you know, okay, how's it going to go and how are we going to do it. And then you, you tend to miss other things. So, you know, try to that'd be my, my big advice. There is try not to focus on the fire. Um, as much as you think. Okay, so we got lucky where it was about a 10 by 10 area that actually got affected by the fire. Um, so're exactly right. Structurally we had a lot of work, okay, so we had to do an entire roof in one section of the house and then some pretty good, uh, structural work and in where it connected and kind of where the fire was.
Speaker 1:So did you guys have to replace the trusses or like what. What was the the extent of the roof?
Speaker 2:Yeah, we, we did now not in every case. You wouldn't have to. They were pretty scorched, so we just figured just get it out of there and get the smoke smell out.
Speaker 3:I think a big part of firehouses, though, is this again, like what Brandon is saying is it's not always just where it's been burned. It's when the fire department comes in here and sprays everything from head to toe in water and now, when that's through the walls, your drywall is shot. So you might as well just plan for ripping everything down to the studs. It might not be burned, it might not even have soot on it, but I can guarantee you you have water damage. So that was like a big factor for us where, okay, yeah, sure. Factor for us where, okay, yeah, sure, it's just this little 10 by 10.
Speaker 3:It went all the way up to the second story, right. So I mean again, big structural issues there. Yeah, that we had all fixed up and actually was like kind of good because we ended up being able to change the layout, but the amount of water damage and mold that you find from now in our situation, this sat for a while, right. So there was a lot of old remedies that we had to do, taking down all of the drywall, you know. So it's like I'm happy, because then there's no like creepy molds anywhere right, yeah, you get to sniff it, you get a fresh start.
Speaker 3:Right right, you have to make sure that it's good to go, but that was definitely unforeseen on that extent.
Speaker 2:I think there was more water damage than fire damage.
Speaker 3:Right, yeah, that's my point, yeah damage and then fire damage.
Speaker 1:Right, that's my point. Yeah, wow, that's so cool. Now, I've seen it before and maybe you guys aren't experts in this, but I'm going to ask you anyway, we've had houses I actually had one that nobody wanted to buy on the buyer's list so I bought it, cleaned it, put some new flooring in and listed it, but it had some fire damage in the attic. Now the roof had been redone since that was done and I was being told like well, it's probably fine or they would have replaced it. But like, how do you know that when you're looking at this, like when you guys were evaluating this, how did you know like, yeah, we got to replace those trusses? Like did you have somebody come in and do that? Was that just a judgment call that you guys made? Like if somebody's looking at one that's had some like fire damage, genetic or you know, uh, to the trusses, like how do you know what's salvageable and is fine? You don't have to mess with it? And when do you got to re roof and replace?
Speaker 2:Yeah, for us it was just a judgment call and it was pretty apparent. I mean, everything was pretty scorched and what we did was we. When we opened everything up, we looked at the plywood underneath the roof and it was all black. So we just figured there was no coming back from that. I know John Vander Heiden. He does great work with firehouses, so he would be willing to come out and take a look if anybody's got any questions.
Speaker 1:Okay, what is John Vander Heiden? Is he an inspector, or what is he?
Speaker 2:No, he's a contractor that just focuses on fire damage.
Speaker 1:Oh cool. Is he the guy that you guys worked with to do some of this stuff?
Speaker 2:No, not this particular one. Okay, but no, like I said, it was just very apparent to us that that had to go, okay Process and that were pretty scored. So that was just the easiest solution instead of trying to everything out.
Speaker 3:I mean, if it was in a situation where we didn't know I personally would not want to have that on my conscience of deciding whether or not something should be replaced I would personally bring in, you know, a local building inspector. You know, I mean, I know everybody doesn't really want to go that route, but at the same time it's like if a family is going to be moving in here like, you kind of just need to do the right thing and just get it looked at by a professional for sure well, if they get an inspection, you're going to be busted anyway, right?
Speaker 1:so it's like you might as well get it done right away and do it right there was no hiding the fact that we can't hide that stuff there's no hiding that stuff for sure.
Speaker 1:No, that's great. Well, this is awesome, guys, I mean, I'm taking, I got a page of notes here already uh, on a lot of things we talked about. I'm sure, like we talked about before this, we could probably just keep going for another hour, hour and a half on here, but I know you guys got kids that you got to deal with and all that stuff, so we'll get you out of here. Before we do that, though, I always ask a question at the end. Again, we're we, we love Wisconsin and we love investing, and hence that's why we have this podcast. But we know there's people that listen to this that aren't in Wisconsin, but they want to invest here, so we got to tell them a little bit about Wisconsin, right, like? So, with that, do you guys have a favorite place you like to visit here in Wisconsin or a favorite tradition? So if some of those folks come here, they can just assimilate right in. You go first.
Speaker 3:Location, so for visiting.
Speaker 1:I'm a big sucker for devil's lake. I've had that one other time, I think love devil's lake. Yeah, all right, I got to get down there Apparently. It keeps coming up.
Speaker 2:And for people that aren't in Wisconsin. You got to hit Von Steele winery in Algoma and Bay beach, oh yeah.
Speaker 1:Those are gems in Wisconsin, that's true. Yeah, it's pretty fun. Yeah, if you haven't been to bay beach and green bay, it's very unique.
Speaker 3:I mean, you give like what some of these rides are, like a quarter yeah, literally ten dollars all day long, and they are just like the kind of old school rides and you feel like you're an old carny yeah, even if you don't got kids just go, I mean they all have their teeth. They're nice high carny, yeah, even if you don't got kids, just go.
Speaker 2:I mean they all have their teeth.
Speaker 3:They're nice high school kids, so I mean you know, yeah, yeah for sure for sure, awesome guys.
Speaker 1:Well, if anybody wants to get a hold of you guys, or or if anybody's looking for fencing options too, and uh, do you guys service a certain area for the fence company? Is it just the shano area? Are you anywhere northeast wisconsin? What does that look like?
Speaker 2:yeah, pretty much anywhere. Uh, our drive from shawnell, so we do northeast wisconsin as a whole, okay, so, yeah, if you want to get a hold of us, it's go frontline fencecom. Okay, you'll find us there.
Speaker 3:Otherwise, uh, for house stuff and real estate stuff. I mean probably facebook. I mean there's a lot of stuff going on on facebook with that, that sort of thing. Not much Instagram, but I like doing my cute little videos on Instagram just keeping everybody updated. But um, like Facebook yeah.
Speaker 1:Cool, awesome guys. Well, thanks again for being on here. Thank you all for listening to another episode of the Wisconsin investor podcast. We'll see you on the next episode.
