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
Contractors & Cash Flow: Dave Zouski’s Formula for Real Estate Success
Dave Zouski shares his real estate journey, emphasizing strategic investing and the importance of relationships in navigating the market. His insights on the buy-and-hold strategy, effective contractor management, and the significance of networking provide valuable guidance for both new and seasoned investors.
• Highlighting the transition from agent to investor
• Emphasizing the need for strong banking relationships
• Discussing the advantages of a buy-and-hold strategy
• Sharing lessons learned from contractor management
• Exploring the importance of consulting with tax professionals
• Encouraging the building of a supportive investment community
If you're new to real estate investing and need some help, reach out at wisconsindiscountproperties.com!
Welcome back everybody to another episode of Wisconsin Investor Podcast. I'm your host, Corey Raymond. I'm super excited to get into this episode today, but before I do I want to talk about Wisconsin Discount Properties, who sponsors the podcast, and I'm going to share a little deal with you guys, like I've been doing the last few weeks. If you've been tuning in this one that we had we just had out to our buyers list, it was in Clintonville, wisconsin. So if you're not familiar with that, that's a little bit west of Green Bay, a nice little small town area 99.9,. We had it out to our buyers list for single family house four bed, one and a half bath and the ARV on this thing was 200K. Would have worked really well with hard money lending. So a lot of hard money lenders will lend 65% of that after repair value. So you could have got the purchase price plus a good chunk of any kind of rehab budget baked right into that loan from your hard money lender and had enough spread there to make a few bucks with having hopefully little to none of your own money into a deal like that. So there's deals like that every single week. We're putting out two to five deals a week to our buyers list. It's all off market stuff. You got to be on the buyers list to be able to get access to these. So if you want to get access to them, you go to wisconsindiscountpropertiescom, plug your information in and you'll start getting instant access to the deals every single week in your inbox and on your texts.
Speaker 1:That being said, let's dive into today's episode. I got my good buddy, dave Zeus Zowski, with us. What's up, dave? I'm on. How are you doing? I'm doing good man. So those of you guys on YouTube, you can see Dave is freezing his buns off in his vehicle right now working on a property there. It is All right, yeah. So if you guys want to pop over to YouTube see what he's got going on. But Dave, I've known Dave now for several years. He's been a force in the real estate world here in Northeast Wisconsin, him and his wife Wanda. We had a mastermind a few years ago. They were part of that mastermind and they've done really, really well over the last few years and flips and rentals and everything else. But, dave, tell us a little bit about how you guys got into this. What does the business look like today? And start there.
Speaker 2:Sure, we got into it. I got into real estate sales just as an agent back in 2017, working for expert real estate partners, did real good for the first couple of years as an agent and then just kind of realized that there was more money in buying my own and holding my own and flipping than there is in helping sell other people's stuff, so kind of got started I think it was 20. Well, it's been 2019. We bought our first property because it was right when right when COVID started Okay, because that one we were working on, that one when everything just went haywire. Okay, still hold that property today. It's actually one of our really good cash flowing properties, nice, yeah. And then kind of just actually then about 2021 or 22, I think, my wife Wanda, she got into it. She got her real estate license, quit her W-2 job and we've just been rocking full-time in the investing and real estate basically real estate agent.
Speaker 1:Nice, nice. So yeah, you're pretty much every day you're talking or working on houses or properties all day, every day right, I mean, you're fully engulfed in it all the time. Yes and last.
Speaker 2:And uh, last well, this last year I went and got my GC license, so general contractor, so I can do, I, we do a lot of our own work. We don't really hire a whole lot of stuff out, so we typically only like to work on one or two properties at a time, just because we don't have the time to, you know, to get into it. You know other properties and you know one or two at a time is plenty for us, for sure, for sure.
Speaker 1:How many, how many flips and that sort of thing have you guys done since you got?
Speaker 2:started.
Speaker 2:I would say maybe flip and sell. I would say maybe 20, 30 that we've, that we've actually flipped and sold and we I mean we kind of go back and forth. We were up to about 30 rental properties and then we sold a bunch so and then bought some more. I think we're back up to 22 or 23 right now, still looking to add more. We kind of we kind of went through our portfolio and found the ones that really weren't cash flowing, that we had some equity in, and dump those so we could take the equity and go use it someplace else. So we kind of just kind of skimmed some of the you know the crappy ones off the top and then kept the better ones.
Speaker 1:Yep, I did a little bit of that this year too and and uh, worked out pretty well. So I like that straight. A little recapitalization, if you will. Yeah, yeah, very nice. What? Let's go to that. Back to the start, dave. So what was the biggest struggle that you had getting into real estate, or maybe like knowing what you know now, what would you do differently if you had to go restart this whole journey, this whole crazy life?
Speaker 2:Well, one thing that I'm learning now that I know I wish I would have just picked one bank and just worked with one bank, Because right now I'm trying to figure out a bank that'll. I think I have a shadow on me or something here. Yeah, that's okay's kind of funny, but so, yeah, if we just had one bank that we worked with all the time and we had all of our mortgages and all of our properties through, we'd have a heck of a lot better idea of what we're able to do right now, because we have a little over a million dollars in equity in all of our properties, but they're all spread out. There's three or four at one bank, three or four at another bank, and then nobody will give you a line of credit on your properties if they don't hold the first mortgage. So that's one thing I would stress to people is find a good bank that you want to work with and have a relationship with and stick with them.
Speaker 1:Yeah, that is a bit of a pickle. Now has been dave a couple banks that we found recently that are offering helox as second position on on um properties they do not hold the first position on. So it's kind of a development. In fact, I just interviewed somebody the other day it'll probably come out a couple weeks before yours, so, uh, if you want to listen to that one but I did brandon and kayla farley, and they were talking about how the uh banker at nicolet bank of all banks gave them a heloc on a property that nicolet bank did not have the first position on no, that's weird because I know, yeah, we have our our proper uh main residence that we live in.
Speaker 2:We have that through nicolet bank and we did we were able to do a heloc on that one, but they wouldn't touch anything else so interesting.
Speaker 1:Yeah, community banks are just so interesting because it's it's very relationship based. It's very much like whatever kind of seems like, whatever the flavor of the week is for them that they want to do, yeah, and then when they fill that bucket of, okay, we've got enough lent out over here, then they just cut that program off and you got to go find another one. And that's kind of what we've shown. We work with a lot of different banks so we have a little different strategy. But it's because a lot of times we've had they've had like a great program and we've been we utilize the crap out of it and then they shut it off and say all right we got to go find somebody else now who can, who can do something else with it.
Speaker 1:But I like your idea, I like your point. It makes a lot of sense because then you can leverage all that equity that you build over time to go parlay those HELOCs into what you want to do with it.
Speaker 2:Yeah, like I said, when you're sitting on a million dollars in equity that you can't use it kind of sucks because I wouldn't need a hard money lender or a bank or anything to really go buy another property or do a flip. I could just do it all in my own pocket and then, you know, not have to pay all that interest.
Speaker 1:So yeah, for sure, what have been the? You know in the mastermind we always thought we talked about needle movers. You know, when we, when we had you guys in there, we did an exercise figuring out one of the biggest needle movers, what about for you and wanda, like, what have? What have been some of the biggest needle movers for you guys are the things that have made the biggest difference? Do you think in your guys's success in in doing this business?
Speaker 2:I think we had a lady that was doing our taxes the last couple of years and she really I don't want to say, but she really didn't do a very good job and last year we ended up having to pay a lot of money that we didn't have.
Speaker 2:So finding a good tax person because that took a lot of time to we didn't have. So finding a good tax person because that took a lot of time to get all that straightened out and that put Wanda at the table working on the computer, I mean for hours and hours and hours and finally trying to get all that figured out. So I would say, now that we got that figured out, that freed up a lot more time for us to go and do what we should be doing, what's making us money. And then kind of realizing, you know, when we do the flips that there's a lot of tax money that comes out of that. We usually always try to put away for that you know we always we're always real good about doing that. And then you know, kind of that's kind of another reason why we're wanting to get away from actually doing the flips and selling and just buying and holding them more and just doing a cash out refi when we get it done, because then all that money is tax-free anyway. You don't have to worry about that.
Speaker 1:Yeah, there's a couple of things that go back to this for the audience. Maybe some of that went over their head. Like what Dave's talking about. When you refinance a property, if you pull some equity out of it, in that moment it's considered loan proceeds, not income, so you don't have to pay tax on that money, at least until you sell it. At some point You'll have to pay some tax on it, but in the moment it's tax-free. So now you can take that cash either, use it to live off of if you want, if that's like your quote-unquote income, instead of flipping. You're kind of flipping to yourself, but tax-free. So you basically are giving yourself what a 20% raise just by yourself, right, yeah?
Speaker 2:I mean, let's say we literally just got done refining out of one. It was a property that we bought for like 120, I think, and we stuck barely anything I'd say maybe eight grand into it, wow and then turned around and got it rented out. I think we got it rented out for it's a single family house. We got it rented out for. I think we got it rented out for it's a single family house. We got it rented out for like $1,550 a month and the payment on it is $1,350. So cash flow is $200 a month and I mean that's everything, that's all included, because we include water and all that stuff. So you know, average cash flow is probably $150 to $200 on it and I think we cashed out just shy of $30,000 on the refi non-taxable.
Speaker 1:I mean I'll do those deals all day long if I can, absolutely Well. And then what's great is your tenants are now paying down that new debt for you again. They started the clock over and now five, 10 years, you've got another possible refi opportunity pull more capital back out again. And I was just talking to Zach Morgan on the podcast before this that's going to come out probably the week before you, and we had the same discussion of, like you know, he was sharing an example similar to that and we just did the math. I said how long have you owned it? And you know it was 60,000 bucks and he owned it for four years. And I said, well, divide 60 by four.
Speaker 1:And now think about that. Divide each of those by 12. Each of those by 12, that's your monthly cashflow. Even if you made zero quote, unquote cashflow, no money went in your bank account every year. You just put 60 grand in your pocket, tax-free. I mean, that's your cashflow over the years. So buy and hold strategy it's tough to beat and it sounds like you guys are going that way. Is it because of the tax implications of the flips or what's the reason you guys are making that shift?
Speaker 2:because of the tax implications of the flips or what's the reason you guys are making that shift? That's probably. That's probably one of the reasons is just the taxes. But the other reason is just because I like having the appreciation too. I mean you know what those houses are going to be worth in the next 10 to 15 years. As long as everything keeps going up, or even if it goes down, it's going to come back out of it eventually. So if you can hold on to them, even if it goes down into a turn, if you can hold on to them through the downtimes, you know you're going to come out even better in the in the long run, so sure.
Speaker 1:Well, and you look at like interest rates right now. People complain about the interest rates right now, even if they went back up again, uh, in three to five years, when the interest rates, hopefully, are back into the fives, maybe, if low fives. Now you refinance Now those things. Now you look like a genius, right, so you break even for a few years on cashflow, but you're building equity, the thing's appreciating. You're getting debt paid on, you're getting tax benefits, right, and now when you refinance it in a few years, you can pull some cash back out. And now you're maybe going to lower, even lower, your payment at that time. And now you look like a genius because your cashflow and big money and rents typically appreciate as well, so they're typically going to go up over time too. Well, that's exciting, man. So do you guys have a big goal as far as, like, how many rental units you're trying to get to, or a certain cashflow number, or a certain equity number? Are you just going to keep plugging away?
Speaker 2:And just probably just keep on going until we don't have to anymore. Okay, very cool. I don't know, I don't see us stopping anytime soon.
Speaker 1:So yeah, what about?
Speaker 2:like I always put a goal on it. I always say I want to get to 50 by the end of the year, and then that never happens, and then you know, so it's like I kind of just kind of just fly by the seat of our pants.
Speaker 1:Just just do a couple, keep it going and then get a couple more and as they come.
Speaker 2:Yeah, very cool, yeah, I think actually last year we only did the last two years. We only did one flip and sell a piece, you know each year, and then the rest of them, we all, we kept everything so nice very cool, very cool.
Speaker 1:Uh, the bookkeeping thing. I want to go back to that. You know, this was something one of our mentors told us right out of the gates, like we'd only done a handful of deals and we had this guy that was mentoring us and I mean he was amazing and he's like get a good bookkeeper and a good real estate specific accountant right now. And we're like, well, we're not even doing that much. He's like, yeah, but you want to, right? And I'm like, yeah, he's actually set it up now and you'll thank us later. And good Lord, you're right, cause I hate, I hate doing bookkeeping. Like, yeah, I don't have patience for it, I want to go do deals.
Speaker 2:Yeah, yeah, and I don't, I don't either, and that's, that's where. That's where Wanda, she does a lot of that?
Speaker 1:Yeah for sure. So those of you guys listening out there, if you're just starting out, get yourself a good bookkeeper, get connected with a good real estate specific accountant. Even if you don't think you're worthy of it at this, you're going to go Right, exactly, yeah, very good, very good. What has been like? Let's talk about some deals. Let's go into some deal. Talk, dave, talk about like, what's the like, the biggest rehab you guys have ever had to do? Do you have you got? Do you have you guys had one where you've had like a monster, you know, ended up being a big bear, and how did it work out?
Speaker 2:Well, I could go a couple of ways. I could go the one that we lost our ass on.
Speaker 1:Well, yeah, let's talk about it, Cause I think you want to talk about a bad one.
Speaker 2:I was talking to I was talking to Dwayne this morning. I mean I told him that I was coming on this with you and you were talking about it, and I said I'm like I should probably just do a podcast of all the stuff that I screwed up, because I think I messed up just about everything. Hey, that's perfect. But we bought a house. It was actually a friend of mine from high school it was her grandmother's house Went into a home. We went down and bought it. It was a huge, huge house, huge old house, built in the 1800s Old farmhouse. It was like seven bedrooms, one bathroom. Oh yeah, oh yeah. So we at least we, you know, we rearranged a bunch of walls and did everything and I think we ended up turning it into a five bed, two bathroom, okay, and added like a nice dining area and all that. I mean it was it ended up being really nice. We ended up sticking about 130 000 into it. Wow, bought it for, bought it for 70. We used I think we used Tony for hard money.
Speaker 1:Bought it for 70. Tony is a owner of good faith funding. He has a hard money lending company and if you go back I think he's like episode five or something like that, and then his partner, jairus, is on another episode as well. But anyway, go ahead.
Speaker 2:Awesome guys to work with. But yeah, so we use them and stuck like $130,000 into it, figuring that it would be worth about $250,000 when we're all done. So we're like, all right, we'll still make about $50,000, you know, after closing costs and all that, you know, even if we make $30,000. And it was a property that we didn't actually do any of the work. We contracted everything out. So again, it was one of those deals that just popped up and was like, yep, I'll take it, we'll have this other, we'll have our contractor do it and take the whole thing. So that way, we didn't, you know. So it's like, okay, we'll make $30,000 without having to do anything, I'm okay with that.
Speaker 2:And sat on the market. Sat on the market, sat on the market, couldn't sell it, couldn't sell it, ended up selling it for $200,000. Thousand dollars. So after we were you know all the interest and everything we were we were behind about 30 grand on it. Wow. So, yeah, that was that was the biggest hit we had we had to take. But ouch, um. So yeah, that was that was our worst, worst deal ever okay.
Speaker 1:Okay, what was the? What do you think went wrong with that deal? Let's talk to that. Did it? Was it an underwriting?
Speaker 2:well, my contractor told me that contractor told me he was going to get it done in three months and the other thing was, you know, and it took him six months. So then we were already behind by the time we got it sold, we were already into it seven, eight months, I think. So then you're paying extra interest and all the extra closing or holding cost and then it's just the arv. Like I said, I figured a five bed, two bath house. I mean, even if it was an omro, it was sitting on a double lot. I mean it was a big, huge lot with an extra garage. I figured it was 250 all day long after. But that, uh, yeah, that was a different, whole different area down there, which is funny because it's where I'm from, I grew up there. So, okay, I kind of figured I was like, well, I know this town, this town, I could sell this for 250 down there Didn't work out.
Speaker 1:That's so good. Well, so there's a lot of lessons in that right Contractor-wise, what they tell you, three months budget for six, double whatever they tell you for a timeline have you ever had experience? So you guys have worked with contractors before. Now you're doing your own thing. But working with contractors, dave, now, as a contractor, what are some things like investors should be doing to have a successful relationship with a contractor? Make sure that that contractor is you know, a the contractors make money, but B there has to be a good symbiotic relationship there. So, like what are some things you see?
Speaker 2:there. So like what are some things, you see? Yeah, I mean I mean we still so I still contract out like windows, roofs, siding, like pretty much all the exterior stuff. I don't like doing any exterior stuff, we pretty much just do the interior. And I mean we got a good relationship with our contractors that we use for all of those. So I mean, and and this one wasn't he? He kind of just he would start on the project and then all of a sudden, well, something else popped up. I got to run over here and just do this for a couple of days, and so he was constantly back and forth, you know, and you kind of just had you just got to stay on them. And I mean that has that's kind of been my issue with other contractors. That's kind of why I went and just got my GC license, just so I could just I don't have to deal with it anymore.
Speaker 1:That's why I can pull the permits you got to talk to about this.
Speaker 2:You know, I can pull the permits, I can do whatever I need to do and then I can get the subcontractors in and, you know, make sure they're they're rolling. That's actually pretty much what I'm doing right now. I'm not this. This house that I'm working on right now is taking over the contracting for him because he's got a couple other ones going on. So I just took over this one and basically just doing some work. We're doing a bunch of framing and stuff and then we're hiring out the drywalling and the plastering and the painting and all the other stuff. So I'm just kind of doing that. You just got to kind of keep everything on a timeline.
Speaker 1:So you're almost more like project managing besides the carpeting stuff.
Speaker 2:Yeah, this one.
Speaker 1:Okay, cool yeah. So somebody else could do that without a license, a GC license if it's their own property right Yep.
Speaker 2:Yeah, yeah, as long as somebody. You know. If you have to pull a permit Like this one, we had to have the whole foundation excavated and everything.
Speaker 1:So there was no way to get away without doing anything without permits. So you know he had to have somebody be able to pull the permits. Okay, got it, cool. So if you're doing it by yourself, like, say, dave, you weren't licensed and you were just going to be doing work, you're on everything you're going to do by yourself, are you still required to pull permits and do you need a GC for that? Or can you pull a permit without being a GC if it's your own property?
Speaker 2:If you're the homeowner and you're going to live there and you're living there, you don't, you can pull the permits. But if it's not your primary residence, then you need to have a GC, a licensed GC pull the permits, you can tell how many properties I physically get involved with Asking these questions.
Speaker 1:I legit didn't know that that's good. So so more tips. Give me some more tips of working with contractors, Cause this is a big pain point for a lot of people out there Like so you some more tips of working with contractors, because this is a big pain point for a lot of people out there like so staying on their butts. But is there anything you guys do on the front end as far as like contractually, to make sure they're like? Is there anything you can put in as far as like we're gonna like? I've heard other people do this in the past years ago. I feel like it's less and less now because contractors are in such demand but used to be like in your contract you could put some kind of penalty if they're not done by a certain day, or something like that. Like, is there anything like that that you're doing now or any other?
Speaker 2:No, we, we had talked about it but we never, never implemented anything, cause, like I said, we only ever had somebody take a, take a flip and do twice that we didn't touch that. We had somebody else completely do all the work. So I mean, we're pretty much staying on. You know, I'm at the house every day, wanda's at the house almost every day when she doesn't have the book work to do. So I mean, we're, we're working there and, you know, making sure everything is moving along.
Speaker 2:If that's not what you wanted to do, then yeah, then I mean, there's some, there's probably you know some wordage that you could put into the contract that you need to. You know you need to be done by this date or give at least progress updates by each. You know, each time, each time you get to a certain step, you know, like the framing's done. Okay, I want the framing done by this date, and then I'll check it out and then then I'll release part of part of the money that I owe you, and then you go on to the next one. I want, you know, but it should be painted by such and such date, and then if it gets painted by that date, then I'll give you that much money, okay, and kind of put it in like a draw system, just like it is when you're building a house Yep, okay.
Speaker 1:Good stuff. Yeah, I think that's probably one of the biggest pain points is like people are like oh cool, I got somebody that'll do the work. Great, here's the project, here's what I want it to look like. And then they come back and they're like nothing's been done here, right, yeah. So I think having those upfront conversations, it sounds like, is really important to your contractors too, and just having clear expectations and ideally written out, uh, signed and agreed on by both parties yeah, that's good.
Speaker 2:Yeah, the other thing I would say is make sure you price check everybody. Yeah, we kind of we kind of got we with our one, our first electrician that we ever used like we just kind of got used to him and was like, okay, we got another project, just come get it done. And he went you know, it's mostly time and materials and and stuff like that and then all of a sudden like, oh yeah, it'll be thirteen thousand dollars, okay. Well, then the next hour suddenly he sends me the bill for like seventeen thousand dollars without saying a word, like there was no talk, no conversation. I was like, uh, what's this for? And you know I still couldn't get a hold of him, he wouldn't explain it.
Speaker 2:So I ended up just biting the bullet, paying him and then found a couple more electricians. So now, now we kind of you know we'll bring two or three in at a time and then get bits on them, and you know, obviously most of the time they're they're pretty, pretty close to each other, pretty competitive, and you know you kind of pick the one that you work with the best. But yeah, we got a pretty good electrician now and a pretty good plumber, that now I really don't have to price check them too much anymore because we've done enough of them. Like, yeah, I kind of have a good idea of what the what the plumbing cost is going to be and what the electrical cost is going to be, before I even before I even bring them in, and so, yeah, well, that's a great little nugget there for the audience there guys.
Speaker 1:So listen back to that. Dave was just talking about when you're getting going or you're trying to figure out your team. You got to bring a couple of people in and get some competitive bids on this stuff, on these projects. Let's talk about timelines, dave, because I think you're in a unique position, being in swinging hammers and doing things and coordinating your people. When you guys go and you get a property, like you put an offer in, you get accepted, what does it look like between, like that date of when you get it accepted and when you finish the project and you list it and list it and now it's being sold? Are you guys doing a lot of stuff prior to closing besides getting lending and that kind of stuff? As far as lining people up, is it start the day it closes.
Speaker 2:Then you start going like tell everybody a little bit about your guy's system and process.
Speaker 2:Sure, it's efficient.
Speaker 2:So, yeah, I mean usually, like you know, if we're able to walk the property and kind of get an idea of you know what we're all going to need.
Speaker 2:First, once we get an accepted offer, I'll let you know, my plumber know, I'll let my electrician know, if I need a roof, I'll let my roofer know that you, because a lot, of, a lot of the roofers can go off like Google maps or they have like a bird's eye app or whatever that they can use, so they don't even need to go to the property, they can just look it up, so they can give you a, they can start giving you quotes before we even close on it. And then that way, when, that way, with the day we close, we go in there, we do the clean out, we do the demo, we do everything that we need to do, you know, get the permits pulled and then and then bring everybody in and we kind of have everything. We like to have everything kind of lined up before we even close on it. At least give the, at least give the subcontractors heads up like, hey, I got this property. When we close, you know it'll be a couple of days after that.
Speaker 1:I'm going to need you, so you know, kind of give them a heads up. Cool, is that something you've always done, or is that something you kind of figured out once?
Speaker 2:you got some. We just kind of figured out because you know, all of a sudden you know you close on a property and you're ready for the rough and plumbing and electrical and they're like, well, we're two weeks out, we can't get to you for two weeks. So this way, if you give them a little bit of heads up, then they can at least put you on a calendar for, you know, a tentative date, private money or something where you're paying high interest rate, like the longer that baby sits, like your seven month project.
Speaker 1:All your profit goes to the lender and not to you. Right, yeah, yeah, that's awesome. What are some other things that you guys have found that have made you know, this real estate thing successful for you guys? Obviously, you've had the struggles. Maybe it's lessons learned or whatever. What are some of the things that you guys have implemented or that have done? Maybe it's, you know, your relationship with Wanda too, like she does this, I do this, or like just any kind of tips that you guys have found or things that have made this thing viable for you guys to do as a full-time business.
Speaker 2:Yeah, I mean we. It's good because we work really well together, even, and even if we we have a couple of different projects going, they're usually always in different stages. So usually I'll go in first. Me and my father-in-law actually are the one we do a lot of like the rough work. We'll do the cleanup, we'll do the demo, we'll do the framing. You know we'll get all the rough ends taken care of, hang the drywall, insulate, you know plaster, paint and well, actually we just plaster.
Speaker 2:And then my wife, wanda, she comes in and she'll do the painting and then she'll do the trim work and she's she's really good with all like the detail stuff that I'm not good at. I usually, once I get to a point I want to get out of a property and I want to get onto the next one, and then like she comes in and she puts like the towel racks in and like you know, just all the trim and caulking the trim and like all the little stuff, you know the touch up stuff that I don't like doing, yeah, and that's you know, she kind of likes doing that stuff. So it works out really good because then I can move on to the next one and start working on the next one, nice.
Speaker 1:How are you guys making decisions on what to buy? Do you have a specific buy box that you guys stay pretty clear to? Is it more of like a opportunistic buy box?
Speaker 2:Okay, we're closing on these couple like I said, we've kind of always just flown by the seat of our pants so we don't really have. I mean, yeah, we love the, you know the 1945 to 55 built ranches. You know like everybody loves, you know. But you know those are pretty few and far between lately. So I mean we'll, we'll really take anything that we can if it's going to cash flow and we can, you know, hopefully cash out a little bit on on a refi, on a refi when we're done. I mean it's just all in the numbers. I mean some people are real picky about what they buy. I don't really care if it's a two-story or a ranch or if it's got a basement or if it doesn't.
Speaker 1:I, you know, like I said, as long as the numbers work, I'll pretty much buy anything Nice, very good, the contractor thing, going back to that and building your team. This is an important part of real estate. Right, you got to have your accountant, like you talked about, your bookkeeper, like all these different people. But I think when people are starting out, dave, finding people to do the work can be a challenge. How are you guys finding these? Electricians, plumbers Is it as simple as you're just going on Google? What about the blaster guys, those things? What are the ways that somebody who's just starting out can start to build that team of people who could do the work for them?
Speaker 2:Yeah, so I mean, when we first started, it was pretty much just Google and then Facebook. I went on Facebook and said, hey, I'm looking for a plumber, who do you guys recommend? And then I think somebody recommended the one that we use now and I had him come in with a couple different bids and he beat everybody and price checked him a few other times and he's always beaten everybody and now we just have a great relationship where I can just call him and tell him that you know, I need a couple guys this day and they usually send them the electrician. We found electricians through Facebook. I think Wanda put a post up that you know, if we were looking for an electrician and somebody recommended some this other guy that we use now and and yeah, I mean it, just it worked out great. Um, I know Dwayne has gotten a couple like drywallers and plasters and finished people off of Facebook as well. It'd be just by putting posts out saying, hey, you know, who do you recommend for this?
Speaker 1:And then you just reach out to them and get them in to take a look at them Easy peasy, right. Is that similar to lenders? Are you doing the same thing to try to find your lenders Facebook and that sort of thing, or what's the?
Speaker 2:strategy yeah, I mean lenders is typically kind of word of mouth, you know, just talking to other investors. You know, hey, who did you use for this deal? And then they tell you, okay, they call me and ask me who we're using, and then you know. Then that way I can get information out of them on who they're using too. So it kind of works.
Speaker 1:It works both ways Nice. A little good back and forth there, right. That's what this community is all about. Right, sharing some information, helping the next guy out, I love it. Man, do you attend a lot of networking events? Or did you attend a lot of networking events to kind of get some of this?
Speaker 2:I've. They don't typically go there. It usually always happened on nights that I got stuff going on. So I can't, when you got four kids, you got a lot of stuff going on at different times. Yeah, a lot of the investors. So I tried to do the caffeine and cash flow ones that you guys have done. We've been to a couple of them, but then usually the Wisco Rio ones, I think, are usually on Wednesday nights. One of them were on Wednesday nights, I think, and now it's just a busy night. So there's nothing I can do there.
Speaker 1:Yeah, yeah, that's. I love that. I love that the caffeine cashflow option is out there now for networking. For people who have a lot of stuff going on at nights, like we have four kids, uh, it makes. I'm going to go to that every month, but to get to a lot of the other ones it's tough and I live an hour 15 now from green Bay. There's really no real estate networking up here in door County so you gotta go, gotta go to the big city of green Bay networking the closest thing. But yeah, the networking piece has been been a big part of our success, for sure, oh, for sure. Yeah, any other like podcast books, any other thing, dave, that have been influential for you and Wanda and your real estate journey that have helped you guys, you know, move that needle, so to speak, or anything.
Speaker 2:Yeah, I would say probably the Bigger Pockets podcast. That was the first one that I ever started listening to and I kind of got in on that one and then just kind of got hooked on it. I mean, anywhere I was going, I was listening to that one. Um, and then when I heard the, we listened to that one before I even bought a property. And then I heard the one about the, the burr investing, and once I heard that I was like oh my God, this is genius, like why isn't everybody doing this?
Speaker 2:Went home and I was talking to wanda about it, she was like all right, we'll just do it. So I kind of went probably another maybe two months or so without buying anything. Yeah, and then I was bringing her deals and kind of just telling them, but I was always just afraid to pull the trigger. And and then finally one day she just looked at me and she's like, you know, you always talk about these people that are, you know, getting bogged down by decision making and you know just kind of over, kind of overanalyzing everything. She's like, if you think it's a good deal, she's like, just go buy it, I don't care, like okay, fine. So I went and bought that first one, and then it's pretty much worked out ever since.
Speaker 1:That's awesome and that first one was that successful. For you guys, that wasn't the big grandma house.
Speaker 2:Yeah, no, that wasn't. Uh, that wasn't that. This one was just a little bed, one bath, like 650 square foot house in Oshkosh and, like I said, we kept it. I think we got it rented out now and we bought it for $45,000 and like stuck like 20 into it I think, and it's worth like 130 now and we got it rented out for I think like a thousand dollars. So we make about 400 bucks a month, I think, on that one. So I love it, man, I like that little house.
Speaker 1:Those little houses. I'll take every little two bed, one bath house. I could find. I love it, man, the rehabs are small on them and I like them. Yeah, that's another point I think people forget about when they look at the little ones is, even if you, even if it needs one of everything, it's not going to be nearly as much because you got a lot less labor and time that has to go in, because there's a lot less square footage. Yeah, so you can make them now, granted that, was.
Speaker 2:That was in 2019, 2020, so material cost was a lot cheaper. But I mean, we actually took that thing right down to the studs and rewired it, replumbed it, new insulation like everything, and we were into it for twenty thousand dollars.
Speaker 1:Oh my gosh yeah, yeah, like we've lived through the time, we're like we're the old people now that you know we used to have to walk uphill both ways with those shoes and like we talked about man. We're back in 2019, we could pick up a house for $45,000.
Speaker 2:Yeah.
Speaker 1:That's how it is. It's different, but I see that a lot, dave, like I talked to a lot of people that are still sitting on the sidelines right Analysis, paralysis, like you mentioned, fears around it, the market they're watching the market, the interest rates, real estate Like, what would you say to somebody that's sitting there in this current market environment, that's sitting on the sidelines with some of those same fears that maybe you shared back in 2019.
Speaker 2:Well, I mean the one, the one quote that kind of always got me it was the best time to buy real estate was 20 years ago.
Speaker 1:The second best time is right now.
Speaker 2:I mean, it's the only you're only gonna, you're only going to, you're only going to get into it. If you jump, so you might as well jump. We always say we kind of, we kind of jump out of the plane and build a parachute on the way down, yeah.
Speaker 1:Yeah, you guys, I really don't know what we're doing. What were some of your biggest fears? You remember back in 2019, when you were going through this kind of analysis, paralysis thing, like what was the biggest fears that you were feeling at that time?
Speaker 2:I mean at that point, I mean we were sitting, you know we were, we were doing okay in the real estate, you know, in the sales business, but it's not like, you know, just to think about throwing a hundred thousand dollars around like that was just nuts.
Speaker 2:I mean back then we didn't, we didn't know anything. You know, like how to do it or really anything about it. So I mean, we were kind of just learning everything as we went. And then, like I said, it was just you know, well, what? If you know what, if it doesn't work out, then we're sitting there with this property that we can't get rid of, or something. You know, it's all the fears that just go through your mind. But now it's kind of like okay, well, if it doesn't work out, we'll figure it out later, yeah.
Speaker 1:I think what's fascinating about the progression, dave and you've probably done this with experience is like I was the same way on my first one. I remember Tony Breuer, our friend at Good Faith Funding. He kind of helped me get started too. And I was like, tony, what if I can't burr out of this thing? And what I mean by that is like pull all my capital back out or my private money's capital back out and pay them back and have like no money into the deal. And he's like, yeah, so what? And I was like, but then I didn't do it, you would have 20% down plus all your rehab money.
Speaker 1:So like if you have like 5% stuck into it versus 25 or 30 or whatever. I'm like, oh okay, yeah, you're right. And he's like then, worst case, you just rent it and like let it run forever. I'm like, oh yeah, okay, I guess so.
Speaker 2:Yeah.
Speaker 1:He's kind of a smart guy. He knows what he's doing. Yeah, I'm not going to tell him to listen to this episode, cause I don't want to make his head. No, I'm just kidding.
Speaker 2:No, I, when I before we, before we started using them to me, we had, we sat down with them and maybe we went out to lunch or something and kind of just sat and talked and I brought them a couple of deals that I was looking at.
Speaker 1:And after, and you're like what, I can go shopping.
Speaker 2:This is great.
Speaker 1:Yeah Well, I love it because it sounds like for a lot of people, like for me. Once I did that first one, I still had some reservations about the next one, but they were a lot less right.
Speaker 2:The first one I was trying to self-sabotage.
Speaker 1:Actually, I was like I hope this deal falls through, I hope we don't actually get it because I'm scared, whatever.
Speaker 2:And then we crap what am I going to do now? We?
Speaker 1:actually own this property and I don't even know what the difference between a water heater and a furnace looks like, right, and I was like, all right, crap, we got to make this thing work. Right. I got the second one. It's a little bit easier. I got through that one and we made some money and then, like now, up to the point like I don't, even, like I't even tell you some of the properties that I own, like if I drill past them, I won't even know them, because it's just, you get that comfort level and I'm not saying that to brag. I'd be like, wow, look at me, that's awesome. Well, Dave, this is awesome. Man, I want to get you out of there because I know you got to get working on this property it looks like. So this has been awesome.
Speaker 1:I love all of the information and I'd love that you bring a little bit different perspective than me in what you do and you've got a whole different viewpoint on things and some great tips I think everybody can take away from here. Specifically, I learned a lot just about contractors and timelines and that kind of thing. I think there's some great nuggets in there. But I always wrap up with one question, and that question is and this is more so for those folks who maybe aren't familiar with Wisconsin Some people out there in the Californias and the New Yorks that are looking to get a yield on their cash. We got a great state here, we think, so we got to get them indoctrinated a little bit to wisconsin. So favorite wisconsin tradition for you, dave, or favorite place to visit in wisconsin- I'd say a favorite place to visit is definitely up north.
Speaker 2:I anywhere up north, you know, managua, tomahawk area. I love going up there. We have some land. Um, it's pretty much straight north of green bay and amber, just north of cribbets. I love going up there and you know, just being up north and just slowing down a little bit, it's always always nice. We got a lot of nice lakes around here getting out on the boat and you know, doing some boating Summertime. We hit the Wolf River quite a bit and go hit the sandbars on the boat. That's nice, oh nice Very good.
Speaker 1:That's, I think, minocqua, eagle River area so far out of all the episodes. I think we're taking a poll. I think that one wins. So I'm right there with you. That's my favorite place. I live in Door County, which is beautiful, but I still prefer if I could spend time in Eagle River. I'd love it up there in Minocqua area. So for those of you guys that tuned in, we appreciate you guys listening. Sharing is caring, so share this episode. Let somebody else get tuned in on this or anybody else you think that's looking to get into real estate investing. If you're new to real estate investing and you need some help, or you need some connections, or you just need some guidance on where to go, hit us up. Go to wisconsindiscountpropertiescom, fill out the contact us form. Somebody from our team will reach out to you and we're not trying to sell you anything or get you going. We just want to help you get into the game and
