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
Sight Unseen: How Andy Boehm Built Wealth Without Stepping Inside
Andy Boehm pulls back the curtain on his 15-year real estate investing journey across Northeast Wisconsin, revealing the counterintuitive strategies that have built his success. What began as a career in real estate sales during the foreclosure boom evolved into a profitable investing operation when Andy noticed a simple truth: the investors buying properties were making substantially more money than he was earning in commissions.
The conversation delivers practical wisdom that cuts through the complexity many associate with real estate investing. "If you buy the property right initially, you can do a lot of things wrong and it's nearly impossible to lose," Andy explains, challenging listeners to focus more on acquisition strategy than perfect execution. This philosophy has guided his approach to both flips and his growing rental portfolio.
Andy shares several tactical nuggets that can immediately improve results for both new and experienced investors. His basement renovation strategy demonstrates how to create significant perceived value without the expense of fully finishing a space - painting walls and floors, adding strategic lighting, and ensuring all lights operate from a single switch. He also reveals his foolproof method for permanently eliminating smoke and pet odors using TSP cleaner followed by oil-based primer, avoiding the rookie mistake of using scented air fresheners that buyers immediately recognize as cover-ups.
The discussion explores the current landscape of new construction opportunities, where Andy estimates 60-75% of properties in the $270,000-$400,000 range are newly built homes. For investors looking to enter this market, he emphasizes finding lots with reasonable covenants and focusing on affordable builds rather than custom luxury projects.
Perhaps most refreshingly, Andy challenges conventional wisdom about property inspections, revealing he's purchased over 50 properties without stepping inside before making an offer. His Monday morning ritual of evaluating wholesale deals from Wisconsin Discount Properties while in the bathroom at 6:30 am speaks to the efficiency possible in modern investing with the right information and processes.
Whether you're just starting out or looking to optimize your existing real estate business, this conversation delivers actionable insights from someone who's mastered the fundamentals in a market he deeply understands.
If you're interested in connecting with Andy and exploring opportunities to work with him, feel free to call or text him at 920-915-6760! 📲
Hey everybody, we're here with another episode of the Wisconsin Investor Podcast, and I have another amazing guest that we're going to be talking with here shortly. Before I get into that, though, as I do in the last few episodes, I'm going to plug Wisconsin Discount Properties for sponsoring today's episode, and we're going to talk about a little deal that we had in the great town of Oshkosh, wisconsin. One of our buyers picked it up and he had sent me a little text breakdown of how the deal went for them. So I wanted to share this with you guys today, and if I shared this on another past episode, my bad, I forget what I do on these sometimes, so bear with me, but this was one. I got a little text from him recently, maybe a week or two ago from the time we're recording this.
Speaker 1:On the surface it didn't look like a slam dunk deal. It looked like a nice little base hit and it turned out they bought it. The numbers here they closed in 105 days from the day they bought it from us to the the time that they ended up selling it. And they outsource, they contract everything out. They have about seven hours into it. So they made about 3,500 bucks per hour on this deal. So, even though some folks I hear out there a lot of times they want to make 40, 50,000 bucks a pop, great, awesome aspirations. 3,500 bucks an hour isn't too bad, better than a stick in the eye, as we say. So those are the type of deals that we deliver to your inbox every single Monday 6 am. If you want to get on the buyers, let's go to wisconsindiscountpropertiescom, put your info in and you'll start getting the deal sent to you every single week. With that, we have one of our longtime buyers with us, mr Andy Bain. Andy, how are you doing today?
Speaker 2:Hey, I'm doing pretty good, Corey. How about you?
Speaker 1:I'm doing great man. I'm excited to get you on here. You know we've we've talked many, many times over the years. I don't know that we've ever face-to-face like had a conversation so.
Speaker 2:I know this is kind of a semi face-to-face, although you know we're still talking through computer screens or whatever.
Speaker 1:Yeah, a little COVID, like bringing us back to COVID days, maybe a little bit, but that's okay yeah.
Speaker 2:Yeah, yeah. Well, I'm excited to have you out man You've been in.
Speaker 1:you've been in the real estate industry in Northeast Wisconsin for for a while now. Tell us a little bit about you know, give the audience your background and how you got started. When did you get started and just how did you get into this crazy real estate investing world?
Speaker 2:Sure, Sure. Well, I got started in the real estate business probably I would say 15, 16, 17 years ago, something like that. I started out in real estate as a real estate agent and really had no aspirations or whatever at that point in time to buy property or be a real estate investor. That just wasn't on my radar at all. It was more trying to find deals and hustle down, you know, customers to work with listings and stuff like that.
Speaker 2:So but when I had started in that in real estate, like that was the time when foreclosures were super heavy and there's a lot of, you know, there's a distressed market and so investor buyers like that was a very big piece of the business. You know what I mean. Like that was a huge part of the overall market in those times where foreclosures and we listed a lot of those foreclosure properties and sold a lot of them. So that's how I got in tune to real estate investing or whatever. When I started trail, it's like, okay, like these dudes that are buying the houses are making a lot more money than I am selling them.
Speaker 1:You know, it's like that's what the pieces together, a little bit like maybe they're doing something I should be doing well, well, right, you know.
Speaker 2:And then they rely on me so much for, like, the key pieces of the deal, right, like what, what's this house going to sell for later? What can I pay for it now? What should I do? What kind of work should I do? You know, they're leaning on me for all of that information and all those questions, right. And then, like I'm just adding it up for them after I do some of these flips with these people, I'm like, do some of these flips with these people. I'm like, all right, they bought the house here. I know what they put into it and I know what we sold it for. And there's just a lot, you know, there's a lot of room in there, sometimes For sure, for sure.
Speaker 1:So you started doing that, did you? Were you involved in any of the short sale stuff too? Is that kind of the same thing? We were dealing with short sales at the time.
Speaker 2:Not, not a ton. I mean, I tried to avoid short sales and the fact just that they were, you know, super hassle, you know their extra work and a lot more time consuming from an agent standpoint. There was deals out there from the investor standpoint in short sales certainly, but from the agent standpoint it was not worth my time and we usually got the short sales, as always pre-foreclosure, before the actual foreclosure happened. So when we would take them and the bulk of the foreclosures, everything I sold was all real estate owned already or you know, like bank owned or HUD owned or something like that, where it was already through the foreclosure process and you know, short sale was off the table at that point it's already done Too far gone Right on, okay, cool.
Speaker 1:What was your first deal? When did you get your first deal? What was it? Take it, let's take us through that process and what was going on at that point.
Speaker 2:Oh man, like the first house I flipped or something yeah.
Speaker 1:First year, first like dive into it. So you saw these guys doing it, you ran the numbers and you're like, dude, I could do this. Like if they can do it, I can do it right now. What was that first foray to cross onto the dark side of real estate investing?
Speaker 2:I'm trying to think I mean I didn't even have to think back what the first one was. I knew that the first, very first house I flipped I did as a partnership deal. I had somebody else with me that would have been the handyman or whatever in the operation, where that's not my skill set at all. It's not what I do, yeah, any part of that so. But I'm trying to think I think this would have been a house in, like in fox crossing I think, maybe barbara avenue or something like this. Raise the bell, I couldn't give you the exact street number. I know it's a little ranch house, three bedroom ranch two-car garage kind of thing, sure, um, and it was, you know, your typical flip. You got some cosmetics and at least for me, I don't get into the into these huge you know projects or whatever. I just handle these cosmetic ones and yeah, kind of fell in that avenue and clean it up and resold it, made some money. You know this. You know kind of the start of things.
Speaker 1:So okay, cool, so that was it. You flipped the first one and you say you don't get into the big one. So are you talking like you're not replacing cabinets, type of big one, or like you're okay if you have to like, redo a kitchen type thing or what's your?
Speaker 2:cabinets and all that. Yeah, I would say cabinets and stuff is totally fine, like that's inside of the wheelhouse it's. I've done some houses where it's literally the only thing that was good was the foundation, you know, and and them are the ones I try to stay away from. So if it's that or it's like if I got to get super creative with the house, like removing walls or that's not my specialty I'll take what's there and put it back together, yeah, but I'm not the kind of person who's like let me blast out this wall and I'm gonna add a second master bath in the house where there never was one. You know, know those kinds of things, that's. That's, I guess, where I'm drawing the line for me personally.
Speaker 1:Yeah, for sure. We've done a few of those too in the past and I'm I'm right there with you. Some people that's their spent like. They love that creative piece of it and God bless them, you know.
Speaker 2:Well, yeah, some people are great at it, you know, but not me.
Speaker 1:We've had one, one of our first flips, really easy one like we walked. It was an mls listed property and we walked in the house and you could clearly see where there was like a third bedroom. Like they had just taken the wall down to make the living room bigger and we're like, oh, if we just put a two walls and a door there, now we have a three-bedroom house and the arv is now this right we're. This is almost like, what are we missing here? Yeah, nobody was offering on it, it just sat there and we did pretty good on that one.
Speaker 1:I think we made like 20, some thousand bucks back in the day, which was good for us at the time. Like I said, we didn't have to do much, just handed the keys to the contractor and tell him what to do. So it was pretty easy. But is that sort of like now? I mean Back then you said the construction piece isn't necessarily your forte. What's been your strategy and what are the lessons learned through the multiple deals over the decades that you've done now as it comes to rehabbing the properties?
Speaker 2:my mindset on that stuff is always like if you buy the property right Initially, upfront, if you buy it right and the deal's correct, um, you can do a lot of things wrong and literally everything can be wrong, Like you could screw up the whole flip. You could screw up the whole deal, you could overpay on stuff, and if you bought it right, it's nearly impossible to lose on these things. If you buy a property right, or you have any idea or you're in tune to the market at all, it's fairly difficult for things to go south in a situation like that.
Speaker 1:That's a really good point. Yeah, you just nailed it there, I think I see so many people are so afraid of getting their feet in the water, like they're afraid of losing, right, yeah, but to your point, even if you just build in a little, you know, build in a buffer or whatever in your numbers so that you can't lose unless you're like, I mean, they would have to like burn down and you didn't have insurance on it or something, that's one way you could lose.
Speaker 2:Yeah, like everybody talks about that or you hear people are always freaking out about the numbers. And what are your numbers and what is your profit margin and how much are you going to spend on your budget and all of this? And I'm just like dude if this house, I know, is going to be a 275 house all day long, because I walk through them every day and I see them and I'm paying 200 for it or 175 or whatever it is like I don't need to do any more math.
Speaker 1:You know what I mean.
Speaker 2:Like there's, I don't. I don't do any more math. I don't count anything up anymore. I did it at the front. I'll try to be smart about it. I'm not going to put stone countertops in a basic house. There's certain things, right, I'm going to be smart about it, but it costs what it costs. I'm going to put it together as reasonably as I can. There's certain things I like to do in houses that I think present well or whatever. You know, there's some of that kind of stuff, but I don't add nothing up until the end or whatever, until it's time to do the taxes.
Speaker 1:I love it, man. That's awesome. What are some of those things, Andy, from your perspective? What are some of the key things when you're flipping a property that you're going to make sure you're doing? On all of these, yeah.
Speaker 2:And so I'm like kind of you know there's some things in the basements right that I think you can do a lot of stuff in basements of houses that you don't necessarily pay for. You know you do obviously, but like not a lot. But you can present by presenting an unfinished basement and presenting it as finished or doing things to make it look finished adds a ton of value to the house, okay, and then you don't have to necessarily deal with like the finished basement appraisal stuff. That can be semi-tricky.
Speaker 1:But what do you mean by that? Can you explain that a little bit further? When you say presented as well, like as like.
Speaker 2:If you finish your basement and as a flipper you spend 25 000 bucks, whatever, so like a new construction world, I know it. You spend 25,000 bucks or whatever. So like in new construction world, I know it's 50 bucks a foot or whatever to finish a basement, right? So if you spend that much as a flipper, I don't know that you get that back on an appraisal for lower level square footage. You're not going to appraise that back. A buyer might pay for it, but that buyer may run into appraisal issues. Okay, okay when. If you take a basement and just leave it as unfinished but present it a little bit better, make it show a little bit better, paint the floors, paint the walls, put recessed, can lights in there, put a little drywall, you know a wall to separate an unfinished area, create like that sort of space can get a similar effect. You know like buyers will pay a similar type price. You don't have to deal with the appraisal aspect. As much you know. And then the house presents and shows almost as like a finished basement.
Speaker 1:So good, dude, that's a good nugget right there. Everybody should go back, re-listen to that because, dude, that's a good nugget right there, everybody's go back, re-listen to that. Because that's a good little nugget right there. We've had that too, where, yeah, you just just paint. That's why I was hoping that's where I was thinking you were going with. That was. You know, we painted the walls and cleaned it and made it look not like a scary basement, like a nice, like oh, the wife could go down here with you, know, and look.
Speaker 2:No, no offense to the ladies out there, but sometimes they're a little timid to go in the basements and, uh, I had, uh, along those lines, like I had an investor guy I worked with for many, many, many years and he used the term barefoot and pregnant. So, okay, if you're, if your wife is barefoot and pregnant, can she go down the stairs and go into the laundry room. If your basement's like, if your laundry's in the basement right or whatever, can she go down in that room and in that state and be like, okay, yeah, you know, and if you can present it like that, then it's a huge win that's awesome and that's a very inexpensive, uh, improvement to make to the property to just give it that extra pop and get more, more interest in and the buyers and hopefully drive up the price Right For sure.
Speaker 1:Yeah, awesome, that's a great tip. What are some other things that you give any other? You know kind of nuggets along that line, that people that you do that you've seen success with, or some of your investor um flipper guys out there you know, um, not, not too much.
Speaker 2:I mean on the basement side, the recessed can lights. That helps. I'm pretty picky about flipping one switch because I think about it from a real estate agent perspective all the time. From showing the houses right. So like if you flip one switch, go into the basement, it turns everything on in the basement, the basement and turns everything on in the basement. A real estate agent doesn't have to jumble through a mess and flip switches, find the pull chain, figure out how the lights turn on in the basement. It just like that would ruin the flow of a showing. A buyer's not going to view that space very well. Versus you flip a switch and boom, the lights are on, or in the basement, like I'd always try to stick in the laundry room.
Speaker 2:I try to make the laundry area because a lot of the older houses that are flips and stuff like the laundry's in the basement, you know. So if you can make that a little bit nicer and put a toilet or a slop sink in there, some counter space in there, again, the recessed lights paint the floor, the floor paint the walls, like those basic things. One switch, come on, versus walk into the room and it's showing and search for literally 30 seconds to a minute, two minutes, try to figure out how to turn on the lights, like yeah, that makes a huge difference, um, in the buyer's perception, and can also be like the difference of like one offer or four.
Speaker 1:Right, ah, it's so good, that is so good. What about? Like, just like smells in the house. Like, are you a believer in? Like when you're going to show us? Like having the cookies out and the candles and all that stuff? None of that stuff.
Speaker 2:No, everybody just laughs at that shit. Everybody laughs at it. Every buyer makes fun of people who do that. It's just totally stupid. And like the, the worst thing is the, the, the smells. If you overdo it, like on the air fresheners, that's an obvious cover-up, like blatant. Every real estate agent knows it, every buyer knows it. Like that's awesome, everybody gets it. Uh, but like you can't have smoke smells and things like that, there's like you have to go over the top to eliminate smoke smell. That's an odor that if you don't seal that up correctly or deal with that correctly, that will seep through and then every investor tries to then cover it up with the air freshener. And like you've hurt yourself so much by not correcting it up front. To correct, you know, right away and get rid of it. But you know, outside of that, just don't have nasty smells in your house and you know, just leave it.
Speaker 1:Yeah, what is your? Have you bought properties that had either pet odor or or smoke smell or anything like that, and what's been your experience with staying away from those things? Or are you afraid of those things when you see that? Or is it just something that you, you know, work into your, your numbers?
Speaker 2:No, it's a not, it's not an issue for me, Like I would. Just. So the steps to me, like I would use, is um, if it's a nicotine smell or smoke type smell, um, you can use a TSP cleaner. That's what I've always used anyways, and you, you know, scrub the walls up really good and you know that helps to get like the layer of soot and grime and nastiness that's on there. It also preps it for paint and I guess you know it's good for that. I guess I don't know, but it helps to clean it.
Speaker 2:But then I was always told to. It helps to clean it. But then I was always told to and I've dealt with this and it works is to use an oil-based primer. You can't just get regular latex primer or something. You get an oil-based primer and then you go over that. Once you've cleaned it, then you can go over it with an oil-based primer that helps to seal that smell in and then you paint it from there to seal that smell in and then you paint it from there. Okay, um, and that has, in my experience, like 100 eliminated like smoke smells and then, like you know, pet stains, you know you get dogs, you know whatever sub floors get pissed on and stuff and like that.
Speaker 2:I've always used the oil-based primer before I put carpet down or before I put the LVP or another layer of subfloor or whatever it is like seal that stuff in and cover it up, and I spent extra time at the beginning doing that so that I don't have to use air fresheners or cookies or whatever else. Like people like to walk into a house and it smells like new carpet, like that's a smell and people like it. You know fresh paint is a smell. Like that's better than cookies or better than you know, yeah, linen breeze, whatever you know, yeah, for sure, for sure, are you.
Speaker 1:When you say the oil based stuff, are you talking like the kills stuff kills primer and all that.
Speaker 2:Yeah, okay, yeah any of those, but they make like kills or them brands. They make two different kinds, so they they'll sell them in the store side by side. One's a latex type primer and one is oil-based and it's a difference.
Speaker 1:Okay, gosh, I'm getting so many good nuggets here today already. Andy, see, I you can tell I don't get in and do any of this stuff. I just I just sling properties or tell people, hey, go fix this, and then do what's best.
Speaker 1:This is good stuff to know so that if you get somebody a contractor, painter, whatever doesn't know what they're doing you can point them in the right direction. So your investing strategy now, andy are you doing a lot of the rental side of things or more flips, or what's your mix in your strategy now?
Speaker 2:I'm a little bit of both I try to get involved in. I've always had, maybe a side goal of adding a couple of properties a year. You know what I mean A few, two, three something properties a year and just buying those and holding them. I've been doing that for a while. Um, and just buying those and holding them. You know, I've been doing that for a while. And if I'm bored or something you know, I get some flips. Or you know something to do, um, I don't do like a ton of flips just from like the tax purposes and stuff I don't love, but, um, like I said, sometimes like I, I get bored or whatever, and then, um, I'll buy some.
Speaker 1:Nice, I love that. That's your boredom habit, you know, not playing video games, it's, I'll go buy a flip, I guess.
Speaker 2:Might as well, something to do.
Speaker 1:You're a real estate junkie for sure, when you know your habit is buying properties like ah gosh, I'm bored, I guess I'll just get another property, that's awesome. Now you also you you represent some people in the new construction space and you've gotten involved in some partnerships. It sounded like when we were chatting a little earlier talk a little bit about the new construction world and what you're seeing as it relates to people. You know I know some, some guys I know that are that started in the flip space and now primarily just do infill lots and and new construction type of stuff.
Speaker 2:But what are what are you seeing on the new construction stuff? For somebody who might be interested in getting into that world, I think it's a hot market, it's a busy piece of the market. I always, every time I've been in real estate or whatever, I just find the niche or whatever and ride the wave. So when I first got in, we talked about foreclosures was a niche and you rode the wave and that was just what the market demanded at that point in time. Was the market conditions right? So? But now, with interest rates the way they were, house prices spiked the way they did, interest rates now changed and spiked.
Speaker 2:Uh, inventory is ridiculously low. Any anybody who hasn't lived under a rock and cares about real estate knows like it's impossible right to find stuff. So that's what's created new construction. And then if you look at the overall market, if you're in a price point of 270, 000 bucks, like on on the low end to 270, something like that, and then you're going to be to 400, price wise, go dig around on the MLS or go look on Zillow or whatever, and you're going to see that I don't know, I'm making, totally making this up. But what is it? 60, 70%, 75, something new, new construction in that price range.
Speaker 1:Yeah.
Speaker 2:Like, especially in the threes, once you get to like 320 or something like that, it's a huge percentage of new constructions, virtually the whole market. So that should tell some people if you want to be involved in real estate, where you want to be like that's what's selling and that's what's moving right now. That's what's selling and that's what's moving right now. So, uh, but it's also important when you know, when you're doing new construction is to to build and sell what people want and what's selling and that's going to be something smaller in size and something more affordable. Uh, I have zero interest in building somebody a fancy house, you know, some big custom house whatever, like that's a different lane or different whatever. But if you can just keep to a basic price and I've had this with any aspect of real estate, flips or new construction if you're in the low end of real estate, you don't lose ever. Yeah, there's always going to be somebody who needs an affordable house. Right, don't lose ever. The low end is always business.
Speaker 1:Always going to be somebody who needs an affordable house, right.
Speaker 2:A hundred percent yeah.
Speaker 1:For sure. Yeah, when you mentioned like 270 to the fours, I was like you can get a new house for that. Like, that seems low to me. What are the keys to keeping the cost low? And then, what are people seeing for margins on new construction? Like, what are they? You, I know, I know what we look at when we're looking at a flip. I know how we run our numbers. There's a certain like I run it as like a certain dollar amount I want to make sure I can make. I don't worry about like percent arv, like some people do, but like what do you?
Speaker 1:what are the guys and what are you seeing on the and you doing on the new construction side, like what is their target typically when they're looking at doing these projects and then how are they making sure they're staying within those I guess you'd say parameters?
Speaker 2:Yeah, I think in each builder is different. You know some builders I work with work on percentage basis and they want to make you know 20% or something on a house right, and they want to make you know 20% or something on a house right. Some people look at it more differently and they're just looking at the overall project and I can make 30,000 bucks or whatever you know it would be. You know slightly different on that, but I know one thing that they do a key thing is finding a lot that you can build on where the covenants are not crazy. So in order to get to a price of $270, you need to build a small house and you need to get creative with how you build a small house. So, do you eliminate basements? Do you eliminate bedrooms? Do you eliminate garages? Do you find giveaway lots that nobody else wants? Do you find subdivisions where the covenants allow you to build less square footage? Those are all little avenues or little ways in which you could reduce costs. You can sometimes work directly with municipalities and you might be able to get some assistance or you might be able to get some kickback from them if they've got, you know, like aged lots or inventory or stuff that they wanted to get rid of. That could be an avenue to help reduce things.
Speaker 2:And then and this is not my lane at all, I don't do this at all, but, uh, smart people do if is they understand exactly how much subs like a new construction, like, yeah, you, you know, if you're a builder, you better know exactly how much people pay for drywall and exactly how much it is to paint.
Speaker 2:And that's that's the world. Where it's a little more my sloppy way of doing numbers and all that stuff that we talked about for ARVs, for flips, like it's harder to do a new construction because you've got such a big range. And then, like I wouldn't know to hire a painter, I wouldn't know that I can get a painter down to X price, you know what I mean. Like you have to be involved in that and you have to shop that and you have to bid that and you have to negotiate that and you have to set that up with every single contractor. So I feel like skilled builders or talented builders are they get good people, clearly, but then they you know they'll either build enough volume or give them enough work that says, hey, your price has to be here, I'd love to hire you, but price is this or I can't hire you, right.
Speaker 1:Yeah, yeah, that seems like that to me has always been the risk of like no, you got to know your numbers, cause you could. If you got a $30,000 margin that can get eaten up pretty quickly with making a few mistakes with subs. Or you got a thirty thousand dollar margin that can get eaten up pretty quickly with making a few mistakes with subs. Or, yeah, like subs, you gave the sub the down payment or something, then they fly, fly away with it and now you got to start over and I mean it can.
Speaker 1:It can be quite an expensive learning experience trying to get into this, this ball game, but I know guys that do it, so that's why I'm like it seems like an interesting avenue to possibly, like you said, ride the wave right now. It seems like that's kind of where the hot market is in some of these more affordable new construction type of scenarios. So buying the lot. Going back to that, what are you seeing people paying for lots and how are they determining the price they can pay for the lots? What are you seeing as far as the criteria goes on that?
Speaker 2:A lot of it would be location specific. The thing with the lots is a lot of times those prices are set in stone from a developer and many times new construction lots are never MLS listed properties. These are all. Builders get relationships with developers and developers sell to builders almost exclusively. So they kind of bypass real estate agents and bypass the mls. Um and those the pricing of those lots are sort of set in stone almost. You know it's hard to buy something. You know 60 000 bucks, like it's almost hard to buy something for 60 grand, 60, 70,000 bucks, depending the area is pretty difficult, um, pretty difficult to find okay, um, I just got totally distracted.
Speaker 2:My phone was kind of blowing up under there for a second.
Speaker 2:No worries man yeah, uh, but then it's, you know, like the infill lots, those things you can find, those are mls listed properties but those you can find at. That's how you get into like the 270s. As an example is if you find a twenty thousand dollar infill lot in anywhere in the fox cities, you know those can be twenty to thirty thousand bucks and you make money on those. There's a little bit extra cost, you know there's added costs. So those infill lots have to be less expensive than like an open subdivision lot, just because there's, you know, a lot more like excavation costs and moving dirt around and all that kind of stuff. The cost to build on a lot infill that has two houses surrounded by it is going to be, I don't know, 15 grand, more probably to build a house than it would be if it's totally open.
Speaker 1:Okay, got it and that's just like you said. Just because you're going to have to be skirting dirt and doing different things, is that anything to do with the utilities? Are those typically there? If you're, like you said, between two houses utilities- utilities.
Speaker 2:Should you? Should the utility should be there. It's mainly like the cost of like, let's say, you had a subdivision and you have all this extra dirt, you can just go move it to the next lot and keep moving it around and there's other builders that need dirt and so like you can move that dirt around okay if you're in the middle of two houses, like not only is it a pain in the ass to get the dirt out, so that costs you more money, but then it's a you have to pay to get rid of the dirt and that costs you more money, you know.
Speaker 2:So then all the contractors too, like when you're pouring a foundation wall, like it's way harder to get your equipment around all these other houses and pour a foundation in that situation than it is when it's a wide open lot, so it makes a lot of sense and I and I think that applies through many of the steps right. So, like that's where the price becomes, they charge more, you know. So everything becomes a little bit more expensive than if it's you know, hey, I got this house right here.
Speaker 1:You know it's easy to work on. Yeah, yeah, wow. No, that's good. This is all really good stuff, because I see some of these lots sometimes and I'm tempted to like, should I try to get this? But I don't know, like those little things like that, like moving the dirt and getting rid of the dirt and doing these things, I don't think about that. Well, there's a lot. Here's how much they want Cool.
Speaker 2:And the old lots to. The other thing on the old lots is the. You know, like in the flip world we deal with the old lots and old houses and stuff where they have the lines coming into the street. You know the sewer and water lines and those in older houses are a lot of times junk or they have roots going through them or they need to be cleaned out all the time or whatever. Like that's the same thing that you'd have on an old infill lot too. So if you're buying a $20,000 lot, you're also flipping a coin, that there's a $10,000 sewer bill that you got to flip. You know that you're going to have to redo as well. So like you know there's're going to have to redo as well. So like you know there's there's there's more surprises and stuff. And then that's where you know, like you'd be aware of it but like I could tell people, you know you spend a lot but by $20,000 for a lot.
Speaker 1:If you can control your pricing on your contractors like you can still eat 10,000, you know you can eat some of that stuff, similarly to what you were saying earlier about, like, as long as you get it right, you buy it right. You can, yeah, you can.
Speaker 2:You can absorb some potential surprises in there yeah, yeah, yeah, and I absorb surprises in volume too, you know what I mean. So, like, that's where, if you do enough projects or have enough things going on and one of them kind of sucks, like yeah, it doesn't matter, I did 15, so three of them sucked, 12 of them or 10 of them were awesome, and two, you know, like yeah, it all kind of washes averaging a little bit there and yeah, yeah, we see that a lot in the flip world or in the uh, in the rental game too, like we know some folks who who bought in one or two rentals.
Speaker 1:And you know I think that's much riskier than buying 10 to 20 or more rentals, because now you got one vacancy, you got 50% vacancy.
Speaker 2:If you got two units or you have a single family house and they're vacant.
Speaker 1:Now you got a hundred percent vacancy, you know and you need that cash to come in from the one where, if you'd buy enough of them and you get one dud, it kind of washes out with what you did on the other one. Same with flips. We have some people that'll buy 15, 20 properties from us a year, plus other properties they're doing and some of them you're like well, I don't know how they're going to make money on this one, but thanks for buying it from us at the number you offered us. It was great for the. Thanks for buying it from us at the number you offered us. You know it was great. Uh, and they don't care because they just started. They're keeping their crews busy and they're they buy enough of them that they're gonna win big on several and they're gonna lose a cup a little bit on some other ones and overall, at the end of the year, like you said, when they're going to pay their taxes, they're gonna have a tax bill because they made pretty good money.
Speaker 2:You know from doing it. That's, that's really the name of the game.
Speaker 1:So you do one flip and you're banking on that one May or may not knock you out of the game, right.
Speaker 2:Yeah, it's definitely easier. I think the more you have you know. Obviously it's easier that you get more experience and stuff like that, but it's from a rental standpoint. It's easier to deal with the furnace, it's easier, you know, whatever comes up, it's just kind of it just simpler once you get over that hump the initial hump, I guess, like yeah for sure.
Speaker 1:Now you have a lot of experience just in in all aspects of real estate which is one of the reasons I wanted to have you on here today and so you've bought some properties from us at Wisconsin discount properties as a wholesaler. Obviously, you've done deals through the MLS. Somebody listening to this? What are some things they should know about the differences between maybe looking at MLS and working with an agent to help them find some investment opportunities, versus working with somebody like us as a wholesaler? What are the things to be looking out for pros and cons? What are the things if they're looking for an agent? What should they be looking for? If they're looking for a wholesale company, what should they be looking for? Those types of things?
Speaker 2:I guess the first thing I would say is like, again, the money's made in the deal, right, the money's made in the purchase of the transaction. So any investor should probably, on the purchase side, spend less time talking to real estate agents trying to buy something on the MLS. It's probably a waste of time to do that and spend more time getting on wholesaler lists or buying properties from you guys or whatever, where it's a off market type situation and it's not competitive Like. The only reason, like you guys, properties have margin and are available for investors is because they are off market. It's a unique opportunity for somebody to get those like. You're competing with your list, which is a fine list, I'm sure, but it is not the list of a real estate agent in the mls you know it's a different, it's different.
Speaker 2:So, um, it's way harder to make things work and mls properties and you can spin your wheels and get frustrated where on yours or any other wholesalers like, still do your due diligence. You know, I pay attention. I make my own arv numbers. I make my own numbers. I don't rely 100 percent on what somebody else tells me. You know, I do my due diligence so that I can feel comfortable knowing that I don't have to do too much more math. You know what I mean. I know my backend number. I'm super in tune with that and I'm not ever going to be wrong in my backend number, and you know. So I would just spend all your time focusing on that and make sure your backend number is what it is and then design your rehab around it. Okay, you know what I mean. Like you can choose to remodel a house and spend $50,000 on a remodel, or you could spend $35,000 and probably get the same result.
Speaker 1:Yes.
Speaker 2:You know. So I think that would be like, no, you're back at number and then be humble enough to change all your plans and what you thought you were going to do with the house or what you want to do or what you saw on TV or whatever, and just work inside of those numbers you know what I mean and just be like, all right, this guy it's got to fit inside of here. And then then you know, like the whole dollar cost averaging thing, like you don't have properties that lose, you just don't. If you understand that one simple concept, you'd never lose money. That's so good, um, but that's like, so on your properties. Like you would be able to actually see a spread, you'd be able to see an opportunity to make money.
Speaker 2:Um, I pay attention, like I watch some videos that you do and I'll rewind them and I'll check and I'll. I'll look for little odds and ends and stuff that might be glossed over or whatever. I look through that stuff. Yeah, um, I factor in the cost for title, I, you know I I factor in all the extra costs. You know, because that's different. When you buy MLS, you're not paying title insurance fees. You know there's some of that. So you just got to know those costs and pay attention to that stuff. You know you guys do a good job of putting a lot of that out there, putting the inspection out there. There's at least something to look at. There's some video to look at. You got the title search so you know there's not special assessments or goofy stuff like that. Yeah well, those are all good things.
Speaker 1:I think a lot of people take that stuff for granted. They don't know If somebody new out there they're like I don't know, what should I be looking for. And I think those are important things. Like you know, to know. If you're working with a wholesale company, you want to make sure you're going to get clean and clear title and that they're actually working with a title company. It seems like obvious, but you know horror stories out there and some parts of Iling. You know that here's a deal you can buy and then they never you know give me this money and then you'll get the house and they don't run it through a title company. There's no title insurance, there's nothing. So that's an important thing to to to point out there.
Speaker 1:Andy, you mentioned you mentioned something earlier, but I wanted to ask you because one of the things I hear a lot about is we don't do walkthroughs right and so with MLS, a lot of times you're going to walk through the properties versus our process. You're going to get a video and an inspection report. What are your viewpoints on that? Because some people I talk to love that idea. They don't have to drive all over the place kicking tires, like you said, and wasting a lot of time on MLS properties that are going to be so competitive with. You've got everybody on the list right On an MLS versus. Our list is still yeah, it's a good list, but way smaller amount of people you're up against. But some people need to feel the need to have to walk through a property in order to feel comfortable with it. What's been your approach on that? Because you've bought several properties from us not walking through them up front. How is talk a little bit about that and how that, how you work that into your system or into your process.
Speaker 2:Um, I don't know, I'm kind of old school and I have a simple mindset that says you want to buy something super cheap and below value, like maybe you can't see it. You know what I mean. Like I've bought 50 plus houses that I've never stepped inside the door, like that's to me that's how you buy houses. If you want a good deal, you know, like, if you want to go pay retail and investigate every nook and cranny of the house and have your home inspector in the house for five hours and pick it apart and it pay retail, yeah, go, you know, go pay retail. That's what it's there for.
Speaker 2:But, like I don't know, sometimes maybe you have a house like from your perspective or whatever, maybe there would be a house that is cleaner or in better shape than what people would give it credit for, or whatever on the video yeah and then you could maybe get more money if people put their eyeballs on it, um, but on the same time it's like you know, sometimes people over and I've been involved in both I've paid more and I'm like, oh, that's a little worse than I thought you know, and I didn't do as good on that one and I'm like, oh, shoot. But then another one it's like, oh, that's a little better than I thought you know yeah um, I don't know.
Speaker 2:I just have always assumed it's part of the game. Like every every short, like if you buy any foreclosure, like through the courthouse or whatever. None of those have ever been walked through in the history. You know, unless you're breaking in so like I don't know.
Speaker 1:Yeah, yeah, I'm with you. Well, I'm glad you brought that up because that is one thing that obviously I get at different people's concern levels and stuff. And glad you brought that up because that is one thing that obviously I get at different people's concern levels and stuff. And we used to do the in-person thing before COVID happened. And then COVID happened and we were starting to grow, where we were starting to get more than like one or two properties that we could put out a week, and it became a logistical nightmare for us to try to like have one of our representatives at the house for an hour a week and then they're also out trying to get more deals, you know, so that we can provide more inventory to the market. And it just became like something had to change, like we had to just come up with a way that was going to be sustainable and allow us to scale the thing. So that's why we get the inspection reports Now.
Speaker 1:We never used to do that. It used to just become walk through it and be your own inspector. And a lot of people have said hey, I actually appreciate you guys having the inspection reports versus me trying to walk through and act like I know what I'm looking at, like I don't know what the hell I'm looking for, so having the inspector go do it, I don't have to go walk the properties. You know, when I set up the process, when we did this I joke, but I said I wanted to make it so you can, instead of sitting on Facebook on your phone while you're on the on the crapper, you can sit and evaluate a deal in that 10 or 15 minutes and hopefully make some money. So that was the.
Speaker 2:That was the precipice of going to this virtual option versus the it's kind of true, though, and I would I'd be lying to you if it had never happened that way.
Speaker 1:Andy, you just you just confirmed my wishes and my dreams. They have come true, Thank you. This is what I've been setting up for the last four years.
Speaker 2:Trying to get somebody on the crap. My internal clock works that way, so I know.
Speaker 1:Monday morning six, 30, that things and I got to take a shit right around that same time anyway, so like I know, my Monday mornings scheduled in. That is awesome. That just made my day, man. I appreciate that. Uh, with that, I think we'll, I think we'll go to a wrap. I don't know if it's going to get any better than what we just ended on here. So our last question before we wrap this besides sitting on the crapper looking at our deals, what's your favorite? Place to visit in w for your favorite Wisconsin tradition.
Speaker 2:Oh my gosh, that's awesome.
Speaker 1:Oh, I'm crying over here. This is so good, oh man, all right, in all seriousness, andy gotta, we gotta, try to wrap this up.
Speaker 2:favorite Wisconsin or place to visit okay, I guess I'd say I'll go Lambeau Field, I mean that's just, that's like a little second home, you know what I mean? You can hang out there and like everybody's cool, everybody's fun to hang out there.
Speaker 1:and like everybody's cool, everybody's fun to hang out with and spend that whole day in the parking lot and having fun and yeah, that's it to me.
Speaker 2:You're going to be at the draft.
Speaker 1:Yeah, for sure. Yep, awesome, for sure We'll have to. We'll have to connect up at the draft. We'll be there, should be fun.
Speaker 2:Yeah, that'd be a good time, for sure.
Speaker 1:Yeah for sure. Well, thanks, Andy. This has been the most I've laughed on one of our podcast episodes. I think and I'm actually in tears over here Cause that was so funny Appreciate you being on man. I learned a lot, in all seriousness, and I love having you on man. It's been great to sit and chat with you and I think our audience is really going to enjoy this episode for a lot of reasons. If anybody wants to get ahold of you for you know, picking your brain or maybe having you help on some new construction lots or anything in the brokerage side of things for you what's the best way for them to get ahold of you?
Speaker 2:Probably just my cell phone. I'm usually like a text person or whatever. So if somebody wanted to, send me a text message or whatever.
Speaker 2:They can reach me anytime. That's the best way to get me and I'm happy to like talk real estate or help them out, help a new investor, help a new builder. I love this game. You know what I mean. It's just a fun game for me at this point in time and I like to see other people win and learn, like learn how to play it, you know, because it's kind of a simple game, I feel like. But yeah, you know, you just got to know how to play For sure, For sure.
Speaker 1:Is that cool If I put your, your cell number in the show notes? Yep, yep, that's cool, awesome, very cool. Well, andy, appreciate you, man, and obviously, yeah, you love helping people because you, when you're bored, you just do flips, so why not help somebody else do?
Speaker 2:it too.
Speaker 1:You can teach them the best strategy for sitting on the can, like what's your approach? Where do you hold the phone? How do you zoom in?
Speaker 2:You only got like 15, 20 minutes before your legs start falling asleep. So you gotta be at it pretty quick.
Speaker 1:You better hope it's not a big property that we're doing with a long video right when you're looking at it. Yeah for sure, awesome guys. Well, thanks so much for tuning in for all of you guys listening out there. This has been another episode of the Wisconsin investor podcast. If you got some value out of this, please share it. Sharing is caring, as we say on every episode, and we'll see you on the next show.
