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
The Cash Flow Myth: Building Real Wealth in Real Estate w/ Jimmy Vreeland
What if everything you’ve been told about “financial freedom” through rental properties is wrong?
In this episode of The Wisconsin Investor, we sit down with Jimmy Vreeland, a former Army Ranger turned successful real estate investor, to challenge the traditional cash-flow-only mindset.
💡 Jimmy introduces his concept of the “cash machine”
🏡 We share how chasing 100 rental doors taught us hard lessons about the $200–$300 per door cash flow myth.
📈 We break down how real wealth is really built: equity growth, tax advantages, and strategic refinancing.
🔑 Jimmy reveals his “BRRRR Key” method—a smarter path for busy professionals to invest passively while keeping their main income.
💰 We cover cost segregation, bonus depreciation, private lending, and current hard money terms that can help offset taxes and maximize returns.
⏳ And most importantly—we explain why waiting for “perfect” market conditions is costing you more than you think.
Whether you’re a high-earning professional or an aspiring investor, this episode will shift the way you look at real estate forever.
👉 Tune in now to learn how to start your wealth-building journey today.
What's up everybody. Corey Raymond, your host here of the Wisconsin Investor Podcast, and I got my man, Jimmy Vreeland here. Jimmy, what podcast are you running again? The Real Estate.
Speaker 2:Fast Pass Podcast.
Speaker 1:The Real Estate Fast Pass Podcast. So we are going to I'm bringing you some heat today, guys, for my audience and Jimmy, I know you're going to be bringing this to your audience as well and Jimmy and I are both members of a group called the Collective Genius and we've known each other now for gosh five, six years probably, been in this group and seen a lot of things over the years, so we're going to get into some of that today. Before we do, I always give a little commercial for our business, wisconsin Discount Properties. So if you are looking to invest in properties in Wisconsin, get on our buyers list. To do that, you just go to wisconsindiscountpropertiescom, you plug your info in and we start sending you deals in your inbox every single Monday morning. We'll shoot you a little text as well. In case you're not a big emailer. You can check it out in the text, and I've been pounding this on the last couple, but I'm really excited about some data that we just put together.
Speaker 1:One of the criticisms wholesalers get all the time is your ARVs are inflated. You guys are inflating the ARVs to try to sell deals. Well, we put some data together to find out how good are we at ARVs. Are we inflating them? Are we accurate? We did 50 flips that you guys bought from us in a six-month span and we looked at what did they actually sell for at the end of the day and what did we say they were going to sell for, and we were five grand short on our ARVs. So our investors made five grand more on average than what we said they were going to make on these deals. And we even included the ones that were just clean and list. So these were people who didn't even bring into the ARVs. So you can have confidence when you're looking at those ARVs that we're going to be pretty damn close on those areas.
Speaker 2:You're underselling yourself, Corey. You need to add 10K to all your dispo prices.
Speaker 1:There we go. That's what we're doing from now on, baby. That being said, Jimmy, let's get into it today. Brother, Tell our audience a little bit about who's Jimmy Vreeland and why in the heck are we talking today, brother?
Speaker 2:Yeah, my name is Jimmy Vreeland. I'm a real estate investor, small business owner from St Louis, Missouri. I'm a happily married father of four and former Army Ranger.
Speaker 1:Love it, boom, that's it. That's what I love about you, jimmy. No nonsense, bring it buddy. So when Jimmy and I were talking at the last Collective Genius that we were at at dinner I'm a big Burr lover, jimmy loves the Burr, and we were just kind of nerding out at dinner one night about Burr and Jimmy's got a pretty cool program called Burr Key, which I think is pretty cool. You've been in this business a while and Jimmy and you've had a bunch of different iterations of what you guys have done there in your market and so I thought, man, this is perfect to bring you on and get your perspective on all things real estate related, but in particular cash flow. How do you look at cash flow for your investors? Tell everybody a little bit about what you guys are doing with your Berkey program there in KC.
Speaker 2:So I'm going to back up a second Corey. And so it comes down to a little bit of a problem with, I think, the real estate education industry and there's not enough distinction and differentiation, like when you say real estate, real estate is a big big thing, right, right, big umbrella, and so there's no differentiation between someone who has a cash machine and someone who doesn't have a cash machine, and I think it's just, I think it's hurting people. And let me kind of understand the way I define a cash machine is you make 250 K a year. So if you make 250 K a year in sales, you have a cash machine. If you don't, you don't have a cash machine yet. And so if you have a cash machine, to direct your attention away from that cash machine, I think is very perilous.
Speaker 2:And so does everybody in America need to be in real estate? They do. You, at a minimum, need to get 20 government, 30 year fixed mortgages. It needs to be part of everyone's portfolio. But to get to that and take your eye off the ball, I don't think it's smart. And so you need someone to help you do it passively. Now, if you don't have 250K a year, cool, you need to wholesale and flip if you want to be in real estate. Because I see people without cash machines start taking on long-term debt and start buying rentals when they shouldn't and then they're in a precarious liquidity position. Then I see people who should just be buying rentals taking their eye off the ball and flipping and wholesaling. I was like wait a minute, this doesn't make any economic sense.
Speaker 1:Yeah, yeah. So what you're saying, jimmy, is let's say I'm in sales, I'm making 300K a year killing it in my job, my job in the real estate space. I should just be buying and being as hands off as possible, getting the rental business going.
Speaker 2:Yeah, because like okay, so that guy making $250,000, why does he even want real estate? Like what do you think that answer is?
Speaker 1:Passive income. He wants to get out eventually, be able to surpass that $250,000, to be able to not have to work his butt off to be able to make that $250,000.
Speaker 2:I have a bad. I'm going to take this podcast on a bad tangent, but I have bad news for that guy. I have bad news for that guy making 250 to 300K. Do you want to know what the bad news is? What's that? There is no way $200 to $300 a door in what we used to call cash flow will ever replace your income. Unfortunately, you're too successful and too productive ever replace your income. Unfortunately, you're too successful and too productive. But now, over the course of 10 years, those houses will build you a ton of wealth, but they are in the traditional cashflow model. They are not going to replace your income. Because I was in that situation. I was making 250K in corporate sales and I remember buying a few rentals and sitting down and seeing oh, I'm making 300. 300,. What is a quick math? If you make 250K a year, you need to make 20 grand a month. Okay, and then $200 a door for 20 grand. What is that? 100 houses 100 doors.
Speaker 1:You need 100 doors. Yep, that was my original goal when I got into real estate. Jimmy, right there, that was it.
Speaker 2:Yeah, and then we're just going to put our head down and we're going to do it no matter what, right, corey, yeah. And then let me tell you a story about my past. Like I was so sick of corporate money and this is how stupid I was I started a deli so I was in medical sales and I was always have to doing office lunches, right, and I had corporate credit card and I was always swiping that card and I'm like wait a minute, why am I paying somebody else to make these lunches? Why don't I just make the lunches myself?
Speaker 1:I did not know this about you, jimmy. I did not know you had a deli dude.
Speaker 2:This is awesome and so I, I, um, I did it with a high school friend who had a checkered past and was like currently in recovery, and this dude could cook bro. His food was excellent, yeah, but couldn't run a business, nor could I, and you know he ended up stealing from the company account to get his fix right. Oh no, but I was in such a demented mental space that making $1 from the crappy deli felt better than making the $250,000 I made from corporate. Wow, dude, but dude, that was a me problem. That wasn't a corporate problem. Yeah, that was me being ungrateful for what that job provided me.
Speaker 1:Right, so was that before you started dipping into real estate? Was that like your first venture into anything outside of a W-2?
Speaker 2:Dude. I read Kiyosaki when I was in the army, got out of the army and then, around 2016, when I started making good money no, around 13, I started making really good money and I started getting stupid. And then, you know, kiyosaki convinced me. I was in the rat race of, I had a new quota every year and then I had to chase my bonus right. Well, my dumb ass, can I curse on this podcast? Sorry, is this family-friendly?
Speaker 1:You know what Family-friendly but ass is, I think.
Speaker 2:That's as bad as it will go, Okay. Okay, this is how stupid I was. I created a second rat race where I would take all my bonuses, reinvest it in some cash flow scheme, oil wells, delis, eBay and real estate and then I would lose all the bonus money and then have to hustle harder to do it again until I sat To catch back up yes, until I just sat and focused and exclusively started buying real estate.
Speaker 1:Interesting, interesting. Did you start with? So taking your advice now that you have today, looking backwards hindsight, jimmy, when you started in the real estate space and got focused, was that on buy and hold. What was your? Because, again, we talked about that's a big umbrella of real estate how did you enter into the space while trying to focus on the cash machine?
Speaker 2:Okay. So I started buying burrs, right, okay. And so then I learned I took my sales ability and talking to rich doctors and I just changed it to I was able to borrow $5 million in private money, right, and I was able to just dude, I got up to 140 birds. Wow, I mean I was highly in debt. No systems, no processes, cash poor. And then I hit my hundredth rental and I was like, hey, and I can finally tell my job to my boss to take this job and shove it Right. Yeah, because according to the math, a this job and shove it right. Yeah, because according to the math, 100 rentals, I should be financially free. Yes, yes, and I so.
Speaker 2:Then I joined cg and I I met jason medley, yeah, and jason was like what do you do, bro? And I'm like I'm retired, I got 100 rentals. And he's like no, what do you do? He's like, look stupid, you are cash poor and house rich. And now, now you're $5 million in debt. When you were a corporate you had no debt. And he's like, so you better find some active income fast. And so then I started turnkeying houses to people. But he had to give me the distinction between passive income and wealth building and active income. He didn't phrase it as cash machine. I learned that like seven years later, yeah. But I mean, here's another thing when I had a cash machine from corporate, the bankers were out in droves to lend me money. Oh for sure, dude, soon, as I gave up my cash machine, guess how much lending I got? Zero, zero, yeah. But I didn't understand the cash machine paradigm.
Speaker 1:Yeah, I see that happen a lot. Jimmy, I'm glad you brought this point up. We'll get people who do they bang off four or five flips in a year. They make a good, nice chunk on each of them. They're six figures now, right yeah. And they're starting to add a couple rentals to the portfolio along the way, building that wealth, which is great. I think that's a great idea. And then they go quit that W-2. And all of a sudden now they're trying to get lending for that next flip or rental and they're scrounging. Man, they are in a tough, tough spot. So I think it's a great point, man, what you just brought up there about your experience and giving up the cash machine.
Speaker 2:Yeah. And so, jess, if you're going to give out that cash machine, make sure you're highly liquid, highly committed. And if your thought is that once you're a small business owner, you're finally free, you're sorely mistaken, because now your bosses are your accountant, the IRS, and really you have to continue to become a better person, to employ people, because I was kind of a I a uh.
Speaker 1:I was not nice when I was a corporate when you say you were not nice, you mean to people who you eventually hired, or just in general as a human being, to customers, clients and everybody else.
Speaker 2:The world was all about me, Okay, and then I mean so I, if I were to take a video of me, my interactions back then, I don't think I'd be proud. Yeah, I thought I was. I thought I was the bomb because I made 250K a year.
Speaker 1:Yeah, okay, so the ego was strong.
Speaker 2:Yeah, I mean rude to my wife, rude to my coworkers and then, if they didn't buy from me, rude to my potential clients.
Speaker 1:What was some of the big talk about that self-development journey then? Like, was it just through experience? Did you get some coaching? Like, what did what helped you continually? You know, become the person you are now that you can employ people, and continually be humble enough to admit that you?
Speaker 2:had to go. So I learned, like, all these great lessons in the army, right, okay and but like after my third deployment, I was like, oh hell, no, I don't want to lead anymore. Leading gets you shot at, I'm done with that, yeah, yeah. So I had all these great leadership lessons and great experiences that you know. After my third deployment like spending a lot of time overseas I was kind of tired, I think Okay, and immature, like I always. People are like, hey, would you ever go back? I was like, dude, it'd be awesome to go back with my brain now and my body then. Ah, yeah, like does that make sense?
Speaker 2:Yeah, for sure For sure, and so I will tell you what the recipe was. I started listening to a ton. I started getting punched in the face a lot with business, and then listening to Jordan Peterson.
Speaker 1:Okay, who is Jordan? I don't know. Jordan Peterson.
Speaker 2:Oh my God, I'm writing that down. He's the man. Okay, 12 Rules for Life. Okay, that's got to be your next book.
Speaker 1:Okay, love it. 12 Rules for Life.
Speaker 2:Jordan Peterson's big thing is the hero's journey. Okay, life is all about aiming upward and, um, you know, the hero's journey is this it's if you look at every movie, it goes through this cycle. It's someone hears a call to adventure, they cross the threshold, like Bobo leaving the Shire, and then, soon as you cross the threshold, it's just a road of trials. Then, once you hit the road of trials, there's going to be a moment, a climax, an abyss, that you either quit and turn around and don't change, or you change, get better and get through the abyss. And so I mean I'm sure your experience is the same Small business ownership is just a series of abysses.
Speaker 1:Dude, I'll tell you what. When we made our first hire, there was so much of that. I call it imposter syndrome, right. But it's like who am I to hire somebody? Like I don't know. I don't even know what I'm doing. How do I pay this person? How do I do taxes? How do I do all this stuff? Like I don't know how to lead somebody. What are they going to do every day? How do I coach them? Right?
Speaker 1:And if you're a small business owner and you're listening to this podcast and you have employees, you know you just had to kind of power through that crap and just do it and you learn a lot in the process. Like you said, you're going to get punched in the face quite a few times. There's tons of mistakes that we in our business have made with employees and regrets Like I wish I didn't do certain things with certain people and those types of things. But all you can do is learn from it and not make that same mistake again going forward, and that's how you grow, I think, in this, in the small business world that we live in, right?
Speaker 2:Yeah, it's part. So Jordan Peterson convinced me that the only path to gross is through the abyss. So if it's unavoidable, you might as well have some fun with it. And so then I started mentally trying to run to them.
Speaker 1:Okay. They always say what is it? Buffaloes run away for a run through the storm and cows run with the storm Be a buffalo yeah. Yeah, yeah.
Speaker 2:Something like that yeah, yeah, be a buffalo.
Speaker 1:I think that's one of the one of the leadership concepts out there right now that's hot is be a Buffalo, not a cow, and run through the storm, not with it.
Speaker 2:Yeah, I have a little gratitude that you do have this problem right now.
Speaker 1:For sure. Yeah, I think I think that's a great point. The gratitude part. You know, having conversations with some newer people. It's really fun for me to when I get them on the podcast. It's fun to talk to newer people because it reminds me of that excitement and energy of when I was starting out and how it was.
Speaker 1:And I think you get a little bit jaded the longer you're in this business, a little bit from some of the lumps that you had to take and you forget how far we've come. Jimmy, you and I have been in now probably it sounds about the same amount of time in this business and I forget that that first deal, excitement and stuff. So talking to newer people, it like lights me back up like oh yeah, yeah, this is really fun. I do need to be grateful for how far we are. Like, wow, you know, I was talking to Carrie on our.
Speaker 1:On our we just got back from a big road trip and on the trip I was like how freaking lucky are we right now that we get to drive around the country for a couple of weeks. We've got a team in place that's running the show for us. I take a couple of phone calls on the road and the team handles everything else. I mean this is incredible. Like where else can you do this?
Speaker 1:But it's almost a decade now of building that and taking a bunch of lumps, of trying it and it doesn't work. It does work, then it doesn't work and we're finally at a point now where I'm sure, if I take my eye off the ball it'll change again and it won't be as easy or, as I say, easy, but it won't be as self-managed as it is right now, cause I've done that a few times where I've kind of given up and be like, ah, you guys got this, and then I'm out in Florida at our house down there or whatever, and meanwhile things are crumbling behind the scenes and I'm I'm just to it. But it is amazing, there's a lot to be grateful for in general in this country. But then to be involved in this business and get it to a point where it's matured to now, at least in our space, it's a really humbling thing to reflect back on and realize we got a lot to be grateful for.
Speaker 2:And then that's kind of related back to the cash flow myth. Can I pop off about that for a second?
Speaker 1:Yes, let's talk cashflow. Myth buddy, I love it.
Speaker 2:So these people who want to step out of their jobs and not work anymore and get to the beach. I always try to remind them we are in the greatest country on earth, with the most opportunity, with the most technology and the AI boom coming down the pipe. It's the most exciting, most abundant time to be alive. And you want to Like are you sure about that? Or why not just buy some rentals so you protect yourself from inflation, build up your net worth and then have a nest egg? Oh, and also learn the skill set of an investor, which is not easy, Right, but hey, if you want to sit it out, that's great.
Speaker 1:More for me and Jimmy Exactly.
Speaker 2:I try to completely dispel this whole myth of I want to quit my job.
Speaker 1:Yeah, so you talked about, like you and I have a very similar experience too with the rental piece. Like I did the exact. It's so interesting because I did the exact same thing. I read Kiyosaki. I'm like I'm getting a hundred doors as quickly as humanly possible, that cashflow of 200 bucks a door, and then I'm kicking it on the beach drinking Coronas and just living the life right. Got a hundred doors in three years and I was like same exact. What were you doing? What was your cash machine? We started, we were wholesaling at the same time.
Speaker 1:So, wholesaling and flipping. Wholesaling and flipping was the cash machine, but I was like it was only solely and I was still working a full-time job for the first two years, no-transcript. The nights and weekends thing for me was like, you know, having kids. You got four, I got four. They were starting to get older and into stuff and I like couldn't be at certain things and I'm like like, ah, this is no way to live, you know.
Speaker 1:So my intensity level to get out of my job was that like a 10. I was like I'm doing whatever it takes to get out of this job because of the time, the time aspect of it. And carrie had cancer back before we got married, I think she was like 24. She had appendix cancer like got diagnosed with it three or four months before we were supposed to get married and she had to have a major surgery and all this stuff. So my perception of time shifted really early in my 20s of like whoa, we could die, like tomorrow, and be gone, and so that was a lot of that motivation like give me to 100 doors, give me 200 bucks a door as quickly as possible, because, who knows, I could die tomorrow, right yeah and then I got there, I got the 100 doors.
Speaker 1:Same exact thing, dude. I'd look at my bank account. I'm like um, it says I'm supposed to be making 200, but oh yeah, that ac unit went out over there, that roof had to get replaced. We needed new windows over here. It just, and even to this day it's like I think we're at like 140, 150 somewhere in there, and it's still uh, it's still fluctu. There's no consistency. We'll put it that way, like it's well, you know what is consistent.
Speaker 2:The wealth building they all, they all appreciate five percent a year. Oh, did I lose you, jimmy? Are you back? Yeah, you got me.
Speaker 1:They all appreciate yep, go ahead.
Speaker 2:they're all appreciating five percent a year, and I don't even want to talk about how much money I know you've saved in taxes.
Speaker 1:Oh dude, and we just got a nice little big, beautiful bill this year 100% bonus depreciations back. That's ridiculous. Yeah, it's a huge advantage for real estate professionals.
Speaker 2:Yeah, Any real estate agent out there. If you're not buying houses, you're wrong.
Speaker 1:Yeah, yeah, Jimmy. What does that tell everybody in the audience? Just for those that aren't understanding, just simple terms, if you can. A doctor is making 500 grand a year. Wife's a real estate professional. How does that affect their income versus not owning rentals? Can you explain that?
Speaker 2:Yeah, I'm not a tax professional, but the quick and dirty of depreciation. This is another reason real estate's the greatest investment ever, because to the IRS, our houses are losing value To the rest of the economy. Our houses are appreciating 5% a year and so, before Trump, a regular depreciation schedule. The IRS said. And before Trump, a regular depreciation schedule. The IRS said, hey, 35% of the house depreciates on a seven-year cycle, the rest depreciate on a 27 and a half year cycle. And then so you would have to wait for your depreciation. 30% of it you could depreciate in seven years. The rest you had to wait 27 and a half years. Now, with the Big, bold, beautiful Tax Bill, you could take that seven-year cycle and take it down to zero.
Speaker 2:So I'm going to use an automotive example. Like, as soon as that bill passed, I bought a new truck right, $85,000 a year truck. Now a truck generally depreciates on a five-year schedule. So you would take 85 divided by five, and then that was your tax savings each year, right, yeah, 85 divided by five, and then that was your tax savings each year, right? Yep, with Trump's bonus depreciation, I take that 85 and condense it down to one year. So I took an $85,000 tax loss and then I'm in a 40% tax bracket. Can I do some math real quick?
Speaker 1:Yep, let's do some math. Let's show them the numbers. I think this is important. When I talk to people, I don't think they quite grasp the actual impact of this.
Speaker 2:A lot of times so I got an instant. I financed it all as a good real estate investor will, and so I got an instant $34,000 tax savings.
Speaker 1:That's incredible. So you are not paying. So just in layman's terms, because sometimes people miss this up, it's not a $35,000 deduction, right Like you're not paying $35,000, or it is a $35,000 deduction.
Speaker 2:I got an $85,000 deduction and then, since I have a 40% tax bracket, I saved 34K in taxes. It's amazing. Now take that back to real estate. You take all the parts of the house, it's 30% of your 60,000. Let's just do a $200,000 house example, right, yep? So I think it's 30, it could be 35. I'm just a real estate guy, but let's. So 60 grand of that house is can be cost segged and can be condensed to a one year depreciation. So you could take $60,000 of that house and say that's a year, one loss. And so what is that? Now there's going to be some sticklers listening to this podcast being like his math's not correct. My math is accurate.
Speaker 2:It's not precise, close enough, but you know what I mean, like some of the high detail oriented people like, oh, I'm calculating a $24,000 tax savings but they're like, oh no, it's actually 20.98. I'm like, okay, cool, yeah, close enough.
Speaker 1:It's significant. So my point with the doctor example I always love this example because that's active income and I think what a lot of people don't understand is if you can consider yourself a real estate professional or you're married. This is where, if you're married or have a business partner that you guys are business partners in, this is one of the best hacks out there to save yourself tons and tons of money in taxes. If you've got a really high paying job or you're that sales guy Jimmy was talking about, have your spouse be the real estate professional, now you can take, let's say, you make 500 grand, you buy enough real estate in a year. You could potentially wipe out your entire income to the federal government and pays literally zero in taxes.
Speaker 1:Now we had a pot we had Marcus Krigler on not too long ago Jimmy, who you know well and he's my guy Perfect and he talked about some reasons why you may not want to take it down to zero, but you want to get it into those lower brackets, right and uh. And there's some strategy around that, which is why marcus is the cpa, not us, but um. But point being, theoretically you could wipe out your entire income and pay zero in federal income tax, which, if you're in a 40 tax bracket, you're making 500 g's a year. That's a lot of money that you're selling and now you can recycle that money right that you saved and reinvest that money in and help it grow like ethically, i'll'll pay 10%.
Speaker 2:So I'm not shooting for zero either. Like it's the greatest country on earth, I'm fine with 10%, yeah.
Speaker 1:Yeah, I'm, I'm at whatever my CPA tells me I should be at. So if he says zero, I go zero. He says 10, I pay 10, whatever.
Speaker 2:For you yeah, for you other stickler types it's like trying to get to net zero with carbon. It's impossible, it'll never happen. So don't try to go to net zero with your taxes either. And remember you live in the greatest country on earth and they deserve some. They got to collect revenue somehow, right?
Speaker 1:Right, that's why we got tariff no 40% 40%.
Speaker 2:That's not acceptable, though, either.
Speaker 1:Yeah. Yeah, there's a threshold there for everybody, right, for sure, for sure, yeah. So talk about what do you mean when you say BRR key? Talk about that for a minute, jimmy, for people who aren't familiar with that terminology. I think you might have coined this. I've never heard anybody use this terminology before, so I don't know if you have a trademark on that, but you should.
Speaker 2:I should means buy, rehab, rent, refinance. And all the gurus out there are teaching people with cash machines the privilege of having a low-paying job in real estate, finding and fixing those burs so you can be wealthy Like love, bigger pockets, but they tell these rich people to take a low-paying job in real estate. It's silly. And so then we had Turnkey from back in the day, which was an already rehabbed house, and so I just combined the two. Burrs and turnkey is like wait a minute, you don't really want to pay full retail for a house like you do with a turnkey. And then I looked at my holding costs and everything and title costs for transactions and I was like net, net people taking the houses down themselves just makes more sense and it's a better investment for them.
Speaker 1:Yeah. So basically what you're doing, jim, is you're finding the deal, they're buying that deal from you at a wholesale fee, yes and then you're taking care of the management and the remodel of that to get it to today's standards.
Speaker 2:Then they're able to refinance that property after it's done hopefully pull all their capital back out or at least Not all. Just like not having a zero tax rate, they'll pull most of it out. But I had one guy not be able to pull out three grand and he got all poopy pants and I was like, come on, bro, dude, yeah.
Speaker 1:Yeah, and I think that's changed quite a bit, Jimmy, over the last few years. Have you seen that where you know the burr nowadays is, you're going to be in for less than 20% down and you got to be happy with that?
Speaker 2:Not a hundred percent, plus getting a check at closing. Yeah, I mean, it's real. You're doing this passively. Like you just see, you just got an asset that you're like into for 10% of the ARV value and did it do any work? Like you can't complain, yeah, so I, as you can tell, I try to shy away from perfectionism and absolutes.
Speaker 1:Yes, I've noticed that here recently in the last three minutes of this podcast yeah For sure, yeah, and by us. We don't have a provider necessarily doing the whole process like what you're doing. So those of you guys here in Wisconsin, and especially up here in Northeast Wisconsin where we are, we partner with a lot of and I say partner loosely we have a relationship where we personally have properties that some of these management companies rent and fix up for us. I don't make anything by referring anybody over to them or anything like that.
Speaker 2:I just there you go, selling yourself short again.
Speaker 1:Yeah, I know, I know I'm all about bringing value, jimmy. I'm all it's all about for the kids. Do it for the kids. Dollars follow value, that's right. That's right. So, but what we do is we? We just recommend, hey, get with some of these property management companies them, do, like what Jimmy's saying. If you want to be pretty hands-off, let them do the remodel, let them fix it up, and and then you go ahead and do the refinance. I just actually this morning and I closed on a refinance. We did that exact same process. I gave it to them. They did the rehab, remodel, everything else. They got it rented up to today's market rents.
Speaker 1:I talked to the bank, refinanced. It got all I actually on this one I got all my money back out, thank thank the Lord. That was nice, but now that's an infinite return. I got like 40 grand of equity in this thing, 50 grand of equity and I did literally I spent probably four hours on it, from getting the loan, transferring money, refinancing. It is probably four hours all in and about 50 grand of equity.
Speaker 2:And then that's the number to look at is how much instant equity you run into If you had five grand in there and then your return now is not infinite. Do you really care If you step into 30 to 40 grand equity? No, no. How do you talk to people, though, jimmy?
Speaker 1:How do you talk to people, though, about this? Because this is one thing I think for people who have the cash machine, right, this is easy for us, because it's like so handsoff it's, you plug it in, boom, boom, boom. What about for the people who don't quite have that cash machine? Cooking right now Is are you, are you telling them get a better job? Are you telling them get into flips? You telling them start there? Like, what's your advice for somebody on the sidelines looking to get started in real estate who maybe doesn't have a big cash machine at this point?
Speaker 2:Those are the people who should be flipping and wholesaling. Okay Are, quite frankly, going to people like you and me and becoming home buying specialists. Mm-hmm, because that's the fastest way to a cash machine is just be a home buying specialist and crush it.
Speaker 1:Mm-hmm, yeah, yeah.
Speaker 2:So you just got to get yourself that active income, like what Medley told you, yeah, years ago, and if you want it, if you want it in real estate, like I mean to start your own wholesaling business, I think is just it's a big thing to fill. I think people make more money as working for bigger home buyers than starting it on their own, like throwing up a shingle and paying for their own marketing and cold calling and all that yeah, well, isn't that interesting like we get.
Speaker 1:We get asked that all the time Like, how do you find your deals? And I'm like well, if you want to spend, you know, 50,000 a month in marketing, you can. You can get there too. What is that about? Where are you guys at as far as marketing spend in a month? For acquisitions In the lo Rock we're 70. So 150 a month in marketing going out, yes, wow. Well, we got to step our game up, apparently with our spend.
Speaker 2:Jeez, we're way behind you, dang. All right, we just did a bunch of numbers. We're improving stuff with TV, but we got to do more TV.
Speaker 1:Okay, got it. Yeah, every market's so different too, and the time of the year is different. Everything's different. But constantly looking at those numbers, right, yeah, well, that's part of what, probably what you're talking about Running a wholesale business it's more than just I got to go out and negotiate a good deal. If you really want to run a legitimate business, there's a lot more that goes into a lot of KPIs to be watching, a lot of marketing, to be watching return on ad spend, all these other things that go into play on this stuff. If you want to be serious, if you want to pick off a few deals a year, you can get away with sending some letters and probably picking up a few deals throughout the year.
Speaker 2:I'd rather buy from another wholesaler.
Speaker 1:Right yeah.
Speaker 2:I mean, that's how I got started, yeah.
Speaker 1:I just had a guy on not too long ago and he's doing now. He's doing some of his own marketing. But when he got started he came to our market, he called me as one of the guys in the market to pick, pick a brain with and I see he wanted to start wholesaling. I said you know why do you want to start wholesaling? Well, I want to be able to get my own deals. I was like, why don't you just buy rentals from us?
Speaker 2:like well then, so what I? What I have those people do is I have a, I have an excel sheet where I show all the time required to find one deal, and then I plug their hourly rate in, and it's always more than the assignment fee.
Speaker 1:Wow, what is? Give me some examples of that. What have you? What have you seen? With some examples of some people.
Speaker 2:As far as how much time it takes to find one deal, yeah. So I would say if you're going to do a, so let's say you want to find a deal by cold calling. Cold calling is a hundred to one, right? So how long is it going to take you to either manage a cold caller or cold call yourself, right? Yeah, that's one thing. Then do the evaluation, then interview the contractor. To me, one house is a 20 hour experience, at a minimum 20 to 30.
Speaker 1:Oh, that's. That's actually pretty pretty darn good If you can get that. You're saying under contract 30 hours.
Speaker 2:No, I was saying rehab. No, yeah, yeah, under contract, 30 hours, yeah.
Speaker 1:Yeah, I was going to say that's. That's actually probably pretty good for cold call. I've I would say I would have thought it would be longer than that to try to get a deal.
Speaker 2:Let's do the math on that. Let, I would have thought it would be longer than that to try to get a deal. Let's do the math on that. Let's say it takes you 30 hours to find one deal and you make $200 an hour, which would constitute a cash machine. Yeah, that's six grand.
Speaker 1:Yeah to get one deal from cold call. Yeah, yep, yeah, yeah, I don't know. That's interesting. I've never heard anybody actually breaking it down that way, but I like the way that you're thinking of that stuff. That's pretty good. What are you seeing? What are your buyers doing nowadays for financing these bird eels? Are they people who aren't just cash heavy? What are they doing to buy and refinance in your guys' market?
Speaker 2:Hard money Hard money. Hard money or private money. Okay, after they do it, after they do a few deals, they go to their friends and family and find private money.
Speaker 1:Okay, do you guys have community banks there that do that get pretty creative, or is it pretty, pretty, pretty scarce?
Speaker 2:Pretty scarce. I mean the initial purchase thing pretty scarce, okay, but then yeah, I'll also show people how to raise private money.
Speaker 1:It's the easiest thing to do ever. Let's talk about that because I love this conversation I've had I had all you know jay connor, yeah, yeah, had jay on love jay. He is a energy machine over there but he he gave some good, some good nuggets that some people implemented actually from listening to this and raise some capital. What let me hear, let Jimmy Vreeland approach to raising private money the pitch, the pitch, how you approach. Yeah, give me the approach, hey you either get or you get.
Speaker 2:I'm actually doing you a disservice when I pay you your interest, because I'm buying a house at 60% of the ARV and if I don't pay you, you can foreclose on me and now you have a house that has 60 cents on the dollar. You have a house for 60 cents on the dollar. So, and when I do pay you, I pay you 8% and you know I help you protect your money from inflation in the safest asset class ever called real estate.
Speaker 1:It's very similar. Yeah, that's a. It's the opera You're giving them an opportunity. I think is the mindset.
Speaker 2:Yeah, I mean especially with people with self-directed IRAs, oh yeah.
Speaker 1:Yes, do you see that executive order that was just signed? Is that going to change any of the self-directed piece of anything as far as being able to now open up some IRAs and things like that to alternative investments, does that change anything with self-directed?
Speaker 2:I don't think any research on that.
Speaker 2:Yeah, I did do some research on it. I think my theory is that I'm going to sell my portfolio to a hedge fund one day, right, okay, and so I think them allowing that allows more institutional money to flood into real estate and create more prices. And then, quite frankly, doing a self-directed IRA is a pain, so I think it's going to make it less painful, so I think more cash is going to flood into real estate. So, even though they know they're trying to make more affordable housing, I don't think that's going to help.
Speaker 1:That's not going to help. No, no, supply and demand Economics 101. Yeah, yeah, doesn't help, does not help. So that's interesting. So the hard money what are you guys seeing for your hard money lenders in your area as far as, like, what kind of rates that they're getting out points terms?
Speaker 2:I think 12 and 2.
Speaker 1:12 and 2.
Speaker 2:Okay, it's pretty competitive, the hard money things. That mindset is like if you're going to go with this long-term wealth plan, this inflation hedge plan, you got to set up your inflation sales. So I don't care how many points you're paying, I don't care how much interest, I don't care if that eats into your forced equity. You got to get 20 of these assets, mm-hmm, and allow them to appreciate at 5% a year. So the faster you get the clock spinning, the better off you are. Like all these people waiting for interest rates to go down, the opportunity cost on the deals they've missed out on has been insane.
Speaker 1:Yeah for sure. Well, we call it the wealth cone. I call it the wealth cone over here. So the minute you start that clock, your appreciation goes up and the debt you owe starts going down and you create this bigger and bigger spread of wealth over time.
Speaker 2:So my buyer's like, well, how do I know you're sending me a good deal? I'm like, dude, I'm sending you the same deal over and over again. We have a certain buy criteria and it's just the same thing. Over to get the clock started yeah, you got to get in the game, yes, and then you're doing it passively, so you're not going to get the deals Jimmy and Corey get, right.
Speaker 1:Yeah, there's a price for that, but you're building crazy wealth, like I. Look at some of the guys that work for us or have worked for us in the past and they got. You know, we're obviously always doing the same thing. We're pushing them, no-transcript. Well, you can learn how to get wealthy or you can get a I can get you a 401k. What do you?
Speaker 2:want? Yeah, and then we looked over time the people that took action that on their personal financial statements because they bought real estate and they started that clock and they started working the clock Right. I mean I wish it was harder. What do you mean by that? You wish it was harder? I wish it was more complicated? Yeah, but it's so simple. But then, since it's so simple, no one trusts it.
Speaker 1:Right, that's true, that's true, or what I see, kind of the guru thing here. Jimmy, I want to go back to that guru thing you talked about. Sometimes I see, um, where I think expectations are improperly set out there, as far as the you know, you hear everybody's massive, massive deals. Everybody likes to talk about the big, the smoking deals they got right. Yeah, nobody's talking about the base hits that are building them and making them wealthy. Right, and I think that's what you and I are both passionate about, right, like I think we share that same sentiment of just keep taking base hit after base hit after base hit and just keep building that wealth. Especially, like you said, if you've got a cash machine, start the clock as quickly as you can and get as many as you can, right.
Speaker 2:Yeah, cash machines create home runs. You know, passive income machines create singles.
Speaker 1:Yep, Yep. But what do you see when you talk to some of the people? Are you seeing the same thing where their expectation is? They have to have, like you said, you got a guy who's three grand in all their money's got to be pulled out, plus they need a check at closing. What are your buyers telling you? What are you seeing from them when they're looking at some of the deals as far as what their expectations are for either equity percentages or return on cash, or what are they? What are their criteria that you're seeing when you're talking to some of these folks?
Speaker 2:The short answer.
Speaker 1:Yeah.
Speaker 2:I tell them they can have whatever buying criteria they want, as long as it's the one I tell them they should have. I love it.
Speaker 1:I love it.
Speaker 2:So a reasonable buying criteria, because do you know how many people I see not get in the game because they have unrealistic buying criterias? This is where I want you to go. Yep, hey, here's what you can expect. You can expect to be all into your BRRRR 85%. That's very reasonable. You can also count on 5% to 10% in change orders and you could expect to be cash flow positive year one. 5% to 10% in change orders and you could expect to be cashflow positive year one.
Speaker 2:So back in the day when we were selling the whole turnkey thing where they can expect cashflow, people were miserable, I was miserable. Yada, yada, yada. And then you're not going to take a dollar out of this portfolio for three years. All your traditional cashflow is going to go to what I call resident reinvestment, which is, when the tenant moves out, you're going to take all that cash and you're going to put it back into the house, so it continues to get a top resident and it continues to appreciate, like everybody expects real estate to appreciate, right, but they don't expect to have to reinvest at all, and that's insane, yeah, and so it's not your money you're reinvesting, it's your residents money, and so I think, setting those low expectations very, very fast, and I know I might have sounded like a jerk that they're my expectations, but this is the buying criteria. I've seen that can create a ton of wealth in a short time and keep people sane. Right, yeah, in a short time. I mean 10 years, yeah.
Speaker 1:Yeah, I was just going to ask you what is a short time to you, but you answered that question. 10 years, because I think that's the other expectation. I think that I had too is like I'm like, oh, I got a hundred doors three years. Wow, I'm amazing. Look at me, I'm going to be so wealthy and so rich. And then I'm like, well, no of my bigger deals. And I was like, oh, oh, wait, I am rich, this is where you get your cash flow from. I got it now, right.
Speaker 2:Yeah, we call that equity milling, okay, so here's the base plan that I think every American should do Two houses a year for 10 years and then at year 10, they either sell the house or they take a line of credit off the house, and then they do that for the next 10 years. And so if you buy a $150,000 house right now, you could expect it to be worth $220,000 10 years from now. So you bought two a year. Basically you could be taking $150,000 a year in equity milling, tax-free lines of credit, and then people are going back in more debt. I'm like yeah, yes and no. Then you hold onto the house for another 10 years and the tenant continues to pay off the new note and you recharge the equity and then take another line of credit at year 20.
Speaker 1:You're saying lines of credit, do you mean like a loan, a home equity loan, or are you? Saying just a line of credit like a credit card no, a HELOC, a. You see, a credit like a credit card, no a heloc, a heloc so like a line of credit, so like they're not using it. If they don't use it, yeah, okay, what would keep them from just refinancing the property at that point, at 10 years, and pulling that, that cash out that?
Speaker 2:way. Um, you could, but then you're gonna pay. What I like, like about helox is you're only paying interest if you're using the cash. Yeah, either way, or sell 10 of them, whatever. Yeah, but, dude, that's it I just did a whole oh, go ahead. So now that I'm hitting like year 10 in this, I'm taking these lines of credit and getting like 700 000.
Speaker 1:I'm like, oh yeah, I really don't care about 200 a door yeah, what are you doing with the 700k that you're pulling on the lines of credit?
Speaker 2:Using that to flip yeah.
Speaker 1:Yeah, you can also arbitrage too. So I started to do this a little bit. I've got an investment. I put some money. I took a HELOC 500K, put it into a guy I know really well, trust, right, so you got to have that trust and relationship and stuff like that. But I'm getting charged six and a half percent on the line of credit and I'm making 10%. So it's not crazy money, but it's. It's all passive and it's just from equity for my properties that have appreciated and depreciated. It's like free money that I didn't have to do anything for.
Speaker 2:It's magical, and now you're probably getting your $200 a door from arbitrage.
Speaker 1:When I do that, I don't have any windows to fix, or tenants or toilets or any of that stuff, right. It really does become passive at that point. But that's the power is. Once you get the time ticking and you let the time tick, you have more options, right. So you and I are having this discussion Do you refinance? Do you pull a line of credit? That's a great problem to have is to figure out. What are you going to do with all this equity now?
Speaker 2:Yeah, but it doesn't happen unless you start the clock.
Speaker 1:You got to start it, man. You got to start it. I love it. Well, jimmy, if somebody wanted to get started with you down in your neck of the woods and they wanted to get some of the Berkey programs going with what you guys are doing because hands-off they can just get in, they have equity, they're going to get some cash flow positive stuff Somebody wanted to get involved with you guys. What's the best way for them to get in touch with you guys in your area?
Speaker 2:Just DM me on Instagram, jimmy Vreeland V, as in Victor R-E-E-L-A-N-D, or go to jimmyvreelandcom.
Speaker 1:Cool, awesome man, and if you guys are listening, you want to get started in Wisconsin and you want to do some of that stuff I said earlier, go to wisconsindiscountpropertiescom. You can get on the buyers list. We're here to help walk you through whatever you need. Get you connected to lenders. We've got a whole bunch of them that we can connect you up with. That'll help you finance these things and have you start the clock, like Jimmy and I have been talking about this whole episode. Jimmy, any final thoughts for the audience out here as we're having this conversation?
Speaker 2:It is your American responsibility and duty to get 20, 30-year government-backed conventional loans and build your wealth. Love it, I love it. Now, if you get the house from me or Corey, don't care, you got to get those houses and loans. You can do it for both of us. Get 10 for both of us diversify.
Speaker 1:Let's go. I love it, man. All right, jimmy. Well, man, I appreciate you being on. We always ask one final question and I don't know if you have an answer to this, but this is always a little fun one we do for people who are looking to get started. Wisconsin have you ever been to wisconsin?
Speaker 2:no, I want to go to. I want to go to a green bay chiefs game. Well, dude, let's set it up. Are they playing this year?
Speaker 1:Not this year, but I think next year we'll be back on the docket, Maybe next year or the year after, but when they do we'll get a big Chiefs group in CG. So we'll get the Chiefs crew up, or, if they're down by you guys, I would love to go to a game of Arrowhead.
Speaker 2:Nice. I've never been to the tundra at Lambeau.
Speaker 1:I've never been to Arrowhead, so we got to make it happen. Dude, for sure, let's go. Awesome, jimmy, we'll appreciate you guys being on. If you guys got some value out of this show, please share it. And again, that, as I say in every episode, not only helps us grow the audience, but it helps you guys grow your reputation as a real estate investor or a potential real estate investor. To help you bring
