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
Base Hits to a 55-Door Deal: How Systems + Creative Financing Built Freedom
From a quick “clean and list” starter flip to full financial freedom by mastering systems, roles, and mindset.
🔥 Inside This Episode:
🏡 How one investor turned a light rehab + relist into momentum for multi-unit deals
💰 The seller-financed 55-unit acquisition—structured at 0% down and 2.38% interest
⚙️ Using AppFolio + a VA to automate portfolio management and save hours per week
🔁 Why focusing on multiple exits (flip, BRRRR, midterm rental) boosts NOI and long-term wealth
🧩 How “Like, Love, Tolerate” role clarity eliminates burnout and accelerates growth
🛠️ Why hiring pros (not DIY) actually saves you money in holding costs
📈 The math behind forced appreciation—and how to underwrite deals in high-rate markets
🌊 Launching Bay House Landing: transforming investing into community impact
Whether you’re on your first deal or scaling past 50 doors, this episode breaks down how discipline, systems, and creative finance can fast-track your journey to freedom.
🎧 Listen now and start building the systems that keep your portfolio—and your life—running on autopilot.
Hey everybody, we are back with another amazing episode. Well, I don't even know if it's amazing yet, but I think it's gonna be an amazing episode with two of my favorite people in real estate investing who I'll introduce here in a minute. But I'm your host, Corey Raymond. And uh before we get started, like I do every week, we are talking about our sponsor, Wisconsin Discount Properties. Uh, every Monday morning, you guys can get deals put right in your inbox, right on your telly. We'll shoot you little texts, let you know what's going on. And uh, we're doing anywhere from two to six deals a week, seems to be about the average. So if you are looking for deal flow and you're not on our list, you are missing out. Easy way to get on. We don't even charge you. You just go to Wisconsin Discount Properties.com, plug your information in, get added to the list, and then one of us will give you a call, Reese, Connor, myself, and have a little conversation, get to know you, find out your goals, try to help connect you to some of the resources you'll need and all that sort of stuff. Whether you're out of state or in state, doesn't matter. We've got deals for you, and we're here to help you out. So go to Wisconsin Discount Properties.com, get on the list, and uh start getting some deals sent to you right away. With that, let me bring in some OGs in real estate as I call them now, which I don't know if they ever thought they'd be OGs, but I have Scott and Shannon Richardson. What's going on, guys?
SPEAKER_03:Well just living our dream, man. It's uh been an amazing journey since we first met you back in gosh, what 2020?
SPEAKER_02:Yeah, early 2020.
SPEAKER_03:Back when Corey was like in the trenches doing his thing, like at the at the tours and just pumping people up to get some properties and look at the growth, like for both both of us. You guys have just exploded.
SPEAKER_04:It is crazy. I love having these conversations that think back to like the old days, right? Like the humble beginnings, right? Of the grind and what it was like back then. I miss some of that. Like I do. I miss the I miss so for those of you guys that are listening. Scott's Scott mentioned the tours. Uh in our wholesale process, we used to do, we call them inspection periods, and we would allow people to come for about an hour. I think we would do like an hour window. You could show up at any point, you could bring your contractor, you could do whatever you wanted, and walk through the properties. And uh, for me, it was always fun. Like I always got I got a blast. Sometimes we'd even bring coolers and hang out and have some drinks in the driveway if the place was vacant, you know, and we would have some fun times with it. And then COVID happened, and uh we realized that was a pretty big vulnerability in our process. You couldn't have 20 people walking through a house anymore. And so we we pivoted and we went to this system that now we've we've done. And actually, most people we found, even though they miss the social aspect, they prefer the convenience of this new process. So we send out an email, you click on a picture, we've got an inspection report in there now that we pay for. It's a third-party inspection, you got a video walkthrough. And for people who are, I guess, more less emotional about the properties and more logical about the properties, it's it's a really nice process. They just can my goal was always I wanted you to be able to sit on the can and instead of looking at Facebook, you could evaluate a property and make 20, 30 grand and you know, that 15-minute window. So that's what that's our process. But the old process was the tours, man. And that's when you guys started. Was that was that your first remind us again, how take us back. How did you guys get into real estate? Was that when you got started? Was 2020?
SPEAKER_01:Um, it was pretty close to that. Um, before that, we were looking for something that would pull us out of our jobs but give us and figure out how to give us some passive income. And we had a few ideas, but we really wanted something that we could work together on. And um, you know, it's always fun to work in real estate and live with your partner, you know, like live together. So we didn't know what we were getting ourselves into, but um, our goal was just to be able to build up that passive income. Yeah, so that's awesome.
SPEAKER_04:And you guys accomplished that goal. What year did you guys go full-time real estate?
SPEAKER_01:Um, well as you know, but nobody else does. Like part of uh what we did was we actually joined the launch mastermind that you and Carrie did in early 2020, and then I was able to leave my job in uh March of 2021.
SPEAKER_03:So just a year after, and then yeah, and then I left in August of 2023. So way ahead of our goals. Like we had a goal, a five-year plan for me, and I was like, Yep, that's probably right on track.
SPEAKER_04:No, three years, and I think we were probably pushing you that you could have probably done it earlier. I think you were hanging onto the blankie a little bit there, right?
SPEAKER_03:Yeah, I think it was in 20, probably late 21, early 22 that you were talking about, just calling her quits. But yeah, we kept pushing forward just to make sure that we have your blanket, that's right.
SPEAKER_04:That was my job was to push you and make you think a little bit differently than what what you were capable of thinking, right? Yeah, for sure. That's exciting. So talk a little bit. What uh let's go back to that first purchase. I remember it like it was yesterday. I tell you, I tell your guys' story to so many people that are like in fact, last night uh at the time we're recording this, we had a meeting, the REI success meeting. Great meeting. We had an attorney there who was on fire last night. He was hilarious and tons of knowledge. And then we had our uh our resident accountant, Jake Calvert's there talking about a lot of a lot of tax implications of some of the LLSC structures and things like that. But before that, I met with a guy who's bought a few deals, but he's looking to buy some more deals, and he was like, Ah, I'm looking at some of these deals, and you know, this one says it's ARV is 210. How do I know I'm gonna get 210? And what do I need to do to get to 210? I said, Well, you might not even have to do 210. I said, do the Scott and Shannon method, just get in and out of the deal. So tell it, take us back to that first deal because this is one of my favorite stories that I tell people all the time.
SPEAKER_00:Do I tell it?
SPEAKER_03:Uh, sure. So we we you know, we were struggling, as every new investor does, it's like, oh man, I just want to get a deal. I want to get a deal, and you're just spinning your wheels, like, how am I gonna get this? And then this uh single family property came up on your wholesale list in this was in June of 2020. Yeah, and um it was a beautiful home. Um, you know, we walked through it and it was like, okay, we're putting an offer in on this thing, and my gosh, finally one hit. And we walked through it, and it's like, man, this will be so fun to flip, and we put all this here and this here, and then Carrie and Corey came in and walked through the property with us, and they're like, don't even bother with that. This thing is just a clean, clean it up, take the 70s out of it, and let's put it back on the market. And we're like, sure, we should do that. Oh, yeah, this will be you'll make money on this one. So we put faith in that, we trusted the process. And I took a week off from my W-2 and we just cleaned this thing up, pulled all the stuff out of it, yeah, and we had it on the market within a week of actually closing.
SPEAKER_01:Three and a half days later, we had pictures taken. Yeah, yeah, we just really pulled the 70s out and pulled a lot of stuff out of it and really cleaned it up.
SPEAKER_03:But and then we had an offer on it within what a week. A couple days. I will less than a week, sure. And which is awesome.
SPEAKER_04:And like I always think about the time. This is where my point with the story I always use it as like, right? And this is the same point that Carrie and I made to you guys. Like, you guys could have gone in and you could have done all the cool stuff. And I know Shannon, you were kind of mad because you were like, I just want to get in and like do creative stuff and like make it cute. And we're like, you could, I mean, sure, you can. But in our professional opinion, I think you could get in and out of this thing relatively quickly and make up make a few bucks, take that money, roll it into the next one, and keep going. And uh, and and you guys were good students, you listened and it worked out. And uh, I would have been really mad if it didn't work. Uh you know, that's always the risky part of giving that advice. But it worked out, but the backup plan was you could always go do the full reno if if it didn't sell, right? And that was kind of our game plan with you guys is like do this quick one, see if you can make some money quick, get in and out of it. If it doesn't work, you always can take it to that next phase of the rehab, right?
SPEAKER_03:Right, yeah, I think that's a really good point that you make because when you do these deals, you need to have multiple exit strategies. And we knew that we could do this, and if it didn't work, we always have that next exit strategy. And even if that, we if it didn't sell, we had the opportunity to rent it and then just let it sit while we cash flowed it, and then the possibility and changes of market that it would sell even at a higher price. So having exit strategies is so key when you're and you guys bought it, right?
SPEAKER_04:You know, that's the other piece of that too, Scott. Is like you guys paid us a nice fee, which is great, appreciate that. Kids can eat again. Um, but then you guys had enough margin in there to be able to have that flexibility, right? Like, hey, we still we can do this minimum re rehab, we'll still make money at this minimum rehab. That doesn't work, we still have this spread to go here. That doesn't work, we could still cash flow it because the numbers still make sense there. Now that in this market, I'm seeing less and less of that third option being there of being able to cash flow a rental now if you go full rental on some of these things, just where the price of the market is and where interest rates are compared to where they were in 2020. Um, but you still had two strategies, right? Like minimum flip, or we know we can sell it if we go full full tilt, and we'll still either even break even on your first flip is still a great learning experience and yeah, and I think just being open to being creative and being able to pivot is key.
SPEAKER_01:So for instance, um we kind of laugh because a few months later we ended up getting our first duplex so that we when we went to um the launch masterby, we could say, hey, we had a couple doors, right? And then on the way home, we were so jazzed up that we rode by um a triplex that you guys had listed. And an hour later we put in a duplex. But one of the things, RB, put it put in an offer. Sorry, put in an offer on the triplex. And one of the things that we didn't really do the best due diligence was we were like, oh, there's one furnace, so that means three units, guess what? But that was around the time we're like, okay, how can we still make this happen? And so what we did was we renovated one unit first and then put furniture in. And um, we started doing some corporate housing, which is midterm housing, people call it midterm. Um, and then we ended up doing a second one. So then this house really cash flowed. Like it went from okay, it's just marginal to now we got$4,500 a month cash flow. So really being able to like just change and pivot is.
SPEAKER_04:And I love that because I see, like for me, when I started, I was very much like a Burr investor only. And I only I'm like, I we me and Carrie were like, we are never flipping properties ever. And then like our second deal, we ended up flipping a four unit. And I'm like, part of me was really sad. I was like, no, four units go. We did all the work, no. But at the time, my goal was to get out of my corporate corporate job, and I was like, I'll do it through the Burr method. That's when I started this. I'm like 200 bucks a door. I know I only need like a hundred doors and we'll be living on a beach, you know, whatever. And then yeah, and then and then we well, then I we did our first burr, and I was like kind of depressed because I was like, man, that's a lot of work to get two doors. Like it's gonna take a long time to get to this goal. And then we did a flip, and I was like, huh, pivot, going back to your point, Shannon. Let's pivot and let's just we don't want to flip necessarily, but let's just flip out of necessity as many properties as we can to build up our bank account where I can get rid of my blankie at the time, right? It's got a corporate job and the consistent income and and leave this thing quicker than maybe we thought we could. And so, you know, that pivoting piece I think is really important. I think so many people get stuck in like I I'm doing this and this is all I have to do when they're starting out. I think it's great later on. Like later on, you can kind of like get like figure out what you like, and you've done a few different things and you can kind of get in a certain lane. Um, but having that wide experience, I think also helps you out of a bad buy. Like we don't always make perfect buys, but having that experience of doing all these different things, now you can, like you said, you can be like, hey, let's do this midterm thing on this one because we you know we didn't we didn't plan for this furnace. Now we can now oh now look, it's a winner. It was a dud. Yeah, now it's a winner.
SPEAKER_01:Well, and we burred into that one too, so that was awesome about it. And then 18 months later, so we wanted a house down by you. We wanted a house in Florida. So 18 months later, we were able, we call them long-term flips. So we were able to sell that, and then that paid for all of our down payment basically and got us our Florida house. So I mean, right?
SPEAKER_04:Do you guys still have the Florida house? Yeah, okay, cool. Are you guys Airbnb in that still? Okay.
SPEAKER_01:We are, yeah, we are, and we um, you know, we have some maintenance we have to do the month of January down there, you know.
SPEAKER_00:And a couple other yeah, that's really tough.
SPEAKER_04:Yeah, you have to you have to go to Florida to do that, which is really rough in the winter time here to get out of Wisconsin and go to Florida and do maintenance. Terrible, yeah. So what else? What else? So, okay, so you guys went there, you bought you guys had what five was that if I'm counting correctly five units under management at the time, sold the three, bought the Florida, so now you're down to three.
SPEAKER_01:So you had the duplex and then um no, in between before we sold it, yeah. We added um we added a few other duplexes. Um, I think we're up to like 13-ish at that point.
SPEAKER_04:Okay. So you parlay you parlayed the three unit into a Florida vacation house flash, probably Cash Floyd Airbnb, if I had to assume. And then you were able to keep all these other doors. Then you guys went into a bigger acquisition, correct? Talk talk to us about that, because I think this is a really cool. Like you started out, you kind of got your feet wet, you you did a bunch of different stuff, and then you hit you kind of hit a bigger, a bigger deal here. Talk a little bit about that one.
unknown:Yeah.
SPEAKER_01:Yeah. For us, so the way we were kind of getting some of the properties was by implementing the the midterm strategy, which was a really good one at the time because it was after COVID and a high need for that. Um, I wouldn't necessarily say that's the best way to go now. However, um, for us, our biggest needle mover has always been networking and developing relationships. And um, you know, in fact, that when we were looking at we want to do real estate, the first two people that we were told to meet was you and Tony Breuer. So we went to our first meeting, we met them, and then Tony introduced us to a few people, you know, and you did, and and then our network just kept expanding. And so um, we tried doing a few deals with somebody that um they had the money and we didn't, and it never kind of worked out. But one day then that person reached out and said, Hey, I'm looking at do moving into storage and new building development. Are you interested in any of these properties? And I said, Yeah, I I would like them all. Um, and it came down to like 55 doors, and so yeah, so I thought, well, why not ask? Right? I'll I think no, right? And my the answer back was okay, let's figure out how to do it. And so we spent probably about six months trying to structure and make a deal that was a win-win for both of us.
SPEAKER_04:Awesome. So you guys had 13-ish doors, is that right? From before, is that what we said? And then you bam hit a big 55 banger. What was that like? Because I I also was talking to another guy last night who's newer to the game, he's got a few doors, and I saw this from some people in launch, actually. So we have we had Logan Rankin come in, who for those of you in the real estate space, if you don't know Logan, you got to go start following him wherever he, you know, LinkedIn, whatever other socials he's on. The guy's a freaking genius, unicorn. But we were good friends with Logan. He came in every time we did launch and would do a little presentation. And some of the folks in your class, as I'll call it, of launch, they I think they got a little distracted with going after the big the big dogs, right? And it sunk them. Like, I don't, I mean, some of those people aren't in real estate anymore because they were hitting base hit after base hit after base hit, they were doing really, really well, and then all of a sudden they took their eyes off of that and went for something like what you guys picked up, and it worked out for you guys. For them, the ones that they went after, they did it did not work out. So, going from a a a nice portfolio, 13 units, to adding 55. Talk about that transition. What were some of the pain points of that? What were some of the struggles? What did you guys learn through that? And what has been the outcome now, a couple years later?
SPEAKER_00:I'm gonna say one word before I let you go on, but I'm gonna say systems.
SPEAKER_03:Yeah.
SPEAKER_00:So go ahead.
SPEAKER_03:Yeah, so when you have that big of a portfolio, the whole thing is like, how am I gonna manage this? And sitting down and and utilizing the current system that this person was using made such a huge difference, which rolls into what Shannon just said is systems. It's a program that basically is providing you three employees because of how the program works. So it does so much of the automation for you, and you don't you don't have to do as much with it. And the other thing that we decided to do is bring in property management to us to run it instead of having somebody else do it. That's not without its you know, scared.
SPEAKER_00:We needed to do that actually to cash flow anything in the beginning.
SPEAKER_03:So it was like out of necessity to make the numbers work.
SPEAKER_00:So we were like, Okay, right, yeah, so that was a change, yep, and then role delineation, right?
SPEAKER_03:Yeah, so it's that's the biggest thing. So when we talk about relationships with um business and with marriage, the biggest thing to make your marriage work well in business together is role delineation, and that way, as they say, stay in your lane, bro. Because once you start interweaving those things, uh-huh heads start knocking, and it makes it very difficult. So we've done really well with sitting down with our the way that we did it was we did a like it, love it, tolerate it method. We put down all the jobs that needed to be done with it. Went back and we, you know, individually circled. Okay, this is what I can do. I hate this, so I don't want to do it.
SPEAKER_04:Came together, and that's that is gold, people. Go back and re-listen to that part if you're a couple or you have a business partner because that is gold right there.
unknown:We did it so simply on paper.
SPEAKER_01:We did it so simply on paper. When we left, actually launched. We stayed a couple extra days. We drove down to Bonita Springs and we did a like it, hate it, tolerate it. So it's on paper. We wrote every roll down and we just circled, and that's how we initially separated. It makes life a lot more harmonious.
SPEAKER_03:It does, yeah. I mean, it's not it's not that you won't have some of those tensions, but overall, it's so minimal, and you know what each other is doing, and it's just trusting the process at that point. Yeah, for sure.
SPEAKER_04:And what I've noticed when Carrie and I do that too in our businesses is like if I start overstepping, and because it's always me that's overstepping, it's never her. Like, she's not like, How can I get into doing sales? Like, and that's not her personality, it's always me, like just being like a hawk, like, hey, ah, you do this. She's like, Hey, she can just remind me, and I I give her permission like ahead of time. Like, hey, if I'm stepping in your lane, like you have permission to kind of smack me nicely and say, Hey, you're in my buddy, you're in my lane, and then it's like a oh shit, like, yes, we agreed to this. All right, yep. I'll step back over here and stay, you know, like it, but it it is healthy.
SPEAKER_00:And I keep keeping it light and being like, because you'll actually say that to me. Stay in your lane, bro.
SPEAKER_04:Yeah, yeah, yeah. Shannon, you and I are probably more similar personalities, and Scott and Carrie have always been like more aligned in their personality types, and so yeah, that's funny that you're having the same experience I'm having. Of uh yeah, stay in your lane, bro. That's so good. The other thing that I would give uh couples out there, business partners, a little nugget that was really helpful for us as a couple was reading Rocket Fuel. So, Rocket Fuel, if you guys haven't read that book, awesome book. If you're an entrepreneur and you're like me and reading is a challenge for you, you can listen to it on Audible, or your integrator type, your Scott or your Carrie, could read it and then highlight the parts that you should read, and then you only have to read a certain few pages. Like that's what Carrie did. She's like, You can just need to read these two chapters, and I think you'll understand where my frustration is. And I was like, Okay, I read. I was like, Oh my gosh, this makes so much sense. So, or you can run it through Chat GPT. I'm sure Chat GPT now could just tell you the highlights of rocket fuel and you could take the bullet points and implement. Yeah.
SPEAKER_01:Yeah. And you know, when you said that before, that when you asked what was the other reason for success, is he had said, okay, now we we have enough that we have to get it really rolling and doing it well, versus because you and I would be like, Okay, there's all these other opportunities. I struggled for a long time to be like, okay, I love the acquisition game, I love pulling them in, doing all that. I struggled just to be like, okay, we've got to get this foundation set and solid before we can go to the next thing. And um, he was always right there to remind me, nope, we're getting in it. Because there was like, oh, I wanted this resort at one point that was for sale. He's like, fine, you go run the resort by yourself. I'm not in. And so then I thought, yeah, yeah. You're like, damn, you're such a party pooper, Scott.
SPEAKER_04:Come on, man. Such a drag, dude.
SPEAKER_03:Just my philosophy. Like, you have to maximize what you currently have because there's so much more that you can do with what your current portfolio is. So before you start moving off in the other directions, maximize that so that you know you're getting the best cash flow that you can, that your system is the best for that particular property. And that is huge in being successful in a business.
SPEAKER_01:Yeah. And we can yeah, and we didn't want to be spending 70, 80 hours all the you know, in this once we got it built, you know, which we had to in the beginning. We're pulling out cabinets instead of going boating or whatever it was, but um, you know, now we have it pretty well oiled that we're probably each working like 10 hours a week on the real estate part, you know. It's yeah, and it allows a lot of time for free time. That is so cool.
SPEAKER_04:I think uh going back to a couple things I want to touch back on with this for the audience here. You guys picked up 55 units. I mean, that's you're literally buying a business, right? It's not it is real estate, but it's a business at that point. Uh, you got if you don't know how to run a that particular business, and then you're just like, ah, it'll run itself, and then you go buy another business, you're just piling on a disaster. And I think that's probably what we saw with some of the other folks in your class. Like they got distracted, they bought a bunch of stuff, just kind of set it, forget it, move on to the next thing, go and buy actual like a literal business, don't know how to run that. Now they've got disasters just happening everywhere, it compounds and it overwhelms, and before you know it, you're underwater and you're sunk, right? And I think you guys did a really wise thing there to just sit back, let's get this baby rolling. You know, that's the hard part for me, too, Shannon. Again, very similar personality types. I'm very much like, all right, I if that you put it on a like love it thing, I hate management stuff. I hate sitting and getting into tedious detail stuff. Like, I just want to go do big vision, big idea, big stuff, let somebody else run it. But then like, I gotta have the who's to do it, right? And you know, you've got a who there in Scott that you know is wise enough to be like, all right, we need to sit down and pump the brakes and get this baby oiled up. Now we can go do something later, Shannon. We'll go buy something later, which we'll get into in a second, where that led to.
SPEAKER_03:But well, that's I mean, I love that you brought that up about the who's because that's another key nugget in real estate, is so many people feel like they can do it themselves. And oh yeah, I mean, I d I'm not gonna hire a guy to do this rehab for me. I can put this in, the scoring, and I can do all this stuff. And it takes them so long, and their holding cost becomes so much that you could have brought in a professional to take care of it, less stress for you, less money paid out in the long run, and you're getting cash flow that much faster because of the sure.
SPEAKER_04:We I just that was another conversation with that same gentleman I shared your guy's story with last night, is is handy, right? You can get in and do the work. And I said, you know, that's the trap I think you get into when you start is you need the money. Usually you're not in a financial financial abundance position when you're getting into real estate, you're getting into real estate to create financial abundance for yourself, right? And so I think like if you are handy, you immediately go to like the pride, the money savings justification for it, and you can really get yourself in that that trap of doing all of the work all the time. And then you've like all of a sudden your wife wants to leave you and your kids don't know who you are because you work a full-time job, and then nights and weekends you're there working on the property to make 20 grand. When you could have hired that out, you could have made 15 grand a lot quicker. Yes, you made less, but your profit per hour was way higher. You're now you could now you could start to scale, do multiple projects at the same time, and now you could be making$30,000,$40,000. Yes, you're making less per deal, but you can scale it and you can have your schedule back. Like, yes, you're gonna get calls, you're gonna have to go run and do stuff, but you're not there having to do the work on the properties all the time. And there's I think there's a balance. Like sometimes when you're starting out, like we talk about, it is probably good to get in if you're handy and do a few of the things so you understand the process a little bit and you know sort of how to go through that. Um, I am not handy, so that I would get zero value from doing that, probably. I am I my time is better spent figuring out how to find the right people to do it than for me to get in there. But for some people, I think that there is some value, but it's a trap.
SPEAKER_03:And you think about um anything ever happened, like take two scenarios, like being able to go away for four or five weeks. If you have a team in place that are your all-stars that can take care of the issues with the business while you're gone, you don't have to worry about it. And then what happens if you have some type of a medical issue or whatever and you and you can't physically do something? Having that team in place allows your business to continue to succeed. If you're the one having to do it all, yeah, you're you're just sending up yourself.
SPEAKER_04:I see that actually in a lot of the uh professions. Like, I have a buddy up here in Door County who's a chiropractor. Oddly enough, I asked him to go golfing and he's like, I can't, my back's uh I threw my back out or something. And I was like, dude, how are you gonna keep doing your business? Like you, like dentist, chiropractors, like it's you. You you something happens to you, you got nothing coming in then. So, same same thing in real estate. If you're in there swinging hammers and it's you doing all the work, you throw your back out, or you know, you your shoulder goes or something, what are you gonna do? I mean, you're stuck then now you and then the cost is every day. It's not sold. Your holding costs are ticking, ticket, tick, tick, tick. Well, I hate that. Me too. That's right. That's why I told you to sell that first one right away. Just get that less ticking, just get it gone. Less ticking. Yeah. What uh what software are you guys using? Is it Building, App Folio? What was the software that you guys okay?
SPEAKER_01:Yeah, we use that folio. We use that folio. And the sweet part about that is the person that had all those units used at that folio too. So app folio helped us move it from one right over into our system, and it was pretty much all set up, except for like a few communication things. So everything just went in there, and we were up and running lessons. That's amazing.
SPEAKER_04:That is awesome. What were what were some of the big what were some of the big challenges? Because were you you guys weren't property managing prior to that, right? You were using third party. So what were some of the biggest learning lessons you learned going from third party to in-house?
SPEAKER_01:Well, I'm gonna just um start with that, but we started to jump into it a little bit with our midterms, because at the time nobody really wanted to pick up the midterm management of it. There wasn't a lot of people. So we started to do it, and we're like, okay, so when it needs a plumber or there needs a call, then we get that funneled through and there's there's a we make a call. So we got to dip our toes into it a little bit.
SPEAKER_03:Do you want to jump in on um it's hard at first to to understand, but it's uh it's because it's that fear because you're dealing with tenants and all the legalities of everything, and just learn to have faith, get yourself a little bit of education on how to properly be a landlord and following the state statutes, it really becomes easy as you keep doing it, as with anything. When you first do it, it's hard, but as you keep doing it becomes more and more, you know, simple. It's you know, and and even from the like Shannon was saying, from the maintenance standpoint, I can do certain things, but I just know where my level of cutoff is that I need to bring in the special trades and whatnot for people who are licensed in that situation. So it's really just figuring out what you can do with that process and then leaving it to your who's to take care of the rest of it. And it's really not that difficult after you after you do it. And it's because you have if there are your properties, you take a lot of pride in your properties at that point.
SPEAKER_01:So that's what makes it even easier, is because yeah, and a lot's automated, so a lot of the requests come in automated. We've already fielded out like a lot of the answers, so he can troubleshoot or get that right. I mean, it can just simplify even the least team problem.
SPEAKER_04:Really, what about that? That to me, as I think about it, I'm like, man, I would hate to have to like show you know vacant units and like screen tenants. And I do some of it with like rent-to-own. I do all my own rent-to-own managements. Like I found those to be a different type of tenant, typically, than a long-term tenant. They're pretty easy to manage. Like they take pride in it because that they view it as their own house, kind of a situation. What like for me, like again, I'm like sitting here going, I wouldn't want to do that. How are you guys managing that vacancy process, the the releasing process, the marketing piece of it? Like, is that all built in and pretty automated? How are you guys managing that or how are you guys doing that?
unknown:Yeah.
SPEAKER_01:Yeah, so that's that's my lane. Um, so you know, I can build the templates right out into app folio, but when I have an opening, we just have like a marketing description that goes on one, and I literally it the the app folio knows when that it is available for rent. And I can go in the vacancies and I put post to website, post to website, uh, post to internet. And when I post to internet, it goes out to like, I don't know, 20 to 50 sites. So it automatically isn't apartment.com and and Zillow and all of those things. So the description just goes out. And then people, as they're interested, they fill out a guest card and it comes in. We have a VA that will filter those. So um there's a letter that automatically goes out. So it says, you know, hey, thanks for your interest. Here's our minimum requirements, you know, some income stuff and different things like that. So they know a person interested, like, oh, I don't even qualify, or maybe I should. So because we want people not to waste money on an application. So once we have that, then it says, tell us more about you, so we get a little bit more like a minimum like credit and uh score and income and that. And then if they meet those minimum qualifications, uh showing can be automatically set up. Um, for instance, I've got, and then we kind of do it like we've got somebody working on one of our turns right now, and so I have somebody that wants to see a property. We're gonna set that up while somebody's in that property and to kind of go see it. If Scott's in an area, I kind of know what we can do. We have a couple cleaners that are willing to do showings, so we just make it pretty easy.
SPEAKER_04:So you guys are having someone physically there, you aren't at the full virtual showing model yet, or is that something in the cards for you, or is that not really in what you guys want to do?
unknown:So we haven't moved on.
SPEAKER_01:I don't know. We haven't moved that way. We don't, we're pretty lucky actually, we don't have a lot of openings usually at you know, so they people are pretty happy. And I mean, when we have I mean, sometimes maybe we have two or three at at a time, but then it's a while before we have some other openings.
SPEAKER_03:Good stuff though. The other nice part about it too is that it with the automation, if we do have a potential tenant that wants to see it, they're gonna get a text a couple hours beforehand just to say, hey, are you actually gonna show up? So that really saves a lot of time for us of driving out to somewhere and then we get a worst getting ghosted.
SPEAKER_02:Yeah.
SPEAKER_04:Yeah. Yeah. Yeah. Can we are you guys okay if we talk some numbers on this thing? Are you guys okay sharing some numbers? All right, let's talk about it here. Let's talk. I'm gonna pull out my old phone here and we're gonna do some math. I this is my favorite part. Let's talk. What did what did we buy this bad boy for? And I think it was seller finance, right?
SPEAKER_01:Yeah, yeah. Yeah, we did a link credit for it. So uh just under six million.
SPEAKER_04:And what did you guys have to put down on it? A goosey?
SPEAKER_02:A goosey.
SPEAKER_04:Oh my goodness, I love it. Okay, my chat GPT is not loading. I'm just gonna do the numbers on this thing on chat. It's not loaded. Come on, chat. Um okay, so a goosey, all right. When did we when did we become profitable? Like what was year one T12? Did we make money in year one or were we oh yeah.
SPEAKER_01:Um so the first year, what we did was we kind of we moved it out so that at least the deal made the 10%, like we said, with property management. So um we were getting that, and then um year one, which would have been so January of 2023, I told Scott, just give me six months and uh I think we can get you out of your job. So we were able to raise rents about eighty, seven hundred dollars a month um by June or July. So six months later. Yeah. And then um that's between the management and the raising the rents that allowed him to leave his job.
SPEAKER_04:Oh, here we go. Okay, I have it now. All right. So well, hold on, real quick. 8,700, do you know what the cap rate is on that on that property? What did it did it appraise out or have you guys had to do that at all?
SPEAKER_01:Uh we haven't we no, we didn't have to do any of that. We worked well, we had some appraisals. I don't know.
SPEAKER_03:There were some appraisals that were done prior to our closing on it, just to kind of get some concrete numbers.
SPEAKER_01:But some were already in mid-financing and such.
SPEAKER_04:I would guess it's probably what a seven right now it'd be like a seven cap, maybe. Yeah. So for those out there that are like, what is Corey talking about? What is a seven cap? So cap rate is how commercial properties are valued, different than comparable sales. They look at comparable sales, what did they trade for on a basically rate of return on your cash? So if Scott and Shannon had paid six million cash for this property, they and let's say, you know, they would look at the net operating income and they would say, okay, we would expect you would get about a 7% return on your money every year if you paid complete cash for the property. So that's how they value commercial real estate. But what's really cool about commercial real estate is they forced a lot of appreciation here. So I don't know what the NOI was when they bought it, the net operating income when they bought it. So I don't know if they overpaid at the quote unquote overpaid at the time based on a cap rate, but again, 0% down, that's hard to beat, especially if it's gonna be profitable year one. But they increased it 8,700 bucks. So let's just say that the value was six million when they bought it. That's what the cap rate would say, that's what the NOI would say. If we take$8,700 increase in NOI at a seven cap, what value increase is that? Let's take a look and see how much equity did they create, guys. Here it is. Oh, it's running the calculation. Here we go. Quick, pretty quick. Okay, total value increase. Oh, that's$87,000,$124,000 a month. So we would have to multiply that by 12. Do that annually. That's gonna be over a million dollars, guys. For those of you out there not real mathematicians,$1.4 million. You guys increase the equity by by increasing the rents and the the value or$8,700 a month created$1.491 million dollars.
unknown:Can we do a wait there's more?
SPEAKER_01:Can we do a wait there's more?
SPEAKER_04:I love wait there's more. Call now.
SPEAKER_01:So to to know the the value when we bought it, we were at like I think it was like 5.3 or something like that. Or five, just to just so you know that we did because we did a 60-month contract, we did take a we did pay a future price, and we were okay with that. Um, because we knew based on a percentage of increase. So then the second year we did it, we raised the rents like$4,500 more a month. And now we're now we're in year three, and we are on track to be at almost three thousand dollars.
SPEAKER_04:So another roughly one and a half million bucks of value, give or take, 300 grand ish.
SPEAKER_01:Yeah, but six, so we're about yeah, sixteen thousand dollars.
SPEAKER_04:So five point three was the value at purchase. You increase it, let's just call it two and a half million just to be conservative, right? So now you've got basically two million in equity in that thing, not counting the debt pay down in that process either, right? So are you guys paying debt down? Is this an interest-only loan? Like, what does that look like on the seller finance? Nope, we're paying debt down. What is the AMP schedule that you guys set up with the seller finance? Because that's the cool part about seller finance. You can kind of make it wherever you want, right?
SPEAKER_01:You're gonna just okay. So it's on a 25-year amateurization at a 2.38 percent.
SPEAKER_04:Oh my gosh. I'm so jealous right now. I want that deal. Can I buy that deal from you after a 2.5%? That is insane, you guys.
SPEAKER_01:No, but we stretched it out, and see that was the thing. We weren't afraid to pay. Why wouldn't you? That's a great deal. So it made it an amazing deal, right? It made, and that's why I said it took us about six months to figure it out because it was a win-win. You know, the seller felt like it was a win because we we were willing to pay more money than anybody else would have if we would he would have been able to sell it right at that time. We're like, yeah, we'll give you more money. Can we stretch it out and then we take a lower percent? And that's how we made the deal work. So do not be afraid to get creative on things. Oh, that's an awesome.
SPEAKER_04:This is a great story about how you can make creative finance work for both parties, right? Like that seller got what he wanted, he's not managing that now. He can go focus on the storage stuff and grow that whole thing. He's still making a fixed return every month, like he's still getting quote unquote cash flow every month without having to deal with tenants, vacancies, leaseups, all that stuff. He's just got mailbox money now coming in. And then at the end, he's gonna get a big old fat payout when you guys go refinance this thing. So let's say you are at what is that? What did we say? About eight million in value, probably.
SPEAKER_03:Probably at that point. At the end of the contract.
SPEAKER_01:Yeah, because I did it, I looked at it, really analyzed it at year two, and we had already surpassed or we're at or surpassed the values that we agreed to pay for. So um, yeah, it is.
SPEAKER_04:So you guys are at, let's just call it eight, we'll call it eight million of value, right? Is this a you said it was a five-year 60-month balloon? Okay, so that means for the audience out there that doesn't know what that means, that means Scott and Shannon have five years to pay this to do this amazing interest rate, and then they have to refinance or just pay cash to pay it off. Most people are gonna refinance that chunk of cash, right? But that means at refi, if they get a lender to give them 80% of the value, they're gonna be able to get a new loan for 6.4 million. They're gonna pay off the seller the six million minus any principal that they've already paid. So I don't know, call it five and a half million just for fun. So that means they're gonna get a check at ReFi for like 900 grand, and that is tax free unless they sell it. Huh, you guys, this is amazing. A million bucks, basically, in your pocket, tax-free. I mean, this is so cool. I love this.
SPEAKER_01:Yeah.
SPEAKER_03:Yep.
SPEAKER_01:Yeah, and we are like planning ahead. The other thing when you asked about like not overbuying, not planning, not whatever, we're planning ahead for years four and five. Any rent increase is going to be um basically something that really won't exist when we re-fi because we know that the interest rates are not that low. So um, so don't overextend, don't overlive what what you are. You have to plan for the deal to work in the end to be able to re-fire it.
SPEAKER_04:You guys may look at it and say, you know what, at the current interest rate, we don't want that extra 900 grand because you got to pay interest on it, right? Um, but the question I always look at is can you make more than call it six and a half percent? This would probably be the interest rate or six percent, you know, because it's stabilized now. Can you make more than six percent on that nine hundred grand somewhere else? And if you can, then the question is why wouldn't you pull that 900 grand and go invest it somewhere at higher than six percent? So that's kind of the question I look at when I'm refinancing properties or those things. I'm like, hey, it's tax-free. Can I take this tax-free cash and then grow the tax-free cash somewhere else if I can? Yes. If I'm like, I'm done, I'm chilling, I I got my I'm living a good life, I don't need to go do anything else, then I'm probably I might not take that 900 grand. I might just let, you know, let the cash flow be higher on my rental and and let those tenants start paying that debt down on that lower amount and let that baby ride and maybe pull a line of credit or something on that money, and that way at least I still have access to the equity, but I don't have to use it, you know. So there's some different levers you can pull. But either way, creating 900 grand of equity tax-free is awesome.
SPEAKER_03:That that wasn't happening in my YouTube job at all.
SPEAKER_04:Little tough to do that at the hey boss, could you give me a$900,000 uh tax-free raise after five years? No, okay. Well, see you later. I'm gonna do real estate full time. That is awesome. Okay, so that I'm glad we broke the numbers down on that for the audience. That is the power of real estate, guys. And that is the power of Shannon. You talk about networking. I mean, that all came from networking and asking and having conversations and telling people what you want. You know, that's that's why we go to these events locally. It's not necessarily because you're gonna land a big deal, but you're one connection away from a life-changing deal.
SPEAKER_00:Exactly.
SPEAKER_03:Yeah, and and that's it's doing all that work does create those relationships, and people can say, Oh, you guys are so lucky, you know, you got that deal. Well, it's really not luck. It took a lot of time and effort going to all the RIA meetings and meeting people and spending that time and staying late and building up those relationships to eventually have something like that. That's not luck, that's hard work to get to that point, and something's gonna hit, and everybody is gonna get that one thing that might make the biggest difference in their life because they spent the time to go to the meetings and build those relationships up with people. It's the key, the number one key to success.
SPEAKER_04:And and the education piece, too. You guys also invested in education. You get you joined our mastermind group, that wasn't free, right? You had to travel for that too, a couple times a year down to Florida and and be involved. You have to take time away. You have to, you know, you gotta invest in yourself in this too. It's not uh you know, like you're just gonna just magically wake up one day and all of a sudden now you've got 55 doors and you're like, I don't know how I got here, huh? Lucky me, right? Like it yeah, a lot led up to that. Yeah, for sure.
SPEAKER_01:Yeah, and and luckily, like Scott was like, we gotta invest in ourselves and put money, you know, into this. And it was kind of like the kids are going off to college, and he's like, So let's invest in ourselves. And so thankfully for him, because that it does, he's like, We're gonna go so much faster when we're around other people doing the same thing.
SPEAKER_04:It's so true. Yep, yep. You're doing it on your own. It's a little bit, it's a slow go, it's a solo, sad kind of existence. It's much more fun to do it around people that are doing it alongside you and with you, and you can share in the struggles and you can laugh about the hard times, you can celebrate the good times. Like, I'm I'm seriously like that. Made my day running those numbers, you guys. Like, I'm not joking with you. Like, I'm almost in tears over here because that is like super, super cool. So I'm super excited for you guys. That also led though, let's talk about now how this stuff leads. Because now, you guys, as of yesterday, I think, when I saw you, like I heard some news. Uh, I'm not on the book, I'm not in the book much anymore, but I think you guys uh announced this on the Facebook. Uh, but talk a little bit about kind of a new sounds like kind of a fun passion project now that you guys are doing.
unknown:Yeah.
SPEAKER_00:Yeah. Do you wanna meet that?
SPEAKER_03:I think yeah. I love how she tells the story. So it's I want her to know.
SPEAKER_01:Oh no, that feels like pressure. Um we I don't know, when you kind of think about like other things and investing in other stuff, you kind of just start looking at different things. And we have um a closed restaurant that is near us that um we just rode by and we're like, can somebody please put something in there and open that? You know, and nobody did. So that's for two years. For two years. So finally one day we're like, you know what? Um, maybe we should look into it, you know, because at the very least, the land is worth great, and we could even change it to residential and and do that. But anyway, we just kept um, I don't know, we thought, well, let's just go look at it and see. And um, God just really opened the doors on this one. We were like, I don't know, if we're barking up the wrong tree, you know, close the doors, God, let us know. And he just kept opening the doors. And somebody was like, Hey, we know somebody that's looking to expand into Green Bay and wants to do this uh coffee house bistro kind of thing, and so we met with them and they are amazing people, and um very God centered, and they're both ordained.
SPEAKER_04:Oh my goodness, and it's just yeah, probably pretty trustworthy.
SPEAKER_01:So, which works with the other yeah, yeah, and and friends of good friends of ours. And so we were like, all right, and then there was just other um people brought into us, and so we also wanted to because it has a full bar, we wanted to be able, and then it's got a beautiful venue view overlooking the bay with the sunsets, and we want to be able to offer it for weddings uh because we have a child that is getting married, and we realize how expensive these wedding venues are. So we're like, we can offer a smaller wedding venue at maybe half the cost and opportunity for people. So we were looking at these multi-revenue streams, which our banker really loves. So if you can come up with something like that, then that kind of makes it more enticing for them. And we were able to pull some commission, have catering commission and all different things, but it's gonna be a fun place.
SPEAKER_03:And we're not, you know, restaurant people, we don't know how to run a restaurant, so it's really again finding your who's. So we bought the building so that we could allow somebody else to come there in there and take care of making that magic happen. And it's just been, you know, a great process, and we're really excited about this to be able to bring community together here, and this is what our area that we live in really needs right now. And we just put a lot of all-stars in place with this whole process that have just made it so amazing, and that's awesome.
SPEAKER_01:So, we want to do some fun special events, and we want people to tell us what they want there, so just to bring the community together.
SPEAKER_04:I love it. Well, if you guys are listening to this and you are in or around or traveling through northeast Wisconsin, is that what we would call it? Headed towards Door County, that's where you're you're gonna want to pay attention. And I'll let you guys maybe share how they could get more information about it because I don't I don't know where you're at and what you can say at this point yet, because it's still fresh and just closed, and I know there's a lot of moving parts right now. So how would it be if somebody wants to kind of you know, hey, how do I come check this place out or get any information about the the wedding venue thing or any of that kind of stuff? Like, what's the best way for them to stay in tune with what you guys are doing?
SPEAKER_01:Yeah, so right now we um the new name is called Bay House Landing. I love it. So we're on Bay Settlement Road, yep. So, and it's so it's on Bay Settlement Road, Bay House Landing, it has overlook of the bay, and it is literally where the settlers landed. So we are calling it Bay House Landing. We're on Facebook, Instagram, and we'll have a website with all of those same names.
SPEAKER_04:Sweet. Well, I'm super excited for that too. We used to live on the east side of Green Bay, and we were talking last night, and I'm like, you're right, there is like no coffee or good breakfast place over here. Like, you gotta go to like the west side or like downtown Green Bay or something like that. So that'll be a really cool, like much needed uh niche filled. And the smaller venue wedding thing, I think, is another thing too. Like, not I think everybody's either got the 250 plus, you know, type thing, or or like the little 20 20-person backyard wedding setup, but that intermediate mid-ground one, I think, is uh another cool, cool niche you guys are filling here.
SPEAKER_03:Yeah, we're excited. It's gonna be awesome.
SPEAKER_04:Yeah, that's awesome. Well, guys, this has been amazing. I know you guys have a meeting coming up here soon, and so we got to get to that. But before we let you guys roll, we always end with a kind of a fun question. Favorite place to visit in Wisconsin or Wisconsin tradition? The reason we asked this question is we have people out of state that listen to this, and we, you know, they're thinking of investing in Wisconsin or you know, coming to check it out, and they're just like, oh, what is this? Is it all cows and brats and beers, or like, what is it? So give people a little bit out there what you know if you've got a couple favorite traditions or spots to visit.
SPEAKER_00:Do you want to go first?
SPEAKER_03:I mean, if you're coming to Wisconsin, make sure you come on a Friday because go to a supper club for a Friday night fish fry. You can't beat it. Yeah, get held hostage at the at the bar when you come. Even though there's a lot of seats available, but it's a great time to just talk with people and get your old fashioned and then have an amazing meal and you know, just break bread together. It's yeah, it's a beautiful year.
SPEAKER_04:That's awesome. Shannon, do you have anything different to add to that?
SPEAKER_01:Well, I was gonna add the old fashions, but um, I don't know, there's just so many cool places. I would say you'd have to get cheese curds either up at Dykesville Bowl or you have to go to Joe Roars for um good burgers. Yeah. Yeah, those are a couple favorite places.
SPEAKER_04:Yeah, one of my favorites is having some captain diets in Scott and Shannon's and then crashing in Scott and Shannon's basement because Scott overserved me. That's one of my favorite traditions. Yeah.
SPEAKER_03:That's a great memory.
SPEAKER_04:I love it. Me too.
unknown:That has happened.
SPEAKER_04:Yes, that has happened. Yes, yes, it has. Well, guys, this has been awesome. I've I've learned a ton. I'm so excited for you guys and so happy for all of the progress you guys have made and for like where you guys are at. You guys are just such an amazing example, I think, for people to look up to you and to follow. And so these guys are great. Follow, find them, connect with them on their website. Um, any last thoughts for the audience out here, guys? Any last words?
SPEAKER_03:Uh I would just say that if if you have any questions, feel free to reach out to us because we didn't get here on our own. We had lots of people that lifted us up, had an abundance mindset, and we feel the same way. You know, you need to bring people, you know, help the next one in line because there's plenty out there for everybody to be successful. And we just want to give back at this point to make sure that everybody can lead a journey like we've had.
SPEAKER_04:Awesome. Very cool. Well, guys, if you want to get some some connections from us as well, and you're not ready to join a buyer's list, you're still just dipping your toe in, and you're not really sure what this whole real estate investing thing is, you've been listening to the podcast a little bit, you got some questions, you can just go to the website and also go to the contact us form, and that will not add you to the buyer's list, but that will uh submit some information so we can reach out to you and at least see where you're at, try to help you in your process, figure out if this real estate thing's for you or not. Totally free. Just something we enjoy doing, kind of like Scott said, we like giving back, we like helping people, and um we're here to do that. So, guys, until the next episode, thank you guys so much for being on here. Thank you for tuning in. If you got some value, share the episode, please. We're also looking to bring up our ratings and reviews on the different platforms. So if you've listened to an episode and you got some value out of it, leaving us a five star review, or if you're a YouTuber, commenting on the YouTube apparently helps us. So please comment and like interact with it. I guess that helps us in the algorithms. So please do that as well. And we will keep bringing you guys amazing guests like Scott and Shannon, and uh appreciate you guys tuning in. We'll see you on the next episode.
SPEAKER_03:Okay, have a good one.
