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
First Real Estate Flip Gone Wrong: Lessons From a $100,000 Rehab Overrun
This episode isn’t about a massive win. It’s about surviving a deal that went sideways and not quitting.
Matt Richardson and Ashley joined Corey to share the reality of their first flip, a deal that looked solid on paper but quickly turned into a crash course in rehab overruns, contractor missteps, shifting lender rules, and refinance delays that pushed them months past their hard money maturity.
Their $47,000 rehab turned into $100,000+, driven by:
- Poorly defined scopes of work
- Surprise subfloor, plumbing, and electrical issues
- A contractor who quoted labor loosely and billed tightly
Once the rehab was done, the market didn’t cooperate. Offers came in $40–60K below asking, and selling would have locked in a loss. Instead of panicking, they pivoted.
Through networking and honest lender communication, they landed on a creative rent-to-own exit:
- $400,000 sale price
- No realtor commissions
- 5-year term at roughly 2 percent interest
- Buyers refinance them out later
What could have been a deal-ending loss turned into a long-term win and a masterclass in resilience.
The biggest takeaway?
👉 One bad deal doesn’t define you. Quitting does.
If you want to connect with Matt or Ashley directly, you can reach them here:
Ashley: ashley@ibuywi.com
Matt: mtrichardson45@gmail.com
Welcome back, guys, to another episode of The Wisconsin Investor. I am your host, Corey Raymond, and I am back after getting a little break here with Reese and Connor. Last week and the week before that, we had Reese hitting a solo episode. If you guys have not checked those episodes out, please go back and listen to them. They did a fantastic job on those episodes. Got me thinking about a lot of stuff. But today's episode is all about a couple who are engaged to be married, but instead of planning their wedding, they've been fighting to refinance out of a hard money loan, dealing with a bank that keeps changing the rules. And now they're a few months behind on payments. And this is not a horror story, guys. This is real life. And uh, if you invest in real estate or you buy borrow private or hard money, you guys need to hear this story today. With that, we have Matt Richardson and Ashley. What's up, guy? Hello. Thanks for having us, great day. Yeah, thanks for coming on, guys. We're gonna get into this story about this deal that we're currently dealing with. We actually, when we started, we started, hey, let's get you guys on the podcast. Let's do it once this refinance is done. And then we got the whole we've got the whole thing kind of with a tied up with a bow. And so we scheduled this thing thinking like by the time we schedule this thing, we'll we'll have that refinance done. And here we are today. Uh, we got another little curveball thrown at us this week. And so we'll dive into that deal. But first, before we do that, let's just just tell us a little bit about each of your stories. Like, how did you guys get into real estate investing?
unknown:Yeah.
SPEAKER_00:Yeah. So for me, it kind of started my parents, they've gotten into real estate for a few years now. They got a lot of properties, and at that point, I was kind of seeing like what the what their process was, what their success was with real estate. So I could see that vision. And like, for me, I didn't want to work at W-2 until retirement. I know Ashley doesn't. And come on.
SPEAKER_01:Come on, AB. By the way, Ashley, Ashley, if you guys have bought a property from us, Ashley is one of our rock star transaction coordinators. So you may have talked to her as she's helped you uh through trans, you know, us transitioning that contract over to you. So that's why I'm I'm making the joke about her, you know, not wanting to be in a W-2 forever. So anyway, go on. Sorry, Matt.
SPEAKER_00:Yeah, no, no worries. Yeah. So we kind of shared that vision. Um and we were in Milwaukee at the time. Um, I was listening to like bigger podcasts, like real estate rookie podcast, um, kind of just getting a lot of information on that, doing analysis. And soon enough, we were like kind of want to get into our own property. Um, we were kind of told that doing the duplex, doing the house hacking was kind of the route to go versus going into a single family right away. So that's kind of what we explored right away. Um bigger podcast, bigger pockets, um, looked for a realtor that was investor friendly. Um, so we connected with a realtor down there. Oh yeah, looked at a lot of duplexes down in the area. Um uh we did, I know there was a triplex that we had um gotten into a deal with, and that fell through. So, I mean, we're not we're not um we're we're used to having things fall through, I guess you could say. So the trend. Stranger to that, yeah. Yeah. So um eventually we found um a duplex through our realtor um off market, and that was our first house hack, first duplex that we still are renting currently today.
SPEAKER_01:Awesome, awesome. And if you guys haven't heard uh Scott and Shannon Richardson's episode, that is uh the parents that Matt is referencing being involved. So they've been they were on maybe 10 episodes ago or something. So if you guys are are on YouTube or on uh what Spotify or whatever, you can scroll down and find Scott and Shannon's episode. They had some really good, really good nuggets in their episode as well. But really cool. So you had that example from from your folks to say, hey, like you got somebody else that you personally and intimately know, they're doing it. You saw that success can be achieved in this, and that was really the motivation for you guys. Ashley, is it the same for you or before you and Matt met? Did you have inclinations? Did you ever think you'd be sitting here talking about real estate investing before you you guys got together?
SPEAKER_03:Um actually no. Um I had a very different, opposite um view. Um, I actually went to school, got my like all the way up for a master's degree, um, and I landed what I thought was my dream job when Matt and I got together. Um, and we were living in Milwaukee, and he brought up the idea of let's go buy a duplex. And I was like, absolutely not. No, um, I want my single family house. And he's like, Well, listen, if we go get a duplex, then we can have renters. And I'm like, Renters, no, no, no, no, no, no. This is awesome. I also grew up in a townhouse, so my mom owns a townhouse. So I was like, I'm I did the multifamily thing, like, I want my own space. Um, eventually, uh, Matt just being really good with his numbers, kind of broke it down and was like, look at this and look at what they're doing. And then um, I was able to see what uh Scott and Shannon were doing, my future in-laws, and I was like, okay, well, maybe I don't want to be working 62 hours a week. Let's just give this a try. And um it it worked out really well for us. Um we got our property um in Milwaukee, and then I was sitting there and we got our first rent payment of$975. I was like, I didn't have to do anything, it just hit my bank account and it just sat there. I was like, wow, okay. This is real. This would I can get on board with this. So, and then um Shannon was actually the one who helped me transition to come up to the Green Bay area, um, connected me with you, um, and then the rest is kind of history from there, interviewed, and now I'm working working here um and learning a lot of great lessons.
SPEAKER_01:So yeah, yeah, for sure. Well, we're gonna talk about one of these some a lot of lessons probably learned in this last deal here soon. But um, I think what's interesting for those of you guys that don't know Matt and Ashley, at least this is my interpretation now, guys, of the couple dynamics here. It seems like the roles have changed. And now, Ashley, you're like the gas pedal, and Matt, you're more of the break. Is that accurate? Am I reading that right?
SPEAKER_00:Yeah, yeah, very accurate. Yeah.
SPEAKER_01:That's great. So for couples out there listening to this, if you are trying to convince your spouse to get into real estate, be careful what you wish for. Right? They may end up, they may end up being the gas pedal way way harder than you you ever imagined they would be. So that no, that's cool. I think that's great. And and what I think is a good lesson here too is Matt, it sounded like you had to show her the numbers to get her to see the thing. Like she it sounded like Ashley, you had a lot of just you know, personal history living where you lived before, and the thought of the you know, the dynamics of what that looked like maybe were the thing holding you back. But the numbers, once you saw that, it seemed like he must have hit your your logical brain there or something where you're like, ah, that now makes makes sense, huh?
SPEAKER_03:Yeah, absolutely. Yeah.
SPEAKER_01:Awesome. And you guys still have this property, correct?
SPEAKER_03:We do, yeah. Um and cash flow in about five hundred dollars a month.
SPEAKER_01:Okay.
SPEAKER_03:Um and we just raised uh some rents this uh month. So awesome.
SPEAKER_01:Awesome. And w when did you guys pick that one up? When did that purchase happen? Was that in 22? So you got a I mean I my question is really like what's the rate on that thing? I'm guessing that if you got it in 22, you probably got a pretty sweet rate on it.
SPEAKER_03:Yeah, so we so we got um like live, what is it, um primary home rates. So it's a 6.5 interest rate. Um and we picked it up at two, we bought it for 250. Um, so right now what uh we because we were teetling back and forth about selling it, what we got um looked at was 295 for a listing price.
SPEAKER_02:Okay.
SPEAKER_03:Um but the uh the cash flow for us is a little bit more important. Um it was it's very hard for us to give up a property that would it's just keep going up in cash flow.
SPEAKER_01:So yeah, and that's a side-by-side duplex, right?
SPEAKER_03:It's an upper lower.
SPEAKER_01:Upper lower. Okay, got it, cool. Well, either way, it sounds like it's appreciating, it's kicking off cash. Like, what do you why would you sell it, right? Kind of a thing. So that's awesome. So tell us so from that point forward, what what else has happened for you guys in real estate before we get to this this latest deal?
SPEAKER_03:Yeah. Um, so since that first deal, we um ended up moving up to the Green Bay area. Uh, Matt's from here. So it was a new transition for me. Um, we ended up buying two properties. So we got our next house hack that we're currently living in and have our other side rented out as well. Um, and then we bought our first flip, which is the property that we will get into that we've learned that. So yeah, that's kind of where our real estate went. And now um we're just trying to work out in this refinance, I guess.
SPEAKER_01:Yeah, yeah, yeah, yeah. The one that you guys, the house hack that you're in now, how did you guys finance that? And how's that one? How's that one working out?
SPEAKER_03:Yeah, so with that one, we financed it the same way we did our Milwaukee one. We found it on the MLS. Um, and then we did primary home rate. So we only had to put 5% down. Cool. Um, we got a 6.8 interest rate on that thing. Um, and obviously we ran the numbers based off of um us living there. Um, and it's still gonna cash flow. Once we're completely out, it'll probably cash flow about$500 as well. Cool. So I'm a big advocate for house hacking. I will love it. You get better rates on it, and if you can do it, it's it's definitely the way to go.
SPEAKER_01:That's awesome. So you guys you're conquering the house hack thing. Now we just gotta figure out how to conquer flipping. Tell all right, take us back. So tell us so that when and when when Ashley's referring to moving up to this area, uh the Green Bay area, that's where our office is. For those of you guys that aren't familiar with that area, but take us back to like when you guys first decided to take down this deal. Tell us a little bit about the deal. What were you guys like really excited about with that deal?
SPEAKER_00:Yeah, so I think when we found out about this deal, we were on a river cruise, I believe, at the time, and we were teetering on whether we're gonna pull the trigger on this. I was running the numbers, and I mean it made it made sense when we ran the numbers. There's a pretty good margin for what we thought needed to be in rehab cost and what the ARV could be. So um yeah, we put an offer in, and then next like couple days later, found out that we got the deal. It's a pretty scary moment for us, at least for me. Oh, we actually got it, so here we go. Yeah. And then yeah, once we got back, started just trying to plan ahead on who we were gonna have for contracting, all the rehab stuff, and when we're gonna go out and see it. I think we had a few months to kind of plan that out before closing, which was nice. So we didn't have to go right into it. So had a little bit of a couple months to plan ahead on that.
SPEAKER_01:Nice.
SPEAKER_03:Okay. It's a two-acre lot, too. So um the land in itself really drawed us. For me, on the other end, I was hoping that we would eventually live in the place. So I was like, oh I think that was a big lesson for me of like um you know, falling in love with something that I would I thought was my own. Um, obviously that didn't go the way it did, but yeah.
SPEAKER_01:Uh not getting emotionally attached, it sounds like, right?
SPEAKER_02:Yes.
SPEAKER_01:That's what I heard when you said that. I was like, that sounds like emotional attachment. You know, that's one of the things, you know, I I for those of you guys that don't know our process when we wholesale deals. We send out an inspection report, a video, all this sort of stuff, but you're not physically walking through these properties. And some people hate that idea, right? They're like, I need to walk in, I need to feel it, I need to do it. And and I understand that, and that works great for a lot of people, but this this way typically reduces the uh emotional response unless you have uh like a I don't know, a hidden agenda here of wanting to move into the property, you're still gonna have that emotional thing. But sometimes when you go to these properties and you're like, oh, it just feels good or it does this, you can you it can work against you in real estate investing where you get too emotional about it and you stop going to like Matt, what you did with Ashley early on was just showing the numbers, like what do the numbers say? Does this meet my buy box? And then and then you can learn some lessons there if you were off on your buy box later as far as estimations of numbers and those kinds of things, but at least making that purchase decision. There's so many people we talk to on a regular basis that are like, I've been looking at buying real estate for the last 34 years, and I haven't, I just haven't pulled the trigger because I haven't found the right deal. And then they we ask them what the right deal is, and they're like, well, it's just gotta feel right. And it's like, well, apparently not, because you know, you can't tell me for 34 years you haven't found one that feels right, you know, and I'm exaggerating a little bit, but um, when you take the emotion out of it and you take that and you get really crystal clear on like we want this, this, this, and it doesn't have to be super dialed in, but at least some idea of what a good deal looks like, you start to remove a lot of that emotional bias that can lead you into some either bad decisions or keep you on the sidelines of never making a decision, which could could be the most detrimental decision that you make is to make no decision, right? So anyway, I thought that was an interesting point as you were talking about the home thing. I'm like, uh, I see there. All right. All right. Well, let's talk a little bit about um the financing piece of this, because I think this is really, you know, as we led with coming into this, this is where some people can really get into trouble in real estate without understanding these things. Now, I finance this deal for those of you guys that don't know, to our employees here, actually. Uh, and that is a benefit to work for our company, is you know, if the deal makes sense, we'll we'll do some hard money lending to them at a little bit better rate than what the market can do. And luckily, you have a nice, a nice boss who's a little more flexible with certain things as far as timelines and things go, if things do go awry. But let's talk a little bit about you know the financing piece and like when did you guys, you know, when when did things start kind of turning for you guys to maybe start becoming more stressful and you you got rid of the excitement of doing the deal? When did all that start to start to happen?
SPEAKER_03:Yeah. So the deal, um, I we learned so much, um, I think from when we ran the numbers, we had um a good margin and everything on that sense. Um we uh learned a lot about contractors. So um our contractor did not uh give us like pricing all the way through. Um and he gave me only like his labor. He did not include labor for all of his crew that he we had to pay. Uh so we learned a big lesson about like making sure we get quotes from our um contractors and everything like that. Um we also made the mistake of um kind of giving a range of like, hey, this is what we want done, but do what you think is best on that. So um, and he did. Uh he did do what he thought was best, but it just costed us money for it, you know. For sure. You know, and we gave a budget, like our budget was$47,000. That's what we were gonna do for rehab. Um, and we hit that within probably week number uh five. Um, and we had to come up with, you know, more money. So we found a way to come up with some more money. Um, and we were like, okay, now we're at$67,000. That's our budget. Like, that's all you get to work with. Well, week number eight hit, and we were blown through that. Um so we ended up having to put um another$40,000. So our forty-seven thousand dollar rehab turned to a hundred thousand dollar rehab. Um so I think right there we're trying to piece together our rehab money, uh, rehab budgets. Um, we learned so much about that and how to do it, scopes of work, um and all that fun stuff. So fortunately, with this, we were able to get everything. It was turned to be a full gut job.
SPEAKER_01:Okay, okay.
SPEAKER_03:Our first flip, right? A full gut. Um, it also had foundation issues, so we had to deal with that. And it's on a well and septic. So um we had we had all of it uh for the first one, and uh thankfully we were able to get everything done in 10 weeks. We got it done in 10 weeks. Okay, which was pretty, pretty, pretty good. Um we could not predict the market though. Um as soon as it hit the market, that's where we were like, okay, we're gonna get a bidding war on this, we have a great price on it. It's two acres of land in a great neighborhood, like out in the country, but still in the city. And then we get the first offering. And the first offer was uh sixty thousand dollars than what our asking price was. And they would there was no negotiation, like they were like, this is the price, we're not negotiating. And then we got another offering, and that was forty thousand dollars, and we eventually got to the point where we plateaued and we were going to lose money on this thing. Um, we were estimated probably like 10 grand of a loss. Okay. I mean being stubborn, um, was like we're not losing money on our first flip, it's not gonna happen. So um I we did not accept any of these offers. Um I was so I was like, unless we can get an offer to where we need it to be to make some, we're we're not we're not accepting it. Um so September-ish, we ended up looking. Um, I know our loan was due in November. Um, so started the refinancing process in September. Um and I was promised that we could get this done in November. And I think when the stress really hit was when we got to November when the note was due, and my lender's like, we need another 30-day extension. So that's when the stress really hit of like, oh no, what do you mean another 30-day extension?
SPEAKER_01:Yeah, yeah. What was going through your mind when that when you took that call, Ashley, or that that text, or whatever mode of communication came in? What was what was going through your head at that moment?
SPEAKER_03:Um I was freaking out. You know, this was my first ever flip, my first deal. Um, and we what I thought we did almost everything, like what we've been told, like we did almost everything right. Like we we got it on the market, we we did the numbers, and then offers were not coming in, the numbers weren't working anymore, and I was like, now I have to go back to my lenders and tell them I need a 30-day extension. And I was like, Oh shit. Yeah, like I had no idea, like I had no idea what what that conversation was gonna look like. Uh you know, it could have been like, okay, like, yep, take that 30 days, or in my head, I was like, okay, this is gonna be the worst case scenario. Corey's gonna say, give me the house, you can walk away, like, just be done. And I was like freaking out. Um but but I think in that moment I learned a really hard lesson that communication is the best key. Uh because as soon as I had the conversation with um you and I had the conversation with the other mortgage that's on the property, I was so less stressed. Everybody's like, yeah, we we understand, like take the 30 days and get it get it figured out. Yeah, so that that would be my biggest advice is just like communicate with the lenders and um explain what's going on, or um, I also think I came with like some solutions of like I don't know what to do, but here's what I'm thinking, and then is that correct? Like, is that what we should be doing? Um so yeah, and then we got that 30 days, so my stress levels were okay. Yeah, and then I got another text after those 30 days saying we need another 30-day extension. And at that point, once I got, I was like 60 days we're going out off from this note, I was like, okay, well, I can't switch lenders at this point because there's no there's no lender, there was no lender in my mind that I was like that could get this done fast that I needed to get done. So having another conversation with my lenders of like they needed a 30 day extension. Um but I also think it would help that you were able to reach out to the lender themselves as well, and that helped significantly because. then at that point the lender was explaining to you what I was trying to explain and it was a whole thing. Um but we there was curveball after curveball. Like we were getting told we couldn't refinance because the house was a rural property and it being plural. Like I didn't know that had anything to do with it. Then we were told that we couldn't refinance because um the we had two we have two mortgages on the property so we would have had to satisfy the first or the second lien to refinance the first lien. So we couldn't do that. And now um after the second third 30 day notice I got told again that we might need another 30 day extension. Like no no no like that's not happening like at this point there that that just tells me you can't do the deal. And this this time it was because um our the debt to income ratio on the property was too high. It and it didn't agree to it. So there was a lot of there's been a lot of emotions and a lot of curveballs with this one but you know a couple things that I've learned with a DSCR loan. If it is listed lenders are going to take that lowest listed price that is what they're going to go off of versus your appraisal. And we appraised really good on our house our house ended up appraising for$444000.
SPEAKER_01:So and you what did you run your numbers at on the front end?
SPEAKER_03:$400,000.
SPEAKER_01:$400. So you got a 44K bump which helps absorb some of that$100,000 rehab overrun right that's nice when on the back end you get a little bump in the in the uh ARB. That's good. That's good.
SPEAKER_03:So um so with the that was our first being told like we were not going to be able to take that$444000 and use that we had to take our lowest listing price. Well our lowest listing price was$390 so that wasn't even going to cover our debt at all like barely cover our hard money loan to pay wouldn't even pay our hard money loan off. So yeah there was just a lot of stress a lot of there's still a lot of stress going and trying to get that done but um going to REIs going to network was really valuable. We were able to um talk to some lenders there. One of the lenders who actually helped us with our house hack with Milwaukee was like okay we can get this done but here's what you have to do and he gave me some steps that I had to do and said just call me if they can't do it we'll we'll get it done. So we're ending up switching we're going to switch lenders um and hopefully we can get this done um fairly quick. I'm I'm really optimal hope hopeful we can get it done.
SPEAKER_01:Yeah yeah for sure and so a couple there's a lot to unpack there guys from this this deal which is why I wanted to bring this one on and talk about this because I think a lot of times we get on the podcast and we're like tell man you made all this money on this deal or you did this and it's good to hear when things go sideways and how you guys are handling it. And here's a cool part you guys are you guys are still talking about the next deal that you're going to do which is great. Like I think that's an important part a lot of times deals like this that go sideways they'll knock somebody completely out of this right they'll be gone right um and then you're right back to well okay how do we get out of this W-2 life again you get to go find some other vehicle somewhere else to go do it where you guys are earning your tuition right now right and uh long story short you guys should still do well with this property after everything. So tell them what you guys are doing on the exit strategy. So you listed it we got to a point where we started having conversations right and I said hey maybe we should try this other avenue talk a little bit about what you guys have done from an exit strategy standpoint to try to help mitigate some of the old you know cost overruns that you ran into and some of those things.
SPEAKER_00:Yeah so I think the the exit strategy that we're trying to do is like a like a rent to own option so instead of taking the loss for trying to sell it for 10,000 loss um the exit strategy was to do with like a rent to own option a little more creative financing way um over like a five year um term having people go in there rent and then with the intention to buy after that five year term. Yeah.
SPEAKER_03:Yeah so we ended up giving getting a sale price of 400,000 which is kind of where we well where we wanted to be on our numbers and uh they have a smoking deal it's like a two percent interest rate on that um and then uh they have five years to five years to pay the 400,000 or refinance us out. So that's our fun exit strategy that was creative. So over five years we should come out ahead.
SPEAKER_01:Yeah. Yeah so it's it we've talked about rent-to-own strategy in in previous episodes but if you guys aren't familiar with that strategy essentially what what we do in that strategy is a you sell it but you don't have to pay a realtor fee. So when you add up those realtor fees five four percent if you're paying six percent you're paying too much but four or five percent uh depending on your relationship and negotiations with your agent you know you do that at a$400,000 house let's just say 5% there's 20 grand right there right down the tubes. So you eliminate that you give yourself an immediate$20,000 bump. The other thing is typically you can get a higher sale price in the end right what would what did you guys have this thing listed for at its lowest?
SPEAKER_03:$390 was at its lowest but the lowest yep and the highest offer we got in was$365.
SPEAKER_01:$365. Okay. So three let's just say$390 now you're selling for$400 there's$10,000 extra. So now add those two things up collectively you've made another$30,000 on this house by doing this strategy. Now you got to wait to get that money so there's a downside to that but you know if everything works out and these folks pull through for you uh on getting and financing you know now you're you're you've taken what would have been a a loss and a hit long you know short term and turned it into a long-term gain you just got to wait to get those funds and so I think that's always something for people to remember there's there's always a different way to think about things if it's not going the original way that you thought it would doesn't mean that you're gonna have to take a huge bath on something you may just have to get a little creative in how you do it. You got to be scrappy which you guys are scrappy and I love that and you're just asking the questions you're networking you know there's there's so many good things here that are coming out of this for you guys I think in the long term um that are are really positive. That'll be lessons learned in the future on the next one, right?
SPEAKER_00:Yep absolutely yeah um so that's cool let's talk a little bit about going back I want to start unpacking some of these lessons how did you guys go from$40,000 or$47,000 of rehab to a hundred and some thousand was it was it mostly because of this contractor or was it like man we really should have seen these things ahead of time what were some of the things that led to that extra 60 grand um I think the big thing so there was like a front deck on the on the front of the house and we didn't really I mean from the videos we could see that the deck needed to be ripped out but we didn't know the the extent of like the water damage coming in so all the subfloor going into like from that porch into like the kitchen area all that subfloor was rotted um so I mean we we budgeted for flooring but we didn't have any clue on what we needed for for subfloor and any like repair on the floor extent of LVP. So that was one of the big things that definitely ramped up the the budget for rehab.
SPEAKER_03:Plumbing as well plumbing and electrical we had to rip all of the plumbing out um and redo all the plumbing. And then our electrical we had to rewire a lot of the um housing like the panel didn't need to be updated or anything but a lot of the rewiring and everything um needed to be updated there.
SPEAKER_01:Okay. Got it so what was up with the plumbing like why did you have to rip everything out? Like would and was that not caught in the inspection or like what was the what was the thing that caused the plumbing to have to get completely ripped out?
SPEAKER_00:Yeah so for the plumbing I I think we knew that there was to some extent that there would be new plumbing needed so like there was like a kind of like a handyman situation where they had plumbing from the bathroom upstairs go to the sump pump.
SPEAKER_03:And that would so probably to like mitigate like costs on utilities maybe I I'm not sure but yeah there's water basically funneling from that to the sump pump and then just shooting out so um and you can't do that apparently you can't do that no I wouldn't have known that I would have yeah yeah we just had coming stack and from there it had to be um well now you know now you know you check that right yeah yeah um and then we ended up um tearing down some walls too um and making it more of an open concept so there was it's not that we found anything but dry um we had to plaster the whole house and do all of that fun stuff so there's just some things that we just really did didn't know to budget for um or what we were even like what materials or anything cost.
SPEAKER_01:Yeah. What looking back at this now and going forward into the future ones guys like just speaking strictly on the construction contractor thing what are some like just bullet points lessons learned uh when you go into this next one like what are some things you're gonna do differently from like the rehab contractor situation whether that's budgeting wise or just relationship with contractor like what are some of those lessons learned yeah a big one uh scope of work we had a scope of work but didn't have a scope of work uh so that was a that's a big one um and we learned a lot about material cost we learned about how much things actually are going to cost um so that is also a nice um lesson for us so we know what materials we want um and how much that's going to cost and how that's going to play into everything um and we had a contractor that uh could do it all so I think we've also learned to get more of people who are specialized in their specific fields and areas um and I think the biggest one is make sure we get quotes like we need to get a quote of how much their um labor and everything is going to cost us um versus when when we get that bill two weeks later and it's like whoa that's five thousand dollars that we owe just in labor costs like that so yeah that's a great lesson I want to I want to just reiterate for the audience out there just from my experience too we have like a handyman guy I would call him that we use for just all he's kind of like my miscellaneous I got a weird project like he'll come up and like take my Christmas lights down which sounds so first world problem like I can't get out there and do it but I'm like I ain't getting on ladders and walking around so I hire this guy comes up does it right and uh I've had him do several projects over the years so I kind of know some of this stuff with this guy. Like you got to get a quote ahead of time before you have him come and do anything. Like it's just we've negotiated like an hourly rate but then sometimes it'll just be like ah this was harder than I thought and then he just charges me whatever he wants. So I had him move some hot tubs for me the other day uh over the years because I had I bought some hot tubs for Airbnbs. They sent me the ones I wanted 220 volts so that they could handle these cold temperatures we've been in the last few weeks, right? And they sent me ones that they said yeah you can convert any of these to 220 and whatever I said okay great. They send them they can't be converted so they're one tenth. So I have electricians who put the 220 outlets in. They did everything right so now I gotta figure out like the guy offered me a smoking deal on these hot tubs if I kept them and he got me the other ones at the same price some different ones that were 220. So I'll it worked out because I had two other properties that needed hot tubs. So it was fine. But I had to move some of these so I had to move some from Door County to Green Bay to places that had 110 outlets, you know, and do the switcheroo and I hear I had a couple hundred bucks he charged me for those or something. And I got quotes ahead of time on those right so then I had one that I had to move from Green Bay to Door County a different one from a seller of ours that was one to get rid of a hot tub. So I said well I'll take it and um and the bill for that one because it was a quote unquote heavier and more and harder to move was twelve hundred dollars he was trying to charge me from a couple hundred and I was like bro no we ain't doing this. No no no so we I get you know we he luckily he was good and adjusted it but I mean that goes to show like I got lazy with like hey what would you charge me to do XYZ get the price up front then it's you know if there's some issues where hey man this took a lot longer than I estimated because it was way heavier than the last ones great we'll make an adjustment based on the hours it took you but like not to the tune of like four times you know what the other ones were so I think that's a good lesson for our audience out there is like even for me I've been in this game almost a decade and I still get kind of you know running 100 miles an hour just like hey man can you go do this and we have a relationship just go you know I'm assuming you're gonna charge me what we did on the last one. Nope. We're gonna try to get four times what really it should have been. And so it's just really really important I think for people out there listening to this get the quotes ahead of time before they start the work. And then you got it in writing. You know Amy Farrow at the RES success meeting the other night attorney there she talked about that was really important and I agree have everything in writing and that way there's no discrepancies when that bill comes right no surprises. You know then you can budget a lot more and you know hey I really do have$47,000. This is all I got and now you keep that to yourself but you you know you can start to chunk up a lot of the the rehab and understand where do I got to put the money in these properties. So I think that's that's good stuff. That's great for the audience here.
SPEAKER_03:What about the financing side of things now let's go to that so looking back going forward into the next deal are you guys looking at doing anything different on when you on the next flip that you do is that gonna look how is that going to look with with uh with the next one that you take on yeah um so hard money is a great way to get into the game without like with little to no of your own money right um and for us it for I'm fortunate enough to have a great hard money lender who's willing to give me a better rate on everything. But I've also started make some relationships with some of the banks um that has been uh recommended and seeing kind of how we can play into those numbers and everything of that. But financing wise a lot of it comes down to networking and building a relationship. We are also in a mastermind group ourselves that has a ton of private money that we just tap into and work and make those relationships. So I think for us it's just gonna be coming down to what we can what we can find in a terms of financing wise of that works with the deal. We won't shy away from hard money we're not gonna shy away from private money. So um I I would love to get into the community banks and work with some of those. So it's just gonna really depend on what works with the deal and what we can make where we can bring little to no of our money right now just as we're building back our cash and our capitals.
SPEAKER_01:Yeah and I would say one thing for the audience out there too the the lender that you were planning this refinance with here's the situation the actual lender the salesperson if we will was at a pr a different community bank prior who you guys had a relationship with there early several of us within this real estate community had had success with them in different capacities and they were very investor friendly. And then that salesperson went to a different company than I don't think a lot of us or anybody really had ever worked with prior to that, right? Correct yeah and so almost like the networking almost hurt you in this case because you had this relationship with the salesperson like hey man like we you know we've got this relationship you get you you know you got relationships with all these other people and then it sounds like this this person hitched their their horse to the wrong cart here with the mortgage company that they're with and you know that they're making a lot of promises that they can't keep which is a big no no in the in the lending world. You say you're gonna do something you got to do it lenders out there if you're listening to this don't be jerking people around like what they're doing with Matt and Ashley here. Otherwise it's real it's a small community you know Wisconsin investors we're in in most of the pockets in Wisconsin we all talk and we know who the who the people are that are doing what they say they're gonna do and have good rates and programs and things like that. And most of the people know who to stay away from and so if somebody brings us that lender now unfortunately if they want to use that person to buy deals at Wisconsin discount properties like they're blacklisted so to speak for right now until we can have some proof that they've they're gonna follow through on what they say they're gonna do. We can't leave sellers out to dry right like that's the most important thing when we're closing on a on a purchase in particular you can't leave a seller out there getting jerked around on a refinance it's not any better that they didn't follow through on what they said they were going to do but it at least it's salvageable in some ways um where you know you just can't be doing that lenders out there. So networking is really important. Unfortunately Matt and Ashley had to be the people that we all learned from who not to use in this case um but it works the opposite way too Ashley you made that point like a lot of times we talk right and we say hey this lender's great this lender's great go use this person use this person but make sure you do XYZ with them because this is how they operate you know you can learn a lot of good intelligence about the the lending options out there if you just use your network and go to these meetings and talk to people yeah um quick shameless plug also guys you talked about you not shying away from hard money private money getting in with commercial banks I talk about it in the Burr for beginners course if you guys are not in the Burr for beginners course yet it is free for you now we used to charge I believe it was like$1500 for the course you can get it for free by going to Wisconsin discountproperties.com plugging your information in getting on our buyer's list and then just asking um Reese or Connor what the discount code is in the link he'll hook you up with that but in the course I talk about having all these different buckets of money and then you can utilize these different buckets of money for different deals. So uh I was talking to an investor of ours yesterday about a deal that we had out and his issue is you know he's got some deals out there. He's got some hard money out there and he's kind of cash trapped right now. But he's got a good amount of equity in his house. And so we talked about some lender options that I have for home equity lines of credit and how we could unlock a lot of that equity for him. And then if he still needs to use a hard money loan for example because the deal has to close within a certain timeframe that the commercial lender can't use, well now he can take a big chunk of that hard money or that HELOC use that to basically get a much lower loan from the hard money lender in that short two week window or whatever he would need to buy himself a little bit of time. Now he's paying less points the interest rate's kind of nominal at that point doesn't really matter you're only going to hold it for a few weeks and so you can and then you refinance you pay yourself that HELOC back you go rinse and repeat and do it again. So that's a way you can utilize just an example of some of these different buckets of money like you alluded to Ashley you've got private money you could do the same thing. You know you tap into your private money network but they only got a hundred grand you need 140 you go to your hard money lender for the 40 you use their money for the 10 or for the 100 and then you refinance as quickly as possible with a commercial lender if it makes sense.
SPEAKER_00:Yeah so a couple different options there but overall guys going forward what does the future look like for Man Ashley after taking some licks on this one um I mean definitely like reflect on what we've learned what we're trying to look forward to um try to find the next deal run the numbers make sure it works just be more diligent on running the numbers for sure seeing what what material costs now are. I mean that'll give us a better idea on rehab for sure too yeah just find that next deal.
SPEAKER_03:Yeah yeah yeah we're we love our multifamilies so that's for sure what we're going for and then um I know we're also itching to get into another house hack here. We're at our year mark from our first one. So um might be in the plans as well. So we'll see.
SPEAKER_01:Time to go shopping.
SPEAKER_03:Right, yeah.
SPEAKER_01:I love it. Well, that is awesome, guys. We always wrap with a little fun question here. The reason we do this, we have people outside of Wisconsin that are thinking about investing in Wisconsin. They don't really know a lot about us. Um, do you guys have a favorite Wisconsin tradition or place you love to visit here in this great state?
SPEAKER_03:Yeah, okay. I I'll go first. I have two. Um so one of my favorite places is uh Grandad's Bluffs in La Crosse, Wisconsin.
SPEAKER_01:That's a new one.
SPEAKER_03:Absolutely gorgeous. Um, and then uh the Tosa village in Walla Tosa uh Milwaukee area. Um it has really cute uh shops and uh food down there. We used to go there all the time when we lived in Milwaukee. So those are one of my two favorite places.
SPEAKER_01:You know what? That's too that first time in all these episodes. Nobody's mentioned those two, Ashley. You get the award for that. There you go. Beautiful. Matt, what about you? We get a double dip today with a couple on here.
SPEAKER_00:Yeah, I'd say like anywhere indoor county. So you got um L. Johnson's indoor county for food. Um I believe you got that the red putter. I think that's a good little mini golf course, a little little hidden gemo indoor county.
SPEAKER_01:So yeah, those two, yeah. Yeah, the red putter is just old classic. You know, it's just it's stuck in the 50s and it's great. Brings it back in time, yeah, for sure. Well, guys, this has been awesome. I think I think you guys I appreciate you being vulnerable on here and sharing a lot about this deal that you know didn't go the way that you planned, but it's not gonna ruin you, you know. And I think that's the important lesson for the audience out there. You know, you can you can learn so many good lessons through a loss, right? And that's really the important piece for people to remember out there. If you don't give up and you keep pushing forward and you learn, don't be making the same mistakes every time, right? Now you may make it one or two more times as you go, but learn from those lessons and it's you're gonna continue to refine your process and your business. And I mean, I think about any startup company, it's really interesting as we wrap this. You know, you think about startup companies, they don't make money for like years, right? They're in the they're in the in the red for years and years and years and years, and people are still like, yeah, you're amazing, right? But they just keep evolving and iterating and getting better and getting better until they get profitable. And so I think for us in real estate, it's really interesting. Some people do one deal, they lose some money, and they're like, Oh, real estate's terrible, I'm out. This is a horrible business. And it's like, well, you're not going to be successful, probably, in any other business that you you get into if you can't take some licks and learn from it. So that's the nature of it. You know, Ashley, as you full well know, we are going through some of the same struggles in our business with some of the deals that we've bought. And uh we ran some numbers and had some projections, and then uh well and septic comes up, and there goes 15 or 20 grand that you thought you had as a buffer. So even those of us that have been in this game for a long time, we still take our licks, but we got to keep moving and keep doing the next go to the next deal and learn that lesson. So, anyway, appreciate you guys being on here today. Audience, if you guys got some value out of this episode, please like, share, subscribe, do all that fun stuff. Uh, if you're on the YouTube, go ahead and comment on this, please. That actually helps the old algorithm get us up a little bit higher in the rankings, and we appreciate all of that. We'd love to continue to build the audience and get this out into more people's ears and eyes. So appreciate you guys taking a listen. Uh, if we can be of any help, go to WisconsinDiscount Properties.com, put your information in there, and somebody from our team will reach out. We will try to help you make sure you avoid some of these same mistakes Matt and Ashley made, but also get you in front of some deals. Every single week, we are putting deals in your inbox that are only available to our buyers. So two to five deals has been our average every single week that are in uh mostly northeast Wisconsin, a little bit up in uh in Milwaukee area, a little bit up in the UP if you're up in that neck of the woods. Um, but get in get on that list and start getting access to these deals. You won't find them on Zillow, they won't be on Redfin, you're not gonna find them anywhere else. So get on the buyer's list and um we are here to help connect you to those right lenders and the right contacts to help you move your business forward. So with that, Matt Ashley, any final words for the audience?
SPEAKER_03:Uh yeah, just network and yeah, network, network, network, and good luck with everything for everybody.
SPEAKER_01:So very good. Awesome guys. We'll see you guys on the next episode.
