PART 2 - 10 Deals to Make You a Millionaire | Live Deal Analysis Breakdown

In this episode of The Wisconsin Investor Podcast, Reese Brown steps in for a solo Part 2, building off Corey’s original “10 Deals to Become a Millionaire” concept, and takes things a step further with a real, live deal analysis.

Instead of theory, Reese walks through an actual property currently available through Wisconsin Discount Properties and breaks it down from start to finish. From purchase price and rehab costs to financing options and projected returns, this episode shows what a deal really looks like when you run the numbers.

The biggest takeaway? Cash flow might not be as important as you think.

Reese dives into:
 • A full breakdown of a real Green Bay investment property
 • How to analyze ARV, rehab costs, and financing options
 • The difference between flipping vs. holding (BRRRR strategy)
 • Why cash flow can be overrated in today’s market
 • How equity, appreciation, and principal paydown build real wealth
 • What happens when you scale this strategy to 10 deals

Using projections over a 5-year period, this episode highlights how the majority of wealth in real estate doesn’t come from monthly cash flow, but from long-term equity growth and leverage.

If you’ve been sitting on the sidelines waiting for the “perfect” deal, this breakdown might change how you think about investing in today’s market.

Whether you're investing in Green Bay, Milwaukee, Madison, or anywhere in Wisconsin, this is a practical, numbers-driven look at how deals actually work in real life.

Full episode available now on YouTube, Apple, and Spotify.

#WisconsinRealEstate #RealEstateInvesting #BRRRR

Transcript

Property Overview And Starting Bid

ARV And Rehab Assumptions

Financing Options And Hard Money

Flip Profit Versus BRRRR Refi

Cash Flow Assumptions And Reality

Five Year Projection And Equity

Ten Properties Thought Experiment

Closing Thoughts And Resources

SPEAKER_00 0:38

What is going on, guys? Welcome back to the Wisconsin Investor Podcast. I am your host, Reese Brown, filling in for Corey, once again, uh coming at you with a solo episode today. And it is actually kind of a part two to a past Wisconsin Investor Podcast episode. Uh, inspiration came from Corey's podcast a couple weeks back, uh, 10 deals to become a millionaire. And what we're gonna be doing today is diving into that very first deal. So, one out of 10, uh, we're gonna be actually analyzing a deal kind of at a high level and then plugging that deal into a performa to see, you know, after five years, where would we be? Um, so super excited to get into that. A couple of things that I think we're gonna find out today from these numbers is one that cash flow can be kind of overrated at times. And two, on the flip side of that, um, equity and principal pay down, you know, tied in with appreciation is something that's super underrated uh when we're analyzing deals. Um, so I was thinking about deals that we could use as an example here, and I thought, why not use one that is live with Wisconsin Discount Properties right now? So instead of giving a shout out to our show sponsor, uh, we are just gonna break down a deal that is currently live. If you're listening to this within a two-day window of when it's coming out, so this is like the third or fourth week in April. I'm recording this earlier. So full transparency, I don't even have all the details yet for this deal. So if you're listening to it while it's still available and maybe looking at this deal to potentially put a bid in on it, uh, make sure you go and look at all of the details on this property because some of it I don't have yet. For example, the inspection report. I haven't gotten the physical report back yet. Um even if you're listening to this after uh this deal has passed, maybe it'll give you some FOMO, uh, but we'll still really be a it's gonna be just as helpful, I should say. Um I was planning on using a past deal before I thought, why not use one that is live here? So if you can get onto YouTube and follow me along, I'm gonna be sharing my screen on this one. That's great. If you can, if you're at the gym, you know, listen to this on the road. Uh, don't do that, don't pull it up on the road. I will try to explain everything uh in full detail. But if you can watch it on YouTube, I think it would be extra helpful. So without further ado, let's get into it. Alrighty. So I'm sharing my screen here, and we are looking at the buyer resource folder for a property on 1162 Pine Street in Green Bay. So this is gonna be the deal that we're gonna break down at a high level and then utilize that as one out of 10 uh to become a millionaire here. Uh, so first thing we're gonna pull up is just property details. It is a single family home, a four-bedroom, one bath. There is uh a full bathroom down in the basement of this property, but it's an unfinished basement. So I'm not even gonna consider that as you know, we're not gonna factor that in when we're looking at this deal. Um, but could be a bonus to help it, you know, sell or be rented um for for the sake of of this property and analyzing it. What am I saying? Okay, anyways, the total square footage is just under 1500. Uh, it's a nice big lot, a deep lot, um 0.2 acres. It's got a two-stall detached garage, and then actually some yard past that. I think they had a little fire pit back there. Uh, and then this property was built in 1915, so an older one. Um, we've got a close date of May 28th, which is about 40 days from the time of recording this. So, for those of you that are, you know, considering using a commercial lender um and need to get an appraisal on the property, we should have some time uh to work that out. Um, other thing we're looking at here annual tax is about 2200. And then most importantly, our starting bid price of 159.9. So 159.9 is the number that we will use as we sort of break this down uh a little bit more. But next, we are gonna go right into our calculator and kind of bounce back and forth between you know rehab and ARBs uh from there. So our calculator, first question it's gonna ask us here is our after repair value. So we'll bounce right back into some comps. Um, we'll keep this quick, but there are five counts that we pulled ranging between$237,000 all the way up to$270,000. Um doing some more research, I'm not gonna go over all of this uh for the sake of time, but we are gonna utilize an after-repair value of$250,000. I believe a very reasonable uh after repair value here. So ARV,$250,000, purchase price,$159,900. Our holding time. So we're gonna consider this to be a burr, right? If uh we're doing the the 10 deals to become a millionaire, we're gonna be holding this property, we're gonna be fixing it up and then refinancing it. So the time that it will take, I'm estimating, at about four months before it's stabilized and the rehab is completed. Uh the cost to hold the property during those four months, I have a total of$2,000 or$500 a month for you know taxes, utilities, insurance, um, lawn care, snow removal, that fun stuff. And then also our closing costs on that initial purchase. So, right, need to close with a title company. Um, and those are around$2,400 uh to get the property closed. Our rehab scope, we're not gonna dive into this too much. Uh, a main reason being I don't have the full inspection yet uh as I'm looking at this deal. Uh, and it just for the sake of what we're covering today, um, I don't think it makes much sense to dive into the rehab scope. So we're gonna take an estimated rehab scope of$35,000, um, which should cover a lot for the kind of where how much it would take to get this to you know reaching what the comps look like. One thing I'd I highly recommend if you're actually looking at this deal or just taking this a little bit more seriously, and you know, we'll include in the show notes um a link so you can actually see all these details, even if it's you know months later when you're listening to this, um, is looking at some of the comps and looking at the pictures of these comparable properties. And some of them aren't, you know, fixed up to the nines. Uh, so$35,000 um I think is a very reasonable rehab scope. So that's what we will use. Uh and now we are gonna talk about the different lending types here very briefly. I am gonna be using hard money uh for our hypothetical situation here. Hard money is what we're gonna uh use as you know, our initial financing type. Uh, but we can compare it to a commercial loan as well for our commercial loan that's just gonna be there hanging out on the side. Uh for those that are watching. Um, you'll you'll see it uh in a second here as I scroll down. For those that are listening, I'll I'll mention it here uh what the total uh cost, if you were to use a commercial lender, would be. Um, but we're gonna say the amount that that commercial lender or community bank is gonna finance is 85% of the purchase price, 85% of the rehab, the rate is gonna be 7%, and the origination cost for that loan is gonna be around$2,000, and that would include uh the cost for an appraisal as well. For our hard money lender, uh, we are gonna say that they uh fund 65% of the after repair value, so 65% of the$250,000. Their origination fee is 3% of you know the total loan amount, and then their interest rate will be 12%. Uh, some of you guys might be familiar with uh those numbers 65, 3, and 12. Um, very common um for hard money there. For the sake of running this, we're gonna say, you know, if you did want to flip it, uh realtor fees and commission or closing costs, uh, oh my gosh, realtor commissions and closing costs would be about five and a half percent. Um, we'll just run through that very briefly. If you were to flip it, what you would make. And then most importantly, down to our BR details. So our new appraised value, also our ARV, we're gonna say is 250,000. The loan that the lender will give when we refinance is gonna be 80% of that 250. So an 80% loan to value ratio. Um, the interest rate, six and a half percent. This loan will be amortized over 30 years. Uh, Corey had mentioned this in part one, I'll call it, of this podcast about how some lenders will try to cut you at 25 per or excuse me, a 25-year amortization. There are certainly lenders on investment properties uh that will go to that 30-year mark. Um, so make sure you're talking to quite a few lenders. Um and then a couple other details are taxes each year. Are we we just covered those a second ago, around$2,200? Our insurance is we're gonna estimate at$1,400 a year. Um, and then our rent, we will go into rentometer, a rentometer, whatever you call it, uh, to take a peek at what projected rents are. So for 1120, 1162 Pine Street, um, we ran a rentimeter pro report. The average rent came out to just under 2100. The median amount was uh just under$2,000 a month. And there were some of these that had two bathrooms. Um, so I'm gonna be conservative and go under, even though some of these also didn't have a two-stall garage, right? I'm just gonna be conservative in general and we're gonna drop it down to 1950 a month as our projected rent uh in this deal analysis. So 1950 is our rent amount monthly. So for those that are listening, we're now looking at a projection of what it would cost uh for the what it would cost you out of pocket if you were to use hard money. So the amount that you would be actually paying your hard money lender, you know, for helping you get into this project would be about eleven thousand dollars. If you were to use a commercial lender, community bank, that drops to about six thousand. Um, so if you have the time and you got a little bit of money sometimes to put down, um, a commercial lender is a great option. And there are circumstances where those lenders will not require any down payment either. Not to get distracted here, um, we'll go back to hard money. So the amount of out-of-pocket funds required if you were to use hard money here would be about$36,000. And that would cover, you know, your purchase price and your whole rehab after that 65%. If you were to use cash again, obviously, well, let's not get into cash. We'll stay on hard money here. Gotta stay focused here. Um going down the the details of the property. So all in, we have$162,000 is our purchase price plus our closing costs. For our rehab and our holding costs, we're at$37,000 for a total of around$200 and I think it's$210,000 is our rough total at that point. Um, now if we were to flip this, say we we want to sell it for$250,000, we sell it, uh, we pay our realtor uh fees and closing costs. That's about$14,000. We could profit right away$25,000 on this deal. That's what all of our projections are saying. You know, forget the the burr that we just talked about for a second and those numbers. If we just wanted to flip it, we had about$25,000. If we were to use hard money, you used a commercial lender, it's over$30,000. And if you used cash, around$35,000 as a flip. But we're obviously not talking about a flip. So if we decided to refinance it, that new appraised value again is$250,000. The magic number is$200,000 because that is 80% of our$250,000, which that's what the bank is gonna cut you a check for. Um so out of that, you know,$200,000. So we have$200,000 as our loan amount. However, our all-in cost, if you remember, was$210,000. So in this deal, if you were to use hard money, you would have after paying yourself back, so right, we we had talked about how you'd need to come out of pocket about$35,000 in it in this example. So say you had a hundred grand in your bank account, you paid$35,000, now your bank account says$65,000. You would still be paying yourself back um$25,000 or so. And then you would be leaving an additional, additional$10 uh grand. So your bank account instead of$100,000, like it was at the beginning, would be$90,000. I kind of explained that poorly, uh, but hopefully you get the gist that we're considering you paying yourself back uh cash that that you stuck in the deal. So the amount left in is about ten thousand dollars, ten, eleven thousand dollars. Um, and then additional details about the Burr is our rent amount of nineteen fifty a month. We added up our mortgage, insurance, and taxes, and each month that comes out to$1,568. So our cash flow is$382. Uh before you guys are already, I'm sure you're already like, oh, you're not factoring in capital expenditures and you know, property management costs and vacancy allowances. Um, I certainly understand that. So for this example, we're gonna call it a wash. That$382 is gonna go towards our property manager, it's gonna go towards um capital expenses, right? Replacing the roof or money we set aside to replace the roof five, 10 years down the road. Um, HVAC systems, right? That's where that money is gonna be set aside. Um, so we've done our full deal analysis. Now let's type this into a projection calculator to see what happens after five years and compare how much of our net worth went up because of equity and principal pay down and how much it went up if we use a hypothetical cash flow number. So we purchased this, we'll say in 2026, right? And we purchased it for we're using our refinance value. So we purchased it for$250,000. Now we're gonna leave out, we could go way in the weeds with some of this. Um, so we're staying at a high level. We're just gonna use our purchase price of$250,000. We're not gonna factor in uh that equity that we earned um as much here. But hang with me here and you'll understand in a second. So$250,000 is the amount that it appraised for at an 80% uh loan to value, six and a half percent rate, 30-year amortization. We're gonna consider 4% as our appreciation rate year over year, uh, which I've seen projections that have actually been a touch higher than that. We'll use four though. And then for cash flow, we had talked about using right, this one penciled out to after all of our expenses, maybe it cash flowed broke even. But if I were to tell you guys that hey, this single family home that you can pull most of your cash out of, it also cash flows$300 a door. I think a lot more people would be very interested. So for for that safe, we will say that this cash flows$300 a month or$3,600 a year. So if we look at this in a projection year after year, let's go to that five-year mark that Corey had talked about in his podcast. Your total equity gain is going to be let's see here, if you're not your total equity gain if you don't factor in what you did to burn it. So this is saying just equity that I've gained from appreciation and principal paydown is nearly$67,000 after five years. You know, 4% um appreciation. Your total accumulated cash flow is$21,000. So what that means is uh 75% of uh your net gain is attributed uh to equity in the property, and it's not uh attributed to that, right? Only 25% of that gain is attributed to cash flow. If you include what you did with the Burr method, it's closer to like 82% if you you know take off that eleven thousand dollars that you had to keep in the deal. Like 80, let's call it 80% after just five years. And these numbers, guys, will as you hold it longer, equity and principal pay down is gonna do way more for your net worth over time than cash flow will. So after five years, our our our number that we our our equity, our total equity, including that you know, 20% down that we have, the 50 grand, we created about 40 of it. Our total equity is$138,000. If right, we are still talking if it cash flows,$300 a month. Now let's go back and change it to if it doesn't cash flow, right? Um if it breaks even every every month, we still are uh you know setting money aside for capital expenses or property management, but even after all that, right, it's gonna break even. If we take a look at this again, after five years, our total equity is$116,000. Right? So if it cash flows after five years,$300 a month, which a lot of you guys be like, oh yeah, cash flows$300 a month. I I love that deal. Let's jump on it. The difference between those two numbers, the percentage difference, right, between$138,000 to$116,000 is quite minimal, in my opinion, here, if the the opposition is right not buying anything and staying on the sidelines. If we just look at a rate of return on this, so if we invested, right, if we used our hard money and it cost us$11,000 uh out of our pocket, um, and the amount we had returned was$116,000. And I understand, guys, this is equity, right? This isn't like cash. Corey had talked about that in the podcast as well. But our annual ROI is 60%. A 60% ROI. If we do say, you know, let's let's go back to that example of$300 a month of cash flow and our total equity, you know, with that cash flow added on, it's it's 66%. We'll round up to 66%. So the difference in your ROI is six percent if it cash flows three hundred dollars a month. And I see that as a deal breaker for so many people, and I've seen so many people not buying deals in the last two to three years because oh, I'm not seeing uh the$300 a month in cash flow that I need. And my question for you is is that six percent worth not doing anything uh with your money at all? And I think one other one other fun thing that we can do here is let's you know tie this all back into Corey's podcast a few weeks ago, right? That's we had talked, Corey and I had a conversation, that's why I'd built out a calculator to see after five years, if you did buy 10 properties, what would happen. So Um, for the sake of time here, I know Corey had mentioned buying like two each year and it showing you the value. Uh, if you bought two of them each year, we're just gonna say if you bought 10 of these, the same deal we just analyzed, if you bought 10 of them at the same time, um, and then what would happen after five years? So we're gonna back this up. We're gonna backdate it to if we bought these in 2021 and we bought 10 of them. If we look at our summary of our portfolio value, if we bought 10 of these, you know, five years ago. I'm just right, I have to manipulate the dates for the sake of how this calculator is built. So if we bought 10 of these properties in 2021, our total equity today, if none of them cash flowed, a dollar would be 1.16 million. If they did cash flow, we could type in here I should be able to. If we did type in$3,600 a year for all of these, and it's gonna, you know, accumulate year after year. Shoot, I don't I don't think it's set up for me to add that in there. Um, I didn't do this before when I was running through this uh beforehand. So um, but we know that right, the difference on one deal, right? It's just gonna multiply by 10, essentially. That's that's all we did here is we multiplied it by 10 because we're at 1.16 million versus 116,000 in equity after five years. So again, I think it's very important in today's climate to ask yourself is it worth not investing um and maybe waiting for something that cash flows better? Or is there still a ton of value in purchasing something um today, even if it doesn't cash flow well? Another huge thing to keep in mind is over time rent prices do tend to increase. I didn't include that in this uh this calculator here for the sake of sake of simplicity. Um, but over time rents are gonna increase and your underlying loan balance shouldn't increase, right? Your mortgage shouldn't change. So over time, that property should start to cash flow. That's a longer-term play, but that's what we're talking about here. So that is where I'm gonna wrap it up on this uh for this podcast. I think there's more to uncover here, though. There might be a part three to this, guys. Um, because there is so much power in this, it is just it's a lot to to wrap your head around at the same time. Even for myself, I I've confused myself looking at these numbers. Um, but to to see the difference um be so minimal when you add$300 of cash flow a month, right? That's the something everyone looks for. I want a cash flow, you know,$150,$200 a door. Hear that all the time. And when you see how that plays out long term and how minimal that amount is, I think it's very powerful. So um again, if you're looking at this deal here uh during the week, this one, this is a live deal. Uh, I think bids are gonna be due on April, let's see here. April 23rd. So I'm thinking you'll probably be listening to this on April 21st. Um, so there are a couple days here um that this deal is actually gonna be live. And then you know, something else we can do in the future is look back at maybe some some case studies of deals that were fully completed and what ended up happening with them and how you know uh a portfolio changed over time. And if these hypotheticals that we're going over stand true, which uh I I have a lot of uh certainty that that it would stand true. Um, so that is all for today, guys. I appreciate you hanging out with me. Hopefully, I didn't confuse the listeners too much. Um I I tried to do a good job of explaining everything I was talking about, but I know there's a ton of numbers in here, maybe one to listen to twice. I would so highly recommend going on YouTube and looking at uh some of the the calculators that were on there. Um, I am open to sharing all of this. Um, I will leave we'll have something in the show notes here. So scroll down to to get in touch uh about some of these resources. The calculator that I am using that uh the folks who are watching can see on your screen right now. This one's not fully built out yet. Um, so I might not share everything on this yet. But if you wanted to to get access uh to some of the calculators that we're using here, the one uh that we initially used is a calculator right at Wisconsin Discount Properties.com. Um, it's under the investor resources tab. I'll scroll up here. Well, you guys will be able to find it that are uh watching along, but it's under the investor resource sources tab and then it's real estate calculator. And you can actually save this calculator to as a CVS file so you can upload whatever numbers you have right into Excel. Um, but no, other than that, I certainly appreciate you guys listening along. Hopefully, uh this made you think about whether, you know, still investing in today's climate if you're missing out on a lot, uh hopefully it it gives you gives you some FOMO because people are still making these deals work. And um, yeah, that's all I got for you. So we will see you guys next time. Uh appreciate it again.