Building Big in Wisconsin: 52 Doors at 28 and 700 Units in 7 Years

Two Wisconsin investors. Two very different scales. One common thread: they both figured out how to move fast.

Zach Morgan is 28 years old and holds 52 long term rentals, almost all of them BRRRed, after going solo just two years ago with 13 units and a low overhead lifestyle. Ryan Gray started a licensed assisted living business out of his college house at UW Eau Claire, parlayed those business reps into real estate, and hit 700 units of multifamily in seven years without ever doing a syndication.

In this compilation episode you'll hear both of them break down how they actually did it, including:

• How Zach scaled from 13 to 52 doors in two years using community banks and the BRRRR method almost exclusively
• The 40 unit creative finance deal that changed Ryan's entire trajectory, where he showed up to closing and got a check instead of writing one
• Why Zach started Caffeine and Cash Flow, now running at five Wisconsin locations, and what intentional networking actually looks like
• How Ryan self-manages 700 units with a head PM, four admins, and five maintenance guys, and why he says it's the only way at that scale
• What Zach's first duplex looked like, two hoarders not paying rent with the city already involved, and why he's glad he bought it
• How Ryan thinks about partnerships, what goes in the operating agreement up front, and why the exit conversation matters more than the entry

Want the full conversations? Links below.

Zach Morgan full episode: 
Spotify: https://open.spotify.com/episode/18cvfsldDCtcgAx0SAdBZX?si=8f770020c0b44e39 
Apple: https://podcasts.apple.com/us/podcast/28-years-old-and-52-rentals-zach-morgans-real-estate/id1773166436?i=1000695847364

Ryan Gray full episode:
Spotify: https://open.spotify.com/episode/2u05Oh5U4nZVAq2p363ieC?si=c0120644d8c04124
Apple: https://podcasts.apple.com/us/podcast/college-rental-to-700-units-in-7-years-ryan-grays-real/id1773166436?i=1000719624600

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Transcript

Welcome And Two Scaling Stories

SPEAKER_01 0:38

Hey everybody, welcome back to the Wisconsin Investor. I'm your host, Corey Raymond, and we've got another special compilation episode for you today. Two guests, two completely different scales, one common thread. They both figured out how to build fast here in Wisconsin real estate. So, first you're gonna hear from Zach Morgan, my former employee, turned full-time investor, who at 28 years old was sitting on 52 long-term rentals, almost all of them bird. And then you're gonna hear from Ryan Gray out of Eau Claire, who went from running a group home out of his college house to owning 700 units of multifamily in seven years. These guys know how to move and shake. Let's get into it.

SPEAKER_02 1:16

So yeah, I'm I guess big picture right now. I'm 28. Uh, we currently hold 52 long-term, all long-term rentals. Come on, baby. If I had the bell over here, like Tom Crawl, I'd be ringing that. Yeah, I think I got a bell too. It's somewhere in a box. It's that has made it to the wall. But um, yeah, so we do that's the that's the main thing. Um, we also do um flips, wholesales um on the side as well, not a ton of that, but a couple a month here and there um as sort of keeping active income going. I mean, passive income is cool and all, but it's not really passive and it's not usually consistent. If anybody owns rentals knows, so yeah, having some other sources is nice as well. Um, but yeah,

Zach’s Path To 52 Rentals

SPEAKER_02 1:54

starting out, I mean, um, I had wanted to invest in real estate for a long time. I didn't really know what that meant, but I mean, I found a um whatever journal, uh little goals thing written out from like 2015. Okay. I was like buy my first duplex. And um I don't I think I was living with my parents still, I don't even think I was renting yet at the time.

SPEAKER_01 2:16

Yeah.

SPEAKER_02 2:17

Um, so it's watching, you know, Grant Cardone and and bigger pockets, I think if they were started around that time. I think they probably were. Yeah, I think so. Um, the social media stuff. I mean, I I grew up with social media stuff, so yeah, whether that's good or bad, we'll find out down the road. But that's those influences have been there. So you get to see obviously the highlight real of what everybody's doing, and um real estate always sort of stuck out to me. It's like seemed like an obvious path, uh like a quote unquote easier way to build a lot of assets quickly, yeah, without a ton of capital. Yeah, because I didn't, I don't know about everybody else. I didn't have millions of dollars sitting around, I didn't get a trust fund. Um, I wasn't making millions of dollars or anything like that to to go buy a bunch of Bitcoin or oh yeah, or whatever other you know, assets or businesses and stuff like that. So yeah, so it made the most sense. Um as far as oops, uh nope, I didn't exit, I thought I accidentally you're still on. Um career-wise, I I always loved sales, so this stuff always kind of lined up, but everything I did was always sales. I mean, I was a personal trainer for years, but that was really if you break it down just sales, um, you're you're selling not just the training program, but selling somebody the future them and the them, the them that they can be if they follow your plan, hypothetically. For sure. Um, I sold insurance and then um I did all kinds of insurance, and then I met this crazy guy at a uh Wisco Re event who also loved cold calling as much as I did. Yeah, a couple years. Yep. And you're you were like, uh, we're both crazy. Why don't you work for me? So that was uh January 2019. I think I left uh United Healthcare. And then and then I guess the rest was history. I mean, banging out deals, wholesaling, and trying to buy as many of those as I possibly could. Yeah, yeah, for sure. Until was that March of 2023? I think so. I think was the time I would sold. About two years, yeah. A couple weeks, yeah, yeah, for sure. And um yeah, so I don't that that was um at that point, I think I had 13 units at the time, something like that. So that was um with keeping personal expenses pretty low, that was like enough to keep going with having a handful of flips and and buying more and stuff like that. So and it's just been rinse and repeat doing the same thing over and over again, trying to get better at the stuff that takes time because time costs money.

SPEAKER_00 4:49

Yeah, so I own a couple different businesses, but my first business, uh stable living, which is my primary time spent still. Um, it's assisted living business. We have 15 group homes um in Eau Claire, Wisconsin, uh, as well as two in Superior, as well as we do in-home care. So that's kind of like how my business journey started um with assisted living. Um, right now we also have uh 700 units of mostly multifamily real estate in Eau Claire and then like surrounding our um have some partners, don't do syndication, but do have some 50-50 partners in those. Um as well as we have a 715 homebuyers, which we

Ryan’s Leap From Group Homes

SPEAKER_00 5:28

buy in flip houses, as well as wholesale a little bit in Eau Claire. Also involved in some adjacent businesses as well, but for the most part, um multifamily and assisted living. So that's awesome, man.

unknown 5:41

Yeah.

SPEAKER_01 5:41

So you're into quite a few things, man. And you grew pretty quick. So tell everybody like when did you start the assisted living business? And then when did you when did you kind of transition over into more of the multi-fam uh 715 home buyers thing?

SPEAKER_00 5:53

Yep. So yeah, 2016-ish, 2017. I was actually working in a group home while I was going to college at UW O'Clair on Tutor, and we started the assisted living company 2016-2017, had a bad boss. I was working in a group home and decided if he can do it, I can do it. And that's basically kind of how it happened. I ended up getting terminated, opened that business. Um, started doing that for a few years, um, actually out of a college house that we were renting, um, ended up getting licensed by the state, Department of Health. So started doing that. That's how the business journey started. And then I actually got asked to go to Whiskerio, which is a real estate group in Eau Claire, um by Dan Deerseth, and went to that the first time um 2019, 2018, walked out of that meeting like, whoa, like, holy man, this sounds awesome. Um, started taking action, I would say, like immediately right after that meeting, started sending letters and trying to find off-market property, which at the time I didn't know what the heck I was really doing. I think I went to three or three houses, um, and basically just jumped right into it, started kind of wholesaling and flipping, um, and then started getting the creative finance and buying multifamily around 2019 and really grew really fast. And I think a lot of that was attributed to kind of having that first four or five years of assisted living, getting my feet wet with business. But yeah, so that's kind of how went from assisted living to real estate. We have like a hundred employees right now in stable living. So I think a lot of that learning that's translated to the fast growth on the real estate side.

SPEAKER_02 7:28

I was looking through everything to see where we've got money tied, and yeah, it's pretty much everything's been burr. Wow. I I think we've got um every once in a while you get you know an appraisal that comes in low and stuff like that. Sometimes you can't fight them far enough that they'll just be firm at it. So you gotta leave some money in the deal. But yeah, I think I've only got maybe two or three properties with some money stuck in them. Wow, that's awesome. Either from the either you know, traditional borough or buying it hard money and renovating it, either with that money or some of our own money, renting it and actually refinancing it to pull the cash out. Uh, most of them have been with

BRRRR Lending And Closing A Portfolio

SPEAKER_02 8:06

commercial banks where we're getting an ARV loan right up front, so we get the purchase price funded and then the rest of it on draw. So that's my favorite. If anybody's any lenders listening that wants to give out some more loans, I'm happy to take 80% ARV, 30-year amortization. Ideally, somewhere sub-7% would be sweet.

SPEAKER_01 8:24

Uh I'm right there. Uh, dude, you're looking for unicorns, I know, but yeah, you're singing my praise. Do you have some lenders you can share with the audience that you've been having success with?

SPEAKER_02 8:33

Yeah, I mean, my best one right now has been the one for a long time, Bristol Morgan. Okay, they've been awesome. So they uh swooped in and saved me last year. I had uh uh portfolio 22 units under contract. I gave another bank, maybe should remain nameless, um, the opportunity. They they made a lot of big promises, um, and it ultimately gave me the runaround for what was it, 93 days or something like that. Like I got a long, I was grateful to get a long closing timeline first because I involved the lender early, figured out what timeline they would have needed. It was odd. It's it's a eight plex, two fourplexes, and three triplexes, three duplexes in that portfolio. So, you know, it's a couple different moving parts. Gave them a long time to get through it. I mean, that's a really long time in in our world, yeah. 90 days for closing, for sure, especially for like an as-is off-market type thing.

SPEAKER_01 9:27

Were you already like set up with this lender, like pre-approved? You gave them all your financials prior to the bunch of deals. You've already done deals with these guys, so they already had established relationships.

SPEAKER_02 9:35

Million and deals or something, yeah. Okay, done plenty of deals.

SPEAKER_01 9:37

Okay.

SPEAKER_02 9:38

Um, so yeah, that it just for whatever reason didn't I never got denied, it just never never got a yes either. Okay. Um, so, anyways, um I've done a lot with Bristol in the past as well. So we uh connected with them, got things going, and they they came in, used the prior appraisals that the other bank had done, um, gave me a little bit of extended amortization, like just made all the pieces work and got it closed. I want to say it was like 27 days. Wow, it was amazing. Many moving parts, that's crazy. That's awesome. Yeah, so I don't I don't want to put that out there as an example of like, hey, this is what to expect. Call, you know, call chat if you're a month out and something happens, like especially if you don't have experience first, good experience first, and then a longer relationship. I mean, that's some of the perks you can get over the long term.

SPEAKER_00 10:28

Yeah, like I would say it was like 2020, 2021, probably like right post-COVID. I mean, I had a triplex and like a couple deals, but I think uh creative finance kind of changed my life. Um started listening to like Pace Morby and those people on YouTube. Um, and I made good money at the time, but like 20% down. If you do 20% down on every deal, it's very hard to grow, no matter how much money you're making. Even if you're making, you know, a few six figures a year, um, very, very, very difficult. Um, I I mean, I was off market sending stuff to find bigger deals and just kind of looking at them, but I was always like, how do I do this? Um, but the first

Creative Finance That Changed Everything

SPEAKER_00 11:06

big deal that changed my life, and it was a 40 unit, kind of like yours from the sounds of it, um, undervalued, it was around 50k unit, a little bit less. And I walked like, you know, I could come up with 20% barely, like, but I would be stretching myself so thin. Um, and I remember kind of walking out of the deal, like, kind of frustrated, and I was talking to the seller, and what did they say? They're just like, well, you know, like we probably could carry some money back. And I was like, huh. I'm like, what does that mean? And I ended up stuff up, and basically the seller ended up carrying back like 30% or 40% of the purchase price. Um, and I bought it for $2 million and it appraised for three. So I ended up coming into that deal with no money down. I think I even got a check at closing, and I was like, poof. I was like, if I can find good deals, um I don't necessarily need 20% down, but two, I think a lot of big commercial sellers are more they're more open to do creative finance or do creative things than smaller scale. You know, the single home person or a duplex owner, like they want their money now, they have one or two, they want to cash up for retirement. But like when somebody has a 40 unit, you know, if they get 1.4 million right now and 600,000 over five, 10 years, like it sounds that doesn't, you know, it's not a big deal.

SPEAKER_02 12:23

Networking has always been huge for me. I mean, obviously that's where we met and um has been a huge part in me being able to grow and scale. I mean, first of all, you get around other crazy people who are doing the same thing, so it seems a little less crazy, yeah. Like taking out all this debt and fixing up all these properties and dealing with the stuff that we deal with. Um, but I mean, just like it's like the power of the mastermind. I mean, it's like mastermind light, because you're not going hyper specific on on um specific topics or people's businesses, but just on the networking end of it, um, getting to share ideas, resources, like like you're having trouble with

Networking That Speeds Up Growth

SPEAKER_02 13:01

plumbing all the time, for example, then someone goes, Well, I just switched to these faucets or I use this person and and they take care of that stuff. Like that transfer of information happens so fast, the transfer of knowledge, like you can solve so many problems in one hour, just like what seems like just chit-chatting with people. Yeah, but like so much gets done if you do it right, you know, if you're focused on intentionally, like meeting new people and sharing ideas and figuring out what they do. Yeah, you can learn so much in between the lines just hearing what people do. Um, so yeah, for caffeine and cash flow. So I started that. Um I think it's two over two years now. Yeah, just over two years now. I think I got that started. Um, so that is um it's all in the morning. So I I wanted something. I'm way better in the mornings than I am in the evenings. Um I I got young kids, you know, I get tired, not to make myself sound too old, but um and I wanted something right in the morning. I'm I'm way more of a coffee guy than anything else. So um started just with Green Bay. We did um hour and a half, 100% networking. We do just introductions. Everybody goes around, says who they are, what they do if they have anything specific, like if they got a deal right now that they want to sell, yeah, something's you know, money that they want to spend or money that they want to lend, something like that. Um, and it ended up being a mix of um real estate investors, you know, real estate focused agents, uh lenders, insurance agents, attorneys, that type of mix because the time that it is, so it's nine to 10:30 in the morning, very difficult to get there if you have a regular job. Right. So not that I don't want to network with people who are still in the nine to five, because I think that's great still, especially I was in that for a long time in the build phase, but um, it creates a little bit more of a focused group of people who are I hypothetically doing this full time. You either got a lot going on that you're working for yourself or you got nothing going on, and that's why you're there. So it's mostly the extremes, you got the far left and the far right showing up, right? Seriously. So um, so it's been cool. I mean, a lot of connections, a lot of of deals being done and stuff like that, and it's grown now to five locations. So we got Green Bay, it was the first one. So we got Green Bay, Appleton, uh, Sheboygan, Milwaukee, and Watertown. Those are the five we've got rotating right now every month. It's just one meetup per location per month, but that that makes it so every week there's one of them that you could go to, you know. If you're I'm I'm pretty um area specific, like I'm focused in Appleton, Green Bay, Manitowak, Sheboygan, pretty much. Um, I don't I don't go, I don't really dip into Milwaukee, I don't go further south than Appleton really. So those are the main ones for me, but there's a lot of people I see at all of them and and they buy everywhere. So you get to meet like the local experts there. You you know, you're I need a guy to close stuff, I need a lender, I need a there's contractors that come to a bunch of them. Nice. Um, you can get like depending on the day in the room, you can get like a whole real estate business in one. That's with that. So so it's been really cool. Um, and I've had a handful of people um not graduate because it's different things, but who have become to all the nighttime ones, they go to the the Whiskeria's the REI success stuff too, and then they come to like their first caffeine and cash flow because they left the job and now they're free in the morning. Oh, that's awesome. It's kind of fun, but that's great. But yeah, so it's it's a good um good free network. We do um caffeine and cash flow on Facebook on the Facebook group. Um, I would say the other groups do a better job of um as far as the Facebook group goes, like being more active. Yeah, not a ton of people are active in caffeine and cash flow. Honestly, it's usually just me posting stuff in there, updates when the events are. Yeah, um, but good place to join if if someone wants to see when the events are and stuff like that.

SPEAKER_00 16:50

I would say honestly, it was more the tactic side of it because I think a lot of people like they want to get into real estate, but they generally don't know how. And like Whiskeria, like I don't know, at the beginning, at least like they break it down very dumb and it's very easy. And it's just like, you know, if you send a letter and you find a property that's under you know 70% of market value and you buy it, you can do this with it. Now you have money. No, it's very simple. Um, but I mean, I would say there's a million different things on why I continue to go. I think the network is huge at the beginning. I think you could learn from people. And I had a mentor, Josh and Audrey Borcharding, that taught me a lot.

SPEAKER_01 17:26

Oh, yeah. I know Josh.

SPEAKER_00 17:27

Yeah, so like those guys have taught me a lot and just meeting people, but I think like the network now, like I probably work with every single person in that room on something. Wow, it's amazing. Partner on deals, um, they send us deals with referral fees, their contractor help, you know, all kinds of different things. So, you know, but yeah, yeah.

SPEAKER_01 17:48

And what it sounds like, Ryan, it sounds like you're intentional when you go to these things because I I know that this is another important part. It's one thing to show up, and that takes a lot of balls for some people. You know, that's just outside of a lot of people's comfort zone is to get in a room with a bunch of people you don't know who already know each other, and it can be a little intimidating, right? It's another thing, though, to go into these rooms and just say, I need to be intentional and I need to meet this person, this person, this person. And that you don't might not know their name yet, but you know what type of person you need to get it going. Or you might be somebody who's like, I don't know what I need yet. I'm gonna show up, but I'm gonna meet, I'm gonna meet everybody in this room I can and try to at least make a connection here before I leave that could be beneficial, right?

SPEAKER_00 18:26

Yeah, no, I agree. I mean, my thing now when I walk in that room is I just try to like build people up and like get them to grow because usually if they're growing, they have a relationship with me and they're gonna help me with something later down the road. So I think you know, them get their first duplex. Maybe I don't make any money on that transaction, have no involvement, um, but they remember that. And then when there's something that I want or they know that I want it, they call me. And like I would say people on that end, it's super valuable for me as well as for them. So um I wouldn't say I'm super super intentional on there, but I just I mean, as long as you build people up, I think it comes back to you to be honest.

SPEAKER_02 19:00

Don't don't quit your job, and when you have enough to quit your job, wait like a year, I would say. Yeah, you know, let it stabilize, let it iron out for sure. Unless you're in the active income. I mean, if you just want to be a flipper, yeah, and and wholesaler, and you know, where your your next month's check depends on on the deals that you're doing, that that is still risky in a way, but it's a little different because you don't you don't have residual you don't have the residual benefits, but you don't have the residual risk either.

SPEAKER_00 19:27

So yeah, we self-manage everything, so which is a lot of fun. But um that's probably I mean, one of the most difficult things that I've done, I would say, is managing. Um, but yeah, we manage everything. We have a head PM and four admins, and we have five maintenance guys, and we do all our own tools. Um I got burned by third party management a few times, and I'm just like, I can't do it again. And with how big we are, I think if um I got mine off the ball with third band party management, it would just blow up pretty quick. So for sure. Yeah, that's always done it. And I actually went to, I don't know if you know who Logan Raken is. I went to his stuff and have talked to him about it in lengths, and to be honest, um

Self-Managing At Scale And Partnerships

SPEAKER_00 20:06

I think that's the only way if you want to get big, in my opinion.

SPEAKER_02 20:09

Yeah, the fourth duplex, that was great. I learned so much with that one too. It was it was awesome. So yeah, that was a little upper lower duplex in um west side of Green Bay, not not in the best neighborhood, middle league. Um, and it's not it's a little better, not much better now today, but it's it's still still cooking. But um, yeah, a little upper lower, it had um two, I think they were both hoarders, um, not paying rent at the time that we bought it, and um the city also had its teeth in it, so it was like awesome learning scenarios right off the bat, you know? Yeah, like the stuff that that people are worried about, uh, you know, tenants not paying rent, tenants being hoarders, uh, the city getting in and on your property. I got to tackle those right off the bat. That's right.

SPEAKER_01 20:53

Great learning experience.

SPEAKER_02 20:55

So yeah, I was, I mean, I was renting at the time too. And you're like, yeah, you're like, dude, you gotta buy, you you need to, yeah, you gotta do it. I'm like, I don't have any money. You're like, I I'll be your lender. Yeah, that's right. We'll take care of it. Yeah. So so yeah, I worked out. Um, bought it. I mean, we were able to we worked with the management company right off the bat. I mean, that was one of the things that you told me early on, is like, look, I know it's not that big of a deal to manage a handful of properties, but like scale-wise, you gotta have somebody doing this. I'm so glad I did that right off the bat because I've never, I mean, besides turning apartments where I need to sort of be the middleman in the process, never done it since. And I see how much time the management companies spend on my stuff, and that's that's valuable time away from deals and stuff like that.

SPEAKER_00 21:40

Yeah, no, I mean, for the most part, I've taken on probably too many, but I haven't had many blow up yet. So um, I wouldn't say I'm expert at it. I think a lot of it is just talking about stuff and getting it on paper in your operating agreement, kind of like what the expectations are from the two roles. But for the most part, all my partnerships, besides one, are all in real estate. And the biggest thing um is we manage all the property, and that's kind of how it works. We get a percentage, 7% on all the stuff we manage. It's all ran one way. There's like we have nine different owners that we manage for, and they're all some of them are 50-50 with me. Um, and the biggest thing is we run it our way. So, like, we're not gonna call them because you want your property ran in this way or that way. It's just it is what it is. Um, a lot of them, I guess on that end, the main reason I partnered at the beginning was either I didn't have the capital to buy something or um uh they had a really good deal that I wanted to be a part of. So, but there were but there were people that I was already working with for the most part. Part. I have two partners on stable living, which is the operating business, the assistant living business that I'm partners with real estate and that business is we work pretty well together. I think I started that and they kind of came on later. So um and they worked for me. So it's just it's always gone well. But to be honest, I don't know what the answer is for that because I think a lot of people I think a lot of people also like they're very stringent on what they want, and I'm pretty I'm willing to bend as long as it makes sense. So and yeah, yeah, yeah.

SPEAKER_01 23:10

No, that's good, that's good stuff. We had a I had one same thing. I a guy brought me a multifamily a few years ago, and he wanted to be, you know, for his compensation, he wanted to be like a minority owner in the deal. That was the same thing up front. I just said, hey, look, happy to do that with you. Like, love it. Let's do a deal together, but like you get no say. So you'll get a K1 every year, and uh and that's about it. Other than that, I'll run it and I'll do the best I can for it, and we'll try to make as much money as we can on this deal. But ultimately, uh, I don't need to be having somebody coming in and telling you how to how to run it.

SPEAKER_00 23:45

Yeah, I think buy sell agreements too, and just like if somebody wants to sell, how does that look? How do you know that type of stuff is huge? But I mean, yeah, for the most part, I would say management-wise, and that's where the majority of the partnerships are. Like it's all set up that we we are managed by this company, this is how it looks. So but um yeah.

SPEAKER_02 24:05

So 50 grand for an upperload duplex, right? And who wouldn't sign on that today? Um, we didn't have a ton of people who wanted it then. That was a wholesale deal that went out. Um, I don't think a ton of people were interested, and that's probably been one of my best ones. So we got got the people removed, um, got the places renovated, and that was my first time doing any of that stuff too. So, like I was over there doing some stuff, and then the management company had some people in there doing some stuff. Um, got them re-rented, and then the city just stuck on us um for a couple years actually. Yeah, they were um first it was the sheds, you know, needed to

The Duplex That Became A Refi Win

SPEAKER_02 24:43

be painted, and so we went over there and painted the sheds. Um, and then there was, you know, they didn't like the chimney, so we had the chimney removed, and then the hardest one, the one that hurt the most was they didn't like there's an addition off of the back that was maybe only like 10 by 12, but it was like an extra storage room. It wasn't really a bedroom, but storage room. Kind of went off of the laundry room. But it's like a nice, I mean that's a good amount of square footage for a small two-bedroom. For sure. Um, and they just decided this is not structurally sound anymore. You can't have it. So we we tried to have like a foundation guy go and do you know, run a report or whatever, try to show them that it's good. They just decided that it's it can't be there anymore. So we had to have that removed. Once that was removed, they saw the other foundation and decided that one wasn't structurally sound that we were able to rebuild because otherwise we'd lose the only bathroom for the unit that we were able to rebuild. So I was like a lot of cost. Um, I think we were negative 15 grand or something year one on that one. If you look at like the cash flow, not too bad in the grand scheme of things. Good for your good for your tax return. Yeah, yeah, that was great. Yeah, um, but just for the experience, like I'm glad we ran into that stuff. Uh we also had a a management company that was not doing well on that. So I think they cost us a lot more than we should have for the renovations that were done. Yeah. Um, and we changed that January. I think we bought it in June, changed management companies the next January. Nice. And I've been with that same one, Main Street Management and Green Bay ever since. Um for all my north stuff, anyways. So but that one, okay. So I'm getting a little into the weeds, but uh numbers wise, so 50,000 purchase at appraised at 72 when we bought it, so just enough to refi you back out and get a get a 30-year loan on it. Didn't have an LC at the time, so that was under our personal names. Um, so October, I think it was of 2023. You know, I had whatever it was into the um 40 somethins that we owed on it. And I'm like, this place has to have appreciated quite a bit. Yeah, um, we've got more projects like let's pull some cash in this thing, yeah. And appraised for 177 or something. Come on, crazy. So that was that's what um four years later. Yeah, that's not a whole lot of time in the grand scheme of settings for real estate. Now that was a DSCR loan. Okay, so it's a debt service coverage ratio loan. That's just another type of loan. We don't have to get into too much, but people can chat GPT that that's right, learn more about it. Yeah, um and yeah, so we pulled like 65 grand or something like that out of it.

SPEAKER_01 27:22

That's amazing. So I don't I didn't want to leverage it, yeah. Tax free. Tax deferred, I guess you'd say.

SPEAKER_02 27:26

Because if you sell it, you got a big thing. Um, I didn't want to go up, I think I only went into the 60s for um LTV. Loan value, yeah. For the loan to value, yeah. Um, but still, I mean 60 something grand free, tax-free. There's your cash flow is just fine.

SPEAKER_01 27:39

Four, yeah, divide that by four. What's 60 divided by four? 20 something, right? Or yeah, that works now. Almost 20. 18, 18, whatever. Sure. We're gonna get we're gonna get we're outside our brain now. Good thing that many people listen to this podcast, Zach. So we don't have to worry about anybody blowing us up too much in our back. Yeah, either way, that's your think about your cash flow now. That's over a thousand bucks a month that you made on that property and cash flow. Yeah, if you look at it that way on the refi, and you still have a bunch of equity because you only went 60 some percent of loan of value. So, I mean, that's where I think people often miss the power of just buying and letting things just appreciate and let your tenants pay that debt down, and you just create your own cash flow that way, even if you guys didn't bring in a dollar for four years, right?

SPEAKER_02 28:22

Net cash still be worth it, create scheme of things. Yeah, and I still own it. It's like I didn't have to exit the asset to to finally collect on it.

SPEAKER_00 28:29

I don't I don't know if I have the answer, but I mean, I at the beginning, the bank that I work with the most actually um approached us, and they were from a smaller town and they came to O'Claire and they're like, Hey, we want to grow with you. We're trying to meet more young investors to uh grow with. I don't know if that's the right answer. Um, but I would say trying to find banks that have a smaller lending limit, I would say, is a big thing, and trying to get in with those banks, the smaller the better. Somebody that where you can walk in and meet the president the next day and just talk to them and meet them and you know, not necessarily their friend, but build a true relationship, I think. Um, especially when you're starting out is just massive. I think a big thing with us that gets the Pandora's box

Bank Relationships And Staying Organized

SPEAKER_00 29:07

or whatever, um, was having business experience beforehand, having a thriving that was cash flowing, I think helped us a lot. I think trying to do all the things we would have done without that probably wouldn't have happened. But I would say, and I think big thing is doing what you say you're gonna do. I think we always kind of said, you know, what we were gonna do. Like our goal is to buy a hundred units in the next couple of years, you know, and kind of explained it out. Uh so I would say another thing, I mean, this is a Reiki thing, but having like really good financials and being really organized, like with what you're giving them, having your three years of tax returns, your PFS, your debt schedule, you know, all that stuff when you walk in a bank makes you incredible. And most investors, I would say, are super disorganized and cowboy everything. So they walk in and they're like, I want to get approved, and then they ask for a bunch of stuff. Then it takes them three months to get it to them. You know, like if you walk in and you're like, here's my book with all my units and what I'm doing and my goals and my family, you know, like you're gonna get a different experience, in my opinion. I don't have like a number in my head or anything like that. I'm enjoying the process right now, I would say. Um, I would say our big goals right now is to get into the property management more and try to systemize it more, make it more self-running. We have somebody that manages it and runs it for us, but I can't leave for a month and be excited about coming back and how things are going. So I think that's the biggest thing. Um, but stable living, maybe a group home or two a year, so not big massive growth, and then multifamily, just whatever comes across the table that I can take down for the most part. Not you know, trying to double or anything. So just whatever nice button. That's awesome, man. That's awesome.

SPEAKER_01 30:46

What is what is the why behind it for you, Ryan? What that what keeps you moving besides just the fun of it?

SPEAKER_00 30:51

Yeah. I mean, I have two kids and stuff that I care about, want to spend more time with, but I don't know if that's the right answer. Honestly, I would say I enjoy business. I enjoy coming to work every day. Um I do work hard, I would say when I'm at work, but I'm very much at 8 a.m. to 4:30. I go home, I'm done. I'm not gonna continue to, you know, work 50, 60 hour weeks anymore. Um, I will take phone calls after work too much, but for the most part, um to me, like if you're at work, why not give it your all while you're here? You know, if you're gonna come and just why not give it everything you got? So yeah, that's my thing. Once I'm done with the office, I don't, you know, I want to go enjoy life and vacate and put a year at more and do all that stuff.

SPEAKER_01 31:30

So that's a wrap on today's episode. Big thanks to Zach and Ryan for sharing their stories. If you want to hear the full conversations with either of them, the links are in the description below. If you got some value out of this one, subscribe so you don't miss what's coming next. We'll see you on the next episode.