How To Invest In Rentals Using Zero Personal Capital In 2021
How To Invest In Rentals Using Zero Personal Capital In 2021
How To Invest In Rentals Using Zero Personal Capital In 2021
On this week's episode of Cash Chronicles, we're going to show you how a former bartender made $80,000 on a property. He found in his own backyard. Let's go. Welcome to this week's episode of The Real Estate Cash Chronicles, where we speak with real investors from around the country to break down individual deals. They've completed showing you the actual timeline of events that it took to make a profit making money in real estate. Isn't a mystery. It's a step-by-step process. Once you complete one, you'll never think about cash the same way let's get started. Hey, welcome to this week's episode of The Real Estate Cash Chronicles. And on today's episode, we talked to Luke Wishmyer about how he managed to flip over 30 rentals with zero of his own money.
How To Invest In Rentals Using Zero Personal Capital In 2021
How To Invest In Rentals Using Zero Personal Capital In 2021
For those of you who are new, my name is Patrick Giarelli. Today's host and proud member of the Connected Investors community. Hey, look, and if you're listening or you're watching, please, please make sure that you give us a thumbs up if you like, what you see. And if you really want to go big and go bold, subscribe to the channel and you'll hear us again and again, in this description of the episode, there'll be packed with thousands of dollars and free resources that can help you find fund and flip your next real estate venture.
How To Invest In Rentals Using Zero Personal Capital In 2021
How To Invest In Rentals Using Zero Personal Capital In 2021
So let's jump right in Luke. Thanks for being on the show today. How are you doing, man? Good. Thank you for having me. Um, uh, yeah, I'm good. Just hanging out in my living room. Talk to the guys they're, uh, they're plowing forward on two projects right now. A perfect it's always nice when you can, you know, spend time with us be in your living room and, uh, still got money working for you. Exactly. Yes. Yeah. Very fortunate. Absolutely. So let's dive into this process that you went through in order to find these 30, but I'll tell you what, it's probably going to be one complex and confusing. If we literally talk about 30, um, it also would probably be longer than your time is going to a lot today. So let's start at the beginning because the beginning is a very good place to start.
How To Invest In Rentals Using Zero Personal Capital In 2021
And let's, let's just tell me, first of all, why did you transition from being a bartender, uh, into the real estate world? Well, uh, simple, I guess I've been done bartending all my life, loved it. Um, customer service driven, obviously. So, um, I met my wife in the bar, um, got married and wanted something a little different. The late nights were hurting me, you know, so, um, got into real estate. I got my license, became a realtor, um, started doing some deals. Um, my wife and I got married honeymoon bought, uh, after we got back on the honeymoon, found the house, it was raining inside.
I convinced her to buy it and we did took about seven months. We flipped it all ourselves and we were happy. We were going to be there for awhile. Uh, found another one that was raining inside on. Um, so let's go look at this thing. So we did, um, but that under contract sold ours real quick, uh, and kind of got the bug at that point. We were almost in our dream home for around our area really quickly. Um, I quit the bar has gotten a real estate full-time, um, found some investors that wanted to put some cash in my way that a couple, uh, smaller flips, um, you know, my wife and myself, good buddy, Brian Horner, 24 hours a day, working on these things, um, made some money, but then realized that I was giving up too much of the profits, you know, so then found some, a couple of different, hard money lenders across the country that were willing to work with me.
And then I would find some more investors and, um, borrow the down payments, find the properties, fix them. And the biggest key for me was finding the F the final bank that would do the cash out refi with zero seasoning. Um, and that just changed the game on me and, uh, just kept flipping the money and flipping the properties. And we're actually 36 rental units now. Um, we bought four 54 55 properties in 25 months. Yeah, we, yeah, we sold 14 or 15. We have three projects going now I've got three or four flips under contract to purchase. So, uh, and looking at a 24 unit apartment building as we speak. Hey, I hope you get that one. I know that's almost every investor I speak to that's that that's that hope getting that 24 units, 16 units that are all consolidated and generating a nice cashflow for you.
So you covered a lot and you gave us a fantastic, fantastic synopsis. And I appreciate it. So now we're going to slow it down a little. We're going to go back to the beginning and I'm going to ask you this. So what was the process and finding that first unit that it was raining on the inside? I mean, how did you find it? That was actually MLS. Um, you know, I became a realtor and I was just right on the MLS. Um, it's actually the first deal I did as a realtor, um, your own deal deal.
Yeah. And I fixed all the, all the appraisal issues and everything to get the deal. So, um, um, yeah, that was in my lesson. Um, fixed it and went from there. Okay. Okay. So that makes sense. That MLS is a great resource and of course. Well, it used to be, it's dried out now. I'm sure pretty much across the country. Um, you know, I, I, I found a few wholesalers, um, who, uh, who I'm hopefully on the top of their list and get the deals. They're not all of them. I mean, you really gotta do your due diligence on all of them. Um, kind of word of mouth now, too, you know, we'll go into some neighborhoods, take the houses that should have been condemned.
Um, and then the neighbor down the street wants to sell his and same kind of thing. So that's been helping, um, you know, circle of friends and core advocate people, you know, Hey, they ran into this house and know someone wants to sell it. So that's been a big thing. Um, you know, other, other agents, um, you know, just, just, it's been great, actually, it just a nice network, you know, I'm not afraid to tell people I'm, I'll, I'll buy that bad house on the street. I don't blame you, man.
So if I hear you correctly, you know, a part of the secret sauce that maybe isn't a secret is building relationships with people throughout the community and the real estate and real estate and investing platform. Oh, sure. It's, it's just like sales. I mean, the phone's not gonna ring unless you make making those calls, you know, this stuff doesn't come to you, you have to go get it. Whether you knock on the door, which, you know, is the best, best situation for me, or, you know, go into the tax record and, you know, just anything I know people have apps that they can find information, you know? So, uh, yeah, I've been very fortunate in my short career and, uh, yeah.
I would say so to do what you've got accomplished in 25, 25 months is outstanding. Yeah. Happy for you, man. So here's another one. So again, let's get him back to that first one, Oregon, you know, you've got 36 of these things. Um, how do you figure out all the numbers and to determine how it's going to become a profitable investment for you? Uh, it's it's gotten a little easier, um, but you always, you always make your money when you buy it.
You have to remember that, um, you know, you have to get it low enough. You have to account for, uh, mistakes and contingencies that you can't see when you open the walls up. You know, cause the key for me is to buy them really bad. Uh, rehab them top to bottom. I'm borrowing the money anyway, might as well do it. Um, and then my bank's going to give me a 75% cash out on the end, you know? So, um, yeah, you gotta, you just got to get it, get it done. And you gotta, you have to make your money in the beginning when you bought, excuse me, when you buy it. And then, you know, I would go in there pen and pad in a laser measure and just literally measure everything out.
And you know, I CA I know what my con, my, uh, my vendors giving me prices on. Um, I have an idea with the plumber electrician, HPAC is going to be, so I've gotten pretty, I can walk in and within 20 minutes be within three or four grand at this point, you know? Yes, yes, yes. I feel similar. Um, you know, by day I'm also a real estate investor and that's usually about the same clip that I feel is the three to four grand. You know, there's always Pandora's box, but that's part of the business, but I'll tell you, you said one incredibly valuable thing. And I just want to make sure that I, I give it back out there again, you know, in your line of work with the buy and hold or the flips, it's you make your money when you buy it.
Um, I try to tell other people this all the time is it's that purchase price, buy it as for as little as you can. I mean, I, it sounds a little aggressive and sometimes maybe a little wacky, but that's the, that's the real deal. I mean, buy it for as little as you can. Sure. Yeah. And you gotta be, you can't be afraid to walk away from a deal either, you know, in the beginning you're so in Amber to do a deal, you want to do a deal, do a deal, do a deal.
Um, and I was like that and I got one, it was two units on one lot, and my wife still kicks me everyday for doing it because we're still fixing things. But, uh, uh, that's, that's my bad one. So now I've learned to, you know, I don't, you know, I yeah, walk away, let, let another guy make that mistake, I guess, you know. But we've all, we've all learned that lesson or, or hopefully, you know, maybe our conversation can help.
Some people not have to go through that lesson, maybe. So once you knew it was a go and you weren't using your own cash now, have you ever used any of the private lenders.com or exactly? How do you get your funds? Open that up a little. Yeah. Again, again, I'm a, I'm a salesman I'm not afraid to ask. So I, um, again, I just went through Facebook people that I knew that own businesses said, Hey, I sent a message and say, let me take you out to lunch.
I got this business plan. I got some things that are working. I got some success already. And I said, Hey, I need this. I'll give you back this and this amount of time. And, uh, I got four or five of them going to write me a check whenever I need it. So fantastic. I know that's great. They just pays for the down payments, a little bit of seed money to get the rehab going. Obviously I'm over budget. You know, I have to incur those costs. I mean, at this point, my wife and I are buying a couple houses here and there for cash cause we've recruited some. Um, but then I use the hard money financing. And then my, my final lender gives me the cash back where I'm making money on it. You know? So it's, uh, for me, it's just a big hustle and it's working in a hospital. Dude. There's so much hot fire right there.
I got to recap just a couple things. One, you just said hustle. And I feel like that's the, that's the core ingredient that I hear in the real estate investing world for the other investors. I know having these conversations on Cash Chronicles, I mean, that is a key ingredient. Is that hustle factor. And then I just gotta say it like this. If you identify yourself as a salesman or a salesperson or not, we are all salespeople. Your veterinarian is a salesman. The grocer is a salesman and real estate investors like ourselves are salespeople. Um, and I think super valuable. You're not afraid to ask. Um, I believe so many people find challenges.
They're afraid of they're afraid of the no. Right. Well, push past the possibility that there might be a no. And do exactly like Luke is talking about and realize that there also could very likely be a yes. Win-win for everybody. If you got a win for everybody, you know. That's fantastic, man. That's fantastic. So, okay. So again, so at that time, some of these you've used the MLS, uh, you know, word of mouth has begun to spread the business. Um, you're buying the ugly house on the block. You're sitting down with your private lenders, your other business investors, you're utilizing their money to go purchase it and get a little bit of the rehab started and things like that.
Um, so again, let's use, let's use that first one again, um, or, or, or you can expand about how long, let me tell you what let's use the word average about how long does your average find acquire and then profit about how long is that spectrum. Uh, averages, uh, man, three months, uh, I mean we were, we rock and roll. I mean, there's some, I mean, I'm very fortunate to have the contractors that work that want to work for us. The subs come when we call I've recently a couple of months ago, I started my own construction company, uh, brought my uncle.
Juan is a GCs and our, we have full-time employees. Um, there's been times John, where, uh, we were full scale rehab. I mean, top to bottom roof HVHC sometimes we split the houses into apartments. So dif uh, extra meters, extra, he, uh, hot waters. There's been times where I've been able to buy a house, rehab, it, put a lease on it and reified back out in 60 days to get my money back flat, you know, three, four weeks of rehab, the appraisals done, close it without making a payment to the hard money lender. Yeah. And I've done that on numerous occasions. Our average is really about three, three and a half months, one drug out six months because I had septic issues and I've never had to deal with putting a septic in, but we made good money on it. So. It was well worth it when it was all said and done on that case. Well worth it. Yes. Yes. Nice. Nice. So I'll tell you what let's take.
Well, again, you tell me, I mean, you've got 30, 36, uh, you know, great stories. Uh, well, yeah, well maybe all the way up to 54. So 54, pretty dang good stories. So let's tell me about one, just one and sort of tell me, this is kind of what I'm thinking by price rehab value. Uh, I'll go with two of them right now. So I guess you want the good or the bad, what are you looking for here. Man? I let's let's do both. I mean, so let's start with the good, cause we always want to start with good news. We'll start with a good, I got two right now are working. Um, one is one 50 purchase 75 rehab going to sell it for hopefully three 59. Yeah. I got another one at 88 purchase, 80 rehab in three 29 sale. So those would be my two good ones for the spring here. That's fan that's that's Superman.
And again, if we take that concept of what you mentioned a minute ago of, you know, about three months. So in about three months, if we just look at the one that was the 150 acquisition, the 75 and rehab that gets you up to let's round it, let's call it boldness. That's actual factual math two and a quarter all in sell it for three 59. So you're making $135,000 profit in a 90 day time span. Sure. Yeah. But then you have, you know, commissions and transfer stamps, things like that. I got to pay my investor. Yeah. I'm looking at about 90 grand. Yes. After all is said and done. Yeah. So, so, so 90 grand, when it's all said and done, so therefore if I break it down super simple, you're making a thousand dollars a day. That. That's that's.
That sounds good. Yeah. Hey man, that's fantastic. That's fantastic. I'm super happy for you and excited for you. Um. I really want to, I really want a new porch, but instead I'm going to go buy five more rental properties, you know? Well, uh, I can respect the idea of the Porsche, but yeah, go ahead and get the five more rental properties. And then I don't know what your end game is, but sooner than later, you can have that generational wealth. And look, I don't know about your wife, but I know my wife, if we, or even just, she was able to retire in her forties. Um, I imagine that would be awesome. Yeah. Yeah. I don't know what the end game is. We've, uh, we got into this and we've blown away all our goals. And now it's just like, where do I have to set a goal? I don't know where it is, but, uh, um, I think we're going to get around 50 rentals and, and focuses on some flips and, you know, we branched out to another market.
Um, so that's been good and I'm working with another guy to branch out to another market. So that's kinda where I'm at now. I want to help other investors, uh, with some resources and, and, uh, you know, get my hands in a little bit of every deal. You know, it just keeps coming, you know, streams of income and build that wealth.
Like you said, for the family. Dude. That's awesome. And there's a great quote out there that I try to live a little bit by myself and you just put your toes in it if you realize it or not, but if you help enough people get what they want, you'll have more than enough of what you want. I've. Never heard that, but that's, that makes sense. Yes. Yeah. Well, there you go. Hey, well, I give it to you. I stole it from somebody and you can feel free to add that to your, uh, the goals that you need to, you need to get on paper, but, uh, happy to hear you've been blowing things away.
Um, you know, when they say Luke, that real estate is often stepping stone for many people, meaning you can make a lot of profit and then you can help fund other long-term goals. Uh, what was the moment maybe a big purchase or a, or a lifetime goal that made you realize we've made it. Through actually COVID, uh, this, this back, uh, March I had, um, I had six, really big single family homes that we turned into rentals, great cashflow on them. Um, and then COVID hit and I was in the middle of refi and you're talking to $700,000 refile. I'm in the middle of that. I had seven other deals coming. Um, and within two days I had everything pulled everything. Um, that was really hard for me. I sat on my couch and drank whiskey for two days. I didn't know what to do, you know? And, uh, and then I just said, screw it. I got up, took a shower and, uh, started making calls again. You know, you gotta get out there and if I didn't call them this other bank.
And, uh, they said, yeah, we'll do that refi for you and got it closed. And at that point, cause I had a lot of money in from investors on the, on that deal that I had to get paid back before I could borrow more. Um, and it just, uh, you know, again, just did it, you know, you got to get out and do it. And it happened, happened very quickly. And then I was able to just keep on rocking out, you know, this whole summer. It was great. Phenomenal, man. So to piggyback on that answer with one more question, and I know you mentioned a Porsche a moment ago, have you did anything crazy? Did you buy a boat? Did you buy a car? Did you buy a mountain cabin? I mean, have you.
Yeah, no, we, yeah, we did. We, uh, we bought a little house on the river and a boat last year, uh, through again, through COVID, you know, cause my wife and I like concerts in the beach and seeing friends and all that was gone. So, uh, we came across a piece of, piece of, excuse me, a house on the river, again, converted into two units.
So we rent the top out, pays for it. We have the bottom, a nice luxury apartment that we partying on the weekends with the boat, you know. That's fantastic. I'm glad to hear you're living your best life, man. That's that's super that's super. Um, so if you never started investing in real estate and you were still in the restaurant bar business, how different do you think your life would look? Uh, on the surface? Probably not a whole lot. I'm going to sit. We're a simple, simple family, simple man. Um, but uh, you know, I wouldn't, I don't, um, it's, it's different, you know, you talk about hundreds of dollars in, in regular life. Now you talk about tens and twenties and thirties and forties of thousands of dollars that you're just throwing around. Um, again, not wasteful but investment and I've never, never thought about that at all.
And, um, just to even be in some of these conversations, like with a 25 unit apartment building, I never knew how to even go about that. And again, that was a lead from another agent I'm tired landlord and I'm working that deal. So, um, yeah, it would definitely be different. Um, but, uh, I don't know. I don't know. I guess, I guess five years from now, it would, it would be really different. I want to be able to sit back and enjoy things like I can, if things keep continuing as we are now is what I'm trying to say, I guess. Sure, sure. So here's an idea. We'll see what happens five years from now. Let's talk again and, uh, maybe it'll be similar questions. Maybe there'll be a little different, but you know, watching your growth and the change that's come over, you guys in basically two years.
I mean, it's just, it's what real estate can do for you. It's what real estate can do for a lot of people, especially in a key word that you've mentioned multiple times is hustle. Awesome hustle, hustle. Yeah. It's not a nine to five. It's not a nine to five. It is not a nine to five and it is not Monday through Friday. It is, uh, pretty much it's a flexible, it's a flat, right? I mean, it's a flexible 24 seven three 65.
It definitely, isn't always guaranteed. When you have plans for brunch on Sunday, there's going to be a water leak somewhere. You have to go fix guaranteed, guaranteed. Guaranteed. So, uh, Luke, what do you think the strongest best habit that you have that has that, that you credit your success to. Strongest best habit. Oh man. Um, but you mean before I got into this or right now or after. And I'm going to give you a little bit of leeway there. I mean just, maybe let's, let's go with right now. What's the best habit that you have that continues to drive your success? Um, again, asking for deals, uh, not being afraid to ask for money if I need money. Um, a big thing I find too is can appreciating my, uh, my, my employees now, my vendors, um, you know, and just, uh, sometimes you fall a little short.
You can't pay right now. You know, you just gotta call those guys. You gotta work it out. You know, you got terms, but things happen. Um, you know, if there's an issue, take care of it right away, don't let it build up. I see a lot of, you know, a lot of people, you know, you start yelling over the phone or this or that, you know, I don't know. I, I appreciate all my guys because without them, I couldn't be doing what I'm doing. Right. It just scale. Um, so I'm very grateful. I make sure everybody knows it. You know, I give them little bonuses here and there and take them to bring them lunch. Um, that's my, I guess that's my big, that's another thing for my success.
I treat my guys like they're, you know, cause again, I, I wouldn't be here without them. Um, you know, you can always run through crews and crews and crews, but I don't think you're going to get the consistency. We've had some guys with us now since day one, so. Very grateful and lets everyone know it. Powerful words, my man, powerful words that, you know, again, these things aren't secrets. Um, sometimes it takes a moment in time. Uh COVID um, and other stimuluses to realize that yeah, be grateful, keep things in perspective, value your employees. And uh, it's kind of a circle of harmony man.
That's powerful stuff, man. That's powerful stuff. So here you go. I got a rogue question. Um, what are you the most thankful for? Uh, same kind of thing. Uh, the cert my sphere of influence and friends and family and um, excuse me, my, uh, my, um, my wife, I mean, she's letting me do all this stuff. I mean, that's, we're all this right now for letting her believe in me and you know, the first couple she wanted to be there, but now I think after six or seven, she hadn't even seen him. You know, we just tell her to show up at the closing table. Um, and my daughter has been great. My whole family has been a wonderful if my friends again, uh, most of thankful for my, my vendors.
I mean, I use the same ones for a reason because they treat me like, I treat them, you know? Well, you just answered the secondary question, which is why are you most thankful for that? Because they treat you like you treat them SPECT, honesty, dignity, you'll rub their back. They'll rub your well it's COVID right now. So everybody shouldn't be, you shouldn't be social distancing. Yeah. I have it right now. This is my last day of warranty and I can't wait to get out tomorrow.
Oh man. I've uh, I'm glad that you were still able to give us some time. And if that doesn't make things even more real that our guest on this week's episode is literally suffering from COVID right now. And, um, boy, that's some real world stuff. I mean, COVID is a thing out there. Real estate investing is a thing out there and, uh, Luke was willing to put them together for us. Um, so you know, at this point we've hung out. I stole some of your time and I'm very grateful. So I do want to say thank you Luke, for being on the show today. And lastly, we have something that we call rapid fire. So I'm going to ask you a series of questions and answer them as fast as you can.
And just say the first thing that comes to your mind, are you ready? Fire away. Cool, man, on a scale of one to 10, how strict were your parents? Seven get up early or stay up late? Both. How many hours of sleep do you get? Well, gosh, four or five probably after the tossing and turning. If you came across an extra a hundred K what would you do with it? Go buy three rental properties.
Your favorite or last book read? Honestly, I can't remember. I'm not a big reader. Hey, if you could be any superhero, who would it be? Iron man. Yes. Something everyone should do less of, um, think about it. There's got to do it. Something everybody should do more of get out and do what they want to do.
What they're thinking of doing Bitcoin bang or bust. Uh, it's a bang now, but I'm hoping it's not a bus for people. I don't have anything on it. Well, people live on Mars in your lifetime. No. Yeah, it will look, look, I thank you again for your time here. Let me make sure that I go on to say again one last time that we, we thank Luke for joining us. We thank and appreciate all of our listeners and subscribers. And if you like what you heard today, Hey, look, sign up, subscribe, make it easy.
Make sure you go get all the free stuff@connectedinvestors.com and um, you know, honestly, while you're there, uh, send topics of things that you want us to possibly talk about on the show with other guests. And um, until next time I probably leave it like this. Remember this it's nice to be important, but it's so much more important to be nice. Thanks again, Luke, take care, man. And we'll talk again. Want to be like a guest on our show and make some cash in real estate. Join the center of the real estate investing universe and start connecting with free education off market deals, cash buyers, and even funding partners. connectedinvestors.com has been changing the game for people around the country since 2005. So just visit connected investors.com/cash So you can start doing more with real estate, no matter where you are in your journey to financial freedom. Seriously guys, if you were brand new to this and looking to close your first deal, there is not a better headstart out there to help you find properties and learn what you need to make cash.
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