How To Invest In Rentals Using Zero Personal Capital In 2021

Patrick Giarelli (00:00):

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.

Speaker 2 (00:11):

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.

Patrick Giarelli (00:35):

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. 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. Let’s jump right in Luke. Thanks for being on the show today. How are you doing, man?

Luke Wishmyer (01:27):

Good. Thank you for having me. Yeah, I’m good. Just hanging out in my living room. Talk to the guys, they’re plowing forward on two projects right now.

Patrick Giarelli (01:38):

Perfect it’s always nice when you can spend time with us, be in your living room and still got money working for you.

Luke Wishmyer (01:47):

Exactly. Yes.

Patrick Giarelli (01:48):

Yeah.

Luke Wishmyer (01:48):

Very fortunate.

Patrick Giarelli (01:50):

Absolutely. 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, and also would probably be longer than your time is going to alot today. Let’s start at the beginning because the beginning is a very good place to start. And let’s just tell me, first of all, why did you transition from being a bartender into the real estate world?

Luke Wishmyer (02:31):

Well, simple, I guess. I’ve been done bartending all my life, loved it. Customer service driven, obviously. I met my wife in the bar, got married and wanted something a little different. The late nights were hurting me, so got into real estate. I got my license, became a realtor, started doing some deals. My wife and I got married, honeymoon. 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 a while, found another one that was raining inside on. So let’s go look at this thing. We did, put that under contract sold ours real quick and kind of got the bug. At that point, we were almost in our dream home for around our area really quickly.

Luke Wishmyer (03:24):

I quit the bars, got into real estate full-time. Found some investors that wanted to put some cash in my way, did a couple smaller flips. My wife and myself, good buddy, Brian Horner, 24 hours a day, working on these things. Made some money, but then realized that I was giving up too much of the profits. Then found some couple of different hard money lenders across the country that were willing to work with me. Then I would find some more investors and borrow the down payments, find the properties, fix them. And the biggest key for me was finding the final bank that would do the cash out refile with zero seasoning. And that just changed the game on me and just kept flipping the money and flipping the properties. We’re actually 36 rental units now. We bought four 54 or 55 properties in 25 months.

Patrick Giarelli (04:18):

Wow, that’s awesome.

Luke Wishmyer (04:21):

Yeah, we sold 14 or 15. We have three projects going now, I’ve got three or four flips under contract to purchase. And looking at a 24 unit apartment building as we speak.

Patrick Giarelli (04:31):

Hey, I hope you get that one. I know that’s almost every investor I speak to that’s that hope getting that 24 units, 16 units that are all consolidated and generating a nice cashflow for you. You covered a lot and you gave us a fantastic synopsis. And I appreciate it. 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. What was the process in finding that first unit that it was raining on the inside. How did you find it?

Luke Wishmyer (05:06):

That was actually MLS. I became a realtor and I was just right on the MLS. It’s actually the first deal I did as a realtor.

Patrick Giarelli (05:15):

It was your own deal?

Luke Wishmyer (05:16):

My own deal, yeah. And I fixed all the appraisal issues and everything to get the deal. Yeah, that was MLS and fixed it and went from there.

Patrick Giarelli (05:27):

Okay. That makes sense. The MLS is a great resource and of course-

Luke Wishmyer (05:31):

Well, it used to be, it’s dried out now. I’m sure pretty much across the country. I found a few wholesalers who I’m hopefully on the top of their list and get the deals there. Not all of them. You really got to do your due diligence on all of them, kind of word of mouth now too. We’ll go into some neighborhoods, take the houses that should have been condemned. And then the neighbor down the street wants to sell his and same kind of thing. That’s been helping. Circle of friends and core advocate people. Hey, they ran into this house and know someone wants to sell it. That’s been a big thing. Other agents. It’s been great actually, just a nice network. I’m not afraid to tell people I’ll buy that bad house on the street.

Patrick Giarelli (06:17):

I don’t blame you, man. If I hear you correctly, 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 investing platform.

Luke Wishmyer (06:31):

Oh, sure. It’s just like sales. The phone’s not going to ring unless you’re making those calls. This stuff, doesn’t come to you, you have to go get it. Whether you’re knocking on the door, which is the best situation for me, or go into the tax record and just anything. I know people have apps that they can find information. I’ve been very fortunate in my short career.

Patrick Giarelli (06:53):

Yeah, I would say so, to do what you’ve got accomplished in 25 months is outstanding. Happy for you, man. Here’s another one. Again, let’s getting back to that first one, or again, you’ve got 36 of these things. How do you figure out all the numbers and determine how it’s going to become a profitable investment for you?

Luke Wishmyer (07:20):

It’s gotten a little easier, but you always make your money when you buy it. You have to remember that. You have to get it low enough. You have to account for mistakes and contingencies that you can’t see when you open the walls up. Because the key for me is to buy them really bad, rehab them top to bottom. I’m borrowing the money anyway, might as well do it. And then my bank’s going to give me a 75% cash out on the end.

Luke Wishmyer (07:45):

You just got to get it done. And you have to make your money in the beginning when you buy, excuse me, when you buy it. And then, I would go in there pen and pad in a laser measure and just literally measure everything out. And I know my vendors giving me prices on. I have an idea with the plumber electrician, HPAC is going to be. I’ve gotten pretty … I can walk in within 20 minutes be within three or four grand at this point.

Patrick Giarelli (08:09):

Yes, yes, yes. I feel similar. 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. 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 give it back out there again. In your line of work with the buy and hold or the flips, it’s you make your money when you buy it. I try to tell other people this all the time is it’s that purchase price, buy it for as little as you can. It sounds a little aggressive and sometimes maybe a little wacky, but that’s the real deal. Buy it for as little as you can.

Luke Wishmyer (08:59):

Sure. Yeah. And you can’t be afraid to walk away from a deal either. In the beginning you’re so in amber to do a deal, you want to do a deal, do a deal, do a deal. 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 that’s my bad one. Now I’ve learned to walk away, let another guy make that mistake, I guess.

Patrick Giarelli (09:23):

But we’ve all learned that lesson or hopefully maybe our conversation can help some people not have to go through that lesson, maybe. Once you knew it was a go and you weren’t using your own cash. Now, have you ever used any of the privatelenders.com or exactly how do you get your funds? Open that up a little.

Luke Wishmyer (09:50):

Yeah. Again, I’m a salesman. I’m not afraid to ask. I just went through Facebook, people that I knew that own businesses. Said, hey. I send them 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 in this amount of time. And I got four or five of them going to write me a check whenever I need it.

Patrick Giarelli (10:12):

Fantastic.

Luke Wishmyer (10:13):

I know that’s great. It pays for the down payments, a little bit of seed money to get the rehab going. Obviously I’m over budget. I have to incur those costs. At this point, my wife and I are buying a couple houses here and there for cash cause we’ve recruited some, but then I use them for the hard money financing. And then my final lender gives me the cash back where I’m making money on it. For me, it’s just a big hustle and it’s working [inaudible 00:10:38].

Patrick Giarelli (10:37):

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 core ingredient that I hear in the real estate investing world from the other investors I know. Having these conversations on Cash Chronicles. That is a key ingredient is that hustle factor. And then I just got to 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. And I think super valuable. You’re not afraid to ask. I believe so many people find challenges. 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.

Luke Wishmyer (11:44):

It’s a win-win for everybody. You got a win for everybody.

Patrick Giarelli (11:48):

That’s fantastic, man. That’s fantastic. Again, at that time, some of these you’ve used the MLS, word of mouth has begun to spread the business. 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. Let’s use that first one again, 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?

Luke Wishmyer (12:43):

Averages is, man, three months. We rock and roll. I mean, I’m very fortunate to have the contractors 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, brought my uncle on as a GC. Now we have full-time employees. There’s been times John, where we were full scale rehab. I mean, top to bottom roof HVAC, sometimes we split the houses into apartments. So extra meters, extra 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. 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.

Patrick Giarelli (13:46):

It was well worth it when it was all said and done on that case.

Luke Wishmyer (13:49):

Well worth it. Yes. Yes.

Patrick Giarelli (13:50):

Nice. Nice. I’ll tell you what let’s take … Well, again, you tell me, I mean, you’ve got 30, 36 great stories. Well maybe all the way up to 54. So 54 pretty dang good stories. Tell me about one, just one and sort of tell me, this is kind of what I’m thinking buy price, rehab, value?

Luke Wishmyer (14:24):

I’ll go with two of them right now. I guess you want the good or the bad, what are you looking for here?

Patrick Giarelli (14:29):

Man, let’s do both. Let’s start with the good, because we always want to start with good news.

Luke Wishmyer (14:33):

We’ll start with a good, I got two right now working. One is one 50 purchase, 75 rehab going to sell it for hopefully 359.

Patrick Giarelli (14:46):

Yeah.

Luke Wishmyer (14:47):

I got another one at 88 purchase, 80 rehab an 329 sale. Those would be my two good ones for the spring here.

Patrick Giarelli (14:56):

That’s super man. And again, if we take that concept of what you mentioned a minute ago of about three months. In about three months, if we just look at the one that was the 150 acquisition, the 75 in 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 359. You’re making $135,000 profit in a 90 day time span.

Luke Wishmyer (15:34):

Sure. Yeah. But then you have commissions and transfer stamps, things like that. I got to pay my investor. But, yeah. I’m looking at about 90 grand, yes. After all is said and done. Yeah.

Patrick Giarelli (15:41):

There we go, so 90 grand, when it’s all said and done. Therefore, if I break it down super simple, you’re making a thousand dollars a day.

Luke Wishmyer (15:53):

That sounds good. Yeah.

Patrick Giarelli (15:56):

Hey man. That’s fantastic. That’s fantastic. I’m super happy for you and excited for you.

Luke Wishmyer (16:04):

I really want a new Porsche, but instead I’m going to go buy five more rental properties.

Patrick Giarelli (16:09):

Well, 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 40s. I imagine that would be awesome.

Luke Wishmyer (16:42):

Yeah. Yeah. I don’t know what the end game is. We got into this and we’ve blown away all our goals. And now it’s just like, where is … I have to set a goal? I don’t know where it is, but I think we’re going to get around 50 rentals and focus on some flips. And we branched out to another market, so that’s been good. And I’m working with another guy to branch out to another market. That’s kind of where I’m at now. I want to help other investors with some resources and get my hands in a little bit of every deal. It just keeps coming, streams of income and build that wealth, like you said, for the family.

Patrick Giarelli (17:13):

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.

Luke Wishmyer (17:31):

I’ve never heard that, but that makes sense. Yes.

Patrick Giarelli (17:34):

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 the goals that you need to get on paper, but happy to hear you’ve been blowing things away. When they say Luke, 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. What was the moment maybe a big purchase or a lifetime goal that made you realize we’ve made it.

Luke Wishmyer (18:11):

Actually COVID. Just back March I had six, really big single family homes that we turned into rentals, great cashflow on them. And then COVID hit. And I was in the middle of refile and you’re talking $700,000 refile. I’m in the middle of that. I had seven other deals coming. And within two days I had everything pulled, everything. That was really hard for me. I sat on my couch and drank whiskey for two days. I didn’t know what to do. And then I just said, screw it. I got up, took a shower and started making calls again.

Luke Wishmyer (18:49):

You got to get out there and damn if I didn’t call this other bank. And they said, yeah, we’ll do that refile for you and got it closed. And at that point, because I had a lot of money in from investors on that deal that I had to get paid back before I could borrow more. And it just, again, just did it. 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 this whole summer. It was great.

Patrick Giarelli (19:15):

That’s phenomenal man. 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?

Luke Wishmyer (19:33):

Well, yeah, no. Yeah, we did. We bought a little house on the river and a boat last year through COVID. Because my wife and I like concerts and the beach, and seeing friends and all that was gone. We came across a piece of shit, excuse me, a house on the river. Again, converted into two units. We rent the top out, pays for it. We have the bottom, a nice luxury apartment that we party on the weekends with the boat.

Patrick Giarelli (19:56):

That’s fantastic. I’m glad to hear you’re living your best life, man. That’s super, that’s super. 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?

Luke Wishmyer (20:20):

On the surface, probably not a whole lot. We’re a simple family, simple man. But it’s different, you talk about hundreds of dollars in regular life. Now you talk about tens and twenties, and thirties, and forties of thousands of dollars that you’re just throwing around again. Not wasteful but investment. And I’ve never thought about that at all. And 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, Tired Landlord and I’m working that deal. It would definitely be different, but I don’t know. I don’t know. I guess five years from now, 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.

Patrick Giarelli (21:16):

Sure, sure. Here’s an idea. We’ll see what happens five years from now. Let’s talk again and maybe it’ll be similar questions. Maybe there’ll be a little different. But watching your growth and the change that’s come over you guys in basically two years. 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.

Luke Wishmyer (21:45):

Hustle, hustle, hustle. Yeah. It’s not a nine to five. It’s not a nine to five.

Patrick Giarelli (21:49):

It is not a nine to five and it is not Monday through Friday. It is pretty much, it’s a flexible 24/7 365.

Luke Wishmyer (22:01):

It definitely is and always guaranteed when you have plans for brunch on Sunday, there’s going to be a water leak somewhere you have to go fix.

Patrick Giarelli (22:06):

Guaranteed.

Luke Wishmyer (22:07):

Guaranteed.

Patrick Giarelli (22:09):

Guaranteed. Luke, what do you think the strongest, best habit that you have that you credit your success to?

Luke Wishmyer (22:26):

Strongest, best habit. Oh man. You mean before I got into this or right now or after, or what?

Patrick Giarelli (22:38):

I’m going to give you a little bit of leeway there. I mean just maybe let’s go with right now. What’s the best habit that you have that continues to drive your success?

Luke Wishmyer (22:52):

Again, asking for deals, not being afraid to ask for money if I need money. A big thing I find too is appreciating my employees now, my vendors. And just sometimes you fall a little short, you can’t pay right now. You just got to call those guys. You got to work it out. You got terms, but things happen. If there’s an issue, take care of it right away. Don’t let it build up. I see a lot of people, you start yelling over the phone or this or that. I don’t know. I appreciate all my guys because without them, I couldn’t be doing what I’m doing. It just scale. I’m very grateful. I make sure everybody knows it. I give them little bonuses here and there and bring them lunch. I guess that’s my big, that’s another thing for my success. I treat my guys like they’re … Because again, I wouldn’t be here without them. 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.

Patrick Giarelli (23:56):

Very grateful and lets everyone know it. Powerful words my man. Powerful words. Again, these things aren’t secrets. Sometimes it takes a moment in time, COVID and other stimuluses to realize that yeah, be grateful. Keep things in perspective, value your employees. And it’s kind of a circle of harmony. Oh man, that’s powerful stuff, man. That’s powerful stuff. Here you go. I got a rogue question. What are you the most thankful for?

Luke Wishmyer (24:48):

Same kind of thing. My sphere of influence and friends and family. And excuse me, my wife. She’s letting me do all this stuff. I owe her all this right now for letting her believe in me. And the first couple she wanted to be there, but now I think after six or seven, she hadn’t even seen them. We just tell her to show up at the closing table. And my daughter has been great. My whole family has been wonderful, my friends, again. I’m most of thankful for my vendors. I use the same ones for a reason because they treat me like I treat them.

Patrick Giarelli (25:23):

Well, you just answered the secondary question, which is why are you most thankful for that? Because they treat you like you treat them. Respect, honesty, dignity. You’ll rub their back, they’ll rub your … Well it’s COVID right now. So everybody should be social distancing.

Luke Wishmyer (25:44):

Yeah, yeah. I have it right now. This is my last day of quarantine and I can’t wait to get out tomorrow.

Patrick Giarelli (25:50):

Oh man. 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 boy that’s some real world stuff. I mean, COVID is a thing out there. Real estate investing is a thing out there and Luke was willing to put them together for us. At this point we’ve hung out. I stole some of your time and I’m very grateful. I do want to say thank you Luke, for being on the show today. And lastly, we have something that we call rapid fire. 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?

Luke Wishmyer (26:43):

Fire away.

Patrick Giarelli (26:44):

Cool, man. On a scale of one to 10, how strict were your parents?

Luke Wishmyer (26:49):

Seven.

Patrick Giarelli (26:50):

Get up early or stay up late?

Luke Wishmyer (26:53):

Both.

Patrick Giarelli (26:54):

How many hours of sleep do you get?

Luke Wishmyer (26:57):

Well, gosh, four or five probably after the tossing and turning.

Patrick Giarelli (27:02):

If you came across an extra a 100K, what would you do with it?

Luke Wishmyer (27:06):

Go buy three rental properties.

Patrick Giarelli (27:09):

Your favorite or last book read?

Luke Wishmyer (27:13):

Honestly, I can’t remember. I’m not a big reader.

Patrick Giarelli (27:16):

Hey, if you could be any superhero, who would it be?

Luke Wishmyer (27:20):

Iron man.

Patrick Giarelli (27:21):

Yes. Something everyone should do less of?

Luke Wishmyer (27:28):

Think about it. Just go out and do it.

Patrick Giarelli (27:30):

Something everybody should do more of?

Luke Wishmyer (27:33):

Get out and do what they want to do. What they’re thinking of doing.

Patrick Giarelli (27:37):

Bitcoin, bang or bust?

Luke Wishmyer (27:40):

It’s a bang now, but I’m hoping it’s not a bust for people. I don’t have anything in it.

Patrick Giarelli (27:45):

Will people live on Mars in your lifetime?

Luke Wishmyer (27:49):

No.

Patrick Giarelli (27:50):

Yeah. Well look, Luke, I thank you again for your time here. Let me make sure that I go on to say again one last time that 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 at connectedinvestors.com. And honestly, while you’re there, send topics of things that you want us to possibly talk about on the show with other guests. And 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.

Patrick Giarelli (28:39):

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Patrick Giarelli (29:20):

If you’re already an experienced flipper or landlord, then Connected Investors gives you access to dozens of unique inventory sources and automation that can not be found on any other platform in the industry. connectedinvestors.com/cash. Go there, claim your free account, get your gift pack. And then, well, don’t look back, jump in and put that whole ecosystem to work for you, because all guests of this show come directly from the Connected Investors community and would love to interview you after your first or next life-changing real estate deal. Peace Y’all.