Buying Multifamily in a Virtual Market

John Harcar (00:00.992)
Hey, all right, guys, welcome back to the show. I’m your host, John Harcar here. And today we’re here with Mike Wallimann. And what we’re going to be talking about is

Building long-term wealth through strategic property management. It’s a fascinating subject and I can’t wait to learn more. And remember guys, at Investor Fuel, we help real estate investors, service providers, and real estate entrepreneurs, 2 to 5X their business by providing tools and resources that help them build the businesses they want and live the lives they want to live. So Mike, welcome to the show.

Michael Wallimann (00:33.494)
Hey John, thanks for inviting me. I’m real grateful to

John Harcar (00:38.714)
Yeah, yeah, me as well. And, and, you know, we talked prior to the podcast off air and, I like some of the things we talked about, you know, as far as helping landlords, maybe with some alternatives, right? But before we really get into army, not landlords owners, but before we get into all that, what I want you to do is enter yourself to yourself, to our audience and just kind of let them know about who you are, how you got started, how you got here.

Michael Wallimann (01:01.612)
Yeah, absolutely. My name is Mike Wallimann and you know, before I even owned a house, I used to play the role of landlord a little bit. would sublet out downstairs areas, workshops, rent rooms and stuff like that. So I was already familiar with some of the nuances of becoming a landlord. And what’s that?

John Harcar (01:17.889)
Okay.

Mm-hmm.

John Harcar (01:27.148)
Do they call that triage? Is that the triage, right? You got a triage? Yeah. Before that whole thing came, yeah, became a thing. okay. Sure, got it, got it, got it.

Michael Wallimann (01:31.52)
Yeah, yeah, was kind of before that really became a thing. Yeah, but yeah, it was more out of necessity, right? Get my rent a little cheaper at the time. Yeah, and what’s that? Yeah, yeah, absolutely. House hack before the term was out there. Yep, yep, absolutely. Yeah.

John Harcar (01:45.302)
So a house hack, kind of. Kind of like a house hack. Yeah. What is it? It’s popper. Okay, cool. Continue.

Michael Wallimann (01:58.35)
Yeah, then in 2016, I wound up signing up for a program called Homes for Islanders, which is very similar to Habitat for Humanity. So I don’t know, you know, if some of your listeners are just trying to get started or whatever. You know, it might. It’s a program that it’s not for everybody, but if it is for you, it could really change your life. It’s a lot of hard work, but you know,

John Harcar (02:09.14)
Okay.

Michael Wallimann (02:28.492)
no money down and a lot of sweat equity that is built into it.

John Harcar (02:34.688)
So what is it exactly?

Michael Wallimann (02:37.242)
so, so I lived on a island, a small island, off the coast of Western Washington, San Juan Island, and it’s basically Habitat for Humanity, but their own version of it. so you get together with a group of people. There’s, we built a whole neighborhood, 20 homes. yeah, we did it in two groups.

John Harcar (02:51.532)
Got it.

John Harcar (02:58.483)
wow.

Michael Wallimann (03:01.326)
So my group, built the first 11 homes, we moved in and then the second group built the other nine. Yeah, but you know, yeah, yeah, it was, it wound up being very life-changing. There was a moment or two where I kind of questioned my sanity, because it was a lot of work, a lot of work for sure.

John Harcar (03:08.362)
Okay, that’s really cool, man.

John Harcar (03:21.698)
I can imagine.

Michael Wallimann (03:26.7)
You know, there was, remember, so I had a W-2 at the time and, you know, so I would work Monday through Thursday, 10 hours a day at the W-2 and then I would go to the job site and then build houses for a couple hours. Then it was Friday, Saturday, Sunday. Yeah, you know, it was busy. It was busy. Yeah, I mean, there was, I remember one time when there was a…

John Harcar (03:40.354)
Wow, putting in the grind, man. Yeah, love it. Let’s go.

Michael Wallimann (03:52.342)
We had a huge heat spell with high nineties, which we’re not used to in this area. And after about nine days of just getting beat down by the sun, no shade, anything, I came home and I’m like, I said to my daughter, was like, I don’t know if I can do this, you know? And yeah, it really, it really isn’t, you know? And, but she kind of changed my life at that moment. She looked at me and she was like,

John Harcar (03:55.414)
Mm.

John Harcar (04:13.14)
Yeah, it’s not for everybody.

Michael Wallimann (04:21.774)
What do mean, Dad? Are you gonna quit? yeah, man, hit me right here. It was the dagger. It was a life-changing dagger, though. Yeah, so I said, all right, I’m getting back out there. I’m gonna do this. yeah, and it really did. It changed my life. It was the catalyst.

John Harcar (04:25.634)
Ooh, that. Ooh, yeah.

John Harcar (04:33.098)
Yeah, no, of course, yeah, that’s awesome.

Michael Wallimann (04:47.82)
You know, I realized that I liked building and afterwards I switched professions. I went into carpentry. Yeah, yeah. And I just, love building. I love creating. Yeah, yeah. I don’t as much anymore. No, I don’t swing the hammers as much anymore, but you know, but yeah, it, you know, there was.

John Harcar (04:56.661)
Okay.

John Harcar (05:02.178)
You like working with your hands. I love it.

Michael Wallimann (05:15.914)
It’s definitely, it could change your life. But while I was doing carpentry, I started listening to podcasts and digging into real estate investing books. you know, the next thing you know, I took out a HELOC on that home that I had put all that sweat equity into and started buying small multifamily units. Yeah.

John Harcar (05:26.252)
Mm-hmm.

John Harcar (05:33.462)
Yeah, heck yeah.

John Harcar (05:39.572)
Okay now were you buying these multifamily and I think you said you’re currently in Washington right? Okay and were you buying these multifamily units in Washington or where were these?

Michael Wallimann (05:45.516)
Yeah, yep.

Michael Wallimann (05:51.532)
Yeah, so the market here is pretty expensive like your market there in Boise. So I knew with the little bit of money that I had to play with at that point in time, it wasn’t going to go far there. So I did grow up in Albany, New York. So I started looking over there for some stuff. And sure enough, the property there was a fraction of what it was here.

John Harcar (06:00.212)
See ya.

John Harcar (06:21.346)
Of course.

Michael Wallimann (06:22.03)
Yeah, so yeah, it became a no brainer, but, know, it’s again, a move that isn’t necessarily for everybody, right? Because, I mean, it’s tricky to invest long distance, especially, I mean, I was brand new. I bought my first rental property.

John Harcar (06:33.099)
Right.

John Harcar (06:40.01)
Yeah, well, and I think what you I think what you had maybe a foot up, I guess I could say then like if I were to go market in upstate New York, I have never been upstate New York. You know where it is, right? So did that weigh into your decision on what what other market you picked or was it just that you kind of wanted to see how that was and then it just stuck with you?

Michael Wallimann (06:49.666)
Yeah. Right.

Michael Wallimann (07:03.182)
It did. It definitely weighed in. know, but for anybody who’s even thinking about going long distance investing, I, you have to build a team. There’s, it’d be virtually impossible to pull this off without a team. And I just got lucky, you know, there was, was a Sunday afternoon. I was sitting around watching football and just kind of

Playing on the computer dreaming about rental properties, right? I’m brand- neither. Seahawks. yep. Yeah, there you go.

John Harcar (07:36.034)
Giants or jets? Giants or jets either. okay. See ya. Oh, okay, I throw a while you in Washington now. Go Raiders. So, okay, so that’s, but that’s really cool because, know, like I said, a lot of people, you know, when you’re making that virtual jump, don’t understand that, you know.

Yes, you can buy homes virtual, the more feet on, you if you have boots on the ground, you have a team put together, it’s going to make your life a lot easier because there’s so many other dynamics when you’re not in control, you’re not there. So tell me about your team. What does your team look like?

Michael Wallimann (08:11.52)
Absolutely, yeah, so it started with the realtor and you know, I was looking at a property I didn’t even know what I was doing. I just clicked on, I’m interested and I swear like a minute later my phone rang. huh, yeah. I know. Yeah, now I was impressed. I’m like, okay, this lady’s on it. Okay, I like this.

John Harcar (08:26.754)
That’s amazing. Sometimes they don’t get back to you for like two days. You got to call right away.

Yeah, one check mark, there you go.

Michael Wallimann (08:39.02)
Yep, yep. So that was a good sign. And yeah, you know, I still buy properties with her today. Shout out Ashley Nagy, best realtor in Lake George, New York, for sure. But yeah, but you know, I trusted her and I think that’s part of the team too. Like once you find somebody that you trust, you know, then it was, hey, do you know a contractor or hey, do you know an attorney or do you know the plumbers or you know, so.

John Harcar (08:51.618)
Cool.

John Harcar (09:05.217)
Yeah.

Yeah.

Michael Wallimann (09:09.208)
They’re already in that market. They’re already familiar with it. They can help you expand your team and that’s huge.

John Harcar (09:16.894)
Yep, so this was just the realtor that was on the listing you called on. This wasn’t like you didn’t go and interview, interview, interview. You just kind of, I guess maybe in a sense, struck gold right away. Okay, so who did she bring into your team? Like tell me the rest of the people that make up and seats that make up your team.

Michael Wallimann (09:20.514)
Yeah.

Michael Wallimann (09:26.604)
Yeah, yeah, I got lucky. Yeah, yeah.

Michael Wallimann (09:35.118)
She brought in the title company, an attorney, because in New York you need attorneys for closings and stuff like that. And Snowplow Guy. A couple contractors throughout the day. I did know a contractor when I was there and you know now as the years have gone on.

John Harcar (09:42.966)
Yeah, right. Right.

John Harcar (10:00.994)
Hmm.

Michael Wallimann (10:01.196)
I’ve found the really good ones, you know, the specialists for your plumbing and your electricians and all of that.

John Harcar (10:08.29)
Are you buying these turnkey? Are you looking for some that need maybe like a light rehab? What’s kind of your avatar property you look for?

Michael Wallimann (10:17.9)
Yeah, my strategy from the get-go was with the BRRRR strategy. So if some of your listeners aren’t familiar with that, it’s buy, rehab, rent, refinance, repeat. So you’re basically fixing up a property that needs it, adding the value, pulling the equity out, and then just recycling that money.

John Harcar (10:43.49)
Mm-hmm. Mm-hmm.

Michael Wallimann (10:45.58)
which is, I mean, it’s a phenomenal strategy until interest rates go sky high in the middle of your rehabs, right? Yeah, yeah, so you gotta pivot at some point in time. But yeah, so the first property I bought there was, it’s kind of a, it’s a vacation town where a lot of like,

John Harcar (10:54.873)
Yep, not bad to say. There’s an if coming up, coming up, or a but.

Michael Wallimann (11:12.396)
Boston and New York City people go to just get away for the weekend or a week or whatever. But so there’s a lot of like old motels and smaller motels, mom and pop stuff. I bought this small six unit mom and pop motel and then I converted it into a duplex. So two 1200 square foot, three bedroom, two bath units. Yeah. Yeah, that’s cool. had a

John Harcar (11:24.13)
Mm-hmm. Mm-hmm.

John Harcar (11:37.554)
Wow, wow, that’s awesome. That’s awesome.

Michael Wallimann (11:41.846)
swimming pool is on two and a half acres. So it’s a cool property.

John Harcar (11:46.434)
When I think of upstate New York, I think of like the movies, What About Bob? Or like The Great Outdoors, right? That’s what I think about upstate New York. I don’t even know if that’s where they took place or not, but. So cool. So you got that team now. Are you purchasing this with your own money? I know you’re doing the bird. You mentioned the recycle it, but when you started out, did you start out using your own money, hard money, private money?

Michael Wallimann (11:51.688)
man. Yeah. Yeah.

Michael Wallimann (11:58.891)
Right, yeah.

Michael Wallimann (12:12.174)
Yeah, I started out using HELOC money that I pulled from the home that I bought. And that has kind of changed. had to, like we mentioned with the interest rates, you know, skyrocketing in 2022. I got caught with a couple of properties that I was right in the middle of rehabbing. So my exit strategy was to refinance and pull the money out. so that didn’t happen.

John Harcar (12:17.922)
Okay.

John Harcar (12:31.81)
Mmm.

John Harcar (12:39.126)
Mm-mm.

Michael Wallimann (12:40.918)
So, but I did get, I did get them finished and rented. so yeah, so I kind of ran out of chunk, the big chunks of money that I could use to, you know, buy the next. So I did stand idle for a little while, just kind of trying to figure out what the next move was. but I was always, I was always searching for, for deals, you know, I know that you’re a cold collar by,

John Harcar (12:44.93)
I’m good.

John Harcar (13:00.977)
Mm-hmm.

Michael Wallimann (13:10.616)
from at least back in the day, right? So, I did a little research.

John Harcar (13:12.968)
You must have seen some of my old videos, man. I love it. And you probably saw the one with Mike Amber, who owns Investor Fuel. So yeah, cool.

Michael Wallimann (13:21.812)
Yeah, yeah, yeah, yeah. I think we’ve got quite a bit in common. So it’s cool to be here spending some time with you. But yeah, so you know, I was looking for deals and I wound up looking into an apartment that I saw for rent and I kind of looked for mom and pop owners again and just asked them, hey, are you interested in selling?

John Harcar (13:27.68)
I’m sure we do.

John Harcar (13:31.938)
for sure.

John Harcar (13:46.028)
Mm-hmm.

Michael Wallimann (13:49.134)
I happened to ask like about a lease option for this particular one. I got a response back from the property manager and she she’s like, hey, the owner would like to talk to you. Long story short, we really hit it off and we kind of teamed up and started doing flips together. Yeah, yeah. So that was cool. you know, so it was

John Harcar (14:10.721)
Sweet.

John Harcar (14:14.978)
So how does that work? Are you bringing the property he brings the flip or what?

Michael Wallimann (14:19.136)
Yeah, so it’s kind of it kind of varies depending on the deal, right? So I guess to answer your question, it’s kind of a long, long winded way to answer it. But I do use other people’s money a lot nowadays, private money. And yeah, hard money happens sometimes, but preferably private money. And I’m about ready to

John Harcar (14:23.7)
Okay.

Michael Wallimann (14:47.414)
I’ve got enough saved up to get going again and.

John Harcar (14:51.38)
Okay, now so this seems like that might have been a bottleneck for your business was just the funds to be able to buy more.

Michael Wallimann (14:58.06)
Yeah, absolutely. you know, I think that just those are all learning lessons, right? Like we always come across the obstacles that we’ve got to overcome. And, you know, I still didn’t know what I didn’t know. So you get caught with your you only have one exit strategy in mind, and then you get caught with interest rates skyrocketing. And, okay, now you got to figure out the next solution, you know.

John Harcar (15:05.918)
Sure.

John Harcar (15:14.476)
break.

John Harcar (15:24.854)
Yeah.

You got to pivot. And that’s what I had a podcast earlier today that was kind of about that same thing. It’s like, you know, just making sure that, you know, you got to have multiple extra strategies, right? You got to really know, you know, like some people want to go gung-ho into a short-term rental and all they do is, you know, manage or look at it as a short-term rental. Well, if you look at it also as a long-term rental and have other strategies, it’s going to make more sense. So, yeah. So, okay. So, what’s your current portfolio look like? So, it’s all, you said it’s all multifamily or do you have any

Michael Wallimann (15:28.878)
Yeah.

Michael Wallimann (15:48.97)
Absolutely.

John Harcar (15:57.176)
single family?

Michael Wallimann (15:58.294)
Yeah, I have a couple single-family homes and then I have four other properties that are smaller multifamilies. You know, two, four and six units. I did buy one that was a four and I wound up doing a couple of things. I found some space to make a fifth unit and then there was a two-car garage there that just wasn’t being used.

John Harcar (16:12.076)
Okay.

John Harcar (16:27.638)
Convert.

Michael Wallimann (16:28.046)
I said, okay, well, I’m going to convert that. So I converted that into a two bedroom apartment and yeah, man, away we go. you know, so that’s, so that turned into six and yeah, yeah, just plug.

John Harcar (16:32.13)
Cool, man.

John Harcar (16:40.22)
Sweet. So for anybody that’s listening up in the New York area, what’s your buy box? What are you looking for?

Michael Wallimann (16:47.118)
I am constant. You know what one of my one of one thing I like to do or at least like to search for is these there’s a lot of cabins there and and a lot of they’re almost like they’re almost set up like motels except that they’re individual cabins and that’s one thing that I’m looking to purchase there. So yeah if anybody knows of any of those and yeah always look at

John Harcar (17:06.028)
Huh.

John Harcar (17:13.57)
Okay.

Michael Wallimann (17:17.142)
for anything from four to 20 units in that upstate New York area.

John Harcar (17:24.736)
Okay. Sweet. And then, you know, at the end, we’ll let everybody know how to get ahold of you, and we’ll put your links in the show notes.

Michael Wallimann (17:33.506)
Okay.

John Harcar (17:36.296)
You mentioned something to me a little earlier about the time freedom part and how that’s important to you. That’s kind of what you’re passionate about. And, you know, the theme of this is building that long term wealth through strategic property management. So kind of talk to me about that part of it and how that time freedom and whatnot could tie in.

Michael Wallimann (17:43.5)
Yeah.

Michael Wallimann (17:56.01)
Yeah, well, you know, there was definitely a point in time, especially when I was working that W-2 and building the house where I was realizing, you know, I’m not getting any younger.

I can’t, you know, I don’t want to be, you know, I was working with guys who were in their sixties and, you know, doing masonry, like lugging huge stones around all day long. And I was like, I’m not going to be able to do that forever. And, you know, so, real estate did wind up calling me.

John Harcar (18:25.303)
Yeah.

John Harcar (18:29.548)
Mm-hmm.

Michael Wallimann (18:36.748)
But I realized that there is a lot more that I’m passionate about and it really does take time. You know, like to be able to do your own thing, you have to have time freedom and to have time freedom, unfortunately, you have to have money as well, right? So I’ve kind of, it has become a passion to try to help others to find

John Harcar (18:56.597)
Sure.

Michael Wallimann (19:06.722)
that time freedom as well through rent through real estate rental properties.

John Harcar (19:12.386)
Well, in a sense, and some people might be listening and we think about that, you know, with that strategic property management. kind of, so people can better understand that. What does that mean?

Michael Wallimann (19:26.766)
Strategic property management. Yeah, I mean that that’s a good question. I think first people need to ask themselves What they really want what what they’re really trying to accomplish? Whether that’s their deep down why or you know, they’re their families or whatever and then Strategically try to figure out a plan according to that. So is that

John Harcar (19:55.628)
Mm-hmm.

Michael Wallimann (19:56.772)
Is that one rental property that brings in an extra thousand dollars a month or are we shooting for three rental properties or do we just want to keep going you know until we don’t stop or we’re we got three generations down the line taken care of you know it’s I guess it really does first start with what what the goal is.

John Harcar (20:14.187)
Right.

John Harcar (20:24.898)
And how does knowing how to, your first, we know through your first time landlord success course, right? You’re, basically teaching homeowners how to basically rent out their property. and I got to ask the question, does that counter intuitive to us as an investor?

Michael Wallimann (20:38.679)
Right.

Michael Wallimann (20:45.678)
Well, could be, I guess, again, just depends on what people are, you know, what the goal is, right? Like if you’re looking for that more hands-off passive income, then maybe the rental properties are for you. Maybe they’re not because rental properties take a lot of work unless you hire a property manager, which is what I do, you know. So,

John Harcar (21:10.539)
Sure.

Right.

Michael Wallimann (21:18.094)
But if you’re looking for the bigger paychecks or flips or you know, you’re trying to just amass properties for long-term wealth or you know passing down to the next generation I guess it just really depends But it certainly could be counterintuitive

John Harcar (21:27.618)
Mm-hmm.

John Harcar (21:34.786)
Great.

Okay, and then what is what’s the goal of the first time landlord success course? Like is that just to teach people, hey, these are their overall steps, scope of what you need to expect as a landlord?

Michael Wallimann (21:48.302)
Yeah, absolutely what you need to expect. And then it’s a lot of just mistakes that were made by myself and the lessons that I’ve learned in trying to help you not make those same mistakes. So

John Harcar (22:05.612)
Tell me, give me an example of some of those mistakes just for my audience.

Michael Wallimann (22:09.55)
Boy, yeah, we could, we could definitely do a whole podcast on that for sure.

John Harcar (22:17.738)
Or maybe let’s rephrase that question. What are some of the pitfalls that someone who is maybe getting into landlording should look out for?

Michael Wallimann (22:28.29)
Well, yeah, first of all, making sure that you are following your state’s landlord tenant laws right off the bat is very important. Especially in these days, you know, I own properties in three tenant friendly states. That was not by design. just…

They happened to be bought before I really knew that aspect of things. And I’ve definitely seen people use those tenant laws to their advantage. and screening, screening is huge. I’m very thorough in my screening. I have made…

John Harcar (23:00.74)
Mm-hmm.

Michael Wallimann (23:23.5)
mistakes in the past and I’ve felt, I’ve definitely felt that in my pocketbook and stress wise, know, so I would say first and foremost, making sure you’re updated on your state’s laws and really thoroughly screening your tenants.

John Harcar (23:42.082)
Okay.

John Harcar (23:45.448)
Know the laws, screen your tenants. Awesome. Well, very cool. If our folks, know, folks that are listening to this and, you know, maybe they have the thought about getting into landlord or maybe they’re doing virtual stuff. How are they able to get a hold of you? What’s the best way for them to reach out and get in touch with you?

Michael Wallimann (24:07.886)
I would say the best way would be on socials. So you could always message me at Facebook, Mike Walleman. Also Instagram, I’m at Mike.By.Design. And you could check out my website, www.MasterClassMind.com.

So those would be the best ways really to reach me. And I’m always here, I’m always available. I love to share what information I do know. And if I don’t know it, I probably know somebody who does have an answer, which is the beauty of real estate in general, right? I mean, you know you’re well connected in networks as well.

John Harcar (24:36.962)
Masterclass.

John Harcar (24:41.538)
Okay.

John Harcar (24:53.437)
Yeah.

Michael Wallimann (25:03.31)
Surprisingly, the real estate community loves to give and share information where I feel like a lot of people who aren’t familiar with real estate think that maybe everybody’s cutthroat and they want to keep everything a secret, you know? And that’s the beauty of it. I love to share what I do know. So yeah, feel free to reach out anytime.

John Harcar (25:17.301)
Great.

John Harcar (25:24.78)
Yep.

Sweet. Guys, I mean, I really hope you guys got a lot of the nuggets that I picked up. You know, I mean, you know, it’s really important, you know, especially in landlord, like he said, two main things. And I know that well, know the laws, screen your tenants. And guys, reach out to Mike if you guys want to want to talk about, you know, anything. OK. And I hope you guys enjoyed the show and we look forward to seeing you guys on the next episode. Mike, thank you again. All right. Cheers, guys.

Michael Wallimann (25:50.702)
Thanks, John, I appreciate it.