Buying Houses with Bad DIY Projects, Rise of Anti Corporate Culture, Launch of the Merch Store

Dan Austin: [0:00] That was the worst DIY I've ever seen in my life, some of the stuff there. But for landlords, I walk enough of them, or there's... And this is the other problem in these days. There's a lot of new landlords, like, everybody in America seems to be a real estate investor these days. There are a lot of new landlords that they go and hire a contractor and don't realize that the contractor just screwed them and used really terrible materials, didn't install them properly, and weird. After six months, it's falling apart.

Mike DeHaan: [0:31] Alright, guys. Welcome to the collecting keys real estate investing podcast. Our new intro there.

Dan Austin: [0:39] That is badass.

Mike DeHaan: [0:40] I think it's cool. I feel like it's a little bit too long. We'll we'll keep working on it. Like We'll tighten it up. Sat there and stared at each other awkwardly long as that was playing. But, well, always evolving, always adapting our show and our brand here. So if you thought that sucked, shoot us a message. I'll do it again. But anyways, if it is your first time here, welcome to the collecting keys real estate investing podcast where I, Mike DeHaan, and my cohost, the big BDE, Big Dan Energy over here, Talk about real estate investing, business, and whatever else is on Dan's mind that week because you tend to stray from the path a little bit more than I do with you.

Dan Austin: [1:16] Are we gonna drop some BDE? Like, is that coming or what?

Mike DeHaan: [1:19] Yeah. Yeah. So it's actually a good bookkeeping thing to start. So if you don't know what BDE is, it is something that Dan coined off top of his head, like, two months ago. It's stuck. Coming in with his big Dan energy, and we're having some shirts made. And those will be available on the official collecting keys store coming up here actually by the time this show airs. That should be out and alive. So it should be at store.collectingkeyspodcast.com. You will be able to get some collecting keys merch. We have our collecting keys podcast logo shirts. We're gonna have our BDE t shirts. And as we create some more inside jokes, they'll show up on there too. Well, as our as our designer and our editor listens to stuff and thinks things are funny. And even if you don't think they're funny, we do. And it's our store.

Dan Austin: [2:05] So we do what we want.

Mike DeHaan: [2:06] Boom. So store.collectingkeyspodcast.com. You should go check that out. And just so you know, we don't really make any money on these shirts. So they're like... This is literally just for fans. And This is for fun.

Dan Austin: [2:17] Just for fun. We'll be like the biggest buyers of

Mike DeHaan: [2:19] us, of

Dan Austin: [2:20] our own dumb shit.

Mike DeHaan: [2:21] Honestly, for people that we send stuff to, for they're doing things like leaving us a five star review and other stuff. Anyways, store at collectthekeyspodcast.com, and you should go check out our new Collect the Keys merch. It'll be available for everybody. But anyway, we have had a pretty cool week because something has happened that I'm very excited about. So I guess backtracking a little bit, one of my goals with entrepreneurship and starting this business has always been to have the four hour work week sort of lifestyle. Not necessarily in the way that I don't have to work, but more just in the digital, you know, location independent style, the digital nomads or something. I'm not a nomad. I stay in my house most of the time. But I like to have the freedom to travel and to do things. And as a result, we built this business with the virtual style business in mind, a lot of virtual systems in place to give that. Like, I have now personally signed for deals in four different continents. Dan, you have not had the luxury yet because you got small kids, but you'll get there. But we built the system out to run this business this way, and we just had our first staff member sign a couple of deals while internationally traveling

Dan Austin: [3:29] Super cool.

Mike DeHaan: [3:29] Which I think is super awesome. So, you know, people that come and work for us, we're not a butt and seat company. You have your roles and responsibilities that you need to get done. And if you do that, I don't care where you are. You know, I don't care if you're at your house or if you're, you know, over in New Zealand where one of our guys is at. And he had some sellers reach out that he'd been conversing to. He got on the phone with them from across the world, got things signed around, and, like, he has two contracts that he's now gotten signed while, like, overseas, which is super sick. One in Maine, one in Detroit. And, yeah, he's making some money. We're making some money, and he's able to travel and go visit his family and do all the stuff that he wants to do. So

Dan Austin: [4:10] So we're able to buy houses anywhere in the world while we're anywhere in the world. Well That's what you just said. I mean, that's kinda crazy to think about.

Mike DeHaan: [4:16] Yeah. I mean, like, I don't know if we can buy houses anywhere in the world because there's lots of different rules and restrictions in different countries. That's true.

Dan Austin: [4:23] We could tell people we're gonna buy houses in all sorts of other places. But, you know

Mike DeHaan: [4:26] I mean, we could. That's kinda like a thing right now is people going to Mexico and Portugal to try and buy these assets. But what makes that tricky, a lot of people don't realize this, is the thirty year fixed amortized mortgage that we have in The United States is extremely unique. Most markets don't have that. I mean, even if you go up to Canada, Canada has like a ten year balloon on all their mortgages that makes you do an adjustment at that point, which is pretty interesting, but then there's other places that have the opposite. So I believe Japan and Switzerland, they actually have what they call, like, legacy mortgages, which are fifty years. Multigenerational. Yeah. They're both multigenerational mortgages that you can get. There's a lot of countries that have, like, three year adjustable rates. Like, that's all you can get. So, you know, in phases like this last little bit, you locked up your sick interest rate in 2021 that's super low. And, you know, in The United States, everyone's celebrating. You go to some of these, like, European countries. Well, enjoy it while it lasts because you're all gonna be forced to adjust to your next year.

Dan Austin: [5:22] Right. Yeah. So... You know, I think it speaks a lot to affordability too and how a lot of other countries, it is not very affordable and a lot of people buy apartments Uh-huh. Like units, what we would call a condo. That's more of the style living in the metropolitan areas. It is. They don't have as much suburbs like The US has because of the thirty year mortgage, which in turn has helped drive the economy massively over the... Over decades of time. Yeah. I mean, construction and housing is a major part of the of our economy.

Mike DeHaan: [5:49] It is. I mean, that, but also too, it's a huge wealth generator for people. You know, they they get into a home. Like, folks like the Dave Ramsey's and the Ramit Sethi's out there, like, these people that are super anti homeowner, they pretend like this isn't a real thing. But the homeowner, you know, you get into a home, you pay down a mortgage with fixed rate debt, you're building equity in that asset. That leads to a significantly higher net worth over the course of your, you know, your life. Right? And, like, a lot that gets overlooked. People talk about maintenance and all these sort of things. But if you look at the history of real estate values in The United States, it is undoubtedly true that people that have bought homes over the course of, like, the last, you know, hundred years, they are significantly better off financially. If they are the average person, they're not an entrepreneur, they're not doing something else that's super high income than just like everybody else who's who's still renting. It's very, very important for our economy and for people's, you know, financial growth. But

Dan Austin: [6:45] Yeah. I was going to add to that. The only way that that functions is as long as our population continues to grow, which other major players are seeing that fall off like China, their population growth is actually shrinking. So if you're reducing the amount of people that need to buy houses from the people that had houses the generation before, now you have a bunch of vacant houses if you're not continuously growing your population, which is also how our economy works. The GDP gross domestic product is measured in how much more did we produce and sell to the world. Yeah. It's kind of a weird thought.

Mike DeHaan: [7:15] Well, mean, have a thing in China though, because they overproduce houses as well as having the declining population. Like, that's why... Have you seen the videos of them, like, knocking down all these empty apartment complexes that they have built?

Dan Austin: [7:25] Right. Yeah. I... And I don't even know what their real estate market's doing. I'm just saying the idea is if you have a declining population, Japan is the same way, and their economy has been in, like like, technically in a recession for years. Like, right, it's just like they're not growing Yeah. Because they're dying.

Mike DeHaan: [7:40] Yeah. Yeah. I mean, when... Yeah. With China, ultimately, what it comes down to is nobody knows what the hell is going on over there. Nobody knows. Nobody knows the truth. Right? Even like the the experts that work for the federal government, they might know a little bit more than everybody else. But China, it does a very good job of making sure that no one really knows. You can have It's chaos. You just can't figure a lot of assumptions. You know, it's a huge country. They'll just go like, yeah. We'll just push things a little bit farther back so, you know, you can't, like, see it from where you normally Right. You know, we're viewing from. And that's why they have, like, those concentration camps out in the the Gobre Desert where they're putting all the the Igor Muslims. Right? I did not know that. You didn't even know that. See, most people don't even know that. You can go and you can find some general footage that has been, like, smuggled out of the country, and they have, like, literal concentration camps that look like more modern versions of World War two concentration camps. And they are just marching marching these people around. They have, like, the jumpsuits. They have, like, the shaped head.

Mike DeHaan: [8:35] They are completely dehumanizing the agri Muslim population over there. And most people don't even know about that. Right? Because China does not want you to know.

Dan Austin: [8:42] I do know that they have, like... Well, they have prisons and farms for organs. Yeah. So they have a huge organ market, like human body organ market over there. And I wonder if that's why... If that's part of it too where they're like... But they literally have, like, people and they're like, oh, you need a heart for a blood type this for this body? Cool. We got that in this jail cell. We're gonna go cut it out right now.

Mike DeHaan: [9:02] I mean, you're not wrong. Wow. The stuff that they do is insane regarding their human rights. Chase. Right? But What human rights? Yeah. So even even the way that they're getting into different countries. So when me and Madison, my my wife, we traveled around the southern African region for most of September last year. We went to Namibia, which was a part of South Africa until, like, the nineties. Then they got independence, and they were a very... I would say, like, they weren't super developed country. They had been the kind of forgotten parts, a super arid area. It's actually, I think, by by size, it's the largest arid country in the world. I might be wrong But, on like... So it's where they filmed, like, Mad Max there. Like, it's like these insane Lot of sand dunes and desert y Yeah. Sand dunes, but it's extraordinarily rich in, like, heavy metals. And to the point that when it first got colonized by the Germans, what the Germans would do is they would have their slaves, right, that would go out there, and they would crawl through the sand, and they would find diamonds. Like, not even kidding. That was their mining tactic was they would have their people that were, like, shoulder to shoulder, and they would crawl through the sand, and they would find diamonds, which is insane. But, anyway, the Chinese to... Like, they want access to these resources. Of course. Then maybe a declared independence.

Mike DeHaan: [10:19] The Chinese came souvenir and were like, hey. Your country kinda sucks. What if we came and we... So so exactly what they said. That is that is by quote in the Namibian history book. The Chinese ambassador said, hey. Your country's your country's shit. Can we come and build your entire infrastructure for you? We will build a modern electrical system, modern roads, modern plumbing, modern everything. We will do it for you absolutely for free. You just have to give us the rights to all of your natural resources. And they were like, hell yeah. We just get middle finger South Africa. Let's do it. Right? And they took it. So now they have this whole infrastructure being built by the Chinese. But the Chinese are crafty because not only are they getting all these resources, they have also now used the workforce they're sending over there. You know who they're sending? All of their convicts and felons Oh. And people that they don't want in their country. They are shipping them over to Namibia to build our stuff, and they're like, yep. You just live in Africa now. See you later. And they're just getting... They're... So they are That's wild. Getting rid of this problem that they had with, you know, the unsavory types, which I'm sure most of them are probably honestly innocent since it's it's China. Shipping them over to Namibia to build all this infrastructure. And now Namibia is, like, a pretty freaking nice country.

Mike DeHaan: [11:32] Like, when we were in some of the cities, I'm like, this is, like, Southern California. Like, it's it's sick. Yeah. We got breweries, like, on the beach. Like, it's not what you expect for Africa at all, but you're on the brink of a Mad Max desert. But then in all these neighborhoods are these, like, big fenced in areas where the Chinese live. And The ghettos. The the ghettos, honestly. And they... The Chinese people are not supposed to leave those. K? They're like the workers. To the point that we had a guy that was in our group, though, that was from Korea. He was, like, walking around by himself, and he got stopped by secure... By police. And we're like, hey. We need to see your papers. Like, who are you? And he had to show that he wasn't a Chinese national.

Dan Austin: [12:08] Dang. So it's pretty hardcore, dude. Well, I guess we'll never be getting airtime over in China now that you just said all that.

Mike DeHaan: [12:15] Damn it. There's there's Thanks, Mike. 2,000,000,000 people that are gonna They're

Dan Austin: [12:18] gonna miss out. Miss it out. Wow.

Mike DeHaan: [12:19] Anyways, that... That's that's my world history lesson for the day. But... Yeah. So back into real estate, though. These... I forgot my frick where I was gonna go with all that sort of stuff.

Dan Austin: [12:31] We were popping things off Yep. In foreign countries Yep. From foreign countries.

Mike DeHaan: [12:34] That's right.

Dan Austin: [12:35] Yep. We're also, like, getting ready to crush some more hiring, so we've been just continuous growth there, which is cool.

Mike DeHaan: [12:40] We have. Yeah. So we have we have several different positions that we are hiring for right now. If you're interested in working with us, you should shoot me a DM on Instagram at Mike underscore Invest. Here's a funny thing. I actually posted our different positions that we're hiring for on Instagram. Something that I've discovered is if you have a general platform, even if it's somewhat small, like, you know, this is an incredibly nice show. People wanna work for you, apparently. We've had so much interest in various things. I should discourage you, though. If you are of interest, you should still reach out because we're gonna be hiring for the next little while. But, yeah, we're looking for sales guys, looking for some data folks inside. We're looking for some admins for various things. And then we're looking for some client managers for our partnership program that we run-in all these markets. And it's something that I've come to find as we're building this out too is, at least for me personally, this real estate investment show, the core of business is real estate investment. I have come to find that in my, like, soul, I'm not like a real estate investor. I love the entrepreneurial style of what we're doing right now.

Dan Austin: [13:43] Yeah. It's it's a lot more fun. That's what you find too with a lot of real estate investors. There's what I find there's two types. There's people that just love it. They love real estate. They don't care about the business of it. They just love real estate, and that's why they're running a business. Or there's people that just love the entrepreneurship, and real estate is like a mini business. If you buy a rental property, you're a little entrepreneur, right? And now you can scale that as big as you want and become a business owner. I'm with you on that. I like that entrepreneurial aspect of running a business, building the systems and processes and all that.

Mike DeHaan: [14:13] Yeah. It's a lot more fun once you sort of... I guess, we've reached a point where we have the means to actually put resources into that. Right? Which makes it a little bit easier from when you're starting out. And, you know, I think something like a... Being a self hustler as, a real estate wholesaler is a great way to get started so you can make a huge amount of income as, a one or three man operation. But scaling that business without proper entrepreneurial structure is impossible.

Dan Austin: [14:40] It's challenging to say the least.

Mike DeHaan: [14:41] It is. Yeah. And as we have made that transition, it's funny as we've... There's kinda like couple different ways you can go. So we have started to go with, like, the large scale wholesaling with the different partnership partners doing and these different sort of things to scale our business. A lot of other people, what they do is they transition to, like, larger assets. Right? That's how they make more money is Mhmm. It's a higher cost per acquisition, but then the deals are much larger. And we toted that for a while, and we still do sometimes. And most people that we talk to, they're like, go up on this thing like that. They're like, when are you gonna start buying apartment complexes? And I've come to find that for me personally, I honestly don't care to do that. Like, it's just not exciting to me.

Dan Austin: [15:15] The ROI doesn't make it any better. Right?

Mike DeHaan: [15:18] No. It doesn't. You know? Like, I guess it can because it's a higher number at the end of it, but like the cash on cash at the race money, all those other things. But to me, it feels like we're starting over again with being... Like, when we were first starting to wholesale, we didn't have any money, and we were having to go and like walk the

Dan Austin: [15:35] Get hustle.

Mike DeHaan: [15:36] Yeah. Walk the pace, man. Like, do the whole thing and like be poor for a while, right, before we figured it out versus I feel like seeing the wholesale business, we can actually apply our resources to it and start to scale it more effectively than if we start with a new asset class.

Dan Austin: [15:51] Yeah. Yeah. It's hard to pivot. That's... It... It's like almost like a whole new business model. It is. And I go back and forth because, like, there are some conveniences with commercial real estate in general that residential, like, small residential, like, single family homes, a small multifamily don't provide, like, conveniences and one roof. Mhmm. There's more zeros behind the deals. So what I mean by that is, like, you could buy a $100,000 house and if that grows by 10%, you just made 10. You buy a million dollar commercial building, you just made a $100 on the exact same ROI. So, like, not that the ROI is any better,

Mike DeHaan: [16:25] but you're making more money.

Dan Austin: [16:26] Yeah. Right? And so there's some conveniences within that stepping in that space, but it's a lot of work. And then with that, the deal flow is typically less than you're gonna see on the smaller number of things. So it's more likely that you can do 10 single family homes before you can do one in commercial deal.

Mike DeHaan: [16:41] Yeah. For sure. And and don't know. Ultimately, for me, like, that just isn't that exciting. Like like, the the monetary gains are what's interesting, right, as it is for everybody. But the actual process of going through and having to underwrite an apartment and having to, like, you know, stand up management and advising them, like, oh my god. I really don't.

Dan Austin: [17:00] I don't It doesn't get you excited.

Mike DeHaan: [17:01] It doesn't get me excited, honestly. Like, what we're doing, we're trying to grow this and we are, you know, doing these partnerships with all these different people, and we are building like a service and a process and things like that that has big picture significantly more upside than a bunch of apartment complexes. We can't utilize things like debt quite as much, but if you look at the actual cash flow and value potential. Plus, also, we're helping people. We're building business relationships that are deeper than just like, hey. Look. Let's, like, buy this apartment together and pretend like we actually care about each other. And and that is,

Dan Austin: [17:32] I think, just a lot more fun, but that's my view. It is. It's just a lot... It's also a lot more challenging in different challenges. It's not necessarily rinse and repeat every day. There's something new you gotta tackle. There seems to be endless business processes or business challenges that you have to overcome with anything, but... Which is fun. And does feel more entrepreneurial than anything. It feels like you've grown a business as opposed to fixing a toilet.

Mike DeHaan: [17:56] Yeah, right. And I also like it too because it's like actually solving a problem. You know, like realistically, what a lot of the apartment buyers do is they buy a place that has like a little bit of meat left on the bone, They squeeze out a little bit more, and then they sell it to the next sucker until find there's nothing left. That's why the cap rates keep getting smaller and everything. Right? Because they're all... It's... It is almost like forced growth on it. And I find, like, when it comes to real estate, as numbers... You know, making money is important. This is the same reason I don't really like Airbnb. Right? I mean, it's like as like a general core model where these people are just buying these Airbnb properties throughout, like, cities where people live. Mhmm. If anything, you're kinda, like, creating more of a problem. If you look at a big picture, like, when they're doing a lot of these gentrifications and things like that on these different apartment complexes, all it's doing is squeezing the population there tighter and tighter and tighter.

Dan Austin: [18:44] Providing... You mean, like, it's providing less and less affordable housing?

Mike DeHaan: [18:48] Exactly. Yes. Providing less affordable housing is taking opportunities off the market for people if you're doing Airbnb. Taking these... Especially because no one wants no one wants, like, war zone properties. Very very few people are are going into these places that have, like, really, like, d class places and making them nice or even, like, c class. Everyone's like, I want b class, mostly turnkey apartment complexes that I'm gonna go and turn into a class apartment complexes. So no Sure. Yeah. Now what happens is with the the middle class, which is, you know, now up to a $100,000 a year, I think, for a lot of, you know, a lot of markets. Right?

Dan Austin: [19:22] Especially, they're nicer markets. It starts at, like, I don't remember, 50 to a 140. Yeah. Which is a wide range, but depending on where you live.

Mike DeHaan: [19:29] Which is crazy. Right? So you have people that are doing everything right. They now have to make a choice because that apartment complex they were gonna live in in the new town is fully gentrified. They either have to exceed, overextend themselves to live in the decent part of town, or they have to settle and live in, like, the shittier part of town that's, like, more dangerous and has all these other problems. And, ultimately, it just creates a larger issue that, sure, you know, people that are involved in it make their money, which makes sense. I fully respect that. But I don't know. Maybe this is just me being holier than thou. I just don't really like that.

Dan Austin: [20:03] Yeah. This socioeconomic conversation is boring. Yeah. Yeah. Right. But I know. I mean, you are creating the problem as well, Mike.

Mike DeHaan: [20:13] Just to know. I mean, like, we buy shithole houses, dude. Me too. We're like, we're not we're not buying, like, the the carpet paint flip for the most part. I would love to buy those.

Dan Austin: [20:21] I know. Trust me, man.

Mike DeHaan: [20:23] We don't get those shots. We only buy crack houses for the most part.

Dan Austin: [20:26] We do. We we truly... Which you could argue we're gentrifying the neighborhood, but we're not really in most of where we're going. Honestly, we're just like making sure the house doesn't look like a freaking pile of crap, which we have plenty of those here in Spokane that you're just like, ugh.

Mike DeHaan: [20:40] Yeah. But that at least gives an outcome that is beneficial to, like, the general population and not just like the the high end.

Dan Austin: [20:46] Like, you and I, like, lot of... We have kind of a unique perspective because I both hate the government and don't always disagree with them on some of the affordable housing and some of the stuff because, like, there are some... And anybody that listens to this, you can drive around your hometown and find these landlords, they're just idiots. Just let... They allow people to live in squalor, and, yeah, it's up to those people to choose to live there, but also just some of the crap these landlords do when we walk properties from tired landlords, and you're just like, are you kidding me? Like, that's what you did? Like, this is not even safe. Like, you just like nailed a piece of wire to the wall and hooked a light bulb to it? Like, really? Like, come on. You know? Or just just weird crap where, like, oh, the window broke. I'm just gonna put a board over it. Like, that's not fair. Yeah. That's not what they're paying for.

Mike DeHaan: [21:26] That one that you walked through yesterday that had the light that you could, like, pivot... Swivel over into the shower.

Dan Austin: [21:31] Yeah. That wasn't even land... That... You know what? Those people are just dumb. That was that was people, homeowners, DIY. That was the worst DIY I've ever seen in my life. Some of the stuff there. But but for landlords, I walk enough of them. Or there's... And this is the other problem in these days. There's a lot of new landlords, like everybody in America seems to be a real estate investor these days. There are a lot of new landlords that they go and hire a contractor and don't realize that the contractor just screwed them and used really terrible materials, didn't install them properly, and weird. After six months, it's falling apart.

Mike DeHaan: [22:01] I mean, we just walked a whole package that we were looking at very seriously, air in Spokane. And the guy that bought them was like, well-to-do. Like, he has the money. He has... He put good money. Great guy. Yeah. Super nice guy. Put great money into these, like, what I would say, were were c class assets. They turned into class assets, but the work quality was absolutely shit.

Dan Austin: [22:24] Yeah. It wasn't great in most of them. Yeah. It's like, how do you And it

Mike DeHaan: [22:27] was only two years old. Less than that.

Dan Austin: [22:29] Yeah. It's like, yeah, you can't allow that. But you don't know what you don't know what you don't know. And and a lot of people see the same thing. They say, oh, new LVP floor. The walls look white, but then you look a little closer. You know? And you're like, okay. It's like when you move into a new house and, like, if if you've ever moved into houses, like, that you own, like, you kinda... Even me, who's an expert at walking properties, like, after about six months, I noticed... Start noticing things. I'm like, noticed that before. Like, oh my god. Like, that looks kinda like messed up. Like, whether it's a brand new house or a house you you... That somebody else lived in, you always see these things. Like, then you can imagine when you're living or you're owning a property that a fly by night contractor put together and you're seeing some of the stuff just fall off. The cabinets literally just falling off the walls. It's like... And then your tenants have to deal with And they're upset, and they're calling you, and you're like, woah. I don't know what's going on with that. And you're spending... Instead of 10% on average a month and maintenance, you're spending 20%. Yeah. Because everything's broken after you just put a bunch of capital into it.

Dan Austin: [23:27] Yeah.

Mike DeHaan: [23:28] I mean That's a huge problem too because that affects the value of your property as well. Like, you're gonna have to fix that.

Dan Austin: [23:33] Yeah. Because people like us walking were like, no. We're buying.

Mike DeHaan: [23:35] Totally. And then... And and also too, now that the market has cooled down, you can't be doing flips like that either anymore. You know? Like, people were getting away with that in 2021. Gross. Like, you do that this year, you're in big trouble. An inspector's gonna go and just pick apart everything. So... And, like, yeah, I don't know. You cut corners on weird stuff. That's what happens. Like, I I was under contract to buy this short term rental down in Austin, and I I dropped the contract this week. Like, a, because my sale that I'll sanction $1,010.31 into had gotten pushed back because title companies are a freaking joke. You know? And they waited until the day before closing to let me know that they realized that there was a lien on the property that still hadn't been released from the previous owner, like, five years ago.

Dan Austin: [24:16] Amazing. Amazing title work.

Mike DeHaan: [24:18] Yeah. They had forty five days to make sure that everything was good. And then day before closing, like, actually, we're gonna delay you two weeks. And I could already see the writing on the wall that things might get pushed out even longer. So I decided to drop the contract and not risk my $10,000 of earnest money. But on that on that deal, it's like a fully renovated house. They'd owned it for, like, two years. Place looked great. Like, it did. And a lot of the little stuff was really good with it. Right? Like, the general visuals were awesome, but it was just little shit that they did. So for example, we found out that they had extended the driveway. In the process of extending the driveway, whoever did it, they didn't. Like, I don't even know, like, how they just do it, but the sewer line

Dan Austin: [24:59] You just know it's wrong.

Mike DeHaan: [25:00] I don't know what's wrong. The sewer line got crushed underneath the driveway. Oh, no. Right? Underneath the new driveway. And so what the inspector guess happened was that they went in. They knew that the sewer line was there. They didn't actually, like, put anything underneath it to, like, give it a support. Right? So it was kinda sitting on, like, sand. And, basically, when they put the cement on top of it, it just, like, crushed it down into, like, a, like, a particular spot where it was, like, super flat and it had a big bellow in it.

Dan Austin: [25:27] Must have been, like, a shallow sewer line because it's, A couple feet.

Mike DeHaan: [25:29] So it wasn't it wasn't very deep.

Dan Austin: [25:31] Oh, yeah. Yeah. That's problematic. They might even, like, dug into it when they were replacing some of the dirt with, like, gravel for the concrete.

Mike DeHaan: [25:37] Yeah. I I have no idea. But just like they cut in corners, like, right there like that. Or, like, for... Or another thing that in that house, they went through and they rewired a shit ton of the house.

Dan Austin: [25:46] Mhmm. I love those ones.

Mike DeHaan: [25:47] And it was good. Like, it was all done by an electrician, quote, unquote. But in the parts, they didn't rewire, that they just, like, sort of left there. It had, like, old shitty aluminum wiring Oh, that's all good. That wasn't, like like, correctly tied to the rest of the system. So not only would it... Was it aluminum wiring, but, like, the way that it was tied to the breakers didn't make any sense. So, essentially, you would have, like, an outlet in, like, one room that was a different breaker than, like, the rest of the room. Right? Because they just, like, did, like, some fuckery with it, and they didn't do it right. Yeah.

Dan Austin: [26:20] I might They... So what they probably did likely... And you know who else has a... Or where else you find aluminum wiring commonly? No. Trailers. Trailers, you do. It was a common... We don't see it a lot up here in the Northwest, but there's there's other parts of the country because aluminum was cheaper. What you see is they... Especially depending on when it was initially built, people trying to cut cost, And so the way that they would wire things is they would be like, well, I'm gonna use the least amount of wiring possible. And so with that, you have weird things, like, just not, like, necessarily bad, but weird things like you're saying, like, oh, this outlet in this room is actually attached to the breaker for the other room, which is because it was the shortest way to connect that outlet to the circuit breaker. And so then they saved maybe, like, six feet of wire. And back then when they're building it, if wire was expensive, why they're use... Like, copper was expensive, that's why they're using aluminum. They're probably trying to cut every corner possible. Yeah. Not necessarily bad, but they're just... It's not ideal for the homeowner.

Mike DeHaan: [27:16] Yeah. Because it has a much higher fire risk. Right? It's like the big thing.

Dan Austin: [27:19] Some of it... Well, aluminum definitely has a higher fire risk because it's... The rating on it is so much lower than copper.

Mike DeHaan: [27:24] Yeah. Right. And then with modern electronics, you plug a bunch of things in and that, you know, aluminum wire is not good. Causing issues.

Dan Austin: [27:31] So if you don't have to mess with it, you shouldn't mess with it. Yeah. Hence, cancel your contract.

Mike DeHaan: [27:34] Yeah. Exactly. So, you

Dan Austin: [27:35] know, in this market where you have options

Mike DeHaan: [27:37] Yeah. Then that's exactly the point I'm making is I have options. I have tons of other stuff I can go look for. I'm like, I'm not gonna clean up their mess. You know? Especially, I I kinda feel bad. They're definitely losing their ass on the property. So that was 100% their version of the property that we had where we lost, like, $50 on. Still hurts. About a month ago, which sucks. But, like, I looked at the history of it. When they bought it, the total work that they did on it, all these sort of things, I'm like, oh, yeah. They're they're definitely getting wrecked, like, horribly. They they originally had it listed at, like, $8.99, and I got it at $7.25.

Dan Austin: [28:10] That's awesome. I... That's what

Mike DeHaan: [28:12] I had it for now. It's now it's on back of the market. So

Dan Austin: [28:15] Yeah. Of course. Yeah.

Mike DeHaan: [28:16] Yeah. Yeah.

Dan Austin: [28:17] So I do have a couple topics that we need to cover today.

Mike DeHaan: [28:20] I'm sure what we need to cover them. Whatever whatever pop culture you've been reading up on.

Dan Austin: [28:25] Dan's pop corner. Is that what we should call it? The pop corner.

Mike DeHaan: [28:29] Like from Costco? Like the chips?

Dan Austin: [28:31] So one of them is funny because it reminded me when we were talking about hiring, I wanted to bring this up. Yeah. It's it's actually pretty funny and speaks to kind of like the anti corporate culture of our company as well, like how we do things. I'll say, where are going with this? Well, Elon Musk. I don't know if anybody follows him on Twitter, but I do. And, like, there's this employee of his or employee at Twitter that posted on Twitter. He said, nine days ago, the access to my work computer was cut along with about 200 other Twitter employees, blah blah blah. However, HR doesn't know if I'm an active employee or not. And and Elon and Elon Musk was like, what were you working on? Like, he literally replies to this this tweet, and he says something about confident. He's like, well, I would have to bring confidentiality, so maybe your lawyers can something something, and Elon Musk just writes, it's approved. Go ahead. Like, he's having this Twitter conversation with the guy. Right? And then the guy goes down and says, well, I've been doing these things, blah blah blah, and then Elon Musk is like, take a photo. It doesn't count without a photo. Like like, just kinda trolling this guy, but also, like, shut the hell up, like, who are... You know, like, and then people get all over, like, oh, he's such a bad person, but then he follows up with his own Twitter post. That is, the reality is that this guy, who is independently wealthy, so he's a a rich dude, has actually done no actual work for Twitter, and he has claimed it's because he's disabled.

Mike DeHaan: [29:49] Mhmm. So he

Dan Austin: [29:49] can't do work for Twitter, and that he's basically one of these guys that he's a serial... I don't know what you'd call it, like, employment, like, he's litigious, so he tries to get jobs at places where he can sue and come up with excuses, And so that's why he's independently wealthy. So Elon knew this dude's background, right Uh-huh. Before he responded to it. But I just thought it was kinda hilarious, like, that he's doing this on Twitter just, like, refreshing people. Yeah. Because it's it's very polarizing, but it also speaks to, like, I think he has somewhat of an anti corporate culture and recognizes that which he's actually also leading the charge in the tech industry because he had all these layoffs with Twitter. And, you know, everybody's like, oh my god. He came in. He just laid off all these people. Well, guess what happened immediately after that? Everyone else did. All the other tech companies are laying off tens and tens of thousands of people, and they... The word on the street is that Elon Musk basically empowered all these CEOs like Mark Zuckerberg, who's, like, limp wristed, just like, oh, I don't wanna lay off my employees. And when he laid them off, he's like, well, we're not technically gonna lay you off or this is it.

Dan Austin: [30:47] We're definitely not laying more people off. And then like two weeks later, he lays off a whole another 10,000 people. Like, just this weird culture within Silicon Valley, and he's, like, leading the charge to change that, basically.

Mike DeHaan: [30:58] It's because they're a bunch of nerds, dude, who, like, start these huge They, like, we're coding something in their mom's garage, and then they're like, oh, shit. I I have a billion dollar company now.

Dan Austin: [31:07] Well, it's it's fascinating though too because I don't know that it used to be like that. Like, you think of startup culture, which is like work around the clock, even if you're a nerd. Right? Like, that's... That culture was in Silicon Valley. But, like, things have changed, and there's a whole bunch of really fascinating topics on this when it talks about why it got to that and, like, why people are getting paid so much and, like, how... Like, stock compensation. One of the reasons why people are doing that is because that is a non p and l item. So they're hiding compensation on the balance sheet so that

Mike DeHaan: [31:36] their EBITDA looked better. Gotcha. Yeah. It's it's all about stock valuations. Right? All those stocks. Yeah. It's just freaking...

Dan Austin: [31:41] Yeah. The whole thing's crazy. Unintentional consequences. Yeah. That's all I'm saying with that, but it... I just thought this was funny. So if you do come work for us, you know, we probably won't have a Twitter battle with you, but, like, we also won't need to because it's not our company culture.

Mike DeHaan: [31:53] Well, the funny thing is is, like, what he's doing, I feel like it is polarizing, but people who are business owners, like, typically, they're like, oh, yeah. I totally get where he's coming from. Because we've all dealt with that person. Even if it's not within your own company, everyone had their own coworker in their corporate workplace. Like, that's like fucking... I don't know. I don't wanna say a name because someone's gonna come a name that I'm gonna flame. But but, you know, there's this... That everyone has been around that person, the corporate workplace before, and you're like, that fucking guy didn't do anything the whole time he was here.

Dan Austin: [32:26] Likes that person no matter what.

Mike DeHaan: [32:27] But they're always super opinion about the company. They're always super against. I mean, yeah, we've all been there. I mean, I mean, I remember especially when I was at Boeing, the people that were the most into the Boeing culture and, like, they hated it. They would always have... They were so involved in the union. They, like, hated the c suite. They didn't do dick ever. Yeah. They did nothing. Absolutely.

Dan Austin: [32:48] And here's my opinion on that. It's like, you know what? The corporate culture is able to foster you to not do anything, and they're gonna still pay you. That's not your problem. But you do not need to whine and bitch about it because you're doing nothing for a pretty sweet paycheck.

Mike DeHaan: [33:00] I know. Yeah. Well, and the thing is the reason people do that is because they're so dissatisfied with their life.

Dan Austin: [33:06] Yeah.

Mike DeHaan: [33:06] Right? 100%. And that is, you know, and that is a personal problem. Right? But that is also why things like real estate are here where you can come and you can make that jump, and you don't have to be that person anymore.

Dan Austin: [33:18] Yeah. 100%. And then that real estate has been helping for decades to get people financially free. Yeah. It's amazing.

Mike DeHaan: [33:24] And I think that's actually a reason there's a huge crossover. We got... We see this all the time with people that have, like, been interviewed on this show or just the interviews I hear on other shows. Engineers that get into a corporate gig at, like, a pretty cool company, and they're like, this sucks. And then they get into real estate investing.

Dan Austin: [33:40] Wonder why because engineering isn't that cool.

Mike DeHaan: [33:42] No. It's the worst job, especially now that everything is so processed and there's so many regulations and things like that. Like like, when I first got... You know, when we were at school, I got my electrical engineering degree. I kinda, like, had this thing. Was like, I'm gonna be, like, out there, like, inventing stuff. You know? Some people design shit. No. You're you're a glorified project manager.

Dan Austin: [34:01] You cut and paste things. Yeah. Like, you don't really do anything as an engineer. And that's coming from, you know, a couple guys who worked in several different aspects of engineering, and it's not really that

Mike DeHaan: [34:09] cool. I worked at five different companies in my five years. Like, I've seen the full gambit. I've worked at everything from a company that was eight people that was doing, like, you know, consulting to Boeing, which was, like, 50,000 people

Dan Austin: [34:22] Right.

Mike DeHaan: [34:22] And everything in between. And all those roles, yeah, it's terrible terrible industry to get into. So freaking boring unless you're

Dan Austin: [34:29] a paper pusher or you just, like, love the Unless you like that.

Mike DeHaan: [34:32] Unless you like that.

Dan Austin: [34:33] Some people love that type of job. They thrive in the in the framework of that job. Yeah. They thrive in knowing what they're gonna do every day. And generally, in engineering, the slow pace of that. Mhmm.

Mike DeHaan: [34:44] Yeah. And people eat it up. Right? That's cool. That's that's all them. But if you're like most people and you don't like that, you get into it, but you still have, like, the mindset around, you know, you understand numbers, you understand, like, the strategy about how to put together a general process, but you want more. Real estate is like the perfect transition. You're absolutely right. It is. Even as we have come and gotten into this business, people have asked me regularly, how are you able to sort of, like, figure this out so quickly? It's like, well, I took my product sort of background. I have my product as my process size background of doing engineering projects, Just put that towards marketing and analyzing rental properties and flips and things like that. And it's kinda one to one. Like, the general mindset that you need is super, super similar.

Dan Austin: [35:30] For sure. It's very helpful.

Mike DeHaan: [35:31] It is. I think that's why there's a huge crossover of people that make that switch. But because, you know, it's ultimately this whole business is just determining patterns and getting a process in place and learning how to run a budget and then doing that consistently over time. I got one more

Dan Austin: [35:45] thing I wanna get your opinion on. Yeah. This is something I've noticed the

Mike DeHaan: [35:47] last couple weeks. Last couple weeks? Uh-oh.

Dan Austin: [35:49] Yeah. And so I followed two... I think only two that I follow prominent female influencers in the real estate space. I don't know if I should name them or not, but we can get down

Mike DeHaan: [36:00] that road. I know what you're say. You're gonna say it's Cody it's Cody Sanchez.

Dan Austin: [36:02] Cody Sanchez. And Investigator. Investigator.

Mike DeHaan: [36:04] They're who everybody in real estate follows because they're... It's shockingly hard to find prominent female.

Dan Austin: [36:09] They're badasses, like, hands down. Like... And that's why I follow them. Like, I just think they're super awesome. They've both started from scratch and and built freaking empires. Like, Cody Sanchez is an entrepreneur, and her whole thing is is buying small businesses. Right? I feel like she's like the Alex... The female version of Alex Ramosie or Alex Ramosie is the male version of her, whichever, like, however you wanna say that. Like, because they're both kind of in that. Alex Ramosie has acquisitions.com. She has her whole mastermind group, and that's her big thing of, like, buying businesses, growing them, and selling them. Investor Girl Brit, real estate, her thing was starting off doing videos of herself rehabbing her single family homes, and now she's like this freaking powerhouse doing self storage and all that sort of stuff. Awesome. But I've followed her for a long time, and then recently I noticed that some of their posts, they would post like them talking about storage units, but in a bikini, or talking about buying a business in a bikini. I'm like, why do you need that? Like, why are you doing that? Right? Obviously, it's for more clicks, more influence, more followers. And then it made me start thinking, I'm like, is that their problem?

Dan Austin: [37:11] Like, is that a problem? And I was like, well, not really. I mean, first of all, I'm like, I don't care what you post. Like, if you like it, if you want, if you have like a nice fit body you're proud of, want to do whatever, it doesn't bother me at one bit. But then the other part is is I was like, is the Internet just driven by a bunch of dudes who need to see that Uh-huh. In order to follow people? Yes. That like, is the Internet broken or is that how the Internet exists or why the Internet exists? It's just dudes needing to see women in bikinis.

Mike DeHaan: [37:34] I mean, even beyond that. Right? Again, it's a it's a general society and Internet issue. And I think it's really sad that they have the need to do that. Right?

Dan Austin: [37:44] Like It's sad, but here's one advantage, though. You and I cannot take a shirtless picture and get a bump in influence.

Mike DeHaan: [37:51] You and me can'ts are not fucking shredded. If we That's true. Yeah. If we were, like, 3% body fat, we probably could.

Dan Austin: [37:57] Maybe... Yeah.

Mike DeHaan: [37:58] Because there's there's dudes that are out there. Even our even our business coach right now, Steve Rozenberg, he's, like, 50. He's shagged. Like, that is part of his brand. With the... With females in this, I mean, that kinda sexualization, I imagine that they... If you wouldn't ask them if that was, like, three years ago when they started this, like, oh, yeah. You're gonna be talking about business, and then you're gonna have to start doing a bikini to continue getting followers. They would have been like, fuck no. That's ridiculous.

Dan Austin: [38:22] Right.

Mike DeHaan: [38:22] I would I would assume... Again, I don't know them. I would just make that assumption. But I guarantee you they... I mean, they have media teams. There was a conversation around putting that piece of material together. And ultimately, what it does is it does get eyes. Right? Regardless of you, you're going through just going through Instagram. How Instagram algorithm works, not only just what you engage with, but it's also what you pause on. You go through, you see a female in a bikini, men or women that are interested in women too. Women too. Anybody. They are going to pause on that because it stands out, and now you are going to get exposed to more of their content, right, on a regular basis. It is a business decision. That's fascinating. Honestly. It's like... You know? And and that's just the reality of it. Is it weird? Sure. Is it necessary? It shouldn't be, but it is. Like, that's just the nature of how marketing works, especially when you're trying to be a personal brand. There's a reason that, like, some of these Twitch streamers and things like that, like, they get... It starts to get big, and they go and start, like, an OnlyFans, and they do all these things. They're making, like, million dollars a month, some of these women. Yeah. Right?

Mike DeHaan: [39:26] Because... And and I guarantee you that when they first started streaming on Twitch, they're like, oh, I'm gonna, like, play games on the Internet. This is cool. And then they're in, a hot tub. And then the people are like, hey. Send me pictures of your feet. And they're like, cool. I'm gonna start this thing. And they've paid ridiculous money. It should it should not be that way. But unfortunately, that is the state of humanity right now.

Dan Austin: [39:45] Man, reminds me of idiocracy.

Mike DeHaan: [39:47] Yeah. Honestly. Right. Dude, that movie, so ahead of its time,

Dan Austin: [39:53] So shockingly relevant. And every decade goes by, it gets even more relevant.

Mike DeHaan: [39:58] It's it's so bad. Like, I don't know. We... I should go rewatch that and just like... We should do... Here's what we should do. We're gonna do... We should do a collecting keys, idiocracy watch, like a reaction. Together reaction. This is what the podcasters do. Go watch a movie, and then, like, you talk about...

Dan Austin: [40:16] We can make a YouTube content. That'd probably be a terrible YouTube video.

Mike DeHaan: [40:21] Yeah. It would. Especially because we get bored halfway through, and we'd be like, well, every every, like, four minutes, we'd actually be taking phone calls because we're trying to close deals and stuff. Seriously.

Dan Austin: [40:29] Anyhow, sorry to take us down that rabbit hole. I just wanted to say that... Express that as as influencers out there to see what your thought was because I just caught my eye. Maybe... And I thought for a second maybe I was the only one that noticed that. I mean, minus the millions of followers.

Mike DeHaan: [40:42] Yeah. Well, it's all about getting followers at the end of it, you know? So I don't know. If I was in the position, I'd do the same thing. That's all I know.

Dan Austin: [40:48] A 100%. I'm on board. Yeah. Like, if that's how you gotta

Mike DeHaan: [40:50] do it, you gotta do it. So Cool. Anyways, guys, thanks for listening to this show, this episode of the Mike and Dan show. Just a couple quick reminders. Goto store.claytonhughespodcast.com to check out our new merch store. There's gonna be, like, two things on there right now, and we'll add stuff periodically. We'll always let you know when we come up with a new design. We're not gonna have, like, 50 things because that's on our brand. Our goal is that there's, like, the niche shirts that when we have Keyes Con or some whatever thing here in, like, the next couple years that everyone can show up and be like, oh, you got the BDE shirt. You got whatever. And I'll be the only one wearing the BDE shirt.

Dan Austin: [41:27] Nah. Nah. They'll they'll be real weird with me wearing them.

Mike DeHaan: [41:30] There there will be a couple wearing them. And then if you want to work for us, hit me up on Instagram at Mike underscore invest, or you can hit up Dan at investor main Dan, go and shoot us DM shoot us a follow. Let me know if you're interested in a potential employment opportunity, because we are hiring people pretty aggressively. And I'd love to hear what you can do. So awesome, guys. Thanks so much for listening. And we'll talk to you all next week.