Cash Flow Lies: How to Stress-Test Your Next Deal

Mike DeHaan: [0:00] If you wanna make, like, real money, you wanna make $500,000 a year, you wanna make a million dollars a you wanna make several million dollars a year, you are not going to do that working four hours a day. So, like, this is actually the real issues with AI, honestly, is people get, like, this, like, false confidence and stuff like this.

Dan Austin: [0:17] Oh,

Mike DeHaan: [0:17] yeah. I saw there was, like, a a headline. There was, like, this big fire at some utility building that was somewhere. I think it in, like, South. And, basically, the story behind it was that there was an apprentice that was rewiring something, and they were unsure about what to do. And they had a master there that told them, like, how to do the configuration, and they instead decided to do what ChatGP told them to do. Yeah.

Dan Austin: [0:42] Of

Mike DeHaan: [0:42] course. And it created a fire that burned down the whole building. So there we go.

Dan Austin: [0:46] What if Chad GPG meant to do that? AI's taking over.

Mike DeHaan: [0:51] What's going on, guys? Welcome to collecting keys. I'm Mike Tahan here with my cohost, Dan Austin and Dylan Cook. And you know what, Dan? It's actually a valid point. Right? They they always think that AI is gonna be like Skynet taking over. What if instead AI is just so malicious that it is slowly spreading, like, false information and bad stuff intentionally because it knows that it will eventually just defeat humans that way, and they'll defeat themselves. So it can live forever. You know? Like, it's not like it has time that it's going against.

Dan Austin: [1:17] It can't live forever, though.

Dylan Koch: [1:19] This is like that Marvel movie, the Avengers movie where the one thing that takes over and is a real I free am not a nerd. I don't watch Marvel movies.

Mike DeHaan: [1:26] The Marvel Avengers movie where the one thing takes over? That's not like all of them.

Dylan Koch: [1:29] The Jarvis thing. I don't know. If you're a nerd, you can correct this on the

Mike DeHaan: [1:32] on our social medias. The problem I have with Marvel sort of stuff is there's no actual, like, danger. Right? Like, know they're gonna win in the end. Right? And even though they had the movie where, like, Spider Man dies, everyone they're coming back in the next one. Don't pretend like you didn't know that was gonna happen.

Dan Austin: [1:46] Does the good guys ever do they ever lose on any movie?

Dylan Koch: [1:49] In movies, no. But They'll, like, kill one

Mike DeHaan: [1:51] of them, but it's it's really because, you know, Scarjo decided that she didn't like the contract arrangement. So Disney's like, fine. We're gonna kill your ass in the next movie.

Dylan Koch: [2:01] Yeah.

Mike DeHaan: [2:01] So you can't come back anymore. You know? Usually, that's all over the headlines beforehand, so you know it's gonna happen. It's not like a surprise.

Dylan Koch: [2:08] You know, good guys always win. That's what the history books say.

Dan Austin: [2:11] They do win. The the winners write the books.

Mike DeHaan: [2:13] Well, they do. They gotta write the books. They get to decide. Mhmm.

Dan Austin: [2:16] That's why America has so many good history books.

Mike DeHaan: [2:18] I know. That's why that's why we forget about so many of the horrible things we've done.

Dan Austin: [2:21] I read them for entertainment.

Mike DeHaan: [2:22] Yeah. For sure. But yeah. I'll tell you what, that that is like a great conversation if you have like a, an older relative that's very pro America. Just like say shit like that. Like, when I was I was home for summer, the we'll get to real soon after this. Over the summer, I was back at my in law's place. Father-in-law, awesome person. I really, really enjoy hanging out with him. But he's also one of those guys when you're, like, you hang out, like, let's watch movies. Like, let's watch, like, Black Hawk Down.

Dan Austin: [2:46] Great movie. It was

Mike DeHaan: [2:47] a great movie. For sure. Great action movie. And I was

Dan Austin: [2:49] like This led a lot of people to kill more people.

Mike DeHaan: [2:50] For sure. And I I was like, totally. Let's completely celebrate an atrocity that the The United States committed. And he got so butthurt by that. Like, I made, like, a kind of a snide comic because I do that with him all the time because it's funny. And it, like, ruined his day.

Dan Austin: [3:04] Well, that that's a bad example. That that's not a good should use the Vietnam War. Like, that's a good example of that.

Mike DeHaan: [3:10] The funny thing is is what he ended up watching was, Full Metal Jacket instead. That's a you know?

Dan Austin: [3:15] That's a great idea. It's also a great idea. Same problem. Here's what you need to realize, though, Mike, is if we didn't do it, someone would have done it way worse. We're doing it in a better way.

Mike DeHaan: [3:24] Well, of course. And, like, I think people do it do it all the time still to this day.

Dan Austin: [3:28] Yeah. In Africa, it happens. It's probably happening right now in Africa. Pretty sure they're actually ethnically cleansing, like, a thousand people right now.

Mike DeHaan: [3:35] It happens all over the world. It has all the time.

Dylan Koch: [3:37] It's like when they release the videos of them shooting the drug cartels in the ocean. You see you got you've seen that lately? It's pretty fucking cool.

Dan Austin: [3:45] A million dollar missile just to some boat.

Mike DeHaan: [3:47] Did you see the video of them boarding the oil tanker yesterday?

Dylan Koch: [3:51] I did, actually. I did see that. Yeah.

Mike DeHaan: [3:52] I was like, I don't really know the deal with that, but that video is pretty dope where they have the drone in. Is it the

Dan Austin: [3:57] coast guard? I haven't watched any of this. Is the coast guard doing it?

Mike DeHaan: [4:00] I don't know, dude. Like, it's fully armed guys that are jumping out of

Dan Austin: [4:02] a helicopter onto the boat. That's what the coast guard you know, this is, like, their one time they get, like, a claim to fame. They're like, we're doing some cool shit, man. I thought the

Mike DeHaan: [4:10] Coast Guard was like, you like go into the ocean to, like, save boats and shit.

Dan Austin: [4:14] No. They actually no. They, like, actually do go after normally, that's what they're doing is going after, like, drug boats, and they do the other stuff too. Oh, really? Yeah. They're not just a rescue mission, but they don't ever get any any fame for it. They're finally getting fame.

Mike DeHaan: [4:29] What are you talking about? They did that movie with Ash Ashton Kutcher in it where he was like a like a diver went out there.

Dylan Koch: [4:35] That's an old one. Yeah. It's old one.

Dan Austin: [4:37] It was that one movie,

Mike DeHaan: [4:38] dude. The one coast guard movie they ever made. But I thought that was Top Gun, though. Were those guys not coast guard? They seem gay enough to be coast guard.

Dan Austin: [4:44] I don't know.

Mike DeHaan: [4:45] But maybe, Nick. That's right. That one was for you, Dan. But alright, guys. Well, we got all kinds of stuff to talk about this week. The big one is the Fed cut rates yesterday, 25 points.

Dan Austin: [4:59] Oh my god. Are we making money now?

Mike DeHaan: [5:01] Yeah. So we're all gonna get rich. It's funny. A bunch of borrowers from any company reached out wanting to know how much the SDR rates went down. I'd tell them that they do not follow the fed rates, so zero. But then, Dylan, you actually sent over that clip, which I thought was pretty interesting of Jerome Powell just straight saying that, like, hey, the housing market is kind of screwed. Like, I don't know what we're gonna do. And he's like, just making some 25 adjustments on the rate is not gonna fix anything. No.

Dylan Koch: [5:26] Yeah. Straight from the horse's mouth. I was kind of like, usually they're pretty guarded in what they say, and he pretty much let it on the table like, hey, this is kind of cooked.

Mike DeHaan: [5:33] Yeah. A couple of months was

Dan Austin: [5:34] it a couple months ago, he said he you know, maybe it was a few months ago. He was like, I think potentially, maybe, possibly that what the federal policy overinflated the housing market.

Mike DeHaan: [5:44] No. And now he's

Dan Austin: [5:46] No. He said that. He said that like a few months ago.

Dylan Koch: [5:49] Yeah. He he's like, our actions might have

Dan Austin: [5:51] May have possibly

Dylan Koch: [5:52] have like caused higher prices than we originally intended or whatever. And like the postmortem on some of their decisions that for them to admit it is a lot.

Mike DeHaan: [6:01] That's a Yeah. Yeah. Huge. Yeah. I mean, the funny thing is is I mean, I'm sure it's always been this way. I feel like it's just really accelerated with the Internet and the rate of information. There's so many for as long as I've been alive, the government makes decisions that everyone fundamentally knows will have negative consequences down the line. And we just kind of like accept it. Right? And then they just kick the can. And then the next administration has to make their stupid decision that's gonna lead to more problems on top of the other problem. And that's how we get into so many of the issues that we have now with, like, failing school system. We have the housing market issue. We have the affordability issue. We have all these different, like, you know, minimum wage situations that are going on everywhere that are screwing up a bunch of stuff.

Dylan Koch: [6:45] A lot of the stuff, like and that you're gonna touch on, like, a soapbox I'd like to get on, but it's basically, like, people like to blame recent past administrations. A lot of this stuff can be tied to really the seventies because that's when we came off the gold standard. That's fifty years ago.

Mike DeHaan: [7:00] I know.

Dylan Koch: [7:00] But this stuff goes in decade cycles. Like, we are paying for some of that now, and you could argue that because of the exponential increase in the dollar, like 80% of dollars have been minted since 2020. Right? That we are getting near that exponential place. Like, we it's really hard to kick the can down the road and has diminishing returns. Right? The diminishing returns of kicking the can is getting harder and harder.

Mike DeHaan: [7:22] Yeah. For sure. Or like the delay that you kinda get from it. You know? Just Correct. It just happens so much faster.

Dylan Koch: [7:27] Well, I was gonna say, so like, they basically said that they're gonna start expanding the balance sheet on top of the 25 basis point cut yesterday, And at a tune of about 40,000,000,000 a month, so around 500,000,000,000 a year. To put that in comparison, like, the 2008 TARP, the toxic acid early program that everyone thought was gonna cause hyperinflation, was 800,000,000,000.

Mike DeHaan: [7:47] Wow.

Dylan Koch: [7:48] So, you know, our run rate is, what, sixty percent of that. And obviously, COVID was trillions. But my point being is, like, I think this is just it'll be 40,000,000,000 now. They're gonna see how it reacts, but I wouldn't be surprised at 2026. Really, q two. 40,000,000,000 a month? That's what it is. Like, I think it's going be more than that. Like Mhmm. Going

Dan Austin: [8:05] from that. Yeah. Damn. So they're to buy 40,000,000,000 a month in mortgages?

Dylan Koch: [8:09] No. It's only and they're only buying t bills. They're only buying short term debt. They're not even buying mortgage backed securities anymore.

Dan Austin: [8:13] Oh, no. No MBS. Okay.

Dylan Koch: [8:15] No. So the composition of their balance sheet is also changing.

Mike DeHaan: [8:18] Yeah. All that MBS is being bought by overseas banks. Yeah. Like a lot of the the same people that are buying the DSCR stuff are buying the mortgage backed securities.

Dan Austin: [8:28] Because they believe in the American dream, dude. They just wanna own some houses.

Mike DeHaan: [8:31] Well, see, and that's the thing actually that's very interesting is there is a fundamental belief in American people, but not the American institution. Yeah. And that's one of the reasons that you're seeing very aggressive DSCR rates is because they acknowledge that there are people that have money, that there are people in The United States that can do good business and are lendable, but they don't trust the American institution to do well. Right? The government.

Dylan Koch: [8:53] Back up your point, Mike, a lot of treasury issuance, especially the long end, is relied upon basically third parties, which is other foreign nations. On net, they have not bought enough of the treasuries that's been issued since 2014, and it's less and less now. So out of all of the bills and treasuries that are issued, we need China to buy them. We need Saudi Arabia to buy them. We need all that, but they don't. Who steps in to to buy the difference? It's the Federal Reserve. Mhmm. And like that has been a more and more portion of their of the assets that they buy.

Dan Austin: [9:26] Yeah. So now they're switching over to that. Yeah. Interesting.

Dylan Koch: [9:29] I don't know what that's gonna look like, but I mean, all of this has even changed in 2008. Like, how the Fed funds rate work? That wasn't a thing prior to 2008. The Fed had control, but they don't control the overnight rate that goes to JPMorgan, Citigroup, Goldman Sachs. And sorry. I'm ranting a little bit here, but the semantics are when they buy these 40,000,000,000 a month of treasuries or whatever, they're adding to the balance sheets of those primary dealers. But it's up to those primary dealers to actually lend that money into the economy. Mhmm. So even though they're increasing their balance sheet, it's up to the public sector to actually buy those, to actually issue more loans. But if they're getting paid three and a half, 4% to buy from the Federal Reserve and just lend overnight, they have no incentive to lend to the consumer unless that they're lending at six, seven, 8%. Mhmm. Yeah. I don't see how this most recent action everyone sees this. I'm like, oh, money printer go burp. We're all gonna start making money. Like, assets are gonna rip. I actually don't think that's the case. At least not until we get a much bigger print level.

Mike DeHaan: [10:24] Yeah. Yeah. I really think that the especially real estate where the potential value right now is is you're just basically holding something that's kind of like a steady value. Right? Whereas people are are losing money and as people are spending money on their day to day life, they're making less money. Inflation has gone up. Right? They their gap between what their savings are and what they actually have to spend just to survive is gonna get smaller, so people will have less money, but your house will still relatively maintain.

Dan Austin: [10:51] Yeah. The I have a interesting anecdote on this affordability thing. Like, this is it seems like to be an issue, and I'm trying to figure out what's wrong with the American people. Because if you this time of year, it's always hectic with the holidays, and there is no lack of consumers spending on holiday gifts and holiday whatever they spend their money on. My wife was telling me she was at Target middle of this week, and literally just like shelves are like bare.

Mike DeHaan: [11:16] Mhmm.

Dan Austin: [11:17] Right? And maybe there's a supply chain issue there, but people are just consuming over and over and over and continuously, yet there's supposedly this affordability issue, which I believe exists. But I'm like, where?

Mike DeHaan: [11:29] That's also a very small sample size. Is that a prioritization of your capital? Yeah. Because I do think

Dan Austin: [11:34] the American people have an issue with that.

Dylan Koch: [11:36] We went to Texas Roadhouse last week and it was packed. Not that that's like a anecdote.

Mike DeHaan: [11:40] Well, those those are very small sample sizes, though. Right? That's like maybe a couple 100 people in the greater economic thing. Right?

Dylan Koch: [11:46] Well, Dan probably lives in a affluent area. No.

Dan Austin: [11:49] I live in Spokane, bro. It's a bunch of poor people.

Mike DeHaan: [11:52] Yeah. So Spokane, I would say, is actually probably a pretty good representation of how most places are.

Dan Austin: [11:58] Yeah. It's it's right in the middle.

Mike DeHaan: [11:59] Because, like, consumer items, restaurants, you know, that are expensive here, for sure. Like, very expensive. We're, like, what,

Dan Austin: [12:07] the fifth most least affordable state least affordable state? Like, we're like the fifth most expensive state in the country now?

Mike DeHaan: [12:13] Yeah. So, like, that stuff's very expensive. Houses are generally affordable if you look at compared to some of the larger markets. The income here though is not awesome on average. And so I would say that Spokane is probably like a good general view of what a lot of places are probably like Do know working class? Austin. So working class out of town.

Dan Austin: [12:32] We don't have a boom bust cycle. We're not.

Dylan Koch: [12:34] Do you know what your median, like, income is versus the national average?

Mike DeHaan: [12:38] So the median income per household here, like in Spokane, is is like $70.

Dylan Koch: [12:43] That seems pretty on par with a median,

Mike DeHaan: [12:45] like It's like it's like right on the money. Yeah. It's pretty average. But, like, when you're comparing it to things like Target or restaurants or whatever, like, that's like a significantly smaller sample size.

Dan Austin: [12:54] What do you mean? What do you mean by that?

Mike DeHaan: [12:56] Because, like, 20% of Spokane did not go to Target.

Dan Austin: [12:59] Right. Maybe. I don't know that.

Dylan Koch: [13:02] Physically couldn't have. They couldn't.

Mike DeHaan: [13:03] There wasn't 40,000 people that went through Target. Like, no, theoretically, did not happen.

Dan Austin: [13:08] I understand that, but this seems to be a thing that pops up every every year is like this affordability issue, but the American people keep consuming.

Dylan Koch: [13:15] Dan, next time you see this, I want you to take a head count. Was like, how old do you think these people are? And the reason I say that is because if they have a thirty year mortgage that they got like ten to twenty years ago, like

Dan Austin: [13:25] Yeah. There might be some of that. And my point in bringing this whole thing up is is like, where is the affordability issue? Because I can tell you in Washington state where the affordability we have rising taxes that are really actually hurting people. We have, wages that are stagnating. It's just expensive. Like Mike said, food is really expensive here for some reason. Gas is like really expensive, which is, you know, a big chunk of money for people.

Mike DeHaan: [13:48] The reason food is really expensive here is because Washington State made the law that all of the tipped workers have to get paid minimum wage. So basically, most places, if you're a tipped employee, you can make less minimum wage. So now we have, like, all the servers that you go out to eat. Those servers are making, like, $18.19 dollars an hour.

Dan Austin: [14:08] Yeah. Plus their tips.

Mike DeHaan: [14:09] Right? Plus the tips. And that just goes straight off the profitability of the restaurant, which is already like at a 3% profitability if it's lucky.

Dylan Koch: [14:17] They're super low margins. Yeah.

Mike DeHaan: [14:18] You know?

Dylan Koch: [14:19] It's like three to 5%.

Dan Austin: [14:20] Yeah. Plus our business business tax sucks. Like Our b

Mike DeHaan: [14:24] and o tax. Yeah. We have we have a b and o tax in Washington that takes a 1% tax off the top line revenue.

Dylan Koch: [14:29] Oh my god.

Dan Austin: [14:30] That's why you have to, like, pay what? Like, $25 for a hamburger here.

Mike DeHaan: [14:34] Mhmm. Like, you know?

Dylan Koch: [14:36] I hear Mike basically, you know, reconciling that these taxes are bad for small businesses.

Mike DeHaan: [14:41] Of course they are. They're horrific for small businesses.

Dan Austin: [14:43] Well, definitely in Washington, the way Washington sets it up, like, should have to pay something, right, to be participating in the community. But Washington definitely hasn't set up a little bit as backwards, and their claim to fame has always been that we don't have a, we don't have an income tax, which is great. Like that is good, but they do tag it on in other spots. And so it just hurts. The restaurant is like a really quintessential small business because fundamentally that's something any American can really do. Right? They have you have to learn how to cook. Like if you have a skill there, can open restaurants, a low barrier to entry, but it's really hard to keep them here. But I would say this in turn, we do have some really good restaurants because to make it in this business, you have to have really quality food.

Dylan Koch: [15:20] You have to be a good operator.

Dan Austin: [15:21] And but you're gonna drop a 100, a $150 to go out to dinner with your spouse.

Dylan Koch: [15:25] Yeah. Yeah. Now this wasn't on the today's agenda, but do you guys wanna talk about like this proposal to get rid of to abolish property taxes?

Mike DeHaan: [15:32] I saw that. Was that in Florida? Florida.

Dan Austin: [15:35] Yeah. Florida's been talking about that forever. They do whatever the hell they want.

Dylan Koch: [15:39] They changed it to, like, it's only senior citizens or, like, you have to be a certain income threshold or something like that.

Mike DeHaan: [15:44] Yeah. And it's only homestead, so it wouldn't work for second homes or Correct. Like any other like investment property.

Dan Austin: [15:51] So it's still like 70% of Florida because there are old people down there.

Mike DeHaan: [15:54] Well, that's a thing. So everyone's gonna move here and have their home here now. So real estate's gonna go up. They were also talking about adding ACA income tax instead, which should be interesting because that would be a pretty big shift.

Dylan Koch: [16:05] I think I would be okay with that.

Dan Austin: [16:06] Which would still be better to the retirees.

Dylan Koch: [16:09] Yeah. Property taxes freaking kill you. Like, this for my own rental. This it's crazy.

Mike DeHaan: [16:14] It's crazy. Dude, I I got a letter literally yesterday of my escrows for one of one of my properties, and I have dropped the rents. I used to rent these units for 1,700. I'm now trying to get them rented for 1,400. K? And so I have one empty, so I'm now $300 a month in rent. I tried to sell the property this year, was not able to do it. I dropped my price. I'm not trying to sell, a $100. Didn't get any offers. The triplex. It's a good property. It's just, not an asset that's super desirable right now. So I've had the property value come down. I've had the rental rate come down. My taxes have gone up. Of course, your taxes always go up. It doesn't make any sense at all. You know,

Dan Austin: [16:50] you should try, Mike, is you should actually try to petition that. Be like, I can prove you my rents are low. I mean, they'll probably tell you to fuck off.

Mike DeHaan: [16:56] No. I'm I'm going to. Like, because like, especially on this one, it's definitely an overtaxed property, but the taxes are killer. So when I bought this property and when I refinanced it back in 2021, I used to cash flow $2,800 a month on this thing. Yeah. Right? I now have not made any money on this property in the last two years. I've actually lost money because the taxes increased so much. It just ate the There's whole people that also bought homes 2021 at these super low rates that get these tax assessments, and they get priced out of their homes because they were getting through on these razor thin debt to income ratios, and all of a sudden their taxes increased $500 a month. And all these people move out because they can't afford their monthly payment.

Dylan Koch: [17:34] Yeah. Oh, yeah. I bet I pay between the whole portfolio, I bet I pay close to a $100,000 a year in property taxes. But the problem is 70% of that probably goes to the school systems, and the public school systems here suck.

Dan Austin: [17:46] Really?

Dylan Koch: [17:47] Yeah. So, like, I what are you

Dan Austin: [17:48] That sucks. Ours is awesome. They just voted in, like, you're not allowed to talk about k stuff in school.

Mike DeHaan: [17:53] That's surprising for They did. Did you see that, Mike? I did see that. Yeah.

Dan Austin: [17:57] Our school district is less, like I guess it'd be more conservative, I would say, we live, probably the the school district. Yeah.

Mike DeHaan: [18:03] Where yeah. The one school district we're in is like the they're the separate one. Like, they definitely are doing policies that excite the rich Christian families that live up in this part of town.

Dan Austin: [18:15] It's their customer base, man.

Mike DeHaan: [18:17] They are shameless. And like, they will like, oh, yeah. We will do whatever you want us to do so you keep voting for

Dan Austin: [18:22] us to

Mike DeHaan: [18:22] get more money.

Dylan Koch: [18:23] Well, they're probably on the board. Right? They have their donors, like all this kind of stuff.

Dan Austin: [18:27] We also have really high property taxes in our area.

Dylan Koch: [18:29] Yeah. Right.

Mike DeHaan: [18:30] Mean, they're they're doing something. Right? The principal lives in a million dollar house. Like, what street over for me?

Dan Austin: [18:34] Teachers in Washington make money, dude. Oh, yeah. They're doing alright. But, yeah, that you're right, Dylan. A lot of property taxes. This is where back to the main point of like, bringing it up with Florida, where I think it would be stupid is because there's a lot of old people in Florida and they don't give a shit about school districts as do, you know, the baby boomer way. Right? And so like, why would they care if they're gonna strip out school district funding so that they could have cheap property taxes? And I think to me, it's there's a lot of political stuff here because they're they're just trying to say, leave New York and come to Florida, which is probably my guess would be Florida's immigration is probably most heavily impacted by New Yorkers because that's like the highest densities like New York City and stuff like that coming south. And that's kind of the notorious place that they go where like the West Coast Washington people go to Scottsdale. Like that's the thing. Right? But for they don't have that for for New Yorkers. And so I feel like a lot of that's just we'll do whatever we can just to be assholes and get people from New York to come here.

Mike DeHaan: [19:29] It's a kind of principled on that. Right?

Dylan Koch: [19:32] It's a combination of being a baby boomer and being from New York. I mean

Mike DeHaan: [19:35] Right. Yeah. Exactly, dude.

Dan Austin: [19:37] I think it's kind of a silly way because the property taxes do and it is in my opinion, it's important to have some level of property taxes if you're going to use public school systems and public systems within your community, within your designated area. If you're not gonna use those things, then, yeah, whatever, dude. Go somewhere else. You don't have to use them, you know, pay those property taxes.

Mike DeHaan: [19:56] The completely anti tax position people have, I never fully understand. Like, I don't understand where they think that, like, a lot of the stuff that your taxes actually do go towards, like where that money

Dan Austin: [20:05] is supposed

Mike DeHaan: [20:05] to come from.

Dan Austin: [20:06] Right.

Mike DeHaan: [20:07] You know, like, general utilities. Right? Like city water, road maintenance.

Dylan Koch: [20:11] USPS, fire departments, like all that kind of stuff. I get it. Like

Mike DeHaan: [20:15] Yeah. Are we supposed to have, like, privatized fire departments? How do they make money?

Dan Austin: [20:18] That'd be sick, dude. Like, you gotta pay. That'd be dope. I'd be a firefighter then.

Mike DeHaan: [20:21] Like, they show up and they have a fucking square, and you gotta like tap your card

Dylan Koch: [20:26] for if they're gonna pay to like save

Dan Austin: [20:27] You your know you and I would have a fire department if that was the case.

Dylan Koch: [20:30] Totally. Dan's over there like setting fires

Mike DeHaan: [20:32] to some of his own Yeah. Doesn't make any sense.

Dan Austin: [20:36] No. It's it's like going to the hospital then we you just don't get told you get a bill afterwards and it bankrupts you. Yeah. But you hey. Your house didn't burn down that bad. We may have accidentally killed you.

Mike DeHaan: [20:44] But there's so many people that are so diehard, like, all tax is theft, and I don't know if they understand how many things your taxes actually do pay for.

Dylan Koch: [20:51] Yeah. It's just the allocation of those taxes. It's the bureaucracy is notorious for being awful with the money that they get. Hell, the mayor of Cincinnati just got alleged that his car got repoed twice.

Mike DeHaan: [21:02] Nice. Really?

Dylan Koch: [21:02] Yeah. And so like, do you guys that can't even handle his own car payments in charge of a multimillion dollar budget?

Dan Austin: [21:08] Yeah. And politicians are notorious for that, right? Not being smartest people for

Dylan Koch: [21:12] It's just the that.

Dan Austin: [21:13] I would say that the allocation is the only thing that would ever frustrate me. And I think about things like, oh, yeah, let's go make Dick Cheney super rich and go to the Middle East and spend trillions of dollars of tax. Yeah. Yeah. Which is a really I was listening to this documentary about this and the amount of money that was spent during, like, our generation on the Iraq and Afghanistan war and other wars associated with that is actually like, you can look at inflation and you can look at all the all the financial issues and, like, how much money was printed

Dylan Koch: [21:42] Yeah.

Dan Austin: [21:43] To pay for this. And guess what? It's about the same amount of money that they spent on So the it's like, oh, they just they really just turned on the printer to pay for this war, which is really for, honestly, opinion, certain people to get, you know, ingratiate themselves with with this money. And so I think the allocation of stuff like that, and I know people use the like social services as a hot button topic. It's like, oh man, look at all these lazy people. And yeah, there are definitely a lot of lazy people on social services, 100%. But it's like, what are you gonna do there? I mean, there's no good way to manage it. I don't have a good way to manage it.

Dylan Koch: [22:13] Well, like, are you a Raytheon board member? Like, USP? It's a revolving door of people that go from like those kind of like companies to people and and government officials. The problem with like the federal stuff is like we don't have a say as as taxpayers. It just happens. Right? They just the act of congress, like, yeah. We're gonna spend this money. At least in the state level, there is some voting to it or, like, municipality level.

Dan Austin: [22:33] Sure. You you at least have an opportunity.

Mike DeHaan: [22:35] Yeah. Yeah. I'm talking about, like, public and private. What are your guys' views on these Trump accounts?

Dylan Koch: [22:41] Where they are gonna give it to, the stock account for the kids.

Dan Austin: [22:45] Minus Michael Dell's wife. Can we exclude her from this?

Mike DeHaan: [22:47] Minus his poor wife. God, dude. I don't know what was up their eyes on that video. Like and the thing is that that's like the shoot they chose to use. Like I know. They probably did that multiple times.

Dan Austin: [22:57] Right.

Mike DeHaan: [22:57] Like, I'm curious your guys' views are on it because, I mean, despite the fact that it's called the Trump account and I hate him and everything else, I fundamentally disagree with what they are doing with it because I think it is an excuse to take taxpayer dollars and put it into the publicly traded stock market with the intent being to promote the stock market, which, yes, I guess it gives an opportunity to the people that qualify for those accounts, but it's so small compared to the billions and billions of dollars that are going to be generated for the people that are already the ultra rich. Right? And in my mind, it's it's their way of like masking something as a good deed when really it's them just sort of like padding their own portfolios by taking all

Dan Austin: [23:42] the taxpayer dollars. It's expanding the four zero one ks, right?

Mike DeHaan: [23:44] Yeah. But they're funding it with taxpayer money, right? Like they're taking money out of the federal budget and they're giving it to all these people. Because like the people that have these accounts, you don't get a say in what's invested in. Right? Yeah.

Dan Austin: [23:56] I don't I guess I don't know much about them.

Mike DeHaan: [23:58] Trump account holder that whatever the the company is that manages it, they get to choose where the money goes. They could literally take all those dollars and say, you know what? We're gonna invest everyone in fucking Trump industries, whatever it is. There's nothing you can do about it, but you said, thank you. I'll take my $1,000, please.

Dan Austin: [24:13] So I only halfway believe that. I don't know that that would be true. Right? There's gotta be some custodian stuff. Right? Because they can't just like control money, but like that. I believe to some extent they can, but I feel like that's like the extreme version of it.

Mike DeHaan: [24:26] Mhmm.

Dan Austin: [24:26] My question is then, because I don't know, and this is why I'm asking. So where does Michael Dell come in and donating? What is like $6,250,000,000? So are they accepting donations to do this to like, I don't know how this is gonna happen.

Mike DeHaan: [24:38] Yeah. I don't know what their full tie is with it.

Dan Austin: [24:40] Or is that just a random philanthropic thing?

Mike DeHaan: [24:42] I mean, so same thing. It goes to them being at that end of the spectrum. Right? If they're heavily invested, they are going to have an incentive to be having all this public tax generated money to go into something. It's do they know where the money's gonna go? And they're kind of like, oh, yeah. Well, we're going to give this donation and do it like prop up whatever. I have no idea. How they're involved, I don't know. Like their whole donation thing kind of put this on the map for me to, like, start looking into it a little bit more.

Dan Austin: [25:07] I didn't actually know what actually was happening until this you're right. Till this happened. Was I thought Trump had talked about it, but I didn't know that they were actually gonna do it.

Mike DeHaan: [25:14] Yeah. And and as I looked into it, it just feels so it feels so shady to me. Like a big part of this is the fact that I believe that everything that this administration does is crooked in some way. I think everything every administration does is crooked in some way, but they're like the most

Dan Austin: [25:25] Well, you go back to the like the give a good example from the Biden administration so you can counterbalance this. Sorry, like let's steel man this a little bit. It's like, okay, Biden wanted to pay everybody's college debt off. Would that not be a similar thing?

Mike DeHaan: [25:37] 100%. I so heavily disagreed with that in the exact same way. It does not make fundamental sense because that money has to go somewhere.

Dan Austin: [25:43] It has to come from somewhere too.

Mike DeHaan: [25:45] Yeah. Totally. And so now we're taking taxpayer dollars to give to these people that got fucking underwater basket weaving degrees? It doesn't make any sense. It's stupid.

Dan Austin: [25:53] So I'll I'll share my opinion on it, I'll let Dylan jump in because I know he's gonna have a much better opinion on this. I think the idea, whether it's taxpayer dollars or not, I don't really know like the extent of how much taxpayer dollars are in. I think it's a great idea to help with like, especially with the lower income youth to have something. Because I do think if you graduate high school and you have $2,000 in an account, like that's a huge help for kids that have never seen that kind of money in their life. And maybe they use it to go start a trade. Maybe they blow it on drugs, whatever. Right? I don't know. But like, I do think the idea of that is great. And I think for anybody with kids, like being able to open up an account, I don't agree with the whole tax advantage account stuff. I think whatever. That's just not my opinion, or that's not my my thing.

Mike DeHaan: [26:36] This also isn't tax advantaged. It's just tax delayed. So yeah, you pay taxes at full rate when you pull it

Dan Austin: [26:42] up. It's a miniature four it's a four zero one ks for kids. Right? So it's like the same thing. But like an account that people can donate money to for like, hey, I don't want you to buy my kids presents. Just give them money in their account or whatever you want. Like, I think that's a great novel idea that people some people have already done in their personal lives. I don't ever agree with the government needing to fiddle with the private market. So from that standpoint, I'm like, I think that's bullshit. I tend to agree with what you're saying is it's another way to funnel money into the stock market for business. That's what all these retirement accounts really have become.

Dylan Koch: [27:14] Yeah. I don't really have much to add other than like I'm pretty my political bent is libertarian at most times, which I it's not like a full blown thing, but the less government, the better. So if the money has to come from somewhere, I'd rather it come from private parties like the Dale family. But, you know, then you question, are they just getting a whole 6,250,000,000 tax write off? Know? Who knows? Sure. And then on top of that, like, don't even like the four zero one k's for the same reason. You're very limited on what you can invest in on those things too.

Dan Austin: [27:40] And you're forced you're forced to do shit with them that you don't wanna do, like RMDs and all that stuff when you get to

Dylan Koch: [27:45] retirement age. But, I mean, the the other side of this is, like, the kids who who currently have nothing and they see this, if it sparks interest in investing or gives the kids some kind of agency, like, oh, I do have a little bit of hope. I have a little bit of head start. Maybe there's some good to that. It's not a it's not a binary thing.

Mike DeHaan: [28:01] Yeah. One of the things I do find quite interesting is I've seen so many people that I'm friends with on Facebook and things that are so pro this that were so anti the whole food stamp thing being the Thanksgiving.

Dan Austin: [28:13] Like It's such a funny thing. It's so

Mike DeHaan: [28:15] It's the same shit. And they were like, good. All these people losing their food stamps, you need get a fucking job. And then they're like, hell, yeah. Now we're giving money to kids to invest. It's like, it's still a handout. It's the same thing.

Dan Austin: [28:25] You know what? Here's my logic on that. Why they think that is, I think that that's naturally the argument is because it feels more productive than just giving to sit on the couch and eat food. Like, that's what people are thinking with food stamps. The problem is, is that like, and we see it in Spokane, I've seen it personally, is there's definitely a lot of people with food insecurity and all that other bullshit that they actually do need. These are like kids that go to school without food. Right? And when you put it in those terms, it's easy for the government to implement things wherein you put a little bit of social, like, ethic into it. Like, oh, but we're gonna help all these people, and it's gonna be great. And you're like, goddamn it. You're right. I would love to help these people. But really at least one or two people are gonna be siphoning money off and making money and benefiting from this.

Dylan Koch: [29:06] So that, like, the biggest donors of the ETS, like, are the Coca Colas, the Hostess cookies. Right? It's the people that okay. This could be beneficial for the health care system because all these people are gonna be overweight and sick and have chronic diseases. And why subsidize the poor eating habits of other people?

Mike DeHaan: [29:21] Well, not only that, but those kind of things. Right? If you think about, like, a Coca Cola, cost to produce junk food like that is so minuscule. And so, yeah, they're basically just using government dollars to generate them a profit even

Dan Austin: [29:31] if they're selling it at a discount. And they donate it back for a tax break, and then you reinvest that money into their company. It's all fucking ragging

Mike DeHaan: [29:38] at the end of the

Dan Austin: [29:39] day.

Dylan Koch: [29:39] The good thing about being libertarian is you hate big corporations too. Like

Dan Austin: [29:42] Yeah. There you go.

Dylan Koch: [29:43] You know, you don't like you don't like them just as much as you don't like the social programs.

Dan Austin: [29:46] The only time where, like, the libertarian argument breaks down for me is like, oh, you don't like roads? Exactly. We were talking about before. Yeah.

Dylan Koch: [29:53] Right. Right. No. Exactly. And you can't be a full blown but what you're describing is anarchy. That's like no for me. Right? Like, there's a difference.

Mike DeHaan: [30:00] Yeah. And and then once you get tired of being a libertarian, Dylan, you'll just be like me, and you'll become a cynic, and you'll just hate everything.

Dan Austin: [30:05] You'll just hate everything everybody.

Mike DeHaan: [30:07] So one thing I wanna talk about to wrap up the show here, you had some notes that you sent us. And I guess, how do you wanna present this around your Thunderdome? Do you wanna do you wanna put people on blast, or do you wanna

Dylan Koch: [30:18] No. I mean, obviously, they're gonna listen to this, but it's good for the general public. And, of course, I won't name anybody by names. But me and I would say some operators have been in the business for a while. And we're sitting there and we're going over things that what worked in 2025, what do we want 2026 to look like, challenges, what worked, what didn't, and why are we all doing this in the first place? You know, are you setting goals? And the first people that went, you know, they have a ROAS of, you know, return ad spend ending from like two to three x or they made a little bit of money. They're they're afraid to spend more marketing dollars. And when we got to the end of it, you know, some of my questions or I challenged them on is, well, how many hours a day or a week are you working on the on the business? And the answers range from, I don't know, two to four, like, four to six sometimes. And I told him, like, I'm sorry to be blunt, but, like, I just think you need to work more. Like, your numbers would just support doing more of what you're already doing. That same conversation happened two or three times, and it's funny. One of the members is like, well, I know what Dylan's gonna say next. Like, I don't know.

Dylan Koch: [31:13] It's just I got to the point where it's like, if you want to succeed, especially in this business, but in any business, you just gotta put in the hours.

Mike DeHaan: [31:19] Yeah. You know, I and people don't like that because I think a lot of people get into business to have more freedom. Unfortunately, right, achieving basic freedom is honestly not that challenging once you have the momentum. Right? And once you kind of understand how to create money and create value, it's relatively simple to replace an average w two job. It's not easy. I would say like the first, especially like year and a half, two years are really, really challenging if you don't know how to do that yet. But once you know, like

Dan Austin: [31:46] What's the average income? Was it what did

Mike DeHaan: [31:47] you say? $70? $70. Like, figuring out how to make $70,000 in, like, a business or, like, side hustling is not hard to do once you kind of understand the basics. But if you wanna make, like, real money, you wanna make $500,000 a year, wanna make a million dollars a year, you wanna make several million dollars a year, Yet you are not going to do that working four hours a day, three hours a day, until you've learned how to make a $100,000,000. Right? Then you can probably be leveraged enough that you can get away with working like that little bit and make that kind of money. Right?

Dylan Koch: [32:16] And some of them were like, you know, I like to go rock climbing, or I did this during the week. I like the flexibility. I was like, if that's the lifestyle you want to live and you can recognize that, that's fine. But you can't just sit here and say, you wanna make more money or you're worried about money, when the trade off is just trading your time for money. That's what it is.

Mike DeHaan: [32:32] Like Dude, this is this is literally why Dan and I decided to break it off with our previous partner, was because the situation was exactly what you described, where there was always these complaints about wanting to make more money, different things. But then there like, was it was very important to me that I get to play golf two times a week. Like, do all sorts of things. And, you know, Dan and I are working like dogs. We're doing stuff in the evenings, on the weekends. And even though I think where people get stuck is they want to spend the money making hours doing the shit that is not money making.

Dylan Koch: [33:02] It's a flex to say, I'm getting my haircut Tuesday at 11:00.

Mike DeHaan: [33:05] Totally. But also during, like, the workday, during, like, the hours when it's appropriate to call sellers, when you should be engaging with buyers, doing different things where you will actually make money, they're doing their bookkeeping. They are going and filing, you know, their new LLC entity. They're doing, like, a a training for their VA. Right? Or they're creating like videos about like how to how to do stuff for their new VA. All that shit, that's what you get to do after work. That's your five to nine to build your nine to five business. Right? And and a lot of people don't understand that. And you need to spend the actual money making hours doing money making activities and all of the business stuff. That is the things that gets to become your new hobby, whether you like it or not.

Dan Austin: [33:49] You better learn to love it because you're gonna be doing a lot of it. Totally. I would say, I think the challenge with the with, especially with our generation of real estate investors, is that we we were all told this, I don't know if it's a lie or just like a story of like, oh, you get into real estate passive income, then you can have freedom. I personally never like, I didn't get into real estate ever thinking like, oh, I'm going to not ever have to work in. Like, I was like, I'm gonna be more rich. Like, this is gonna be Like, I'm gonna I wanna be more rich. And so for me, I've never had that like, I just don't wanna work today or or I want to be able to do whatever until noon. It's just not my style, but I can understand where people get that from. That's the dream everybody's selling them. But it's like, at some point in time, you're just being lazy and you need to recognize that. And you said it perfectly, Dylan. It's like, if that's what you want and your income the income you have allows you to live that lifestyle, that is perfectly okay. Like, that's your thing. But if you wanna double it up, triple it up, like, you're gonna have to work really hard. And that's I know all three of us do that.

Mike DeHaan: [34:46] I think it's just being honest about what your priorities are. You know, I think a lot of people that have that kind of like lifestyle, right, where they can go rock climbing on a Tuesday or whatever, there's like a societal pressure to be like working more that they probably feel or like they are in these different entrepreneur groups and people are making more money and there's a little bit of envy there. Right? And so they feel like they need to be like that, but they don't compare apples to apples. It's like comparing yourself to a professional athlete. You're like, man, why aren't I as good as at basketball as them? It's like, well, they've been playing for twenty five years. They're naturally gifted. They've done like, put in thousands and thousands and thousands of hours, and you play rec league at YMCA once a week. Like, you're just not gonna be the same.

Dan Austin: [35:26] Yeah. They said this is my one thing.

Mike DeHaan: [35:28] Totally.

Dan Austin: [35:29] Yeah. Right.

Dylan Koch: [35:29] Yeah. Right. There's a guy here who's worth a lot of money. He's been doing this a long time. Commercial real estate. But his thing is like, I meet someone new. I give them a pretty extech extensive homework assignment. Nine times out of ten, ninety nine times out of a 100, I don't ever hear from them again. Totally. And that's his filter. It works. The other side of that spectrum, there's a guy that went first. Was killing it. Let's say this, kill it. His return ad spend is you won't believe me if I told you. He's done like four deals, all flips, made almost $400. And he still has a full time w two. And he's sitting there and he's the way he's just projecting with his numbers, there's there's a sense of lack of confidence in the way he's presenting. And everyone at the end, me included, is like, bro, if if what you're saying is accurate and you don't need the benefits because your wife's got a nice w two, you should quit six months ago.

Dan Austin: [36:13] Right.

Dylan Koch: [36:13] Imagine what you do with forty hours a week of what you're doing now. Right? And then then I hope he takes the advice. You know, I don't know if he will, but, you know, there's two ends of that, I guess.

Mike DeHaan: [36:22] Yeah. For sure. You know, and ultimately, if you wanna make more money, like, there's the one thing that everyone has is hours. Right? That's such a cliche. But the people that put in more of them will on average come out better.

Dan Austin: [36:32] And learn how to be efficient with your hours too.

Mike DeHaan: [36:34] I know. And that's the thing is actually like being productive with them. And then not doing like I said before, where you're spending those money making hours doing other stuff. It's funny. Like, you see, like, a lot of people rip on this hustle culture because it sort of contradicts, like, what actually matters in life and everything else. I think ultimately what matters in life is what matters to you. And you just need to decide what that is and then accept it, you know, and understand that everything in life has some kind of trade off. If you're gonna have more flexibility, you're gonna make less money. If If you're gonna make more money, you're gonna have less flexibility, at least for right now. And just embrace it and then do what you need to do.

Dylan Koch: [37:06] Don't throw labels on yourself. If you say you're I'm a hustler.

Dan Austin: [37:09] I'm a

Dylan Koch: [37:09] real estate investor. You're gonna be tied to that identity, and you're gonna hate yourself in a couple of years. Don't be afraid to change that that label. So.

Mike DeHaan: [37:15] Yeah. So there you go. All, the, Thunderdome people that Dylan met with, figure shit out. That's what I'm gonna say. Right on, guys. Thanks for listening. You guys have a great rest of your week, and we'll talk to you guys next time. See you. See you. This episode is sponsored by Sir Lenzelot LLC, also known as SLA Capital, which if you didn't know, is Dan and I's private lending company. So, yes, we are sponsoring our own show, but what you're do about it? It is our private lending company that offers hard money and DSCR loans to real estate investors of all types. So you can be a new investor, an experienced investor. You can be buying flips. You can be buying rentals, whatever. We can do everything. And not only that, but the rates that we offer are just as competitive, if not cheaper, than pretty much every other company out there. So whatever big company you've been working with, bring us their term sheets, I guarantee that we can probably beat it. We have the same connections they do. We just don't have all the overhead and middlemen. So if you wanna come and check us out, go to slacapital.com/keys, and I will know that you came from the show. And by seeing that you came from here, when you get the closing, you will save $500 on your first loan with us. So slacapital.com/keys, we would love to fund your next deal. Thanks for listening, everyone. If you want more from us, you can shoot us a follow on Instagram.

Mike DeHaan: [38:28] I am at Mike underscore Invest. Dan is at investor man. Dan and Dylan is at Dylan underscore Does underscore Deals. Choose to follow and send us a DM to let us know what you think of the show.