Choosing Investments In A Turbulent Climate, Finding The Best CPAs And Lawyers, Working Smarter Not Harder

Dan Austin: [0:00] You said it right. You have to block out the noise and look at things that have good fundamentals and keep executing because you're gonna look like a dummy in three years from now when the world's still here.

Mike DeHaan: [0:16] What's going on, guys? Welcome to this episode of the collecting keys real estate investing podcast. This is Wednesday, the Mike and Dan show, where I, Mike DeHaan, and my cohost, Dan Austin, talk about real estate investing business and whatever else is going on the in the world or what feel like talking about that week.

Dan Austin: [0:35] There's a lot going on in world.

Mike DeHaan: [0:36] I know. But you got a lot going on your mind, Dan. You just went on a little tirade before we hopped on the air here. That was freaking riffing. I'm worried about you, man. I feel like you've been spending too much time at your mother in law's house watching Fox News because you just are spewing all the all the bullshit.

Dan Austin: [0:51] Dude, did you see? I mean, Donald Trump's going to jail, dawg. A It's big deal.

Mike DeHaan: [0:55] Is he actually now? No. I don't know. I don't don't care.

Dan Austin: [0:59] No. I do think though, like in all seriousness, like, this is an interesting point in time to make decisions on investing, Kirk, because there's like there's a shit ton of stuff going on in the world, and so I'm going to empathize with some of you for a minute. Okay. So we got we started off, we got inflation. Right? Like, that's been going crazy. So everybody how everybody became an expert at real estate, everybody's an expert at macroeconomics now. Right? We all know what a supply and demand curve is, and inflation's been sticky, and it's just not going away. And every time you go to the store, it seems like stuff's expensive. Housing prices are sticking high. Interest rates are up, and it's like, what do I do? And then you throw on top Russia, Ukraine war. You throw in some Chinese spy balloons. You just sprinkle a few of those in there. Then you've got the BRICS, the Brazil. What is it? Brazil, Russia, Iran, China, Saudi Arabia. Basically, everybody that's okay with us dying as a country trying to get off the petrodollar, which if you watch anything on that, they're like, oh my god. The economy will crash. Buy gold. Buy gold. And then other people are like, that literally can't happen. All this macroeconomic crap going on. So if you turn on the news, it's like doomsday every single day.

Dan Austin: [2:06] And the question is, what should you do as an investor? Especially if you haven't started investing, this is every excuse in the world to not invest right now.

Mike DeHaan: [2:14] So there's all this stuff going on. Here's why. Next year is an election year. Every single fucking time there's an election, 2019, 2020 was the same shit. Stuff starts to pile up. We got into 2020. Everyone's like, 2020 was the worst year ever. We had, you know, Black Lives Matter. We had, you know, obviously COVID was a huge thing. The worst year ever we had Black Lives Matter. Well, not so yet. Poor phrase. Poor Poor Like, was the whole thing with that, like, George the Floyd incident. And they had the villains on both sides, right? You know, all the Republicans hate George Floyd, all of the other guys hate the cop, and then there's the kid that shot the guys in Wisconsin, whatever.

Dan Austin: [2:57] It was chaos, dude. It was chaos. Let's just admit that.

Mike DeHaan: [2:59] And everyone was like, this is like the worst year ever. And then 2021 was a bit better, 2022 a little bit better. Now we're getting ready for another election Time to start turning up. Right? We need to create more rhetoric, we need to create more fear, we need to create these issues for people to feel like they need to come out and vote and, you know, support their bullshit candidate who doesn't give a shit about you anyway.

Dan Austin: [3:23] Right.

Mike DeHaan: [3:23] Right? And so my point being, this stuff always happens. The noise gets louder when you approach times of political importance. So as an investor, how much should you care about all those things if you are the standard investor? You should not.

Dan Austin: [3:39] Right.

Mike DeHaan: [3:40] At all. Like, does not matter. You should focus on buying hard assets at a discounted rate whenever possible, and manage your own finances, right, and do things responsibly. Like, that's

Dan Austin: [3:51] Yes.

Mike DeHaan: [3:51] That's the answer to how you make investing Absolutely.

Dan Austin: [3:54] It's the you're like the head of the cult that gives a really solid date. Whenever I hear stories where the guy that's leading the cult gives a natural date, I'm like, bro, like, that's a bad idea because, like, once that date comes, like, you're gonna lose your fellowship. Like, know, what do you you gotta pick a date that you just don't know. Right? Yeah. And so that's how it seems like to me, and there's so much stuff going on. And I don't know if I would argue because it's election year or when I would argue. It's just the media gets on top of it, and then it's in our human nature to be fearful and have self preservation. And so when you see one little bit, then everything it's like you kinda see the tree among the forest or whatever they say, and it just becomes overwhelming. And if you really did just turn on the news, and that's what you're watching is the noise, the background noise in your house, you're probably super scared, and you should literally put it on mute, lock that out, and start moving forward with your investing, because if you sit on the sidelines, you're gonna regret it.

Mike DeHaan: [4:50] And it's so toxic, right? So toxic. Know, and I think that people should still be educated, but the unfortunate thing is that takes time to actually become educated on what's going on. It takes time, it takes understanding, and it takes having, I guess, enough understanding to figure out who you should actually listen to. Here's the unfortunate thing is, as you're going through that path of trying to research who you're supposed to listen to, all of the suggestions that come up from the Internet, from your friends, from social media, all those people are not who you should be listening to. Right? Because You know who

Dan Austin: [5:23] you should listen to this one time? I'm having our guy, Ramon, make a video of this for me. Dave Ramsey. You wanna know why you should listen to Dave Ramsey? Because I saw a video of him, and it was so spot on. He's like, gold is trash. He's like, you should not be investing in gold. If the United States central bank system if the central bank system collapses, you know what's worth more than gold? Bullets. I don't respect your word. I was like, you know what Dave? I like that. If this actually happened, do you think gold's gonna get you anything? No, it's not.

Mike DeHaan: [5:52] God, but even that sort of mentality is toxic. I don't know, man. I think that people, they spend too much time focusing on macroeconomics, when really I'm like, you're worried about what China's doing, but your goal is to make $4,000 a month in passive income? How do think it's You're so far removed from China. Your $4,000 China get four is not even a rounding error in the GDP that is involved in

Dan Austin: [6:14] 2008, I remember, was a tough time. I wasn't even a real estate investor. I was just an adult at that time. Was like people were talking about the world ending. There's a lot I mean, there's people committing suicide over situations. It was rough. I And remember I was actually getting out of the army shortly after that, like, late two thousand nine. And I just remember, like, all my leadership being like, you're an idiot. You're just gonna go out there. It's a war zone. You're not gonna be able get a job. You're not gonna be able to do this. You're not gonna be able to do And guess what? We won the biggest bear run, and I was very happy that I got out from underneath a government paycheck when I was able to learn how to make my own money.

Mike DeHaan: [6:47] Yeah. I mean, I think that that's exactly what it's right though, you there's all people that give you the warning. You went out, you figured out how to your own thing, make your own money, and lo and behold,

Dan Austin: [6:56] it worked out I for

Mike DeHaan: [6:57] also think too, just a lot of the stuff that gets blown up, it is a this is this American thing where that is just like what our culture is based on is this kinda like fear and this huge political bullshit. Like, this is also why I think so many Americans need to travel more. Sure. Because you go places where they have like real problems. You know, I know that they don't have real problems, but they have like really real problems. Like, half their country doesn't have food. Like, it's just a different

Dan Austin: [7:24] Third world country type situation.

Mike DeHaan: [7:25] Yeah. You suddenly real Different perspective. Right? It's totally different perspective. You suddenly realize a lot of the stuff that we have here really isn't that bad.

Dan Austin: [7:32] Well, I think two part of it is, you know, when you're the number one, when you're it's like being the the best in your sport. Right? That athlete probably has some issues and concerns about aging and not being their best and might have some, you know, emotional or mental concerns about that. It's like in America, we've been number one for most people's lifetime that that are alive right now, and the fear of the like, what people say is if you're not number one, it's communist Mhmm. And take over. Game over. What it's like, well, what if you were number two? Is that okay? I'm not saying it's a good thing or bad thing. I'm just saying there's that element to it as well. It's like, There's a lot of other countries in Europe where people are living pretty good, and guess what? They're not the number one economy in the world.

Mike DeHaan: [8:13] Yeah. I I think that that's a really valuable point that literally most people's, not only our lifetimes, but our parents' lifetimes and our grandparents' lifetimes, The United States has been like the pinnacle country. And, you know, it's like if, you know, LeBron James, he's almost 40. And people are like, LeBron James ain't what he used to be. It's like, yeah, he's been playing for twenty two years. Right. Yeah. Has a he's been playing for, like, longer than multiple people's careers combined, and he's still, like, in the top five players on his snaps.

Dan Austin: [8:43] Yes. Still doing alright.

Mike DeHaan: [8:45] Yeah. You know? But it's like, you know, people like to focus on that. But if he becomes like the second player, third player, like that shit does happen. Like, things do start to transition over. They start to change over. You know, China becomes like new superpower. Sure. They're not in our favor, but that's because they wanna be number one. And that sucks. Sure. But like, then it's as part as a country, it's like, what can you do to sort of, like, try and help your country get back up there? But Sure. That's comparing to sports getting a little bit weird because that's like if, you know, comparing that to LeBron is like, well, what if somebody if LeBron also had someone that was, like, injecting him with, like, estrogen, you know, or doing something to fuck with his body.

Dan Austin: [9:19] Know what I would actually appreciate when we're talking about this geopolitical and macroeconomic situation is I would like to be able to go to more countries as an American. So maybe if American isn't in the spotlight, I could actually go to other countries without risk.

Mike DeHaan: [9:33] I mean, you can go to most countries.

Dan Austin: [9:35] You can go to a lot of countries. Right? But there's some out there, like, I can't fly into Iraq anymore. That's probably not gonna be a good place for me to show. I probably have a better than fifty percent chance surviving, but, like, there's just some things that you you know? But, like, if you're if you're from Iraq, like, you can go anywhere.

Mike DeHaan: [9:51] No. Unless you're a flight list. If you're on Iraq, you can't Their go their passports aren't worth anything, dude.

Dan Austin: [9:57] Well, I mean, you could make it feasibly happen, if you know what I mean.

Mike DeHaan: [10:00] What are you you're showing your ignorance for travel right now, man. So you don't think that if you could

Dan Austin: [10:05] if you were like a wealthy Iraq person that you couldn't like

Mike DeHaan: [10:07] It's different? If you're not on a no

Dan Austin: [10:09] fly list, like in your country

Mike DeHaan: [10:10] What level of wealth are you talking?

Dan Austin: [10:12] Like a person that would be able to afford a passport in their country and afford the visas to go to the other countries.

Mike DeHaan: [10:18] So there's that whole process there going, depending on the country, that gets very complicated for people.

Dan Austin: [10:23] Oh, I know that. I'm understanding that, but I'm saying you could potentially go somewhere else because of where you're from.

Mike DeHaan: [10:31] In the deep end, dude. You can do that as an American extremely easily in most places, except for, like, you know, those sort of countries, Middle Eastern countries, China. A handful, though. There's a handful. No, dude. Yeah. It's like China.

Dan Austin: [10:43] Russia, man. You gotta be careful there too nowadays.

Mike DeHaan: [10:45] The only You can't

Dan Austin: [10:47] go to Ukraine. I can tell you that.

Mike DeHaan: [10:48] I can't. Oh my god. Okay. We're gonna move on because there's not a productive conversation there. But no. I get I agree with you, though. It is interesting just sort of like seeing a lot of that because also to his thing with like social media, all the real estate guys now especially now that like kind of the real estate drama has leveled out a little bit, you know, like we're doing deals. A lot of people we know are doing deals. Things are actually looking pretty good. All the real estate people are now economic experts all the time. I even see dudes like, know, like Ryan Pineda posting about like, oh, here's what the economy is looking like. And like these countries, all sorts of things. I'm like, bro, you're you're a house flipper like that. You're a house flipping coach. That's your whole business.

Dan Austin: [11:27] Right.

Mike DeHaan: [11:28] And they're doing greater economic Yeah. We're doing greater economic stuff because that's what people wanna see. So people wanna, like, consume and use a content creator.

Dan Austin: [11:35] It's because they want a reason to not take the next step, really.

Mike DeHaan: [11:39] Oh, like like the consumers? Yeah.

Dan Austin: [11:41] So if you're looking just for followers or you're looking for a reason to need more information or more education, you're going to soak up that information. Your naps are gonna go to room and be like, okay. This is the reason why I can't do this, so I need to go and follow him and replace Ryan with whoever's spewing this information. Tons of them. Exactly. And then if I follow them and then they can pitch me on whatever they're going to sell me that's going to help me overcome this economic issue, then I'll be ready to invest. Yeah. It's like, well, not really. Yeah.

Mike DeHaan: [12:09] I mean, it's all noise at the end of it. You know? I don't know. Like, always have struggled with that. And same with, you know, people that get scared about jumping in or doing all sorts of things. It's always just like, the alternative is out of your control, really. Like, if you don't do anything while the economy is kind of turbulent, like, is is your life going to be that much worse? Probably not. Like, it's just just not gonna be better. It's gonna probably be exactly the same. And I here's the thing too is if if you're so if there's a situation where, you know, you start buying some houses, you start investing, and then whatever happens on in whatever goes on in China causes your investment to be terrible, it's happening to everybody at that point. So there's not really much you can do about it. Yeah. Right? Like, we got bigger problems.

Dan Austin: [12:56] The only one.

Mike DeHaan: [12:56] If you buying a single family home in Cleveland, Ohio is negatively affected by something that happens in China, the greater global economic issue is so much larger.

Dan Austin: [13:06] That's a great perspective because Who cares? It's like, first of all, get rid of your ego. You're not that important. You're a single family home in Cleveland, Ohio. Like, you should not compare that to the macroeconomic stage there, please.

Mike DeHaan: [13:16] Yeah. Right. Like, I've seen I've seen this joke that goes around on on Wall Street Bets on Reddit, and it's like, oh, you just always buy the dip when there's nuclear threat. Because best case, it comes back. Worst case, we go to nuclear war, and everyone dies anyway. That's that's a great philosophy. Yeah. Right. Buy the buy the dip. Oh, yeah. Anytime it's Wow. Anytime it's nuclear threat, buy the dip.

Dan Austin: [13:38] Well, you wanna know, I I have another topic to pivot if you're ready to pivot because this you're talking about, like, other influencers on the Internet and things. And I do have, like, an issue with these, 'm not gonna call them influencers, but people trying to make billionaires feel bad for flying on their jets. Have you seen anything like that? No. Do you ever see those videos? Like, you haven't seen, like, that that in the news too, especially if it's, like, somebody trying to argue the point of view of, like, a green movement. Right? Like, oh, this person says they're they're for, like, going green, but then they're flying in their jet. And it's like, it's usually just people that are upset that a person has a jet. Right? So there's this lady, and she was talking about how Elon Musk is a terrible human being because he actually pollutes more by flying his private jet. And I was like, well, I mean, that's not really the case. And she tried to justify with some some data that wasn't even probably accurate. Was like, he he could have flown around The United States 12.4 times. I'm like, yeah. You could go to Germany and back, and, like, depending on where you're flying from in The US, do that several times throughout the year and start adding up routes around the world. Right? So it's like 12 times around the world is actually not that much

Mike DeHaan: [14:44] Uh-huh. If you actually put

Dan Austin: [14:46] into perspective. And then she's like, he flew to meet his rich friend in Hawaii, Larry Page, founder of Google, which is like, okay. Yeah. Probably because they're like billionaires like that don't just fly to each other's houses. Yeah. You know what I mean? Like, he didn't take time out of his schedule to go hang out with Larry. Like, they're gonna create something probably massive. Right? So they're gonna do something. Then he went clubbing in Germany. It's like he did not go to Germany to go clubbing. Like, he was actually talking about building a gig gigafactory over there, so I'm sure he was,

Mike DeHaan: [15:13] like, mean you know? So all

Dan Austin: [15:14] these things, it's, like, super easy fact checks. And it's like, mind you, this guy, like, got Tesla. He has SpaceX. He has Starlink, is under SpaceX, but is, like, providing air into the entire world, including parts of Africa that would have never been able to have WiFi, that sort of stuff. Like, he just he started, like, PayPal. He started the first mapping software. You could just go down the list of things, and the cool thing I like about Elon is, so he started if you go back, he wrote the code for one of the first online mapping softwares. Right? Sold it, made a pile of money, rolled that into what became PayPal, sold that, rolled that into Tesla, took Tesla, rolled all of his profits in SpaceX and Starlink and all that. He's left all the ships on the table. How many people are doing that? Yeah. Not very many. So you can shame him for flying a jet, but he's also doing some pretty cool stuff for the world.

Mike DeHaan: [16:01] But what about all the starving people, Dan? What if he didn't set up flying that jet, he had self fueled hunger with his time?

Dan Austin: [16:09] Well, he certainly could have tried. I mean, know Bill Gates is trying, but it's not looking super successful. Bill Gates hasn't created anything since he was like 14.

Mike DeHaan: [16:17] Yeah, right. Yeah, that's where people always end up with that.

Dan Austin: [16:20] I don't know. It's just kind of frustrating, right, because you have these people doing great things, and there's always somebody out there saying, Hey, you suck actually. It's like, Come on.

Mike DeHaan: [16:28] I mean, that's how you know you've made it. I'm looking forward to when we start to have more haters. We get them sometimes. I I haven't had too many haters on my social media. I had someone tell me that I looked like a member from a band one time, but I didn't know if that was a good thing or a bad thing or just an observation.

Dan Austin: [16:43] What kind of band?

Mike DeHaan: [16:44] That was literally the guy just guy I don't even know. He just commented on my video, and he goes, this man looks like the drummer from the Arctic Monkeys. And I was like, what? And I went and looked it up, and was like, I guess he's not wrong.

Dan Austin: [16:58] Man, that doesn't sound like afterwards. Mainstream band.

Mike DeHaan: [17:01] Yeah. It is. I would know. Mainstream in, like, the I might guess mainstream ish in like the early two thousands. But yeah, like, it's it's always funny with the Jets. People like to fixate on that, but billionaires do go over the top with it. But also, it's just like it's such like a minor detail in the big picture. Kinda goes back to what we were talking about before where people are focusing on the small thing and not the actual large issues that are out there.

Dan Austin: [17:23] Right. The big picture.

Mike DeHaan: [17:24] You ever watched that show Silicon Valley?

Dan Austin: [17:25] Oh, yeah. Yeah. That's a great show.

Mike DeHaan: [17:26] You know that? There's like the one episode where the CEO of Hooly and one of the other CEOs, they like meet each other at the airport and they're like, where you headed? Like, I'm going to Jackson Hole. Oh, me too. That's so crazy.

Dan Austin: [17:39] And they get on their own PJs.

Mike DeHaan: [17:40] And they they get on their own jets at the airport and they they say they're gonna play like digital chess, like with each other while they're both flying to Jackson.

Dan Austin: [17:48] Of course. Why wouldn't he do that?

Mike DeHaan: [17:50] Yeah. I mean, I'm gonna fly on his jet. Like, that's that's pointless. No. You need a tax write off. It's gross.

Dan Austin: [17:54] But, yeah, you gotta you gotta get that pilot some hours, man.

Mike DeHaan: [17:57] Yeah. Right? I know. You gotta gotta justify paying them. But, yeah, outside of that, though, the real estate world, you've been hitting off some stuff pretty well. We have had several of our partners. It was pretty I felt pretty good today. We had one of our our partner members come on our one of our instant investor calls. So I didn't even realize this, but they've closed two deals off the first two weeks with us working with us, which is pretty awesome, which is pretty sick. I hadn't heard that at all. So I appreciated that that shout out from him. And those are in Knoxville, Tennessee, too. That's a competitive market.

Dan Austin: [18:28] We've been down there. We used to go there. We used to market down there ourselves.

Mike DeHaan: [18:31] Oh, I always say Knoxville. It's in Nashville.

Dan Austin: [18:33] Yeah. No. Is it because they're in Nashville and Chattanooga, right?

Mike DeHaan: [18:36] Yeah. They're in Nashville and Chattanooga. Yeah.

Dan Austin: [18:38] That's why you say Knoxville.

Mike DeHaan: [18:39] But, yeah. I always say Knoxville because we market we worked ourself there for an extended period of time, and it is now forever ingrained in my brain.

Dan Austin: [18:47] The only place there in the entire state that you can go to?

Mike DeHaan: [18:50] Pretty much. Yeah. Like, why it's always immediately go there versus Nashville. Yeah. But, yeah, so, you know, stuff's been going on there.

Dan Austin: [18:57] Well, it's Chattanooga or no. I can't even say it. Nashville is a highly competitive market. So Yeah. For them to get things locked up is really good.

Mike DeHaan: [19:04] Yeah. Yeah. We have well, we have 12 in escrow right now. We finally got some closings getting underway. We've had some crazy long escrow periods we've been navigating, which is also too just like such a great learning trend. I don't remember if I talked about this last time or not, but making sure that you get like full title reports and all this sort of stuff before you get too indebted with some of these sellers. Because we've had to renegotiate some weird stuff because we have these sellers with debt that has been defaulting since before COVID, and they don't realize that they now owe $60,000 more than they did previously. And that creates such a tricky situation where you're making offers based off information that the seller tells you when they don't even know their own situation.

Dan Austin: [19:47] Right.

Mike DeHaan: [19:48] And we're hitting situations right now where their fees like, typically, if that happens, and this is what you hear from all these indifferent investors like, oh, if they're underwater on the properties, buy it subject to. What people don't make clear with a lot of these situations, you know, someone's pining on their mortgage, buy subject to. A lot of the fees that come up with those different situations, they need to be paid due, like to stop the foreclosure. Like it's not like you can just assume the property and like just take over the payments and get them current. But one of the ones, the guy's literally behind like $60,000.

Dan Austin: [20:20] Yeah. That's crazy.

Mike DeHaan: [20:21] So so that means that if you're gonna buy for cash, you have to be able to cover the debt plus that $60,000, which makes it a non deal. If you're gonna buy it subject to, you have to bring the $60,000 to closing to pay off the property.

Dan Austin: [20:34] Just to get it in good standing.

Mike DeHaan: [20:35] Yeah. And that just goes straight to fees. So that's just an expense. It's not even like it's equity at that position going into the the deal. It's almost as if some of these banks have been set up to where if you fail, you can't recover from it.

Dan Austin: [20:48] Right? I know. You you just think about some of these fees that they get into, and I know a few people got kinda tied up that we worked with into that forbearance situation where it actually wasn't that great of a deal from the people going in a forbearance standpoint. From the bank standpoint, it was great because not only were they just tacking it on to your mortgage idea, they were also tacking on a ton of fees. Uh-huh. And so that happens also when you're in these situations where you're getting behind on your mortgage, if you get behind on your taxes. We see this with, like, federal tax liens. Like, the federal government is not very nice to you if you don't pay your taxes. I know. And the interest the the bummer is that they add interest, but they don't tell you that they're going to put you in jail for a while because you don't know or you don't think you got caught, I guess, if you're trying to do it overtly. But, basically, if you don't find out for two years, they don't care. They put two years of interest on this. So when you first get told it's two years of interest at least, if not three or four years of interest on what and then you have to prove to them that you don't have to pay that, which is highly unlikely because it's gonna take you so much time and effort to do that.

Mike DeHaan: [21:50] Well, it's not even like that short span. I've heard horror stories of you know, an old guy that has some sort of tax issue from like the eighties, he didn't know exists. All of a sudden the IRS comes and says, oh, yeah. We're charging you now fifty years worth of interest on those payments.

Dan Austin: [22:07] Oh, didn't know they could do that. That's crazy.

Mike DeHaan: [22:09] And that, like, $8,000 thing that you didn't do is now a $150,000 or some insane nonsense. Because they'll not only charge interest, but they charge penalties and fees and all these stuff that are, like, fixed amounts over the course of it. And there's these stories of like old guys, you know, obviously guys, I don't know why. Just assume because if it was the eighties, it was probably the dude that was doing it. Probably. But they're like going to jail, right, because they don't have the money to pay off all the stuff. And IRS is like, well, sucks to be you. You know, there you go. Sucks to suck.

Dan Austin: [22:38] Yeah. Yeah. It is not a good situation, and we come across that quite a bit. If you have liens and all that sort of stuff, they might think they know what it is, but you need to get that in that title right away, because like, a good example would be a federal tax lien where someone's like, well, yeah, last time they sent me a letter, which might be last year, it was $30, but then this year, it's actually $60,000, or they were way off on their estimate, all that sort of stuff. And so when you actually get through title, like, no. Yeah. It was $30 last time they filed it, but it's actually 60 now because nothing's been done on it, and so you're like, oh, crap.

Mike DeHaan: [23:06] Yeah. Yeah. It is one of those situations that so many people avoid going into escrow until they have a buyer and all sorts of things. They don't wanna pay the earnest money. They don't wanna pay the $200. They don't wanna have to tell the buyer that they're backing out of it. But you need to do that. Like that, especially right now, would say in the three and a half years you've been doing this business, for most of 2020, 2021, you could do this without ever having to read a title report because the financial stuff was gonna kinda be whatever. Because the banks couldn't do anything. Right? And they couldn't even regularly claim stuff back. Now, as they're all playing catch up and you have all these people that are distressed because of that situation, it's so important that you get a full financial view.

Dan Austin: [23:48] Yeah. And if you find a good title company, it's not gonna cost you anything for that preliminary quick search either. But some title you gotta watch out. Some title companies will try to charge you every time you do that, especially if you fall out of escrow. They'll send you a bill for, $400. You're like, come on.

Mike DeHaan: [24:00] Yeah. And you should be extremely cautious. I've seen an influx in this recently, actually, with different Pace Morpey sort of crowd folks is to save on, like, escrow fees and all sorts of stuff. And and Pace even says in some videos, he's like, we didn't even go to the to an escrow company. He's like, we just went. He just gave me the deed, we I just went and recorded it myself. So sketchy. Yeah. How do you

Dan Austin: [24:24] that wouldn't even make sense to me. I mean, obviously, like, nobody wants to pay a title company to do the thousand dollar title search on both buyer and seller in. Yeah. Silly. But But you should.

Mike DeHaan: [24:33] Mhmm. But the whole thing is, you know, that you can like, to buy a property subject to because you're just having it deeded over. Right? You're just taking a stake in the title, mortgage, in Technically, you can just have them sign a quick claim deed and, like, give you the property. And you can, like, have, like, oh, yeah. I'll give you $5,000. You know, here it is in an envelope. Quit claiming the property, and now I own it. Take it down to the county's office, get it recorded, warranty deed for $10.

Dan Austin: [24:58] Which he's probably skipping he's probably skipping out on he probably had to have gone and got a title. I don't know why you would do that, why you would not do that.

Mike DeHaan: [25:05] I mean I mean, sure he does, but he doesn't teach people that.

Dan Austin: [25:08] He doesn't teach it. He's not telling he's trying to make it sound very simple. Yeah. Right? Like, I could just take this because it's so simple. Mhmm. And he says interest rates also don't affect him. Yeah. Right. Which I don't know that that's true because it still affects the market.

Mike DeHaan: [25:20] Well, that's the whole thing with his model though, is everything that he says in all of his free videos is like 90% of what you need. And he gives out so much free content. I don't wanna put that in quotes. It is free content. And there is valuable stuff in there. He always leaves out like the 5% of it that you actually need to do it appropriately. Mhmm. You know? And so like in that, he's like literally a video we saw, it was like a stage thing where he's like, wow, like how'd you buy this house? Like how much does this cost? He's like, I have no idea. All I know is that this is what the seller owed and he deeded the property to me and I paid him a $100, you know, whatever it was and some bullshit. Sure. But like, if you don't get a title report and it's that situation like we just mentioned, where the guy was underwater on the property and he has a $60,000 issue, that is now your issue forever. There's nothing You you can do with just bought for a

Dan Austin: [26:11] $100.60 grand's worth of debt.

Mike DeHaan: [26:13] Yeah. Right? You know, like, of fees on top of the debt that's already there. And sure, the house is worth $4.50. You can refinance. You can figure that out. But that is not gonna be the normal situation.

Dan Austin: [26:23] Right. I'd tell you, I'll tell you just from our experience, because we market to the very similar people that he would be marketing to. Mhmm. There's a coin flip chance that I would not wanna risk having massive liens or debt associated outside of the mortgage associated with the property that I would not wanna take over unless I knew what the picture was. Absolutely. It's like to me, it's like a flip of a coin. Like, the same odds of, like, you getting screwed by doing that. And so that being said is, you should definitely get title opened right when you get a thing under contract.

Mike DeHaan: [26:53] Yeah. And if you don't know how to read a title report, you go through that process, you're like, I don't really know what this means. Just ask the title company and be like, hey, is there anything on this that I don't fully understand? Their job is to help you, right, to go through that stuff. And if they're not able to do that, then find a different title and escrow company. There's tons of them out there.

Dan Austin: [27:11] Yeah. You have to be you're right. Absolutely. That's a whole art and science because you could tell a title company to run a title report, they're like, here you go. And you're gonna be like, oh, we're good. I guess I got a title report, and they might not even tell you anything about the title report because they're like, well, you only asked me for the report. You didn't ask me to analyze the report. You Like, you can get into those nuanced things. Yeah. And it's kinda silly, so you definitely need to find a good title company.

Mike DeHaan: [27:32] Yeah. Yeah. It's an interesting situation.

Dan Austin: [27:34] And they exist in probably every market. They do, for sure. We haven't ran into anybody that hasn't been able to find a good title company, and we've talked to, worked with people in dozens and dozens of markets across all the states.

Mike DeHaan: [27:45] I mean, have people that choose to work with shitty companies. They're the guys working in Detroit that are a freaking nightmare.

Dan Austin: [27:51] That's title companies. I don't think I could ever talk to them again.

Mike DeHaan: [27:55] The worst. So the fact that every single transaction, they're requiring you to send all of our business docs just to prove that you're not that because you're not the sole owner of our business. Oh my god.

Dan Austin: [28:05] There's so much stuff with it. Like, I was just like, I can't believe it. Like because we also do have doing business ads. We also have DBAs, which are perfectly legal. But to them, they don't even know what to do with the doing business as. I'm like, hey. If you wire this money to my bank account, my banker will tell you that these documents that I just sent you that show you the whole chain of ownership of this company and that bank account are in alignment. Like, they're just so worried if they wire the money to somebody else that it'd be wrong.

Mike DeHaan: [28:31] It's such a tricky thing, like the business structure. And this is it's funny. This is actually a question that comes up from people fairly regularly in the instant investor program and with our partnership program. And even on Instagram, people will ask me about how they should set up LLCs and how you should organize your actual business itself. And the worst thing about that question, that conversation well, first off, it's individual for everybody. The worst thing about it is that I have yet to find somebody that can give me, like, a true good answer. Everyone's like, oh, you go like find an attorney, you know, go and do this. Yeah. But all attorneys do from my experience is they're like, sure, give me $2,000. I'm just gonna go on legal Zoom and do it for you. Right. You know, like, I don't know the value that they actually provide or how you're actually supposed to learn the best way for that, for your business.

Dan Austin: [29:24] Right. You've gotta have a group of good lawyers in your town to choose from. I don't know that we've found that good lawyer No. In our home They are out there. We've worked with good lawyers, but I don't know. I think the answer should always be it depends. And then the person that you're working with, if you're going to choose somebody, should tell you what depends means. Yeah. And not try to so what happens, to your point, you're saying they all go to LegalZoom and download the same documents, They may or may not do that, but what they do do is try to go off the template that they already created and make that square peg fit into your round hole. Yeah. As I was saying that,

Mike DeHaan: [29:56] that sounded terrible. But that's the new t shirt. That should echo on the back of the VDE t shirts.

Dan Austin: [30:06] Oh, man. But seriously, and I've taken business law classes, unfortunately, and learned all this sort of stuff that it's like, yeah, not all lawyers are out there. It's like doctors. Just because they're good doctors doesn't mean they can help you on how to be healthy. Yeah. Because they're probably one of the more unhealthy people you know.

Mike DeHaan: [30:22] Or like accountants, you know, CPAs. That's a huge thing. Everyone is always like, oh, I'm gonna start investing in real estate. I've learned this. How do I explain to my CPA what I'm doing so they can help me with my taxes? The answer is go find a different CPA who actually understands real It's not your job to coach your professional on how to do what you need them to do.

Dan Austin: [30:46] You know what, I swear we are a great resource for this, because we have been so bad at picking some of these professional resources. It took us like, what, three accountants till we got our accountant that actually Yeah, three understood four. Real Uh-huh. Was like, okay. They all say they can do real estate. But then we finally got our accountant, and we're just like, oh, now this guy knows what he's doing. Okay.

Mike DeHaan: [31:06] There's people, there's an accountant that understands a passive real estate investment. There are ones who understand taxes and strategy for a real estate business. Very, very, very different. An active business is what you're talking about.

Dan Austin: [31:20] A wholesale Correct. Flipping

Mike DeHaan: [31:23] know, or if you actually have transactional stuff, part of it you're taking depreciation, you're a real estate professional. That is different than if you are a W two employee who owns like a couple of rental properties. Right. Yeah, That's normal CPA can do that. If you're gonna start like trying to take, you know, bonus appreciation, do all sorts of other stuff, you need a CPA professional. Yes. And then, so same thing goes with like the business structure mentioned before with the attorney. You need to have a real estate attorney that understands what exactly the phases are of your business, how, you know, you need to structure your business entities around that, and just going to, like, a regular business lawyer or just a regular real estate lawyer is not necessarily going to understand that the same. And it's hard. Right? Like, when and I think a big thing too, this is somewhere else that people get held up. And we're talking about going back to the economic stuff before, is they spend all this time trying to find that individual that can make sure they do it 100% right from the get go. First off, I commend you for wanting to be that organized, right, and make sure that you do it right. Right. Second off, if that takes you forever and you're using that as an excuse to not take action, shame on shame on you because Right.

Mike DeHaan: [32:37] Like, now now you are, like, finding excuses to not do the things that are actually hard. And we can tell you from experience that you can do very, very well without having those sort of things figured out. And sure, it sucks for a while when you're trying to scramble and get yourself back on track, but it shouldn't be the reason that you don't

Dan Austin: [32:55] make sense Definitely don't let that be the reason, or don't think your logo is actually what's gonna sell a seller on you and your business. There's so many little things. I think it's great. Don't get us wrong. We have spent time on marketing and all that sort of stuff. Like but, like, when it comes to real estate, like, those are, the least things you need to figure out. The most the best things you need to figure out is, like, how are you actually gonna buy people's houses at a discount? How are you gonna find distressed sellers and and buy their house at a discount? If you can never make money, nobody cares that you spent $250 on your LLC filing with your state, you know, Secretary of State, and that you had a super cool logo from Fiverr. If you can't actually make money, then it's all waste. You don't have a business.

Mike DeHaan: [33:32] You wanna hear my favorite excuse that I've seen somebody from getting started ordering their marketing? Yeah. So this was in a different group that we were in. This guy built this huge, elaborate spreadsheet. He was getting ready to order his marketing. He wasn't gonna pull through yet. He built this huge elaborate spreadsheet, analyzing the value of the credit card points that he could get with every card. And he had not started marketing yet because he had not determined what the best card was to get credit card points for all the marketing that he was going to do. And I remember when this guy built this thing out, and I was like, okay. That's, like, kinda cool, whatever. And then when he was still going through this and having conversations with people in that group, like, two months later, I was like, are you serious

Dan Austin: [34:17] right That's tough.

Mike DeHaan: [34:18] Yeah. That's tough.

Dan Austin: [34:20] I mean, here's the thing. Let's have this quick conversation here. I get it. Buying marketing hurts. It doesn't feel good when you're starting out, especially when you're doing direct mail. You might think just because an SMS or a cold calling service is cheaper that you're gonna go that route because you're gonna get better leads. I assure you that's not the case. Like, direct mail, we pitched up because we know that those are good quality leads, and, yes, it's expensive and it hurts, especially if you spend it in one month and you don't get a deal. Uh-huh. Because in your mind, you're like, well, Mike and Dan say, like, well, if I order it, then I'll make money. I'll have it's an ROI. Just like when I buy a rental property. It's like, yes, it is, but that ROI sometimes takes time. Right? Just like when you buy a rental property and and the first thing that happens is, I don't know, something explodes. Like, the big leak, and you gotta redo the bathroom. It's like $10. You're like, well, that goes on my cash flow for the year. That happens. But with the marketing, you still have to have time to do this Yeah. To get that ROI. It's not instant. Yeah.

Mike DeHaan: [35:14] You're right. I would say the comparable is you drop a few thousand dollars on mail, and you go out, not only not get a deal, but your response rate's terrible. Right? Which does happen. We have people that have worked with us. That's happened. We've had that happen in our own business. With our own established system, we have sent out $5.06, $7,000 worth of marketing and gotten 10% of the response rate that we were hoping for.

Dan Austin: [35:37] Sure. And what do you do? Do you market the same people? What would you do? What's your answer?

Mike DeHaan: [35:41] So our typical answer is we go and we review the data. Right? We see if there's some sort of issue, there's some sort of problem that happened there. We look at, like, the ZIP code to see, are we really targeting people that are going to be distressed? That's a big area people kinda mess up. Looking for any,

Dan Austin: [35:56] like, whoopsies or mistakes that we may be made.

Mike DeHaan: [35:58] Yep, exactly. So I've that's a very big area people mess up as they say, I'm gonna spend $3,000 just to landlords. And I'll look, I didn't get a good response rate. It's like, right, did you include people that have bankruptcies who have liens, you know, in clause stuff off PropStream. It's not super complicated. So we we look at all that. We look at our return to senders. So like how much mail are getting back? And we've literally had this happen too, where we've had a really bad hit rate, And then we look at our return to senders, and I'm going through and every single one is actually the correct address. It's basically the post office giving us the middle finger and saying, we're not gonna deliver your letters this month. You can go after yourself. Why that happens, I have no idea.

Dan Austin: [36:37] I think it's just laziness.

Mike DeHaan: [36:39] Yeah. So I remember when we we had a podcast, that was probably about a year ago, where we're going to that that rabbit hole, and I called, like, the corporate post office, and they told me that their acceptable margin of error is eight to 14%, which is insane.

Dan Austin: [36:52] So 14% of your business could be going down the drain Exactly. Because that post office sucks. Yeah. Yeah. I mean, that's like, don't blame it a 100% on them, because that's not a major issue, like it shouldn't be. Yeah. But it can be. It could be a transient issue, think.

Mike DeHaan: [37:06] Yeah. Mean, you a 30 or 40% return to sender, you need to figure that out. But if it's within the eight to 14%, understand that is an acceptable range. And then after you look at all that, honestly what we do is we send the same list again, and we see if it happens again. Right? Because there are free situations, some like, we've also had it where we've hit a list three times in a row. It's been awesome. And the fourth time, it sucks. Then the fifth time, it picks right back up again.

Dan Austin: [37:32] Yeah, I would say that's what I was trying to get at, was sometimes it's that consistency, and some months are way, way better than other months. And so sometimes you might send a letter, a batch of letters to the same exact group a month later, and you get the typical response rate you need. But you have to not get discouraged based on that first month or two that you're sending it. You need to actually continue to do that, but obviously review what you're doing. To your point, you said if you're just looking at landlords, why would they sell to you? And if they would sell to you, I guess don't create a persona in your head that doesn't exist, or only exists in the perfect world that aligns with what you want. Yeah. You have to find that distress, and that's why you're going off market. So looking at landlords, you wanna hit those because there are some advantages to hitting that list, but also, if you can add that distress to the list, yes, that means you might have to do some work, or you might have to wholesale a deal, and maybe you're only focused on buying, But those deals are what keeps paying for your marketing Uh-huh. And that's why you go off market, and that's what distressed means, and that's what the data you're using data that shows you where to go.

Dan Austin: [38:35] Yeah. Don't create an ideal persona that doesn't exist.

Mike DeHaan: [38:38] Exactly. Yeah. Yeah. I mean, I think I think that's a big area where a lot of people get stuck to is they are only targeting places that they personally wanna buy, which I understand why you do this because you wanna be an investor.

Dan Austin: [38:48] We did that.

Mike DeHaan: [38:49] That's exactly what we did, but that's also not how you generate cash and revenue to keep the marketing machine alive. Unless you have a really high w two Yep. Or like a really high form of income somewhere else, you need to do that transactional real estate to keep the machine going. But, like, you know, going back to that consistency standpoint just real quick, the biggest danger people have is they try to make conclusions based off of one data point, like one month. And that's not how it works. Right? Like, need to have some sort of pattern. You need to test and retest and see what works, and then you can start to make conclusions.

Dan Austin: [39:22] Right. You know, like, I'm trying

Mike DeHaan: [39:23] to think of a good analogy for that, but I don't know. It's like A square picture. A square a square trying to put someone's square patch in your round hole. So anyway, name of game's consistency. Go and listen to like every single guest that's been on this show for the last year. And that's gonna be the most reoccurring thing that you hear is being consistent with what you're doing. That is the number one thing that leads to success for everybody.

Dan Austin: [39:52] And it's not rocket science.

Mike DeHaan: [39:53] It's really not. So cool. Awesome. Anything to finish out, Dan?

Dan Austin: [39:57] No. I'm good.

Mike DeHaan: [39:58] No? Okay. I'm just gonna say one last thing purely for for Rahman, who is our our digital media manager from who does all of our social media stuff. He's a big soccer fan. He wants to talk about this absurd contract that Lionel Messi got offered to play in Saudi Arabia for $400,000,000 for the year. And I'm gonna say one thing about that. Well, I'll start two things about that.

Dan Austin: [40:21] It was a $400,000,000. He broke it down to where it's what is it? 13 or is it $13 per second that he's gonna make?

Mike DeHaan: [40:29] Yeah. Something like that. It's like a million dollars a day, million something a day, which is insane. First off, the people that are, like, saying it's a sellout if he accepts that, you're an idiot. He should absolutely accept that, especially he's, like, 37. Yeah. Second off, the amount of money that Saudi Arabia has to just do, like, nonsense is ridiculous. They're like

Dan Austin: [40:51] the Catholic church. We don't actually know, but I can assure you Elon Musk is not the richest guy in the world. Somebody in Saudi

Mike DeHaan: [40:57] Arabia Absolutely. Have more money than Yeah. Anything. It is unbelievable. And even on like another note, should like just dive into foreign economics sometime. I saw this thing about how they were gonna be starting trying to get into like the video game industry, And whatever chic or what I don't know how their whole system works, decided he was gonna do that, had pledged $35,000,000,000 to start getting into the video game industry. Dang. So the $400,000,000 for washed up Lionel Messi to come in and do his thing, who gives a shit? That's just like that's just chump change to them. That's just like their their play money because they wanna play fantasy soccer in real life. Wow. Yeah. So the next thing is is we should buy foreign real estate with stuff like that in mind, some of those sort of markets. I'm curious to see.

Dan Austin: [41:44] You wanna buy in Saudi Arabia? Don't recommend that.

Mike DeHaan: [41:46] Maybe it was with ROI. Don't know. Desert. It's hot. I know people that are doing it. I'm starting to see it more and more often with GoBundance. For sure,

Dan Austin: [41:55] like Dubai and whatnot, I've known people to go there and start businesses and stuff, and there's a lot of great places in the world to go, That I would would be kinda interesting. We should bring on an expert that we could talk to about even more simple types of investments. I've heard a lot of folks in Portugal doing investing and Italy doing investing and other places like that. Americans going there to buy properties.

Mike DeHaan: [42:18] Yeah. I actually talked to a guy the other day in GoBundance who's starting a fund in Barcelona Go fund it. Which I was I'm actually really interested in, a, because I really like that city, and b, because having been there recently, I can see the growth Why? Potential and the interest. So that would be interesting. We should see if we could get someone come on for that. Anyways, there you go, Rahman. There's your your soccer talk for he loves it, man. He always is like hit me up wanting to talk about it. Anyways, guys, thanks so much for listening. If you enjoy the show, if you enjoy Dan and myself, you should share this with your friends and go and leave us a five star review wherever you listen to this. That is the easiest way for you to help us out and help us continue growing this show, which March is actually our biggest month to date, which is pretty cool in terms of downloads. So I'm just pumped that we keep going higher and higher. It's super cool to see.

Dan Austin: [43:07] We are just square pegging things, man.

Mike DeHaan: [43:09] That's just one pegging. Trying to make a t shirt out of that one, and I

Dan Austin: [43:14] don't know

Mike DeHaan: [43:14] if we could do it.

Dan Austin: [43:15] I just can't do it.

Mike DeHaan: [43:18] But anyways, guys, go and share it. Leave us a five star review. If you wanna buy some Collecting Keys merch, go to store.collectingkeyspodcast.com. We had a handful of different things on there. Nice shirts. We've been dishing them out to people. You should buy one, send me a photo, and I would love to have a little story where I show all of our fans wearing our sweet shirts. So store..collectpodcast.com.

Dan Austin: [43:40] Outside of that, if you wanna start finding off market leads, you're gonna

Mike DeHaan: [43:43] go to collectingandkeyspodcast.com/free. Get your free five step guide and start generating off market leads. And then you can spend time reviewing title reports with people that have gotten so serious financial issues and trying to figure out how the hell you're gonna bail them out when the bank has them by

Dan Austin: [43:59] the balls. So anyways, guys, thanks

Mike DeHaan: [44:02] for listening. Talk to you all next week. See you.