Dealing With $1M Issues, Tips For Better SOPs, And Losing Tenant's Pets

Mike DeHaan: [0:00] We just had a $100,000 line of credit canceled.

Dan Austin: [0:03] For We got canceled. Yes. Mike and Dan got canceled.

Mike DeHaan: [0:06] But for

Dan Austin: [0:07] If anybody's not gonna get canceled, it's us, but we got canceled.

Mike DeHaan: [0:10] But, yeah, for no real reason other than the fact that the bank told us that they were looking to reduce their risk going into the economy next year. We had used this kind of credit pretty heavily over the course of the year. I'd had on time payments, everything was like going good. And then I went to go make another draw, and they're basically just like, yeah, you can't do that. Sorry. But we actually want you to pay this due by the end of the month. This was yesterday. They said they want it paid in full by December 31, and that they were not gonna be renewing it for the New Year purely for their own risk and the risk mitigation. And I'm curious what they would have said if we had had the full $100,000 drawn. Like, if they would have just been like, you know, and it got to the thirty first that they were just gonna be like, yeah. So you need to pay that back in thirty days. Yeah. Which they very well honestly could have done that.

Speaker 3: [1:00] Welcome to the collecting keys real estate investing podcast with your host, Mike DeHaan and Dan Austin. From wins, losses, horror stories, and tactics for optimizing your business, Mike and Dan take a real uncensored deep dive into the ins and outs of running a full time real estate investment and wholesaling business.

Mike DeHaan: [1:24] Alright. Alright. What's going on, guys? On this episode of the Collecting Keys Real Estate Investing Podcast, we have another episode of the Mike and Dan Show. And it is the slow season. So Dan and I are sitting here going, should we even have this today? Because we are coming up hard on Christmas. In fact, this is the last episode that we are recording before Christmas. You'll be hearing this shortly after Christmas. But in the real estate world, this is typically when things are dead. Not a lot of people are Quiet. Yeah. They're quiet out there. Quiet. Not a lot of people are buying. Not a lot of people are selling. Although, we did just get a contract signed around today with our Detroit clients. So, you know, they're not completely dead. Our our Detroit partners out there is they're part of our instant investor partner program. We've been working with them for two months, and we finally got our first deal sent around. So that's pretty cool.

Dan Austin: [2:12] Heck, yeah. It's a win.

Mike DeHaan: [2:14] One. Yeah. Big win. So it's not completely quiet, but a lot of other places, it is certainly pretty quiet. You know, even looking at, like, tenants and those sort of things, like, if you're trying to rent stuff out right now, no one wants to move, especially up here, it's snowy. Yeah. You know, a lot of people, they're just using the mental time frame of, you know, the New Year to fix all of their issues.

Dan Austin: [2:38] Right. That's when they're gonna that's when everybody loses all their weight, January.

Mike DeHaan: [2:41] That's

Dan Austin: [2:41] New Year, new me, put off all the goals. Yeah. Hey. I'm putting off all my goals till then too. Our tenants are quiet, which is cool. Like, you mentioned that. Like, they're not doing anything stupid

Mike DeHaan: [2:51] Yeah.

Dan Austin: [2:51] Or, you know, good otherwise either. But, like, it's so quiet out there,

Mike DeHaan: [2:55] you know. Yeah. I mean, like, I I haven't heard anything from any of my tenants in quite a while, which has actually been good. My my my two Ukrainian tenants who are having a good month because I gave them the don't know if I talked about this already. I gave them the months off rent because we went and picked up, like, an old washer and dryer there, like Oh, yeah. Two was it two months ago? No. Was two months. It was last month. And accidentally left, like, the side gate open and their dog got out and they, like they ended up finding their dog. But they lost their dog for, like, four days and somehow this little thing survived, like, out in the wilderness.

Dan Austin: [3:29] Yeah.

Mike DeHaan: [3:30] And I felt so bad though, man. I was like, I can't I need to, like, have some sort of reparations for that. So I let them I waived rent for the month. Figured it was the least I could You

Dan Austin: [3:40] should've just brought a new chihuahua over there whenever.

Mike DeHaan: [3:44] Dude, that's not the same.

Dan Austin: [3:44] Replaced it.

Mike DeHaan: [3:45] It's not the same, man. I feel I feel so bad, especially because, like, we went we went over, like, in the morning we did that. And then they texted me a little bit later, and they were like, oh, I didn't realize when you came over that you the the gate open, and now our dog has run away. And I was like,

Dan Austin: [4:01] I felt so bad. You worry you care too much. This reminds me of this Tom Segura bit where he talks about, like, the difference between, like, people that have kids and the people that, like, don't have kids but have dogs. Like, he's like, here's the difference. He's like, if my dog ever bit my child or injured my child, I would choke it. And I would choke it out to hold his head underwater and get after it. And he's like and then he goes to the whole joke of how you would murder this dog for biting his kid. And then he's like, yeah. This one's been this one's hit pretty hard all to her. Nobody laughed.

Mike DeHaan: [4:29] Yeah. No. So, no. So so I I know that bit. And what he says is he's like Yeah. He's like, I understand people love their dogs. They're like, I have a dog. I love my dog. Yeah. And I also love my children. And the one difference I know is that if my dog ever bit the kid, I would drown that fucking dog.

Dan Austin: [4:43] That's exactly it.

Mike DeHaan: [4:44] And then and then I would give it to my son and say, did Yeah. This for

Dan Austin: [4:49] That exactly. That you said that was so much better. I couldn't really remember how he said it, but that's exactly it. Yeah, it's just the dog. You're good.

Mike DeHaan: [4:55] Yeah. Oh, man. But I mean, they're they're they're like a millennial couple. It is their child, dude.

Dan Austin: [5:00] Yeah. From a war tone country. I get it.

Mike DeHaan: [5:02] Yeah. I mean, yeah, exactly. Right? They don't have much, man. Their country got freaking devastated this year. That's why they're over here. They were fleeing that. And they're just looking to get out of their

Dan Austin: [5:11] mom's The the president who's also spearheading the war was getting interviewed by David Letterman. Is that who interviewed him?

Mike DeHaan: [5:19] I don't know.

Dan Austin: [5:20] So I think he's okay. Yeah. In a subway.

Mike DeHaan: [5:23] In a subway?

Dan Austin: [5:24] On a Netflix special, because the subway is a the I just saw the headline for it or whatever, I was like, wow, they're not he's not really spearheading the war.

Mike DeHaan: [5:32] I mean

Dan Austin: [5:33] And his clean five eleven tactical gear that he got sent to him from five eleven for, like, wearing it, and he gets paid, like, probably 5,000,005 million dollars a year.

Mike DeHaan: [5:41] What are you supposed to be, like

Dan Austin: [5:42] He's sponsored. He's sponsored.

Mike DeHaan: [5:43] Is he supposed to like, on the front lines as the fucking medieval ages?

Dan Austin: [5:46] That's what he's trying to portray. Like, he's out there, but he's wearing, like, his tactical gear. He's all out there, like, yeah, I'm on the front lines with white people. I'm like, no, you're not.

Mike DeHaan: [5:54] I mean, he's he's closer than most world leaders Not can be in at that even dirty. He's still in the He's

Dan Austin: [6:01] he's on the ground. I'll give him that. We would not have our president be on the ground. But, I mean, come on.

Mike DeHaan: [6:06] Have you seen, like, the recent video stuff over there? Like, the the front line of it? It's like straight out of World War one. Like, the trenches and shit.

Dan Austin: [6:13] I don't believe it. I don't believe it.

Mike DeHaan: [6:14] Dude, go look at the videos. Like, they're just insane. It's like

Dan Austin: [6:18] There's no they're not having a trench warfare.

Mike DeHaan: [6:20] Yes. They are.

Dan Austin: [6:20] They probably bombed the shit out of their buildings. Bet

Mike DeHaan: [6:23] that Go look at the freaking trenches. You see them everywhere, like, right on the front line. Like, honestly, have you ever seen that movie 1917? Either like like that one that came out a couple years ago, the World War one movie. Either

Dan Austin: [6:33] Zero fucking sense.

Mike DeHaan: [6:35] What do mean?

Dan Austin: [6:35] Zero fucking sense. Why Go would you have a trench when you have

Mike DeHaan: [6:40] look in the video. You'll see. Good. Alright. It's crazy. Honestly, though. It's it's it's

Dan Austin: [6:47] I'm there may be some trenches. You're you're right. I don't know for sure because I haven't been been to Ukraine, but that seems like the dumbest way to fight a war in modern times. Well, you have tanks and things that could just drive up to the trench and, like, look over and be like, hey, guys, and drop a grenade.

Mike DeHaan: [7:02] I don't I don't know how it's working. I mean, that they're not the US military going against, you know, the Middle East, which is like, basically aliens attacking prehistoric area at like, honestly. Yeah. You're

Dan Austin: [7:16] It is.

Mike DeHaan: [7:17] So Yeah. You enjoyed that joke way too much, you fucking sicko.

Dan Austin: [7:20] I did.

Mike DeHaan: [7:22] Seven flashbacks with the good kind.

Dan Austin: [7:24] Yeah. We're having a good time here with you and your church warfare and us being aliens, biting prehistoric stone age people from the Flintstones.

Mike DeHaan: [7:31] Oh my god. Alright. We're gonna definitely get canceled for that one.

Dan Austin: [7:34] Sorry. My bad.

Mike DeHaan: [7:35] Anyway, so yeah. But, you know, so that's that was my one tangent drama I've had recently. Besides that, it's been quiet. And then, you it's looking Yeah. We Investing strategies going into the New Year, I'm looking at just selling off a couple places and ten thirty one ing into some slightly different assets. Mhmm. But nothing too exciting at all though, man. I mean, from pretty pretty straightforward. I guess one thing though that this is a good sort of lesson for everybody, especially when you have all these freaking gurus out there that are spouting off about just going and getting, like, all these lines of credit.

Dan Austin: [8:10] Oh, yeah.

Mike DeHaan: [8:11] And, you know, just using those to buy houses with, you know, then it's not with your own money. It's all with the bank's money. We just had a $100,000 line of credit canceled.

Dan Austin: [8:19] For We got canceled. Yes. Mike and Dan got canceled. But for If anybody's not gonna get cancelled, it's us, but we got cancelled. But,

Mike DeHaan: [8:27] yeah, for no real reason other than the fact that the bank told us that they were looking to reduce their risk going into the economy next year. So with how business lines of credit typically work, they'll review them on an annual basis, just sort of like what more information about your business is doing, make sure you're still lendable as your stuff, all of which we fit. They didn't even give us the opportunity to reapply. We had used this kind of credit pretty heavily over the course of the year. I'd had on time payments. Everything was like going good. And then I went to go make another draw, and they're basically just like, yeah, you can't do that. Sorry. But we actually want you to pay this due by Yeah. The end of the month. This was yesterday. They said they want it paid in full by December 31, and that they were not gonna be renewing it for the New Year purely for their own risk and the risk mitigation. And I'm curious what they would have said if we had had the full $100,000 drawn. Like, if they would have just been like, know, and it got to the thirty first, if they were just gonna be like, yeah, so you need to pay that back in thirty days. Yeah. Which they very well, honestly, could have done that. Like, it was fully in the right to

Dan Austin: [9:29] do so. Read the I didn't read the fine print, so I can't speak to that.

Mike DeHaan: [9:32] No one does.

Dan Austin: [9:32] Nobody does. But that that is an interesting point because when you do get these especially these unsecured line of credits, they do do an annual review on these. Uh-huh. And at some at points in time where they're not trying to hedge risk due to, you know, recession, you could actually go back and ask for more. Uh-huh. So say you did what we did, we used we maxed out that line of credit and used it throughout the year up and down, and then we paid it all off, it was sitting zero waiting for us to pull on it, which we were about to pull on it again. Mhmm. And we were in great standing. And so in any other year, we could have been like, hey, do you guys offer 150 or $200 unsecured line of credit for businesses? Here's our track record, and they see that. And they would likely be okay with giving you an increase in that had you had good standing and your business is still strong. Not right now. And that that's the question that I would we should ask and get answered is, if we have a line of credit pulled, and it's probably gonna depend on the institution, if we had say, didn't pay it off in the beginning of December like we we did, how we had it pulled already, would they be able to call it because our year is up or would they have to do something else with it? Uh-huh. Because they probably wanna amortize it or anything like that, because there's no nothing securing it.

Dan Austin: [10:41] So they probably don't wanna do that.

Mike DeHaan: [10:42] Yeah. Yeah. I mean, it is a good question. And so I I asked well, I guess I posted in the GoBundance Facebook group that we'd had our line credit canceled because there was a lot of people that were using that institution because it was very easy to get lines from them over the past couple of years.

Dan Austin: [10:57] Easy come. Easy go.

Mike DeHaan: [10:58] And one of the main things people said was people that were local to the area of this credit union, or it's actually it's a it's a bank. Was it for the bank or whatever it was. It's either way, it's a small, like, local area that was based out of North Carolina, South one of the Carolinas. One of those East Coast states. Everything I

Dan Austin: [11:15] don't even know. We're in

Mike DeHaan: [11:15] Washington state. Maybe everything past the Mississippi is, one giant state. Yeah. But

Dan Austin: [11:20] Except for Florida. Florida gets its own area of the And

Mike DeHaan: [11:23] like Michigan, the ones that shaped it funny. But people that were close to there said that they talked to their reps, they weren't having any sort of they were told that that's not gonna happen. But the people that Wacey were outside of the geographic area were starting to get called. And there was actually one person though that was based out of Colorado that has stuff, and he's he responded and said that he was told that his weren't gonna get called, but he also used them for banking and had like a decent amount of cash deposits and stuff like that in there. So I think that that was something that, you know, would likely play in your favor is if, you know, you have a significant deposit, they can see money coming in and out of that account, they're gonna feel a lot more comfortable keeping a line of credit open with you

Dan Austin: [12:05] For sure.

Mike DeHaan: [12:06] Versus if all you have with them is a line of credit and the free checking account that they forced you to open when you got the line of credit that you just kept at zero for the entire year.

Dan Austin: [12:15] Yes.

Mike DeHaan: [12:16] Which is what Exactly. Really happens with most most of these lines that people get.

Dan Austin: [12:20] Yep. Absolutely. Yeah. I it had it been secured like a home equity line of credit or a line of credit against a property. I think things look different. I don't know that they're calling those or looking to do that. I don't think we're in that kind of situation. Because with those, the bank at least has some recourse against you if you have it out, and they can choose to amortize it and basically make it like a like long term debt where you're they're getting a principal and interest payment. You can choose to do that, right, if you want to on most of your line of credits that are held against the property. But again, they have they have some assets securing it, so they're not scared. On these business lines of credit

Mike DeHaan: [12:54] Yeah.

Dan Austin: [12:54] You know, going into recession, a lot of businesses close shop. Uh-huh. That's just what has happened. So if they have money out there that's unsecured by nothing, like, or secured basically by you and me, like, they don't want that. They have no recourse to get it back. Yeah. But we do have a plan to just go get a bunch more of these because they're pretty cool and see if we can get I don't know. How many do you think we should get? 10 more?

Mike DeHaan: [13:13] I don't know. Go go watch any of the Instagram gurus. They're just like, go start a new business and then call 50 of them in the first month.

Dan Austin: [13:20] No. They don't even say start a business. They go get an LLC Yeah.

Mike DeHaan: [13:23] Because that

Dan Austin: [13:23] means you have a business. And then go call all these people.

Mike DeHaan: [13:26] Yeah.

Dan Austin: [13:27] I don't know. They are a great way for your business to operate, especially in real estate because it's so asset intensive, and sometimes you do need to bridge the gap between closings or for construction funds. But, like, as you and I have talked, like, we've had a pretty big swing in money recently. Not that we're losing money, but, like, when we added up, like, how much money we were planning to have in our pockets to the swing to what we don't have in our pockets is huge. And so, if you are just solely relying on credit to do your business, or solely relying on other people's money, you're fucked.

Mike DeHaan: [13:59] Yeah. Totally.

Dan Austin: [13:59] That's all I'm gonna say. Like, that's a terrible business model anyways.

Mike DeHaan: [14:02] Yeah. Yeah. I'd say totally is. But again, so that's kinda the farce with all these people that say, you know, you can do these business with none of your own money. Just raise private money. Just use other people's money. Mean, technically, you can, but then if you get into It these does. It does. Then if you get into these weird situations, though, you're kind of, like, stealing from other people, and you're putting other people in a weird spot. And you gotta decide, like, if that's wants to be you, which which us, I know, for us, that isn't who we wanna be. We don't wanna be the people that are fucking people's retirements and those sort of things.

Dan Austin: [14:28] No. And like, I do believe in other people's money or borrowing money from a bank. I mean, we've done all of that, But, like, take it easy, like, just because it worked once doesn't mean you need to go and do it a 100 times. Yeah. Yeah. Like, to ease into it, build some, like, a robustness to your business, build some resiliency so that when things do kinda push push back at you, you have some cushion. That's all I'm saying.

Mike DeHaan: [14:50] Yeah. Exactly. And and I guess, let's just put some numbers on this. People have context for how quick things can swing. So if we look at, I guess, this year, so we have the one property that we've been unable to sell that we're still trying to figure out. We're now refinancing it to list again in the springtime. It's a little bit better buying season. And this is just like tough price point to be selling a property, fully renovated, and still would have a unique property. It's just, you know, a year ago, it would've sold in five seconds. Now, just for the market

Dan Austin: [15:17] condition, We'll it's sell. We just don't wanna sell for what people wanna pay us.

Mike DeHaan: [15:21] Yeah. Yeah. Right now. And we were you know, by the time I was listening, it was it was snowing. It will fucking stop snowing.

Dan Austin: [15:25] Yeah. Too bad.

Mike DeHaan: [15:27] So in that property, we have like a $150 tied up that we're expecting to have back at least, if not more than that.

Dan Austin: [15:32] Yeah. It might be more.

Mike DeHaan: [15:32] Maybe more. Maybe 200,000 tied up that we're expecting to have in our pocket that we don't. We had the oil spill house that you guys have heard about if you've been listening to us last a little bit, which ate, what, another 50 that we weren't expecting to have. We have the condo house that we weren't able to sell.

Dan Austin: [15:48] Say say that again. What did say? Eight fifty?

Mike DeHaan: [15:50] The another another 50 who have tied up in the oil house?

Dan Austin: [15:54] Yeah. But we also have a 160,000 tied up in that one too. You're actually right. Sold yet.

Mike DeHaan: [15:58] Yeah. So we had the piece of land that we were expecting to get back.

Dan Austin: [16:01] It was

Mike DeHaan: [16:01] a 160,000

Dan Austin: [16:02] That's attached to that property.

Mike DeHaan: [16:03] Yeah. That's attached to the property that we were unable to sell. And this is again indicative of the economy. They decided to not let us rebalance the

Dan Austin: [16:11] loan partial reconveyance.

Mike DeHaan: [16:12] Do a partial reconveyance of the loan because, you know, they wanted us to not have the low interest rate and refinance the loan. So that's cross those two between the oil repairs, and that's 200,000. So that's 400. Then we have the condo that we couldn't sell because of the insurance situation, which has 130,000. So that's Yeah. Right 500 into it. We got our line of credit just called that we're checking to have have that was 100,000. So was that put us out like 600. Yes. And then we had two of our private money lenders. One just called a $250,000 investment they had with us. They wanted that back. Another one had a 180,000. So that's like 400. All of a sudden, we have a million dollars swing on money that we were expecting to have available to us that now we just don't. Yeah. Over the course of like seven months. It's a million dollars.

Dan Austin: [17:07] That's a lot.

Mike DeHaan: [17:09] You know what?

Dan Austin: [17:09] It's a it's just a cool cool millie.

Mike DeHaan: [17:11] Yeah. Well, I mean, like, I think the one testament that we do have that shows our maturity from this year, honestly, even over this time last year, like, we started the podcast, was this time last year, we would have been toast if that happened. We would be so screwed. Yep. But just because things have gone well, we've leveraged appropriately. You know, we've been putting money in our pockets and not overleveraging on a lot of stuff. It's a inconvenience, and it sucks. It's definitely is gonna, you know, slow down some of the stuff that we're working on, but it's not like it make us go bankrupt. Just kidding.

Dan Austin: [17:40] Yeah. I mean, and you and I you and I have always preached this to people, and including to ourselves because sometimes it's hard to, you know, practice what you preach.

Mike DeHaan: [17:47] But Yeah.

Dan Austin: [17:47] Don't over leverage yourself. Don't get out there and start doing things that are just dumb because you watch and see people and it and it's great when people are high fiving each other and and they're being successful, but it does not take long to watch them unwind when you in your heart, you know, like, that's possible and it could happen and you're not doing it for that reason and it doesn't feel good until you start seeing other people unwind. Not that you're, like, laughing and it feels misery, but you're like, okay. Yeah. Alright. You know, we stood we stood fast. We we kind of held strong on some of principles, our core values around investing, which is not easy. And now, we're sitting there in a decently comfortable position.

Mike DeHaan: [18:22] Yeah. And and

Dan Austin: [18:22] Still sucks.

Mike DeHaan: [18:23] I mean, I would say for us, this is the first sort of downturn that we've gone through or started to go through. Right? And Yeah. You can now see, like, a lot of the OGs that have been around for a while, they're like, oh, yeah. Everyone's making money right now. Just wait until stuff turns, and then you'll see, you know, like, weak hands will will get shaken. Right? And I mean, we were definitely a part of that crew for the last couple of years where we would look at some of the people, like, how they were making money, some of the deals they were doing. And, you know, we we were making money too. We looked at someone and be like, man, that deal, like, I was fucking sick. Like, they are raking it in. Right. And now, front of those people are gone.

Dan Austin: [18:59] They're not here anymore.

Mike DeHaan: [19:00] They're here. And, like, not only that, but some of them are filing bankruptcy and all this sort of stuff because they just kept They've

Dan Austin: [19:06] not Made career pivots.

Mike DeHaan: [19:07] They make career pivots. Yeah. Yeah. So but, know, point being, it's that's why it's like I said, have those those investment principles, have those cash principles, and, you know, run your numbers and stick to them, and don't get greedy just because, you know, you feel like you're the king of the world because you're probably not.

Dan Austin: [19:23] Yeah. No. And it's okay to push a little bit sometimes. But again, don't make your entire business model where every deal you do is pushing.

Mike DeHaan: [19:29] Yeah. Yeah. I mean,

Dan Austin: [19:30] that's just the bottom line. Like, if your whole thing is is like, oh, I buy short term rentals, and we're gonna I'm gonna go down this. I know. Sorry to our listeners. Mike and I always this is like the it's easy button for us. Sorry. But if your models to buy like short term rentals and like non desirable markets and like that's all you're ever gonna own and the only way that they cash flow is if they're short term rentals because you're playing retail for them, then you can't figure out how to do it any other way, Like, that's dumb. Yeah. That's I don't know what else to say. Yeah. Like, that's that's called pushing it. But if you're like, hey, let's try out the short term rental in this nondesirable market that we think we can cash for a little bit. And if not, there's still some intrinsic value to this property and we won't be net negative on it. And worst case scenario, if we are, we can absorb it into our portfolio. This is a test run. Let's try it out. That's not pushing it. That's that's like trying to test your business model. It's trying to like, you know, expand a little bit. But like I said, if that's your only business model, if only things things only work when you're just doing weird shit Yeah.

Dan Austin: [20:24] Like, good luck.

Mike DeHaan: [20:25] I think it's the importance of always having more than one exit strategy. Because like short term rentals, we hit on those a lot, even though that's why I'm looking at $10.31

Dan Austin: [20:32] in Sorry. Two It's just fun.

Mike DeHaan: [20:33] Yeah. I'm looking at 1031, my couple of properties into a short term rental in Austin. But it's also in Austin. I feel like that's a high desire area. But you're starting to see that two people that have multifamily properties, people that have triple net properties. Especially, we've talked to some people recently who were buying property the last couple years, where they're like, oh, yeah, we're just going to, you know, stabilize reposition it, you know, refinance it out or sell. But and so, like, they were getting like these three one adjustable rates or these five one adjustable rates. And then all of a sudden, interest rates go up, cap rates start to go back up. Your exit looks a lot shittier than it did when you bought that property, and you have no other exit strategy besides Yeah. You know, something that involves debt, which is now significantly more expensive. Yep. So And

Dan Austin: [21:18] that's the bummer about real estate that we always tend to forget is that it can be illiquid and it can be a it can actually be like a super big drag. Yeah. Like, if you, like, go put some money into the stock, like, you start losing money, like, you're gonna lose money on that stock, but that stock's not gonna get like a leaky toilet as well. Yeah. Like, it could still go to zero. It's not like fun, but like, it doesn't take any effort from you while it goes to zero or like real estate, you know, you can make a bad choice and although if if as long as you can wait it out, you're good. But if you can't wait it out, that could be a costly decision Yeah. For you.

Mike DeHaan: [21:52] Yeah. I mean, absolutely. And then you're using leverage as well, which comes with additional cost, you know, and something like I guess, with normally with stocks, people don't use leverage, even though, I guess, you technically can. Most people aren't using margin and those sort of things. Esta, did your dog just come into your room? No. But Oh.

Dan Austin: [22:11] No. My wife came in my room because her battery's dead. Remember I told you before the call, I was like, oh, her her battery's dead.

Mike DeHaan: [22:15] That's what I just saw your door open, then nobody came in, and I thought your dog just came and opened your door. Yeah. But

Dan Austin: [22:22] Need a recording light out there.

Mike DeHaan: [22:23] Yeah. Right. There you go. Anyways, if you wanna see a ghost come into dance room, which works out on YouTube. But, yeah. So, you know, don't usually use leverage if you're doing stocks, but I've actually seen an influx of stuff recently on Reddit on, like, the different stocks subreddits of these people that were, like, using margin on Robinhood still. This got people last year when they were using margin and when they used it doing like the AMC and GameStop stuff. Yeah. But there's people that had like, you know, $100,000 basis in their accounts. Right? And they had been using margin. And now Robinhood is like, okay, you need to you know, we're cuffing your margin. You have to give us like $4,000,000 to cover that because there is such in debt.

Dan Austin: [23:03] Robinhood let them go there And that

Mike DeHaan: [23:05] that's the controversy. They're like, why the hell would they let them do that? Because they were, like, doing all these day trades. And I I don't understand entirely how it works. But people are having these screenshots and sending these emails they're posting on these different sub brands. They're like, yeah, I just got told I have to bring $4,400,000 to pay off my Robinhood debt. It's like, well, good thing that you you didn't read the disclosure that you signed off I

Dan Austin: [23:27] feel like I don't know. Again, I'm not a pro at stock investing. I have some stocks, but that's about it. If you're like day trading on Robinhood, you're probably not. You're probably like over your head.

Mike DeHaan: [23:37] Totally.

Dan Austin: [23:38] I'm just saying. Like if you don't have what do they call it? A Bloomberg terminal? Like if you don't have access to that, you probably shouldn't even be day trading, let alone day trading at all no matter what.

Mike DeHaan: [23:47] Yeah. Yeah. No way. But anyway, so but, yeah, you know, aside from that, we're just working towards getting things launched into this new year. So we're doing a lot of SOPs. I was actually thinking, have you seen this, like, chat GI stuff or whatever it's called? What's it? Like, the AI? Chat AI? Chat AI.

Dan Austin: [24:06] No. It's

Mike DeHaan: [24:06] GI, I think. But people are using it for, like, the photos and shit that you're seeing all over Instagram right now. You know, you can actually use that to write stuff. So I haven't

Dan Austin: [24:16] I Oh, heard you can use it to write, like, like, you could, like, write blog posts with it potentially.

Mike DeHaan: [24:20] Yeah. So I haven't heard about this yet. So I wanna go I'm I'm gonna try this. I'll report back on this episode. I wanna go and have it write, like, a standard operating procedure for, like, something simple and see if it comes out good.

Dan Austin: [24:31] So how would that work? Like, what do you have to do to get it to write?

Mike DeHaan: [24:34] I have no idea. But I've seen people doing plot posts. But if I

Dan Austin: [24:37] can be like Right.

Mike DeHaan: [24:38] Write a standard operating procedure for doing don't think you'll

Dan Austin: [24:40] be able to do that. I think it wants I bet you it wants you to give it like some like buzzwords and then like, have it go out and it'll search the Internet and bring all those buzz buzzwords together in like, in what's the most common way people are talking about like flowers in the summertime on a trail.

Mike DeHaan: [24:57] No. No. No. No. I don't know. So let's think about if you did it for something though that was like super generic. So let's say we have a try to write a standard operating procedure for like

Dan Austin: [25:06] Or bring a can of beer.

Mike DeHaan: [25:07] No. Like a like a bookkeeping, like doing bookkeeping for a rental portfolio.

Dan Austin: [25:11] Maybe.

Mike DeHaan: [25:12] I feel like I feel like that'll get pretty close.

Dan Austin: [25:14] But If all of a sudden, we start selling SOPs

Mike DeHaan: [25:17] for like

Dan Austin: [25:17] 99¢ Yeah. Right. Even though Mike figured it out.

Mike DeHaan: [25:20] Well, that is kind of the thing that people are saying though is Yeah. As the stuff gets more and more sophisticated, a lot of, you know, creative jobs or jobs that are, you know, even slightly technical in nature, but are repetitive, such as code and development, things like that, are all gonna go away. Because you can use those to write code right now. If you just say like, oh, I need Yeah. This button that does this function that, you know, is green. Like, you can have it, and it'll actually write the base code in different languages for you.

Dan Austin: [25:48] You still need somebody to tell it what to do, though.

Mike DeHaan: [25:50] Yeah. But it takes away, like, the technical aspect of it.

Dan Austin: [25:52] Yep. Yep. You know, I've no, I know that, especially computer programming. Yeah. That seems to be something that's so could easily automate it because Yeah. A lot of it is cut and paste anyways today. And if you learn how to do one function in one type of code, like, you may wanna do the same function in another type of code.

Mike DeHaan: [26:08] Exactly. Yeah. Mean, we can totally and they've they've already take taken so many things towards making that simpler by having, like, WordPress and, like, Squarespace and all these sort of different

Dan Austin: [26:17] web Like libraries. Right?

Mike DeHaan: [26:18] Yeah. Well

Dan Austin: [26:18] Like, darn they're like code libraries. Like, you could go online. I've never coded before,

Mike DeHaan: [26:22] but I have to code shit on any of those. You could at least, like, You track

Dan Austin: [26:25] can go you can go to a hypothetical code library where, like, you can, like, go to some website. I'm talking out.

Mike DeHaan: [26:33] See your heart. Way over

Dan Austin: [26:33] my skis. But you could go listen to this. You could go to, like, a JavaScript website and be like, hey, I want a website. I don't fucking know, dude. And you could say, hey, I want to go and I wanna put a button on my website. I need this JavaScript.

Mike DeHaan: [26:47] Do it. Jesus Christ.

Dan Austin: [26:48] There's probably there's a code library for JavaScript button on website. Right? In, I get it. It's not right.

Mike DeHaan: [26:55] So What

Dan Austin: [26:55] did I just say about

Mike DeHaan: [26:56] Yeah. So there's there's frameworks and there's libraries. So basically, the Boom.

Dan Austin: [27:00] Done. You said it. I did.

Mike DeHaan: [27:02] So like I was right. So like so if there's one developer listening, yes, there's frameworks and there's libraries. I'm talking about and basically, the framework will be kinda like the foundation of what you, you know, use. This is like a JavaScript framework, which will have, like, you know, build the back end of the whole application. And then there's libraries within those frameworks that you can use to do a components of it.

Dan Austin: [27:22] So I was right.

Mike DeHaan: [27:23] And like the most basic

Dan Austin: [27:24] I was right. Was right.

Mike DeHaan: [27:24] Yeah. You've chosen enough for any I

Dan Austin: [27:27] was right. And so, yeah. Point being, that there is it would be easy to automate a lot of the programmers that are working at three tech companies jobs.

Mike DeHaan: [27:37] Yeah. I mean, honestly, that that well, I think that what they do is a little bit more technical, but I do think that ChatGI and those sort of things, the different AI platforms are gonna start to weed those people out.

Dan Austin: [27:47] So then, how can we use it for real estate? Let's bring it

Mike DeHaan: [27:49] back full

Dan Austin: [27:50] circle, besides our blog post. Like, how can we what what is the next evolution of that? Is that, like

Mike DeHaan: [27:57] Yeah.

Dan Austin: [27:57] Your underwriting?

Mike DeHaan: [27:58] So Like,

Dan Austin: [27:58] could you

Mike DeHaan: [27:59] So that's part underwriting? Of

Dan Austin: [28:00] because that would be sick.

Mike DeHaan: [28:01] People are using it to write scripts. Right? Switch like with web crawlers and things like that. So what you could theoretically do, depending on the the power of it, is use it to write like a web crawl that you can say like, oh, I wanna find all, you know, cash buying companies in this market. And it can go and like pull whatever that could potentially look like. I don't know I don't know if you tell like where to look and that sort of how sophisticated it is. But anything that's data heavy, like for a while, couple years ago, we used to run a bot that would go and it would go through like a spreadsheet of LLCs and go through open corporates and like search for them and then skip trace the owner. And we would do that and basically, it would like just churn through the process manually. It's like the same as having a VA do it. Yeah. But it was like a software that would do it, but we stopped using it because you had to have a computer always going that was operating, and it would take for freaking ever, and then you would get banned if it would like go too fast. So like the developer that we used would have to put, like, weird little inconsistencies in it, it'll seem like a human. Like, it would be, like, missed clicks, and it would have, like, slightly different hesitations. But then we would still get, like, our IPHS banned from these different websites. So yeah.

Mike DeHaan: [29:11] So I don't know if we could potentially do things like that that would be a little bit better because it's sort of a back end system. But anyway, I don't know. Interesting stuff there that will be coming out with that. But I do wanna try and see if we can use our SOPs because tell you what, even though it's so necessary, especially for a lot of the stuff that we have coming up, I hate it, man. It's so freaking

Dan Austin: [29:28] fun. Yeah. Tough. It's tough. Well, I think you gotta take it off, like, bite off, like, a little bit at a time. Like, if you say, today, I'm just writing SOPs, no, that's how it works. Yeah.

Mike DeHaan: [29:36] Well, I kinda like

Dan Austin: [29:37] I don't know. For me, like, I like to be like, if I'm doing this, I'm going to write the SOP while I'm

Mike DeHaan: [29:41] doing it. Yeah. Well, I do like what you said in the in our instant investor group, our investor Slack group. Someone did ask about SOPs and how we put those together, you know, which I respond if we don't. And just figure it out. But you said, which I think is super good, is where you record, like, a video, whatever the process is talking through it, and then you'll get your VA actually turn it into a document. And then you can always have the video and the document Yep. That outlines the whole process. And that definitely is less labor intensive Right. Than just having to, like, manually write something out.

Dan Austin: [30:11] Well, and and and here's the tough thing with SOPs is they especially in a small business, they can change so fast. Like, it can be as simple as, hey, we don't use that software anymore. We use this one. Now your whole SOP is called

Mike DeHaan: [30:22] The whole thing.

Dan Austin: [30:22] For that. Right? Yeah. And so that's why I'm always in favor of recording a video of you doing it because that literally most of the tasks you do are, like, five minutes. Like, if you're trying to write an SOP around a single task, now, there could be a large overarching task with, like, several subtasks, but each of the subtasks is, like, five minutes. I think my longest is, like, ten minutes of recording, that's just because I'm talking a lot. Yeah. I'm so much more more in favor of that because you can record it, and people naturally learn better on video. Like, most people don't read the manual. I don't ever read the manual, I just like figured out and if I need to watch YouTube, I watch YouTube. That's how I do it. Yep. And so same thing, I've I feel like the same thing with videos and business, do that. And then if your process changes, all you have to do is learn how to do it yourself and redo that task. Yeah. Redo that video. Yeah. Honestly, I mean, five minutes.

Mike DeHaan: [31:08] Yeah, exactly. That's a lot a lot simpler at the end of the day.

Dan Austin: [31:10] It's a lot less daunting to do this. Yeah. And as we're finding out, it's highly important.

Mike DeHaan: [31:14] It is.

Dan Austin: [31:15] And you may not know because you may not like, yet have your business built out there or maybe you're just starting and everything, there's just a ton of stuff and you're I can't imagine doing SOPs for people because I'm just trying to learn the business. That's okay. You'll get there eventually to where you can step away for a minute and see that there's better ways to do things, more efficient ways to do things.

Mike DeHaan: [31:33] Yeah. Totally. And I guess one thing too is, I'll say, don't be something that comes from the opposite, where you need that you think you need to have all these standard operating procedures, these SOPs, like, you know, all these other structures in place to start making money because you really don't. I mean, we've made multiple 7 figures and done a shit ton of deals that having any of those things.

Dan Austin: [31:53] Right? Yeah. You and I were talking about this earlier, masterminding with other business owners, and they're like, oh, I have this, like, super elaborate system, and you're like, oh, I feel inadequate, and then they then you tell them your revenue versus theirs, like, oh, Oh, shit. Okay. Yeah. You're doing that without a system like my robust system that I spent all this time building before I even made one sale. You know, you and I have always been like, let's make money first.

Mike DeHaan: [32:13] Yeah. And I I think that's personality wise, you know, that's type a, type b, that's, you know, different different sort of like levels of age and experience too. I found that younger people, I think just because, I mean, I've I've fallen to, like, I would go call it the younger category, just being impatient. Like, we don't wanna take the time to build a framework, we just jump in. Like, we have We have we have several interviews coming out over the next couple months with, like, younger wholesalers and investors that are super similar to us. Well, super similar to me, and the way that they're just like, I don't know. I just like, I was selling beepers or cell phones or whatever the fuck. And now I'm like, now I'm making shit tons of money, and I don't know how it happened. But then, they have people that are a little bit older, like mid thirties, you know, into the early forties, that are slightly more experienced with business and, you know, different kinds of jobs. And they definitely approach it from like a more structured standpoint.

Dan Austin: [33:02] Right.

Mike DeHaan: [33:02] You know, and then there's there's no way that's necessarily wrong as long as

Dan Austin: [33:06] Right.

Mike DeHaan: [33:06] You don't lean so far one way or the other that it inhibits you being able to grow and inhibits you being able

Dan Austin: [33:12] experience in working with instructors, you're gonna use those. When you don't have the experience to work with structures, you're not gonna use them because you don't know. Yeah. The worst thing that, you know, you and I have talked about several times is, like, the people that get in that analysis paralysis where they need to write all their systems, make all this this super cool business that doesn't actually generate anything because you you've been spending the whole time talking and theorizing how the business will work.

Mike DeHaan: [33:34] Yeah. Yeah. Exactly.

Dan Austin: [33:35] So In perfect action.

Mike DeHaan: [33:36] Yeah. Take it. Yeah. Anyway. So alright. Well, I guess one last thing. I know that that you hate soccer, by the time this comes out, this will be old news. But, man, that World Cup final, bro, was probably one of, like, the best sporting events that

Dan Austin: [33:52] Dude, has I could not believe that team won.

Mike DeHaan: [33:56] That team. It was such a good game, dude. Like, Anthony, if anyone who has any interest in sports or competition at all had to have enjoyed that game. It was insane. This

Dan Austin: [34:06] is America. This is America. We watched the other football.

Mike DeHaan: [34:09] The other football. I don't know why, man. With four hours. It's just getting away. Everyone's like fat and just like all

Dan Austin: [34:16] juicy Hot wings, man. You get hot wings with the other football.

Mike DeHaan: [34:19] Yeah. Yeah. It's just not my jam. But yeah. Anyway, Argentina winning. Messi completing his thing is probably the most winningest athlete that's ever existed. You know, it was good stuff.

Dan Austin: [34:29] Besides Michael Jordan.

Mike DeHaan: [34:30] Besides Michael, I think he definitely was won a lot more shit than Michael Jordan.

Dan Austin: [34:33] Michael Jordan's cooler. Sorry.

Mike DeHaan: [34:35] I mean, he's definitely richer with his like, multi billion dollar business empire.

Dan Austin: [34:39] You see those Jordan shoes? I don't have messy shoes back there. But those are Jordan shoes.

Mike DeHaan: [34:44] How many more people I wonder I wonder what would be more valuable. The, like, Jordan, like, final game that he played or, like, whatever his most famous game is or the shoes that Messi wore in this past World Cup final.

Dan Austin: [34:59] That's actually tough because Jordan does transcend many cultures. It does. Messi, like but soccer in general has some a bigger fan base than basketball.

Mike DeHaan: [35:08] Yeah. Yeah. Yeah. Poor fan base. That's maybe they don't value the shoes as high.

Dan Austin: [35:11] Exactly. Yeah. Nobody in Africa has been in issues.

Mike DeHaan: [35:13] Yeah. Yeah. Anyway, it's my random tangent for the week though. Cool. Alright, Dale. Anything else to add on before we hop into

Dan Austin: [35:20] the Not Christmas? Good. I gotta go figure out how to get my my car started.

Mike DeHaan: [35:24] If you do, don't like cheat yourself.

Dan Austin: [35:26] Dude, this wintertime sucks, man. Yeah. Heals everything, including batteries.

Mike DeHaan: [35:29] Do you feel like a like a, I don't know, an outcast being outside of your 5,000 square foot house trying to replace a car battery I'm

Dan Austin: [35:39] not gonna replace the battery myself. I'll tell you that right now. But

Mike DeHaan: [35:42] Do do you like

Dan Austin: [35:42] I do know how.

Mike DeHaan: [35:43] Do you like rub some dirt on your face so you look like more working class? So everyone's like, he works so hard. At that He must have inherited that house. He can't afford it.

Dan Austin: [35:53] Look at that guy working on his wife's car.

Mike DeHaan: [35:55] Yeah. Yeah. Every everyone else in your neighborhood goes and hires someone, just goes and buys a new car.

Dan Austin: [35:59] They do. They do. Anyway. Whatever.

Mike DeHaan: [36:03] Must be nice. It's alright. I I appreciate your resourcefulness.

Dan Austin: [36:07] Thank you. I appreciate that. Thank you.

Mike DeHaan: [36:10] Yeah. Hopefully, HOA doesn't turn you in. But I'm a broke down car parked

Dan Austin: [36:15] in front of my house.

Mike DeHaan: [36:15] Hey. I guarantee you can't do that. Just go put it on blocks. No. You You're really blend right in.

Dan Austin: [36:19] You're absolutely right. Oh my god. Okay. Perfect.

Mike DeHaan: [36:21] So, anyways. Alright. Well, have fun with that. Thanks for listening, everybody, to this week's pointless rambles. I guess, moral of the story, if you have lines of credits or any sort of unsecured debts, check-in with your bank and make sure that they're not gonna get called before you throw them into a project. For sure. Like, honestly, because that would be a rude awakening.

Dan Austin: [36:39] Y'all bank on having them.

Mike DeHaan: [36:40] Yep. Spend the next couple weeks getting your operating procedures figured out and going into the new year. Use chat, AI, or whatever. Fuck. Gee, I'd start building it out. I'll let you know if it works, I'm gonna check it out for next week.

Dan Austin: [36:51] Yeah. Check it out, man.

Mike DeHaan: [36:52] And besides that, enjoy your week and your Christmas, everybody. Or I guess Christmas, probably enjoyed it. Enjoy your New Year because this is after Christmas, and the next one's out.

Dan Austin: [37:00] Enjoy all the gifts you got for Christmas.

Mike DeHaan: [37:02] Alright, guys. If you wanna start learning how to generate off market leads with our five step process, you can go to collectnikispodcast.com/free and get our free five step guide, and that will get you started right away. It's a great time to grab that going into the New Year so you can start finding some legitimate opportunities as New Year turns over. So collectingkeyspodcast.com/free. Aside from that, please share this podcast with anyone who enjoys business, real estate, investing, or just listening to two idiots talk about nothing.

Dan Austin: [37:30] Such I guess I'm culpable.

Mike DeHaan: [37:31] You are. You are. So, anyways, thanks for this, everybody. Talk to y'all next week.

Dan Austin: [37:35] See you.

Speaker 3: [37:36] Thanks for listening. Please leave us a review on iTunes or wherever you get your podcasts, and check us out at collectingkeyspodcast.com for tips and guides on starting your own real estate investment and wholesaling business.