Everyone in Your Deal Is Working Against You

Mike DeHaan: [0:00] But, yeah. Like, there you really should shop anything like that that's recurring because Yeah. There's always, a better deal you can get.

Dan Austin: [0:06] Well, also people are always looking for transfers. They wanna, like, they want growth. They want subscribers. Right?

Mike DeHaan: [0:12] Yeah. Mhmm. Not only that, but, you know, a lot of these companies, your lifetime value to them is so high that it's pretty easy to get better pricing on stuff

Dan Austin: [0:21] Like, upfront.

Mike DeHaan: [0:22] If your threat is leaving. And it's not only just like insurance, but also like insurance providers, you know, phone companies, that kind of stuff. That's why they always like, we'll give you a better deal. You know, leave. Like, we had a Internet outage this morning for, like, the sixth time in the last, like, couple of months. And I called them and I was like, what is this? And they gave me a $203 credit on my bill. Oh, nice. Which is essentially, like, three months worth of Internet. I'm like, that's great.

Dan Austin: [0:43] Let's tell my wife to do that today because that's crazy.

Mike DeHaan: [0:45] Yeah. But it's just like, is that a principle? Yeah. And I was literally like, why don't I just go back to Comcast instead of using your shitty service, which apparently is constantly down? And they're like, oh, well, we'll credit you for three months. Blah blah blah. And I was like, how much would you have credited me if I'd really was a real asshole and I was being nice to Like, what is this?

Dylan Koch: [1:01] Still 500? What?

Mike DeHaan: [1:03] Yeah. Right.

Dan Austin: [1:03] Totally. Yeah.

Mike DeHaan: [1:04] What's going on, guys? Welcome to collecting keys. I am Mike DeHaan here with my Dan my cohost, Dan Austin and Dylan My Dan. My Dan. My best friend, Dan. Yes. Exactly. But, yeah, you guys are new to the show, I don't know. Just listen to it for five minutes. You'll decide if it's your vibe or not. But, I will say last week's show, I got, like, an abnormal amount of feedback about it. And I was doing it was actually pretty good. Like, if I was a random dude who had stumbled across these three idiots on the Internet, I would subscribe because I was entertained. And I already knew we were gonna talk about. And I actually got over the absolute disgust of hearing my own voice, which is always such a challenging to do. I got over that very quickly because I felt like the conversation was fun.

Dylan Koch: [1:47] Your audio was kinda shit last week because you were traveling though too.

Mike DeHaan: [1:50] That was two weeks ago, Dylan. Welcome to the fucking future. Shit. Yeah.

Dan Austin: [1:54] Welcome to the future, bitch. Yeah. I would say also where, like, sometimes when I listen to the pod, I'm like agreeing with myself. I'm like, fuck. I'm like, yeah, bitch. It's because you fucking said it. I'm like, yeah, dude. Yeah.

Dylan Koch: [2:05] These guys

Mike DeHaan: [2:05] these guys know what's up.

Dylan Koch: [2:06] Yeah. It'd be worse if you're like, oh, man.

Dan Austin: [2:08] I shouldn't have said that. Right. I mean, I definitely I definitely do that sometimes. Yeah.

Mike DeHaan: [2:13] Yeah. I had, like, a couple friends listen to it that don't normally listen to our show. One of my friends, she said that she was listening to another podcast, and it ended. And it just, rolled into, our show because she's subscribed. I guess she doesn't listen. And she said it was she was like, who's talking? She said, that Mike? But he sounds like a nerd. Like, I don't understand because she said because I have, like, my podcast voice. You know? But then she listened. She said it was actually very entertaining. Yeah.

Dan Austin: [2:36] There you go.

Mike DeHaan: [2:37] You know, there's I I say I'm giving credit to us because even though we've done 502 reps, it's hard to see your own progress. But if we really wanna torture ourselves, then we should listen to, like, one of the first couple episodes.

Dan Austin: [2:48] No. I don't. I purposely don't go over that.

Mike DeHaan: [2:50] Whenever I like, people reach out and they're like, yeah. I I started at episode one. I'm like, don't do that. Yeah. Just just jump just jump to, like, one fifty

Dylan Koch: [2:57] and, Is like, start the material even relevant from 2024, 2025? I mean No.

Mike DeHaan: [3:03] This is the problem with all that kind of content, like the real estate sort of content is I mean, we see this a lot with the lending business now, especially, is you will have people that are consuming, you know, the books and the YouTube videos and podcasts and everything from, like, 2019 from, like, the old Bigger Pocket stuff because, you know, they they went and talked to somebody and they're like, oh, Bigger Pockets was way better and Brandon Turner was on there.

Dan Austin: [3:27] So let's go listen to

Mike DeHaan: [3:28] those Brandon Turner episodes. That's seven years old now. Yeah. Like, that is not relevant.

Dan Austin: [3:33] Yeah. But you know the crazy thing is he's saying the same shit as he did back then.

Dylan Koch: [3:36] So Yeah. His Instagram. Just go to his Instagram, you'll get the same material.

Dan Austin: [3:40] Yeah. Right.

Mike DeHaan: [3:40] Totally. And then people take that as, like, gospel. Like, that's still the way the

Dan Austin: [3:44] business It's so different.

Mike DeHaan: [3:45] So different in every way.

Dylan Koch: [3:47] Well, that's just a swear experience. You can use those as maybe like stepping stones, but until you start doing your own deals and running your own business, then you learn like, oh, this is what it actually takes to be successful.

Dan Austin: [3:57] For

Mike DeHaan: [3:57] sure. Well, just like the space has evolved so much, you know? And like even a lot of the different strategies and products and different things they talk about, they don't exist anymore. Like, they're not even applicable. You know? Even even in our show too, you go back five years, some of the guests and stuff that we have

Dan Austin: [4:10] on, those people probably aren't even around. You know, there's probably guests who have on

Mike DeHaan: [4:14] the show who's dead. We don't even know.

Dylan Koch: [4:16] Yeah. As a Like, as a point to this.

Dan Austin: [4:18] How's Art Burdoon?

Mike DeHaan: [4:19] Is he alive?

Dylan Koch: [4:20] Yeah. Not for a long my thing anymore.

Mike DeHaan: [4:24] Yeah. Stroked out by now.

Dylan Koch: [4:26] There's a bank here locally that one of the, I guess, local gurus always pitch because they did no seasoning, 80% LTV on appraised value. So you could really like basically close a week later and refi 80% of the value.

Mike DeHaan: [4:40] Oh, damn.

Dylan Koch: [4:41] They don't do that product anymore. You can imagine why. Yeah. But a lot of the people are still asked for products like that that's been around. Like, they just don't exist. Sorry.

Mike DeHaan: [4:49] Like It's not

Dan Austin: [4:50] a thing anymore.

Mike DeHaan: [4:50] Yeah. No. Yeah. Anyways, what we're talking about at start of the show, though, was looking like, making sure that you're analyzing your different sort of recurring expenses that happen with your real estate and with your business. So we kinda got on to this topic. Yeah.

Dan Austin: [5:03] So Taxes.

Dylan Koch: [5:04] Tax is

Mike DeHaan: [5:04] a big one. I'll talk about that in a sec. With the insurance, I recently just read it a bunch of insurance on, like, my personal portfolio. And across my entire portfolio, my total insurance bill dropped over $3,000 for the year. Right? So not like an insanely huge amount, but like that's decent. Right? And that's money that's just going straight to my pocket. And, you know, to Dan's point, he's like, well, luck getting an insurance claim. It's like, I'm not gonna get insurance claim regardless of who I have. So I might as well just pay the least amount like the way

Dan Austin: [5:31] Or you're gonna you're gonna get if you do file a claim, you will pay it back no matter what. Totally. So yeah. It's gonna help the whole thing.

Mike DeHaan: [5:37] Yeah. But tax is another one, because I just recently did a refinance through a Sir Lancelot, by the way, for one of my triplexes that I own. And I got the appraisal back, and it was about a $150,000 less than the tax assessed value on that was showing up on the county assessor website. That's what the appraisal came in at. And so I was able to submit that to the county and basically say, hey. You're taxing me for this amount. Here's what the actual appraised value is. And I was expecting it to be kinda like a process, but literally I got an email yesterday where they get, hey. We got your claim. Makes sense. We'll make the adjustment. Sweet. Love it. And so that alone is going to save me almost $1,000 for the year.

Dylan Koch: [6:18] The flip side of this, I actually had a even on our primary residence where it did, it had a massive appreciation because we bought in 2020. The insured amount was actually less than the value. Mhmm.

Dan Austin: [6:28] And

Dylan Koch: [6:28] so like, yo, I'm just have to go back and be like, hey, this actually needs to be bumped up a little bit.

Mike DeHaan: [6:31] Yeah. Totally. Because also you don't want to get into a situation like we have with our condo that we ended up selling where well, that was a whole different deal because basically the market value was more than the rebuild value. And the insurance wasn't gonna ever be able to, like, cover, like, a loan on this thing or, like, rebuild cost. And that was a whole other issue altogether. But I don't know. It's a freaking racket. Like, the way I see it is you should actively just make sure that you're paying as little as possible. And if you just go and ask for incentives, it doesn't take that much time. Like, realistically, it takes, like, thirty minutes, forty minutes, but it can save you a huge amount of money. If you don't wanna do it, just have your freaking VA do it. You know? Just give them all the personal information. Have them sit on hold with the person. They'll figure it out. Anyways, cool. So we're doing Devin today, guys. We got all kinds of stuff we can talk about. We can talk about how Dylan's Bitcoin still sucks, I'm waiting for that to come back up so that I can finally sell it and do something worthwhile with that.

Dylan Koch: [7:26] No, man. Don't sell it when you get it. When it goes up, that's the worst time to sell it.

Mike DeHaan: [7:30] Don't know that it's the best time to sell it because I'm gonna wait for the next round of dummies to

Dylan Koch: [7:35] Or you could sell it now at a loss and claim that off your taxes. There you go.

Mike DeHaan: [7:38] I already did a a wash sale on it, though.

Dylan Koch: [7:41] Oh, there you go.

Mike DeHaan: [7:42] Yeah. So I've already locked in that loss at the current low pricing. And then just doing that again would just be pointless, pay more transaction fees for no reason.

Dylan Koch: [7:49] Yeah. That does make sense. We could pick off where we left off last week about being the breadwinner or one thing that was related to the taxes and recurring revenue, putting money in your pocket. Especially in the off market business where it's the cash conversion cycle's either long and it's large swings. If you're projecting out, this is a great example lately, your accounts receivable or the money that you think you're going to be, it's always less than what you actually think it's going be because something always comes up during the due diligence process. Just for as an example, we have a contract for 110. I had it sold for $1.85, one of the biggest spreads I've ever done in my market. Guess what the payoff comes back at?

Mike DeHaan: [8:29] $1.50. $1.80. Oh my god. So is only a $5,000 spread even possible on

Dylan Koch: [8:37] it? Exactly.

Mike DeHaan: [8:38] Oh my god. That's brutal.

Dylan Koch: [8:39] So yeah. And I not to that extent, but that kind of stuff happens all the time.

Mike DeHaan: [8:43] Was that like a forbearance situation, or what was that?

Dylan Koch: [8:46] So we sold the original mortgage.

Mike DeHaan: [8:48] And so I guess just to clarify in case people missed that. You had to contract for one hand, these sellers so basically, Dylan's buying it from their payoff statement for the property came in at $1.80. So essentially, for them to not have to bring money into closing, Dylan's gonna have to pay at least $1.80 for this property.

Dylan Koch: [9:02] Correct. And so their mortgage balance,

Mike DeHaan: [9:05] they haven't paid on

Dylan Koch: [9:05] it since 2024. So how they have not foreclosed on it, I have no idea. But that's like $1.50. And then there's the secretary forbearance loans of another 30.

Mike DeHaan: [9:13] Well, are they at least rational and they're gonna, like, get it done? I know it kind of is not really worth it for you for the effort.

Dylan Koch: [9:19] I mean, yeah. We'll still make it work, but, like, just the even the mental thing of I'm gonna make $70 to I'm gonna make 5. Yeah.

Dan Austin: [9:27] That sucks. Screw that, dude.

Mike DeHaan: [9:28] Yeah. We've faced that a lot of times over the years. And one of the most challenging things is you would face these sellers that were like almost in denial about it. Right? And then they still wouldn't wanna move forward. They'll well, it's not worth it for me anymore if that's what I'm gonna get. I'm like, well, every day that you don't sell, you're gonna get less because you're accumulating daily penalty interest and fees. Like, realistically, if you wait three weeks, you're gonna get nothing. So I don't know what your issue is.

Dylan Koch: [9:52] And what they think their other options are. I just

Mike DeHaan: [9:54] I know.

Dylan Koch: [9:54] Like, do you think someone else is gonna offer them $20 more? That's likely not gonna happen.

Mike DeHaan: [9:58] That's what a lot of them think.

Dan Austin: [10:00] They live on hope, hopium, and prayers because that's why they're in that situation. It's like, well, something will come by that'll be better than that. And then they're in foreclosure. Yeah. But that's like I always said most of the times we were dealing with sellers. It had nothing to do with like their well, I should I'm not gonna say nothing, but it didn't have anything that necessarily do with the a certain decision. It had everything to do with the indecision. All the times they decided to not take action, decided not to do something is what compounded and got into that position. While they're in foreclosure, they're in bankruptcy, they're had liens, they didn't pay their contractors, whatever it is. It was just them not doing something and then not taking care of it. Sometimes you get in weird situations. Right? Maybe you have a medical issue and you put a lien on your house, but like, what do you do after that? And most of them just like most sellers we deal with this kind of curl up into a ball and just hope something will change. And it never does.

Dylan Koch: [10:47] The one that we closed on Tuesday that I'm having you guys do the refi for, the day of closing, literally that morning, I get a call, we're clear to close. Someone put a mechanics lien on last Friday.

Mike DeHaan: [11:00] Nice.

Dylan Koch: [11:00] But it was an amount of like $6. So I just ended up calling them and like, Hey, Like, I'll give you $3 to make it go away. And they accept it.

Mike DeHaan: [11:07] So it

Dylan Koch: [11:08] was just worth it at that point to just like Yeah. Get it done. I could still get owner's title insurance.

Dan Austin: [11:12] The deal still Yep.

Mike DeHaan: [11:14] Yep. But so to your point, I guess, regarding this conversation in taxes, like I said, you've been paying taxes based off this projected income and then overpaying or what?

Dylan Koch: [11:24] Well, we did overpay in 2025. We just finalized them last week. Yeah. So we're gonna get some of that back.

Dan Austin: [11:29] Me too.

Mike DeHaan: [11:30] Yeah. Last night, I was on a call with Dan. I I overpaid by, like, a $106,000.

Dylan Koch: [11:35] Oh my gosh. That's that's a lot.

Mike DeHaan: [11:37] Which I was actually pretty stoked with it because now I don't have to pay quarterlies for the rest of the year.

Dylan Koch: [11:40] Yeah. But once you get it you probably get some back though too, won't you? Or no?

Mike DeHaan: [11:44] I could. I'm just gonna put it towards my tax bill. Yeah. Because basically now all the money that I get from everything moving forward the rest of the year is basically just free money as far as I'm concerned.

Dan Austin: [11:52] Mike got a new pair of shoes and Max got a haircut. Yeah. Exactly. I'm good. Yeah. I'm spending money again.

Dylan Koch: [11:58] 50% of the conversation with my CPA yesterday, not to get too off track, but my wife and I are still looking for a new primary. So it's looking lendable. Like, how's your AGI look good versus not paying a shit ton in taxes? And that balance is hard.

Mike DeHaan: [12:09] It's so hard, man. You know? And and like the I would say especially in the real estate business that you're in as well because you do have to have so much capital that is kind of like going out at all times. That has been a nice thing since we moved to the lending business, which isn't quite like that, is it's easier for us to produce revenue while also being liquid. You know? And so, like, I would say it feels less bad to have to pay a sizable tax bill because we actually do have surplus cash.

Dylan Koch: [12:35] Sure.

Mike DeHaan: [12:36] Yeah. Unless we like elevated our lifestyle beyond what we should have done because we were just living off of like the gross revenue. But when the real estate business, it always felt like when you were when you're paying a tax bill, you're like,

Dan Austin: [12:46] oh my god. There goes all Now of my I'm in four. When you're in acquisition mode or in flipping mode, you feel poor all the time because you're putting all your capital out there and you don't get it back when you want to.

Dylan Koch: [12:57] My go to lender, like for the primary, not for business or rental stuff, He's just like, dude, you got so much stuff going on. Like, getting you even a thirty year loan is gonna be hard at this point. Like, he wanted me to do, like, a twenty five like, a commercial loan, but on a primary. Really? Like, a five five one arm, twenty five year AM.

Mike DeHaan: [13:14] So so he wanted he wanted you to commit fraud? Can you do that?

Dylan Koch: [13:17] No. I think it's still like a primary residence loan. It's just not like the thirty year fixed loan. Yeah.

Dan Austin: [13:22] Maybe it's like a local like a local type Yeah. Bank would do

Mike DeHaan: [13:25] Or a

Dan Austin: [13:26] different lender.

Mike DeHaan: [13:27] That's always a challenge, though. You know, the like, projecting for that, like, it's very easy. I think especially when you start making money to forget about how significant that tax burden is. You know? Because, like, when you're coming from the w two world, you don't really think about it because it's all taken out of your paycheck. But once you have your own business and that becomes your primary source of income and that actually grows, you pay a lot regardless of

Dylan Koch: [13:49] Yep. And then you need to be in a what taxes think Dan, I think you know this about like a c corp. So you're not playing also self employment taxes, like 15% on top of all the other business taxes.

Mike DeHaan: [13:58] Yeah. Yeah.

Dylan Koch: [13:59] And so and the only other change we made was I changed I increased my own W-two salary by 25 k. Like, so that way it looks a little bit better, but

Dan Austin: [14:07] Looks a little more consistent. That's what they want is they just want consistency over time. You know what I mean? For for a self employment person, like, if you can show the same thing over and over for four or five years, even if it's lower than, like, up and down, like, where, like, if you had, like, up and down, but you made way more money on the aggregate, they don't wanna see that.

Mike DeHaan: [14:23] They wanna see that

Dan Austin: [14:24] you paid yourself $85,000 a year for the last five years.

Dylan Koch: [14:27] One, if you calculate AGI depending on your capital gains if you did sell properties or whatnot with depreciation at like, if there are large swings, I guess is my point. So Yeah.

Mike DeHaan: [14:37] There are. Yeah. And all these people that are out there talking about how they never pay taxes with these super high incomes, they're either lying to you

Dylan Koch: [14:43] They're full of shit.

Mike DeHaan: [14:44] Or they're they're committing fraud and they just haven't been caught yet.

Dan Austin: [14:47] Yeah. Yeah. They're I don't know how there's a way to do that.

Mike DeHaan: [14:50] Yeah. Because here's the other thing is you can know you have a tax bill. You can just not pay it and go on with your life.

Dan Austin: [14:56] That's very true.

Mike DeHaan: [14:57] It will take several years for the IRS to catch up with you. That's why you have like these actors and, you know, professional athletes and stuff that end up in these huge tax issues because they just made $40,000,000 and they just didn't pay the $20,000,000 in taxes.

Dan Austin: [15:10] They're like, well, my friend I went to high school with was my business manager and accountant. He was supposed to take care

Mike DeHaan: [15:15] of it. And it's like, oh,

Dan Austin: [15:16] you think they knew how to deal the IRS?

Dylan Koch: [15:18] Think so. Steve Harvey, like from the Family Feud had something like this where he, his money guy didn't pay his federal taxes for, like, ten years.

Mike DeHaan: [15:27] Nice.

Dylan Koch: [15:27] And he had, like, tens of millions of dollars owed to the IRS.

Dan Austin: [15:30] Yeah. That's not uncommon. I've heard that story time and time again.

Mike DeHaan: [15:32] Dude, there was this guy we talked about him on the show. This was years ago because one of our employees had, like, connected me with him because he was, like, wanting to work with us in our partnership program. He had this big real estate company, all sort of things. And then I did some due diligence on this guy. And I found all these, like, criminal charges against him for fraud because he owned an accounting company, like an actual certified CPA company. And they were collecting the money to pay the taxes. They had were weren't had people pay the IRS directly for some reason.

Dan Austin: [16:03] Oh,

Mike DeHaan: [16:03] yeah. And they were just pocketing it.

Dan Austin: [16:05] Yeah. They're just taking the money. They were just taking it. Yeah.

Mike DeHaan: [16:08] And so there was this huge lawsuit, this whole criminal thing. And then, like, literally two weeks after I talked to this guy, all this stuff came out, and he just, like, bounced to the Dominican Republic or wherever he went. Wilder.

Dylan Koch: [16:20] I just when you're doing this kind of stuff, you have to recognize that it's going the party's gonna end someday.

Mike DeHaan: [16:27] Yeah. You'd think so. With all the crooks. Right? You like, they have to know that it's gonna come crashing down eventually. You know? Are are they just purely just trying to live on the high horse while they can and they're just sort of like waiting for the tipping point? I've never understood.

Dan Austin: [16:38] Seems like it. So I

Mike DeHaan: [16:40] don't know. But, yeah, with that sort of tax stuff though, it's also why it's important to kinda know what to look for even though it is incredibly confusing and it can take a long time to kinda figure out. And I can tell you from Dan and I's personal experience, if you have a CPA that just like is like doing stuff, especially if you a lot going on, you just kinda like trust them and sign the dotted line, they are very likely going to make mistakes. Even simple stuff. So last year, I was kinda going through our, our taxes because I was I was looking at, getting a loan on a personal sort of thing. And I discovered that they had didn't even include our sirlensalot income for me on my taxes from '24. Right? And it wasn't like an in crazy amount, it was like $30,000. But I noticed it wasn't there at all, so I had to pay like a $7,800 tax bill in the last year from several years earlier, plus penalty interest and shit because it wasn't paid correctly the first time because my CPA screwed it up. Yep. And just because I didn't even I didn't even look at it. I was

Dylan Koch: [17:35] just like, oh, yeah.

Mike DeHaan: [17:36] This must be good. I just signed it.

Dylan Koch: [17:37] They messed it up. And we'll talk about the the HUD's review that I've done in a second because like those have all been messed up lately too. But I just wanted to point out for the tax purposes, if you're married filing jointly, this was another talking point with the CPA. Like the tax rate is the big difference. It jumps from 24% to 32% if you make under $403,550 married filing jointly. And so let's say you make 500,000, which is great income, and you want to reduce it by $100,000 and you're a real estate professional,

Dan Austin: [18:10] you still

Dylan Koch: [18:10] have to buy like a million dollars of real estate to get that bigger reduction. Yeah. So it's not just like you buy a $200,000 place and you're not paying any taxes.

Mike DeHaan: [18:18] Yeah. I mean, where you're at, that's like 18 properties.

Dylan Koch: [18:23] Be a couple.

Dan Austin: [18:24] You have to do What do you have to do to avoid it? Married separately? File separately?

Dylan Koch: [18:28] Oh, I don't know about that. I was just saying

Mike DeHaan: [18:30] Or is it like a head of household? I mean, what is your other

Dan Austin: [18:32] option, dude? My wife is married and we're filing jointly. She doesn't have a job, so she can't like

Mike DeHaan: [18:37] I don't know if you should you could do like a head of household designation. I don't know what that looks like.

Dan Austin: [18:40] That doesn't make any sense.

Mike DeHaan: [18:42] Dude, I'm not a tax professional. You should probably You guys are

Dan Austin: [18:45] so stupid.

Dylan Koch: [18:46] Go back to buying that Airbnb that you're gonna buy a month ago.

Dan Austin: [18:50] Oh, that would be so sick. Or maybe for like a And then

Dylan Koch: [18:52] you go on a rant about how Airbnbs are the worst, by way.

Dan Austin: [18:55] Airbnbs are the worst. I hate Airbnbs. I effectively don't like Airbnb owners. Like I have some people that I probably like as Airbnb owners, but the on the aggregate, owners are the worst. Yeah. Yeah. Like people that are only doing Airbnb, like that's like that's their form of investment, and they make it their job and their life.

Dylan Koch: [19:13] That's not getting to the Airbnb.

Mike DeHaan: [19:14] Yeah. Mean, these are basically just people that grew up playing The Sims and just like don't wanna graduate from that. It's like, okay. You played a you played the lamest game ever as a youth. You know, as an adult, it's not cooler.

Dan Austin: [19:25] Totally. Yeah. There's some I mean, there's you know, let's not even

Dylan Koch: [19:28] do this.

Dan Austin: [19:29] Our listeners have heard this conversation a million times. They know we're gonna say next.

Dylan Koch: [19:32] We're gonna round we're gonna round out the like, you guys had to babysit your CPA. Right? You had you had to babysit the bookkeepers. Oh, this off market business?

Mike DeHaan: [19:39] You have to babysit everyone.

Dylan Koch: [19:40] You have to it's professional babysit. It's literally it. Like, title companies, contractors, sellers, loan officers. It's everything. Have you been sued yet, Dylan?

Mike DeHaan: [19:49] Have you been sued yet?

Dylan Koch: [19:50] I've had a demand letter once. That was about it. Yeah.

Mike DeHaan: [19:53] We we've had a a couple lawsuits. And the funny thing is that you have to be still lawyers because if you just, tell your lawyer, hey. I got sued. They'll go, let me see it. And you send it over. They're like, cool. We spent all this time researching this. Here's a $6,000 bill. You're good. You don't have to do anything. But if you don't, like, actually tell them very explicitly what you need and, like, what you're concerned and everything else, they will just happily rack up a massive bill and then send it to you because they're billing on hours. There's no person in the industry that you don't have to babysit in some capacity.

Dan Austin: [20:24] Yeah. Makes no sense, bill by the hour.

Dylan Koch: [20:26] Yeah. Even with the title companies on both the sell side and the buy side, four out of the last five of you have had been wrong by thousands of dollars. So I don't know. It's just frustrating that you have to rely on so many different people in this business and anyone can derail a deal at any time.

Mike DeHaan: [20:43] I think it's every business. And also in your personal life as a higher net worth individual where you're at the point where you need to hire people for things, you're just gonna have to watch stuff like that all the time because they're

Dylan Koch: [20:54] Yeah. I know it comes with the territory, but it doesn't make it less annoying.

Mike DeHaan: [20:57] Yeah. At the end of the day, the thing to always remember is anyone that you hire, they most likely are an employee that just wants to go home and watch their fucking Netflix and do, like, whatever their hobby is. Right? And you are their client that you're working with them. You know, even if it's like a smaller sort of boutique shop or like it's a one person CPA or whatever, you're still their client. You're their goal to financial freedom while, you know, you're you're part of that whole path for them while the they're listening to their Alex Remosie in the car. Right? Like like, they're like, damn. I got dealing with my fucking $100,000,000 offer. Look at that. Like, it's working. Like, you were a part of their bigger picture, and you're just ultimately a, you know, paycheck to them at the end of the day. Yes. It's true. It's true. I'm not sure I borrow for SOA then. You're a family and we love you.

Dan Austin: [21:48] You're part of the SOA family and

Dylan Koch: [21:52] So full of shit.

Mike DeHaan: [21:53] Yeah. You're you're part of the kingdom. Come join the kingdom,

Dan Austin: [21:55] Come join the kingdom. And if you do enough business with them, we're gonna send you a sword.

Dylan Koch: [21:59] That's dope, actually.

Mike DeHaan: [22:00] We actually have talked about that. It's like a while. It's like, we need to have like a leaderboard where you can get like prizes, like like a punch card system. Just having this like outrageous dollar

Dylan Koch: [22:10] amount and volume. Like a number of loan Yeah.

Mike DeHaan: [22:12] If you get if you get a 100 loans with us, we will send you a custom engraved engraved Sir Lancelot sword with your name on it. I will happily do that.

Dan Austin: [22:19] Absolutely. It'll be a real one. I'll fly to Scotland. Is that where they have, like, good swords making swordsman?

Mike DeHaan: [22:23] I didn't get swords out

Dylan Koch: [22:24] of at. They're like Japan.

Mike DeHaan: [22:26] You could just go out to the 50,000 silver dollar gas station out in Idaho.

Dan Austin: [22:30] Do they have that? Do have some words?

Mike DeHaan: [22:33] No shit. That's like the whole thing. You ever been in there?

Dan Austin: [22:35] I've been in there. I've seen just the bar. It's just a bunch of silver dollars.

Mike DeHaan: [22:39] No. I do. Like, they have, like, around in, like, the little, souvenir section. They have, like, weapons. That was the coolest shit ever when I was, like, 13. Remember I I went through there and I bought a battle axe. They just, like, let me they just, like, let me buy it and take it home. And my parents promptly bolted it to the wall because they're like, I already know where this is gonna go.

Dan Austin: [22:56] Yeah. A battle axe? Oh my god, I guess unless

Dylan Koch: [23:02] you got something else I about. Could talk about my recent experience of helping my clients buy a primary and dealing with general realtors.

Mike DeHaan: [23:10] You still, like, work as a realtor?

Dylan Koch: [23:12] No. So I don't do it. The like, literally, this will only be the second family I've ever helped buy a house.

Mike DeHaan: [23:17] Why did you help them?

Dylan Koch: [23:19] It's like personal Because they're close friends, and I'd still get, like, $20.

Mike DeHaan: [23:22] Okay. Cool. I I wasn't sure if you're just like, oh, I got, a Zillow lead. I'm just gonna capitalize on this.

Dylan Koch: [23:26] No. No. No. They're yeah. No. I would not do this for anybody other than me.

Mike DeHaan: [23:30] That makes sense. Sure. It's like Dan's been my realtor for the last house that

Dan Austin: [23:34] I bought. I'm the

Mike DeHaan: [23:35] worst fucking realtor. But Well, the good thing is you were working you were working with the actual worst realtor on the side.

Dan Austin: [23:40] So No shit. Yeah. He was telling me about his DUI fifth DUI and coke problem.

Mike DeHaan: [23:45] Homie showed up with an ankle bracelet. Like he That's was supposed to be on house arrest.

Dan Austin: [23:49] Yeah. And he's and he is the the the grandson of the developer in a very well established company in town that develops very nice neighborhoods. Yeah. Like for decades.

Dylan Koch: [24:00] Yeah. Well, not necessarily a good thing.

Dan Austin: [24:02] That fits the bill, what you would expect.

Dylan Koch: [24:05] But so we walked this house. It's been on the market for two weeks. They had it listed as 600,000. It's vacant. So all I did was I went on county records. I was like, okay, they bought a new place. So they're paying 2 mortgages at once, as you can see that. And they have no other offers. I know their cash So we offered $50,000 less. And the other realtor was like, This is gonna be so insulting. I can't believe you did this. Well, guess what? We're under a contractor for $40,000 less.

Mike DeHaan: [24:31] Nice. There you go. Yeah.

Dylan Koch: [24:33] It's just I don't know. I don't know where I'm going with that story other than like it I feel like they don't solve problems.

Mike DeHaan: [24:38] They don't solve problems. And also, chew that listing agent's pissed because now she's getting a commission on $40,000 lower offer on the house. Sure. Right? This is where, like, the whole industry has had issues because the incentives are not aligned.

Dan Austin: [24:50] They're not aligned at all.

Dylan Koch: [24:51] Yeah. I guess even from my side, if I was just a general realtor, I probably would tell them to offer more, but I'm not. I'm their friend.

Mike DeHaan: [24:55] Yeah. You would have offered $5,000 less. Right? And now you also have the mortgage lender who's like, shit. I'm making less money on a smaller loan. Right? You have the insurance agent that's like, damn it. I'm making less money on a smaller policy. Everyone is completely aligned against the homebuyer's best interest at all times. You know, it doesn't make any sense. The whole industry is completely broken. But the thing that's always so funny as well is what's like a deal for an investor versus a homeowner is such a different

Dylan Koch: [25:24] Oh, totally. Like,

Mike DeHaan: [25:25] playing field. You

Dan Austin: [25:26] know? Yeah.

Mike DeHaan: [25:26] I remember when we first started really growing our business and it was, you know, 2020, 2021 came around very quickly. And everyone we knew was buying a house. And I'd have people that were telling me like, oh, man. I got actually $5,000 below asking price on that house. In 2021, that was a flex because everyone was overpaying. And I was like, damn. We just bought a house for, like, 70¢ on the dollar. Right.

Dan Austin: [25:47] Yeah. Know? Way

Mike DeHaan: [25:47] cheaper. It's complete and people are buying fixer uppers on the off the MLS with, like, $5,000 below ask plus, like, a concession. You were like, shit. And I was like, yeah. We just got one for $85,000 below market value. I

Dylan Koch: [26:00] will never forget when you told me that you guys had post closing ARVs, like, post flipped ARVs that were, like, different than the current ARVs. Oh, yeah. Is. Like, blows my mind.

Mike DeHaan: [26:09] They loved that. They did loved it. Dude, I had a very short stint when Dan and I were growing our business where I got a job as a loan officer at a local hard money lending company. There were people, like, borrowers of that company that were defaulting on their loans, primarily in Seattle, where the property advisor was already high and the market was going crazy. Mhmm. And I remember overhearing this conference call. And this lady was like, so I know the loans do. She's like, the problem is is every single month, my property is appreciating 2% right now. The amount of money I'm gonna make by holding on to this for six more months is a lot less than the penalty interest that you're gonna charge me. It's pretty wild. And she was right. Like, was so right. And the funny thing is that she actually ended up paying off this loan, like, four months later, paid all the penalties, didn't give a shit. She probably made an extra, like, $80. How stupid is that? Dude, that's just like

Dylan Koch: [26:58] That's just the sign of the times, man.

Dan Austin: [27:00] The sign sign

Mike DeHaan: [27:00] of the times.

Dan Austin: [27:01] Sign of the times.

Mike DeHaan: [27:02] For me, the principle of that is just really bad business. Right? Like, you're intentionally being a prick, which just makes no one ever wanna work with you ever again. And sure you made your money, but now that relationship is, you know, ruined forever.

Dylan Koch: [27:13] Yeah. You come back for another loan. I'm like, sorry. Shouldn't

Mike DeHaan: [27:15] have luck.

Dan Austin: [27:15] Yeah. Well, there's a lot of other opportunity. What are you doing? Like, why don't you just go buy another property?

Mike DeHaan: [27:19] Come on, Dan. We we we know that's not how people are.

Dan Austin: [27:22] Yeah. Exactly. That's how I would be. I was like, let me offload this one. Let me go get another one where I can make more than 2% a month on it.

Mike DeHaan: [27:28] Dude, it's the exact same reason that we've had borrowers back out of massive loans because their rate had to be adjusted to, a 6.1 instead of a six. Because the LTV ended up being slightly higher or whatever because the appraisals came in low. And they're like, oh, I can't do it. And like, ma'am, you're about to get $2,000,000 cash out, and you're gonna walk away over point 1% on your interest rate. Yeah. Sorry.

Dan Austin: [27:51] People are like that.

Mike DeHaan: [27:53] This is a real story, Dylan. You know this

Dan Austin: [27:54] True story. I had a hunch to win over.

Dylan Koch: [27:57] When you mentioned the loan size.

Dan Austin: [27:59] Yeah. So Exactly. Dummies.

Mike DeHaan: [28:01] So when you go and you look at stuff for your primary residence like you've been doing, are you still trying to get like discounts and stuff the same as you would as an investor? Like, or are you, as an investor that's buying a primary home, are you okay paying retail for a house you really like?

Dylan Koch: [28:15] If it checked all the boxes, we would pay retail. Yeah. I wouldn't be mad without that.

Mike DeHaan: [28:20] Because it's something that I've always thought is funny about like the real estate crowd. And we all know these people. There's a lot of them. And they're like, when they're in the real estate investment mindset, they're like, oh, I need to buy a fixer upper for myself so that I can, like, force the appreciation, and we're gonna, like, do a live in house hack. We do all sorts of things. I'm like, fuck that. Don't take work home with you.

Dylan Koch: [28:38] Younger Dylan would have done that. Younger Dylan for sure.

Mike DeHaan: [28:41] But dude, I'm talking about people who have two kids that are like this.

Dylan Koch: [28:43] Yeah. No. You're gonna, like,

Mike DeHaan: [28:45] move your whole family and wash dishes in the bathtub for two months where you try to figure out how to do your own kitchen?

Dylan Koch: [28:50] Yeah. No. The inside renovation thing would be awful. I would maybe try to, like, pick specific, like, ZIP codes and, like, maybe do direct to seller on them to avoid, like, maybe getting a deal just on, like, being direct to seller without renters. But not like a massive renovation project.

Mike DeHaan: [29:05] Yeah. I've seen that a lot. I don't know. Like, my home right now is a new build. I paid full retail for this, and it is awesome because I don't have to fix anything. Hey, Dan. You had a really

Dan Austin: [29:14] good realtor that negotiated you a good price. And absolutely. Don't lie. Your house appraised for, like, $200 more than you bought it for. So

Mike DeHaan: [29:23] It wasn't quite that much. It was, 130. Oh, yeah. Sorry.

Dan Austin: [29:27] Multi 6 figures, basically.

Dylan Koch: [29:28] Do builders still pay the full 3%? Or I guess here, it's 3%. It's

Mike DeHaan: [29:31] 6 percent total.

Dylan Koch: [29:32] Mhmm. Yeah. Okay.

Mike DeHaan: [29:33] Yeah. Yeah. And there was a whole bunch of issues with that because I also ended up having to, like, rent the property back from

Dan Austin: [29:39] Oh, yeah.

Mike DeHaan: [29:40] The builder after a freaking Better Mortgage that was doing my loan backed out three days before closing because they decided that my debt to income was too high.

Dan Austin: [29:47] Yep. They don't like that.

Dylan Koch: [29:49] It's funny because I don't know. Like, we were doing the DTI stuff at that same tax account. You're like, I could buy mostly this cash. Like, if I cash out my business, I can just buy the fucking house. But then like, nope. Your debt debt income's too high. And I was like, not really. He's Yeah. I just gotta play the game.

Mike DeHaan: [30:05] Yeah. Well, you had to find a lender that kind of understands like he talked about. Like, I ended up working with somebody that works with quite a few risk people. And I don't know what he did different. He did like the whimsical move numbers around, but then it got approved. No problem.

Dan Austin: [30:16] Yeah. Does it make sense at some point in time to just pay cash for your primary and get a line of credit on it?

Dylan Koch: [30:21] It's not a bad idea.

Dan Austin: [30:22] Because you still have the debt and your monthly your monthly overhead is way lower if you don't have it amortized. Think about that.

Mike DeHaan: [30:28] I would say now it does. Back then it didn't. Because like my mortgage on my primary is like a And three and a like I got a HELOC shortly afterwards because it appraised so much higher. And my HELOC, I mean, rotates, right, but now it's just like eight. But like right now, if you're getting a primary loan at 6.75 and you're get a HELOC at eight on it instead if it was paid off, I think that makes sense. Like if you if you can actually afford that,

Dan Austin: [30:54] why not? It's interesting because then you could just take that money and then maybe your strategy is to invest in such a way that you could take big chunks and like pay down your, you know

Mike DeHaan: [31:02] Yeah.

Dan Austin: [31:02] Or wait and just refinance it.

Mike DeHaan: [31:04] If you have active opportunities for that money, for sure. Know, You like, if you can make it so you don't have to worry about a monthly mortgage, but you can pull on that HELOC whenever you want. You're gonna put it into rentals. You're gonna put it into, like, house flips, those kind of things. And you don't have to worry about on a month to month basis if you do have lulls. It could make sense, but it would just depend.

Dan Austin: [31:22] I guess assuming it would make sense and it's harder to get a loan and the loan would be less favorable or something like that. Because we also have a borrower that Dylan probably knows that he has like a freaking, I don't know, 9% interest only loan on like a $1,500,000 note. I don't know. I did. And I'm like, I thought it was a portfolio of loans. I was like, oh, no. That's your primary. Gotcha. Yeah. It's like, that's a lot.

Mike DeHaan: [31:46] Yeah. It all depends on your opportunity cost. Go for it, John.

Dylan Koch: [31:49] No. Like, obviously, the one side of this is, okay. You're just arbitraging interest rates and where you can spend the money, risk versus reward. And the other side of this is like, I look at our personal net worth and balance sheet, and it would be so cool just to be debt free. But our thing is our mortgage loan is 2.5%. So the investor in me is like, Never will I not do that. Because obviously you can do the math on what that comment would be different. But at the same time, having zero payments would also be cool.

Mike DeHaan: [32:15] Yeah. And it will depends on what percentage of your net worth it is. Right? But, like, it's it's always kinda like a weird sliding scale because let's say that you had, like, $5,000,000 and you're gonna pay off your $300,000 mortgage so you don't have to make a payment. Sure. That that makes might feel good. That's cool. But also if you have $5,000,000, why don't you just make the payment? Because you won't even notice the drop in the bucket that's leaking out.

Dylan Koch: [32:35] No. I get that. I get that. But a lot of people's like boomers, like, you know, they just paid on for thirty years, so they don't have a house expense. They have their, you know, beat up cars. So they can realistically live on $1,502,000 a month.

Mike DeHaan: [32:47] Yeah. But they also come from a time though where a lot of the conversations around debt are like, debt is always bad, you know, and they really are have a averse to that. I think especially if you're Yeah. Somewhere like the Midwest. This isn't this isn't fully a Midwest dig. But I feel like the people that I've met that are from there, they sort of grew up with that sort of being a more traditional family value, I guess, around, like, eliminate all debt, be super conservative to all those kind of things, which out in the Northwest, you don't see that quite the same.

Dylan Koch: [33:15] Oh, yeah. No. It's it's definitely more common around here.

Dan Austin: [33:18] Also, people people also don't like baby boomers didn't move. Like, I mean, how many of your parents moved? Yeah. I have my parents still own that.

Dylan Koch: [33:25] Oh, no. My parents have been the same house for forty years.

Dan Austin: [33:27] Yeah. My yeah. Since 1990 is when my parents moved in that house.

Mike DeHaan: [33:30] Mhmm. Yeah. My parents moved in there. It was like 1989. It's been the same thing.

Dan Austin: [33:34] Right. So it's like then naturally, you're gonna pay your mortgage off at some point, you know? Like, it's

Dylan Koch: [33:38] gonna happen. You could have told that back in 2020, you can refinance your property, pull up $300,000 at two percent tax free, and they'd be like, what? Are you crazy? Yeah.

Dan Austin: [33:47] I can't have a monthly payment.

Mike DeHaan: [33:48] Yeah. Yeah. Anyways. Alright, guys. Anything else to dive into?

Dylan Koch: [33:52] I don't have anything else planned.

Dan Austin: [33:53] Yeah. I heard Anthony Fauci was testifying in front of congress recently. You guys wanna talk about that?

Dylan Koch: [33:57] Yesterday. I don't know. I guess you didn't say anything for a 111 times.

Mike DeHaan: [34:01] I have I just wanted to,

Dan Austin: [34:02] you know, round it

Mike DeHaan: [34:03] out. Opinions. I I don't wanna get into politics.

Dylan Koch: [34:06] It's

Mike DeHaan: [34:06] I I have actually really enjoyed getting out of it.

Dan Austin: [34:09] That's why I brought up. I want you to get into it. I want you to get into it. I will say this. This has nothing to do with either of those. I was I actually had this, like, weird thought. I was like, I was on a trail, like a biking trail, and I saw a person riding their bike, and they're wearing a mask. I was like, that's interesting. Like, is that like a thing? Like people are still caught up on this thing or

Dylan Koch: [34:31] I see people driving in their cars with the mask on.

Dan Austin: [34:35] And it doesn't bother me one bit because like my assumption, like a 100%, I always assume if I see someone doing that, it doesn't offend me at

Mike DeHaan: [34:41] all because it's like that's their shit, right?

Dan Austin: [34:42] It's their bubble. I assume they're doing it for my benefit. Maybe they're sick. Right? But I was like, what are you doing on the bike trail with that thing, dog? Like chill out, bro. Maybe there's a smoke. Babe oh, baby. See, there you go.

Mike DeHaan: [34:53] Maybe they were thinking there's something there. Oh, I don't know, dude. Like, the only place I still see masks at this point is in like the Seattle Airport. It is definitely a weird thing that still exists.

Dan Austin: [35:01] I mean, but honestly, like, even that, I don't even care. Like, because it's like, I get it. People here are dirty, dude. You wanna breathe in that nasty air.

Mike DeHaan: [35:07] It's for them. I don't know. I'm headed to a wedding here in a couple weeks, and, I need to get my my suit that I have, tightened up a little bit. And so I was looking at Tailors. Tight? Yeah,

Dan Austin: [35:17] bro. You're looking good, dog.

Dylan Koch: [35:18] I know.

Dan Austin: [35:19] Getting

Mike DeHaan: [35:19] lean, looking good. But I was looking for a tailor online, and I was reading Google reviews. And this one there was a Google view for this one. I thought it was so funny. It was from, like, two weeks ago. So it was recent. And the person that left the review, they're, like, completely disrespectful of my boundaries. They're like, I walked in and I asked them if they were okay wearing a mask for my safety, and they said no. I will never come back here again. Oh, that's weird. Yeah. Yeah. That's weird. I was like, wait. Is this two weeks ago? I was like, what what is

Dan Austin: [35:49] happening? You're like, what what is this review? 2021?

Mike DeHaan: [35:51] And I was like, okay. So it's a situation where they're immune compromised, they have cancer, like, something create add that to the review. So that way, don't think you're a fucking psycho

Dan Austin: [35:59] because now you're Yeah. That's a weird thing. But, you know, if you need a tailor, you gotta you gotta find the, old, Afghani dudes. Like, they're really good at that. There's one guy was it Downtown Spokane in the mall? He's probably not there anymore, honestly. Never mind.

Mike DeHaan: [36:14] Yeah. So I well, I guess where everyone goes to is there's a place on Monroe that's, there's like a Vietnamese guy that owns it.

Dan Austin: [36:20] Yeah. I I go there. I used to. I don't really do a lot of that anymore, but the thing is is what he's gonna do when you go in. This is great. You're gonna get your clothes, and you're gonna drop it off, and you're gonna be like, when can I pick this up? He's like, when you want it? And you're like, a week? He was like, one week. And he just like puts it on the pile. Like the whole thing is just clothes piled up everywhere. It's Dux Tailors. Yeah.

Mike DeHaan: [36:40] Yeah. Yeah. I thought that's right.

Dan Austin: [36:41] Actually, there's a the guy that sorry, listeners. The guy you should take a dude is right there in 5 Mile. Yeah. That's, way closer. Yeah. It's way closer, way more organized. I'll I'll tell you off off air. Sorry. Yeah. So with that, Josh. No worries.

Mike DeHaan: [36:53] Yeah. Bye. Cool. Alright, guys. Well, thanks for listening, everybody. You guys have a great week, and we'll talk you guys next time.

Dan Austin: [36:58] See you. Bye.

Mike DeHaan: [37:00] This episode is sponsored by Sir Lenzelot LLC, also known as SLA Capital, which, if you didn't know, is Dan and I's private lending company. So, yes, we are sponsoring our own show, but what you're gonna do about it? It is our private lending company that offers hard money and DSCR loans to real estate investors of all types. So you can be a new investor, an experienced investor. You can be buying flips. You can be buying rentals, whatever. We can do everything. And not only that, but the rates that we offer are just as competitive, if not cheaper, than pretty much every other company out there. So whatever big company you've been working with, bring us their term sheets, I guarantee that we can probably beat it. We have the same connections they do. We just don't have all the overhead and middlemen. So if you wanna come and check us out, go to slacapital.com/keys, and I will know that you came from the show. And by seeing that you came from here, when you get the closing, you will save $500 on your first loan with us. So slacapital.com/keys, we would love to fund your next deal. Thanks for listening, everyone. If you want more from us, you can shoot us a follow on Instagram. I am at Mike underscore Invest. Dan is at investor man. Dan and Dylan is at Dylan underscore does underscore deals. Choose to follow and send us a DM to let us know what you think of the show.