How Diverse Investing Is Halting Your Growth, Finding Locations For Virtual Investing, Why Successful Investors Choose To Coach

Mike DeHaan: [0:00] Unfortunate truth. 100,000, 200,000, $300,000 is not a lot of money in 2023. Disappears fast. It disappears extremely quick. Inflation has caused costs to go up. The real estate market over the course of 2020, 2021, 2022 has made so many people wealth, like, that sort of range, like the 100 to $400,000 range where they now have equity. They've sold house. They have that in cash. The number of people that have that money has grown an incredible amount. And ultimately, what that means is that the new level for what's considered wealthy is higher. Right? Alright, guys. Welcome to this episode of the collecting keys podcast. This is our Wednesday Mike and Dan show where I, Mike DeHaan, and my cohost here at Dan Austin, talk about real estate investing business and everything in between. And Dan, believe it or not, this is episode 100.

Dan Austin: [1:00] Dang. This is a century? Is a century.

Mike DeHaan: [1:03] This is our our one hundredth long form episode. We crossed 100 a little while ago if you count our our short Friday folks episodes, but those are a little bit different. So this is our number 100 episode long form, and so we are each gonna be chugging a bottle of Pappy Van Winkle over the course of this forty minute I

Dan Austin: [1:20] got it right back there. If you if there's any whiskey drinkers that actually watch our videos, like that right there is like a I don't know. It's a few $100, maybe a thousand bucks. It's a Pappy Van Winkle. Why are you

Mike DeHaan: [1:29] pointing like you're trying to flex? No one's gonna notice that you're Can you see it? I'm pointing at it.

Dan Austin: [1:33] That's a bottle of Pappy that I won in a lottery. It's like I but it was like a thousand bucks to buy, so I can't drink it.

Mike DeHaan: [1:39] Right here. Right here. You can go check out the YouTube I

Dan Austin: [1:42] would have do collection back there.

Mike DeHaan: [1:44] Wanna see Dan trying to trying to flex point to his whiskey Any

Dan Austin: [1:47] opportunity I get, I try to throw in a flex.

Mike DeHaan: [1:49] I mean, that's what you gotta do, man. When you're a father of young kids, you know, your wife spokes on them. No one appreciates you anymore when you're in that phase.

Dan Austin: [1:56] I am the most that's right. Dads are the most unappreciated group of people out there in the world.

Mike DeHaan: [2:02] Or they're, like, overly appreciated to the point that it's kind of nauseating.

Dan Austin: [2:05] It does frustrate women. I do know this as a dad and a spouse because men get a shit ton of credit. Like, if I take my son in public, people are like, you're such a good dad. Like, my wife takes him and my daughter, drag him around the grocery store, no credit. Right? But if a guy takes their kid out and oh my gosh. Oh, he's so cute. Oh, you're he's just hanging out with dad today. Wow. That's so great. That's funny. Especially with the older ladies.

Mike DeHaan: [2:30] They complain about that. But when we get a vice versa, you go into the professional world, and everyone's like, you're a woman engineer. You should be so proud of yourself. That's true. Then with men We

Dan Austin: [2:38] have a whole week dedicated to you.

Mike DeHaan: [2:40] Yeah, right. And now now has a man that's like, just shut up and do your job, asshole.

Dan Austin: [2:43] Right, yeah. That's a great point. Everything balances out. If we could just get people to understand that, it all balances out. Some people get, you know, over here, you get a little benefit. Over there, you don't get so much benefit.

Mike DeHaan: [2:53] Yeah. You know, like to yeah. Exactly. It's all if you do anything that's outside, like, the social norm, people tend to notice that. And, you know, good or for bad, that's what happens. But, anyways, episode 100. And here's one thing that we know. If you have been listening to this show for the last 100 episodes, or I say, like, the last 85 episodes, if you go back to the beginning, you can probably skip the first 15.

Dan Austin: [3:18] I forgot about those episodes. The forgotten episodes for a good reason.

Mike DeHaan: [3:21] They're so bad, but people go back and listen to them all the time. But if you've listened to last 100 episodes, you're probably super freaking wealthy now. You've probably taken so much action about everything that we talk about every single week. You've bought a bunch of properties. You've wholesaled some houses. You've created a huge income and built some incredible wealth for yourself. So we we were having a conversation before the show that is kind of an interesting talk about investing outside of, like, even just like with real estate, but actually knowing how to invest to get the most bang for your buck. Mhmm. And I feel like this, you know, regardless of my sarcastic remarks about if you've listened to everything, you're probably super rich now. I do think that is a really interesting conversation, because I have a ton of people who reach out on a regular basis just asking about different questions. And one of the most common questions that we get is, hey, I have, like, say, $10,000, $20,000, $50,000, what do you think would be the best way for me to invest my money? No joke. I literally had somebody that hit me up from GoBundance the other day, and they said, hey. I have a million dollars in cash. What do you think I should do?

Mike DeHaan: [4:24] And I'm like, that is such a That's such a Why different problem. Yeah. Such a different problem to have. But it brought brings an interesting conversation about how to figure out what to do with your money. And I think this is especially important when you start making money on a regular basis. And so, you know, we're in a position now. We've been running a successful business. We've built up some cash. All And of a sudden you get all these people that start reaching out, and they're like, oh, you wanna invest in a syndication? You're going you wanna, you know, start this life insurance policy? You wanna buy this type of property? How do you actually decide what to do? Honestly.

Dan Austin: [4:59] Right. And it's so hard, and you and I have actually over the last have had kind of an extended conversation recently about this. Talking to other people and looking at our options just as individuals, and as a business, to be honest. You also look at what you can invest in as a business owner to keep your business growing. But from a personal finance standpoint, which is where we're getting at, is everybody will want your money once they recognize that you have a little bit, and that's the way those people tend to make money. Even if it's a syndication, and it's a great syndication, it's a great syndicator, they make money. They're capital raises. Right? They make money on on that. And granted, if it's their own development deal, they make money multiple ways, and your money is only one of those ways, but financial advisers, insurance, people that sell insurance as a generally the way they make money is if you sign up for insurance, and those are all great ways to invest your money. I'm of the belief, and we can dive into how deep we want to on this, but I'm of the belief you should probably master only a few ways to invest your money, and that's because when you talk about layering on all these different ways to invest I mean, anything's an investment. Anytime you put money anywhere and it brings back more money, that's considered an investment, right? Or the idea is that it should bring back more money. It could also lose money. I think about people that run family offices, and that's what they do professionally, right?

Dan Austin: [6:18] Wealthy people have a staff of people. They have a person that is an asset class expert in many assets that they are building their family office around, and they're investing in higher risk funds typically because they have those experts, what would be higher risk to us, and the reason that what they do is they diversify out of just that one asset, right? So they have multiple assets that they're investing in. When I say assets, it could be funds and all that sort of stuff. As individuals, going and getting a life insurance policy, when we talk about life, we're talking whole life, universal life, those types of policies, going and opening up a brokerage account, going and starting to invest in real estate, getting help starting to invest as an LP, doing all of the things that you hear on podcasts is probably not the most efficient way to invest your money. It's just my belief, and I'll throw it out there right away.

Mike DeHaan: [7:05] Yeah. So think, yes and no. So I think that what you're saying is super applicable when somebody is building their wealth. I would say when you are kind of like under the 1 to $2,000,000 net worth range, if you are trying to really diversify into all these different things, are limiting your growth, you know, and I I mean, I see, like, maybe maybe that's a little bit high, but I see a lot of people that have, like, a $100,000 net worth, and they're like, I'm trying to diversify and spread my risk. And that's the kind

Dan Austin: [7:33] of the ball. I would say I would say probably anywhere anybody under 2 to $3,000,000 net worth, depending on how they have that net worth made up, how they got to that net worth Yeah. Should be maybe limiting how much they're investing in different things. Yeah. Or that's what they're doing full time, then it's a different story.

Mike DeHaan: [7:51] Exactly. When you're kind of lower than that, especially if you're in the couple 100,000 or even less net worth, you need to be going all in on the stuff that's gonna maximize your return if you wanna be wealthy. Mhmm. Like, unfortunate truth, 100,000, 200,000, $300,000 is not a lot of money in 2023.

Dan Austin: [8:09] Disappears fast.

Mike DeHaan: [8:10] It disappears extremely quick. You know? Inflation has caused costs to go up. The real estate market over the course of, you know, twenty twenty, twenty twenty one, 2022 has made so many people wealth, like, in that sort of range, like the 100 to $400,000 range where they now have equity. They've sold house. They have that in cash. The number of people that have that money has grown an incredible amount, and ultimately what that means is that the new level for what's considered wealthy is higher. Right?

Dan Austin: [8:37] So let's just for context, I saw this statistic recently in early nineteen eighties, like 1982 or 1983 was the number or 1983, so it was what was that? Forty years ago? The $100,000 a year salary where people were like, Yeah, I'm making 100 ks. And we still talk about that, like, Oh man, making 100 ks is awesome. That same 100 ks that we're talking about is 300 ks in today, adjusted for inflation.

Mike DeHaan: [9:00] It's crazy. Right? See, that's just adjusted So for if making 300

Dan Austin: [9:03] k, you're doing awesome Yeah. In the nineteen eighties standard.

Mike DeHaan: [9:06] Yeah. Right. That yeah. And that's just adjusted for inflation. That's not adjusted for the increased cost of living that people have in general now. You know, we have a lot of extra fixed expenses.

Dan Austin: [9:14] Oh, sure. So much more service based stuff.

Mike DeHaan: [9:16] Yeah. So much more service based stuff. Have cell phones, you have internet, people have two cars, you have childcare, you have child extracurricular activities.

Dan Austin: [9:24] You have somebody walking your dog for you. Yeah, right. Doggy daycare exists. Let's put it that way.

Mike DeHaan: [9:31] Yeah, right.

Dan Austin: [9:31] We take our dog there.

Mike DeHaan: [9:32] Yeah. So, but point being, so many people, they fixate on what they already have, and they limit their ability to actually generate wealth because they are not leaning into what's going to produce the most return. And in my mind, when you are that sort of like lower net worth, the like, know, let's just say 500,000 and below range, you should be going full in on yourself, right, to increase your skill set, and your knowledge, and your ability to make money. And you should be going full in on any sort of business endeavor, or any sort of investment that is going to maximize your return that is in your control. So basically meaning not crypto, or not buying like, you know, GameStop calls, right, or whatever. Right. Right. Actually, you know, learning how to flip a house, right? Mhmm. Putting money into that so you can generate large active income, learning to start a business, learning how to, you know, build a brand or ecommerce or whatever. Those should be your investments when you're in kind of like that under $500,000 range. When you start to get to like the 2,000,000, 3,000,000, $4,000,000 range, I think I actually had a call today with someone from GoBundance who's, like, a wealth adviser, so I'm trying to sort of figure this out for myself to have, you know, have this life insurance policy that I'm not entirely sure is right for me. It's a whole life policy, and I've just been looking at these different options. And he basically said, he's like, you should not be buying, like giving anyone, any sort of like third party your money until you know what your whole financial goal is. Right?

Mike DeHaan: [10:59] Just like, you know, how much income you wanna have, how much you want it to grow, what your risk tolerance is, all that sort of stuff. Until you know what that looks like. And then you need to be prioritizing, basically putting everything in a different bucket. So he's like, you need to know how much you need to put into your business for your business to reach its growth goals. It's like that should be priority number one. Your second priority should be how much money do you need to have on hand for yourself for if, you know, bad things happen in your life. So basically, that's like your security. And then from there, you need to figure out your growth goals based off of how much you wanna go into investments, what your risk tolerance is, and how much you wanna hold in cash for basically as you put short to middle term stuff. So like whole life insurance policies, which is a cash like investment, hard money loans, or debt based funds, CDs, or like treasury bills, things like that. Those are like short term, slightly lower yield stuff that you can get access to a little bit quicker. And how much money you put into those is kinda just dependent on what your overall goals are. Do you understand you are giving up compound growth and other things by doing that? But you just need to make sure that you actually have a holistic view about what you want your wealth to look like.

Dan Austin: [12:11] We have kind of articulated this as I'm listening to what you're saying. Because do you think those same rules apply to somebody that has an under $500,000 net worth? Or somebody who's working a W-two job and has enough to put away what would be meaningful money to them, but not much else, but put it in a savings account so that one day they could buy their first house invest in rental properties? Or do they need to go all in and take more of a risk and put it into that one investment?

Mike DeHaan: [12:39] I think that the key thing is you need to do an analysis of what you want your lifestyle to look like, like realistically. And if you are comfortable with working your w two, you're comfortable, so it's like going through the grind and you wanna like, you know, you're relatively conservative in nature, then that same line of thinking could work a little bit. Right? You're not you're not gonna ever achieve wealth if you diversify too much when your net net worth is lower. But if you're listening to this podcast, that's probably not you. Right? You're probably someone that wants wealth. You want a higher income. You wanna escape your w two. You wanna have financial freedom. If that's you, you need to go all in into something that is going to maximize your growth and your income. It's gonna be higher risk, gonna be more work, but it's gonna be something that's in your control. And that's the only way that you are going to make real money and real wealth when you're at that lower lower net worth and that lower income point. Right.

Dan Austin: [13:31] And that that's coming from two guys like us where we came from, like, w two jobs, and we're, like, the traditional real estate investing kind of mentality at first, but then you recognize, like, buying one rental property is great. I have this whole belief of the whole buying 10 rental properties in ten years, which is I I was like, yeah, that's what I'm gonna do. That's super freaking hard. Like, really hard. We've talked about this on the podcast before. It's like, that's really challenging.

Mike DeHaan: [13:57] For a w two earner. For somebody that Right. Is W

Dan Austin: [13:59] two, yes.

Mike DeHaan: [14:00] Has regular monthly income, and they have nothing else outside of that.

Dan Austin: [14:03] And you're taking your excess income, assuming that you're not making 1 to $2,000,000 a year, you're buying $100,000 houses, okay, that's a totally different ballgame. Right? But for the average person who's buying assets within a reasonable distance of their well, right, that's really challenging. And for me, I started out buying one house, two house, and it's like, okay, I wanna get three and four, and you run out of money quite quickly, even if you're making a good w two wage, but also you run out of opportunity. So at at that point, you and I both pivoted to, we need to go all in here if we want to achieve our goals. And by all in, I mean, not like we just spent every single penny we own. I mean, we spent we did go quite a bit all in as far as percentages of our net worth, honestly, to start this business at that point in time, and that's now how we can look back and tell you the story of how to do this and how to get here, because it's not like we were anything special, it's just that we realized what we wanted to get, we took that stock of where we wanted to be, and recognized that the traditional path, a lot of people at that time were talking, wasn't for us. Mhmm.

Mike DeHaan: [15:03] Yeah. I mean, and there's a certain level of risk tolerance that you have to have, right, which a lot of people don't. But I think the biggest thing too is understanding, like changing that mindset around your money to understand that there's always gonna be more money, always gonna be more opportunities. Right? And you're never going to reach like a level of financial independence or wealth or like a high income if you don't seek those opportunities yourself, which is like such a big thing that most people don't realize. Yeah. They always kinda like expect someone to bring it to them or they expect it to be something that sort of builds over time, which, you know, it kind of can. But you can expedite that process, right, if you go out there. You can make I reflect on this kind of regularly of you know, I started investing in 2018, but when I worked my last engineering job, which I which I quit in 2018, by all intents and purposes, from like the standard view, I had like kinda made it. Right? Like, you know, we had dual income. We had low living expenses. We were able to save a lot of money. I had a good trajectory upward at my engineering job, I could have been very comfortable forever. And that was like kind of a hard thing to walk away from.

Mike DeHaan: [16:16] But I can guarantee you that if I had stuck with that and tried to use this sort of like save and slowly invest mentality, I would not be either close to where I'm at right now.

Dan Austin: [16:27] Right. Especially from a yen from a network standpoint, it's just it's just not it's honestly just not feasible. There's only a small percentage of people in the w two realm that get to do that. And that's usually the top executives. You know how hard it is to be an executive at a company that actually pays money? You're actually better off starting a small business and not not talking real estate or what we're doing. You're better off starting a small business to make a really good wage or an above average wage.

Mike DeHaan: [16:53] Mhmm. Yeah. In my opinion. Yeah. Absolutely. I mean, even if you're just like a one man operator, especially right now, if you have a service based business, you could be a, I don't know, a person that cuts lawns, and it's like you and your 16 year old son or your brother or whatever, you could probably make a $150,000 a year at this point. Right.

Dan Austin: [17:15] And you could it's a business that you could build to sell. And then have a have a good exit. It might not be like selling Amazon, but you could still I know guys that are making, you know, up depending on how big your company is, up to 7 figures selling a lawn mowing company.

Mike DeHaan: [17:27] Honestly, yeah. You know? So, you know, it's just interesting going through that, and trying to figure out the best way to really invest at those different levels. But ultimately, I think the core thing is you have to have a plan about what you want your lifestyle to look like, and what your goals are, and what your risk profile is, and make decisions from there. And I'll also say to you, if you are like, seek out mentors that can help you with that, but ideally mentors that are not trying to make money off of you. Right. Which is a huge indicator. Because like there's a lot of people that you can hire to be experts, right, or like wealth managers, whatever, but they make commissions. They're going to sell you whatever gets you those commissions. Even if they're like a fiduciary or whatever, good for them. They still get paid based off of you doing business with them.

Dan Austin: [18:15] My father always used to tell me when you're talking about finding a financial advisor or somebody that you're going to have to work with that makes money off of you, go and talk to three of them first. Yeah. And then go and talk to three people that are using services of people

Mike DeHaan: [18:29] Mhmm.

Dan Austin: [18:30] Before you make your decision. Because if you just talk to one person, you're gonna get one person's point of view. And there's so much opportunity out there to talk to three people in any investment category, whether that's being an LP on a syndication. Go talk to three syndicators. You can talk to 30 in a week. They'd be all happy to take your call right now. Or three wealth wealth advisers, three guys that are pitching insurance. Just kinda get the perspective so that it gets because ultimately, you gotta do what's best for you, and if you don't know what's best for you, talking to one person's not gonna they're gonna give you what they think is best for you not knowing you.

Mike DeHaan: [19:01] Yeah. And with that too, I think that it's important to have those conversations. You So like, you know, you get general information. You just need to be hesitant to pull the trigger on, you know, giving anybody your money. And the diversification piece too, I think that as you start to make money, and you start to have, you know, a couple million dollar net worth, you have a high income, I think that's where it actually becomes important to diversify from just being in your zone all the time because stuff can change. And especially if you're smart enough to live below your means as your business continues to know, your investments continue to grow, you have all sorts of stuff, but you're able to keep your living situation kind of the same. If you invest, like in a way that you diversify, and you kind of spread that risk, if one of those buckets does go weird, the real estate market does crash, if the stock market does crash, if, I don't know, the crypto goes to zero, whatever you put your money in, at least you'll have these other buckets that can still sustain your lifestyle without it having to be the end of the world.

Dan Austin: [19:58] Yeah. That that's a great point, and maybe there's like a a point to to like a demarcation point here. So it's not that you have more to lose when you have more money, it's that once you have some of your basic needs taken care of, and you're kind of at this point of like, I'm kind of taken care of for a long time, whatever that is. Maybe that's like, I've got to a net worth of 1,000,000, 5,000,000, 500,000, whatever you need based on what lifestyle you live. Now you wanna you do wanna start protecting some of that, and you have the freedom to now diversify. When you're coming up though, there's probably going to be points in time, like if you're going to reach some level of like, high success, where you are uncomfortably extended. Mhmm. Yeah. You and I have both been uncomfortably extended. We were still smart about it. I believe we were still smart about it. But I guess if, like, some black swan event happened, we could have been in trouble. Right? But there are times where we had, especially starting out, extended a big portion of our I know when I bought my first rental property, I extended a huge portion of my net worth to do that, because I didn't

Mike DeHaan: [20:59] have a

Dan Austin: [21:00] lot of net worth. Yeah.

Mike DeHaan: [21:02] I mean, like, that thing is, you will be excited, and you will have to take that risk, and you will have to accept that if you take that risk and things go sideways, you will be in a bad spot. But that is Yeah. That alone is why most people don't become wealthy. They're not willing to roll that dice.

Dan Austin: [21:18] That's how you become above average. Otherwise, you can go get a job, hopefully you're fortunate enough to get a 6% match on your four zero one ks, and put that in there every year, and you can max that out at whatever we're at now, 20,000 a year, and your tax advantage account, and when you're 65, you'll know exactly how much money you should have, and that's what you'll get.

Mike DeHaan: [21:37] Yeah. And that's the trade off, you know? And if people aren't comfortable straying from that, sorry, you don't get to have the early life wealth that other people that took the risk get. You know, you get the gold watch, just not the boat. Yeah. Right.

Dan Austin: [21:51] I don't think you get a gold watch anymore.

Mike DeHaan: [21:52] You get the retiree boat. I mean, there's a reason, like, most of the sports cars you see around are being driven by old dudes. They put their time in. I know. You know? You don't you don't see a lot of, like, 20, 30 driving sports cars around.

Dan Austin: [22:03] Right. That's true.

Mike DeHaan: [22:05] Anyways, that's just something that we've been talking about a lot recently, it's come up a lot recently from different people. But point being, I guess just to round that up really quick, if you are not yet wealthy, you're not yet where you end being, you need to invest in yourself first. Don't be afraid to put those eggs in one basket. Just do it in something that you can control, such as a business, real estate, anything to increase your income. And then once you have that money, it becomes how can I spread my risk here to make sure that if stuff does get weird, can maintain my lifestyle? And I think that a lot of real estate investors, especially ones that run successful wholesaling flipping businesses that end up sitting on a lot of cash or have a lot of opportunities is something that they probably have to face on a regular basis. I know that I'm currently trying to figure out right now. I'm with you, man. It's a good good problem to have, but just something to think about. But yeah. So Yeah. You know, if you've been listening to All 100 episodes, I'm sure you have that problem too. Of course,

Dan Austin: [22:59] you have that problem. Yeah. Of course,

Mike DeHaan: [23:00] you do. If you've been buying houses through 2021, 2022, you absolutely have that problem. This is very true.

Dan Austin: [23:07] Yeah. If you were buying assets for the last few years, you've got a little excess money that you have access to that you did not have or think you have.

Mike DeHaan: [23:13] Yeah. Yeah. Exactly. So go on. If you have any questions about that, you can hit me up on Instagram Mike underscore Invest. Most have a chat with people. But, anyways, real estate specific topic though, which I think is one that is super relevant. You had someone that actually hit you up from somewhere as opposed to me, which is a first because I feel like I do a lot more general putting myself out there than

Dan Austin: [23:35] you do. You're very invest Mike underscore invests forward. I'm not quite as much investor man Dan Ford, but I do love talking to people, and I do talk to people quite often. But I did have somebody reach out to us and talking about farm markets, and how to pick those, and how do we how do we because we do a lot of virtual stuff. We have done many iterations of different marketing, like how we and we've had to pick and select. We've done it locally in several markets as well. I don't know. How how many markets do you think we've total marketed

Mike DeHaan: [24:07] in Probably 20 something at this point.

Dan Austin: [24:10] 20 something across North America.

Mike DeHaan: [24:12] Yeah. Some of them we've we've dropped out of. And I guess let me let me reframe that question a little more directly. Someone reached out and they said like, hey. You guys do a lot of virtual investing, marketing, wholesaling. How do you pick the criteria in the markets that you're looking at?

Dan Austin: [24:25] Yeah. What criteria do we use to say this is where we're going to market, or we think this is gonna market? And honestly, it's changed and adapted over the years too, so that's where we used to be very data heavy. Uh-huh. And I would not say that the data necessarily speaks to that. Yeah. Would you say that data is a big like, I say data, I'm talking like we were taught how to do this in another mastermind, which is like, look at unemployment, look at employers, look at growth rates, look at median income, look at average household, look at the population size, look at this, look at there's like 10 probably different criteria that you could look at that were like, probably somewhat arbitrary, to be honest.

Mike DeHaan: [25:02] Yeah. That was so the thing I don't like about that is, about that sort of mentality, if you're looking really into like the demographics and like specific areas, is because essentially what you're trying to do is trying to look for a needle in a haystack. Trying to find like the random town that no one cares about, whatever I shared about, look for opportunity there. And we take a little bit of a different approach. So first off, the core markets that we pick, we have our partnership program, where we partner with these investors in different market, that kinda gives us the general location we're gonna start. Mhmm. You know, so we work with different investors around this part of our instant investor program that you can find at collectecuespodcast.com. We have the third tier where we actually partner with people in these different markets. Right? With that, like them alone, be having interest there, them being involved in the investor community there is enough to sort of like certify like, hey, look, there's somebody else that wants to buy there. There's probably opportunity. Right?

Dan Austin: [25:55] And there's that could be in any market.

Mike DeHaan: [25:57] It'd be in any market. Right? We've done stuff as as huge Too small. Yeah. We're doing stuff as huge in sort of like, mainstream as Houston to as small as, like, some of these, like, Northeast markets, and everything in between Montana, like you name it. We're we're doing stuff in these in these different markets. The main thing, instead of like looking at like all these really tight little demographics and like these numbers for these these different locations, What we do is actually very simple. We find like the key market where we know people are interested in living. It's a major market that tells you that, you know, people are live there. People probably invest there. And then what we do is we go forty five minutes to an hour from the main city, and we market there. That simple. The general thought being is American cities, most of them, if they are growing, they grow outwards. K? If you start going to these these tertiary markets that are outside the main cities and then the great thing is is there's thousands and thousands of these across The United States. So it's not like we're, you know, saying like, oh, we go to Memphis, and we look here. Yeah. You can go to Memphis and pick the cities that are an hour forty five minutes to an hour away from you. Market there, you can know that it's gonna have the interest of the local investors that live in in that Memphis area. At least the serious ones.

Mike DeHaan: [27:15] Like, I know for us, if we have a good opportunity up in North Idaho or somewhere forty five minutes away, we don't go in like, ah, I don't care about that. We've literally done many deals like that. Right? That same pattern is going to exist in these metro markets, but it doesn't have the sort of same effect that like, there's been two dozen bigger pockets blog posts about it. You know, people have done virtual wholesaling podcasts about like, this is why Oklahoma City is the best market. Right? They don't do any of that. Instead, you just find the little spots outside, market there. We do direct mail, SMS, targeting the most standard stuff, absentee, bankruptcies, liens, vacant properties, and that's it. You're gonna get

Dan Austin: [27:57] the phone to ring.

Mike DeHaan: [27:58] Gonna get the phone

Dan Austin: [27:58] to step one, and I wanna stay on step one for a minute. Uh-huh. Getting the phone to ring is step one. Yep. And picking your market is, like, I guess, step zero. Uh-huh. There's reasons there's several reasons why you wouldn't wanna go to the bigger pockets or the Google top 10 markets to live in, like Austin, Texas, for example. Why market there? You could market there, but your cost per deal gets pretty high, and you're probably better off being connected and paying a premium price for whatever you wanna do there. Because the people that are able to invest successfully in Austin, are having much lower profit margins, back to our earlier conversation when you're coming up, you need to have really high profit margins, you need to go all in on something with the best ROI you can. A 4% ROI on a large development in Austin is not nearly as good as a 25% ROI on a single family home somewhere else outside of Austin when you have limited funds, right? So that's one reason. It's just challenging, and your cost per deal is so much higher that you'll get starved out by other players, or other developers, or whoever that is in those big markets, because trust me, they come there, and they come with lots of money. Yeah. The second thing I would say about picking your market, you're talking about tertiary markets, where we do find some folks have a challenge, and it's sometimes a personal challenge, where they live in a town of say 20 to 30,000 people.

Dan Austin: [29:17] That is maybe 40 five to an hour from a larger market, but it's more of a I would consider that kind of a smaller rural market. The challenge they have is everybody in town knows who they are. So they're like, Well, if I get a property under contract, I try to sell it to Billy Bob over there, then they're gonna know that I sold to Billy Bob, and they're gonna be mad at me. Everybody in town's gonna be mad at me, they're not gonna pat me on the back when I'm at the bar. That is a challenge you have to get over if you're living in a small town and marketing a small town. Easy to get over, because I think you can also become the awesome badass local guy that everybody knows that go to, you don't even have to market to them eventually because they just call you because they know you. Mhmm. You know, Joe Blow that buys houses and renovates them and turns them into nice homes that everybody in town likes because it fixes up their small dying town.

Mike DeHaan: [30:00] Exactly. Yeah. You just gotta when you're in those sorts of situations, you gotta have more BDE. More BDE, More big day energy and then confidence going into those.

Dan Austin: [30:08] But think about that. You do need to think about that of going too rural or too small. That's one piece of it, but also that there's just not enough opportunity. If you're in a town of 30,000 people, and you wanna own 500 doors, this is just an example, you're gonna run out of houses to buy. You're just a hrf. And it's funny.

Mike DeHaan: [30:25] And that's literally somebody we're working with right now. They live in a very small town, and he's like, I wanna buy 200 properties. You're like, bro, that's half the town.

Dan Austin: [30:33] Yeah. Eventually, you will run-in, he knows that. He's like, okay. I'm gonna probably have to go to another town eventually, but when you're that small but people are like, oh, would never go to a small town like that. Well, you should definitely look at something. If you're going to go virtual, and you don't know anything about it, don't go to a town where they have one major employer, and it's only a town of 10,000 people, you know what I mean? And that major employer happens to be a sawmill that goes out of business because for whatever reason, that's a bad idea. If you live locally in that town, there's probably a different play that you might wanna you might be looking at. So make sure you do look a little bit at that, but I wouldn't spend too much time trying to find the best data, the best demographics. If it's a place that people live and is generally close to another place other people would really like to live, it's probably a good market to go to.

Mike DeHaan: [31:17] Absolutely. And I think that that's one of the reasons people get stuck is, I mean, everyone, they wanna be in the hottest market. They have this sort of mentality of like, oh, I wanna be in Seattle in the nineties, or San Francisco in the eighties, or whatever back before these places blew up, and you could buy a house of $300 that's now worth like $4,000,000. If that is your exit strategy, you shouldn't be a real estate investor. Like, honestly. There are so many more ways that you can make money. And you go to the small tertiary market, you can still figure out a property's worth $300,000 $200,000 and buy it for 50% off. Right. Right? And you still make your spread that way. That 50% discount is exactly the same in Austin, Texas versus, I don't know, Springfield, Illinois. Right? Is that small town? I don't know.

Dan Austin: [32:09] I think we used to market there, actually.

Mike DeHaan: [32:12] No. That was Springfield, Ohio. Oh, oh, yeah. Sorry. But you know what I was saying though? Like, don't have like, you can still get the discounts in these other markets. And the thing is too, is people fix it on these really small areas. I just looked it up. There is a 129,000,000 households in The United States. Most people are trying to buy like 10, or like 20 if they're feeling ambitious. Why don't you be more open to where those 20 are? Totally. You know? Like like, sure. If you could own 20 houses in Austin, Texas, in Orange County, California, whatever, that's awesome. But that's also gonna take a lot of money. It's gonna be you're gonna be competing with all the people that have big money. And it's just gonna be like, you know, it's more of a speculation play because you're not gonna have an immediate return. Right? Versus if you go to whatever town in somewhere else that is tertiary, forty five minutes to an hour from, like, a major metropolitan area to deal in the path of progress, you can usually kinda figure that out, And you buy 20 properties there, you're probably gonna be just as happy in ten years if you bought those properties in Austin, Texas, honestly.

Dan Austin: [33:18] Right. I mean, and you were saying, like, being open to it. Right? Guy and Mike, go pod and go abundance. Brandon, shout out. One of the places he markets in is Little Rock, Arkansas. He lives in Dallas, but he markets Little Rock, Arkansas. Like, I would have never in my life thought I'm gonna go market at Little Rock, Arkansas. I'm from Washington. Right? I'm up here. That's not an option. But now that I've talked to Brandon, like, dude, he's killing it. Like, that's a great market. He's built relationships with all the right people. He has a pretty good portfolio that's growing pretty rapidly, and he has found for him that's a niche that works really well going to that, and he's got a couple other markets that he actually buys in as well. And so what thought do you need to put into that other than Little Rock, Arkansas is a city, and I could buy houses there, and it's a decent city. I mean, I don't know what else to add to that as far as demographics that I would look at.

Mike DeHaan: [34:07] Yeah. I mean, that that's kinda it. Right? And I mean, you're talking about Little Rock, Arkansas. How many people have thought about Arkansas that don't live in Arkansas over the last thirty days? Not a lot. It's outside of the general public eye. Right? And I think that that alone is is a great way to identify market. And then when it comes to marketing in those areas, like I said, we just do the most standard thing you can think of. We go and we pull the same list that everyone else does. You can find on YouTube. We market to those consistently. You do it over a consistent period of time with a strong brand behind it, and you, most importantly, have a sales and follow-up process. That's where a lot of people also, you know, miss out. And that's where the opportunity comes from. Right? And it's not rocket science. So many people, they're like, well, I'm trying to decide between the market that has 1.81.6% growth. And then this one, they just had this new facility open up there, whatever. Like, you don't need to get that granular. You're not a freaking hedge fund. You're someone that's trying to buy 10 to 15 houses, and so you can have cash flows, you can leave your w two. Yep. And you can certainly do that.

Mike DeHaan: [35:08] Yeah. Exactly. You can stop trying to find the needle in the haystack, the golden goose of all this data just to procrastinate on actually having to do what you know you need to do.

Dan Austin: [35:18] Right. And then again, get the phone to ring. We can show you how to do that. We talk about it all time on this podcast. Get the phone to ring.

Mike DeHaan: [35:24] Exactly. And

Dan Austin: [35:25] then your follow-up is up to you. You've gotta crush the phones and make sure that those people know you wanna buy their house. Yep. That will be your key to success. It is. And again, depending on if the market is like you and I have marketed in some of the hottest markets, Boise, Austin, the only difference there is is your cost per lead is going to be much higher. Do you really wanna spend that much cost per lead if your goal is to own, again, 15 properties, cash flow x amount? Those are appreciation markets that have topped out. I would probably stick away from that, because it just doesn't make any sense for where most of the people that listen to our podcasts are in their investing careers. That's not where you need to be.

Mike DeHaan: [35:57] Yeah. And if you wanna wholesale, that's even more relevant. You don't wanna wholesale in the hottest market. Right? Because not only do you have all the homeowners that are trying to buy properties, but you have all of the people that have migrated there that are like, man, I just got this job at freaking Facebook in Austin, I'm fucking miserable. And I wanna get into real estate here locally. Right. Exactly. You're also meeting with them.

Dan Austin: [36:21] So Yeah. There's a lot more competition. That's why cost goes up. Okay. That's along with everything. It's not like you're gonna just the people that made all this money why why it was super hot is already gone. So don't even worry about it.

Mike DeHaan: [36:34] Yeah, exactly. So point being, don't overthink it, tertiary markets, do the simple thing, have a sales process. It really is that simple. I hate to break it to you. Like even in the instant investor program, we go into a lot of deals about how kinda how to build the foundation of it. But it's always funny as we go through and I start talking to some of the people that are in it, and they're like, so that's kinda like it? I'm like, yeah. They're like, well, what do I do while I'm waiting for the leads to come in? I'm like, I don't know. You wait. Exactly. You start building connections with buyers. You know, it's not that incredibly sophisticated. And like, really what you do is you prep your sales system so that when leads do start to come each other and have a backlog, that's where the real work starts to come. But when you're starting out, it really is that simple.

Dan Austin: [37:20] For sure.

Mike DeHaan: [37:20] And a lot of people try to overcomplicate it because they feel like it should be harder than it actually is. So simple. Cool. Right on. Anything to finish up with that, Dan?

Dan Austin: [37:28] No. I think we beat beat the dead horse there on that. Keep it simple stupid, whatever we wanna we wanna call that. We need a, I guess, a t shirt for this now. It simple stupid.

Mike DeHaan: [37:40] I kinda like that versus what did they say? Keep it stupid simple? Is that what it's supposed to stand for?

Dan Austin: [37:45] I have no idea. I've always just said

Mike DeHaan: [37:47] keep it simple stupid. I'm pretty sure it's not supposed to be like inflammatory. It's supposed to be keep it stupid simple.

Dan Austin: [37:53] See, here's how ignorant I am to the social behavior. Didn't do that. I was inflammatory. I was just like, I just thought that was a funny way to say it.

Mike DeHaan: [37:59] Yeah. They're not gonna tell you that in a corporate environment where they're like, yeah, keep it simple, you idiot.

Dan Austin: [38:04] It simple, you stupid person. No. That's funny. Well, let's keep it simple, listeners out there. Is that Yeah. More

Mike DeHaan: [38:14] I guess. I don't know. But anyways, guys, thanks for listening to the show. Hundredth show, please. This is great. Our hundredth Get out there

Dan Austin: [38:21] and give us a shout out for us making it a 100, because this is an accomplishment itself for us, like a 100 episodes. And to actually have people that like our show, which we do get regular feedback, and keep it coming, we love it, but that's a big step for where we came from. It is. We should show some gratitude.

Mike DeHaan: [38:37] We should. To ourselves. I show gratitude all the time, man. It's funny, I will say that that is I get more excited about people, not even instant investor people who's going to have to see you, but just random people that will let me up and say they took some sort of advice or something that we said on this show, and they took some action and they got something from it, that gets me more fired up than any deal that we do.

Dan Austin: [39:00] Way cooler. And it's funny because you hear I've heard other people say that, and I'm like, oh, yeah. You say that because you're making money and this and that. It's like, no. It actually really is pretty badass. Yeah. And it wasn't until probably recently that I understood that goal of helping people can be somewhat altruistic. Is it? Because it does feel good. It's still selfish, and the term altruistic is somewhat maybe it doesn't apply here, but helping people, maybe it is more selfish than altruistic is what I'll say, guess. Helping people feels good to me. It does. Genuinely feels good.

Mike DeHaan: [39:30] I've thought about this, and I'd actually think this is a big reason that people that have successful real estate companies, they get into education. And everyone's like, well, if it works so well, then why are you doing this education program? I'm trying to steal my money. It's like, no. Like, you don't understand. I no longer get the dopamine hit from getting deals. It is an expectation for my business. Like, if anything, I'm either neutral or I'm fucking depressed because we're not signing deals. Right? There's no longer the upside. Yep. But I can re get that dopamine hit by having somebody else who's like, I get it. Like, you helped me get this. And that's super fulfilling.

Dan Austin: [40:03] Absolutely. Yeah. And you can help somebody get to the next level in their career, something big, they have some level of breakthrough. Yeah. I mean, it's just super cool. I enjoy it, so I'm showing gratitude today

Mike DeHaan: [40:13] Yeah. I like it. To our audience. Anyways, guys, thanks for listening. If you enjoy this show, please share it with anybody else who might find it interesting, whether they like real estate business or just two guys talking trash. It's always we're always good for at least one of those things on any given episode. Go and, you know, hopefully you can share it. And my goal is for our next 100 episodes, I wanna be 10 x as big as we are now. I feel like that's, like, the new thing. You're not trying to double. You're trying to, like, 10 x. Right?

Dan Austin: [40:40] Like, Grant Cardone, that's, like, 2017, bro.

Mike DeHaan: [40:43] After that, he's still he's still leaning into it. You know? Like that that's that's he's got his brand. It works out well. But So help us get there by sharing this with everybody, leaving us a five star review. Also, too, a great way to spread the word is you can buy some Collecting Keys merch if you go to store.collectingkeyspodcast.com. And that's something else that gets me fired up. We've had several people that have bought shirts now from there that we bought it for a bunch there that we accept to people and those sort of things. But actually having cold people buy your merch Oh, I love that. We have a $2 margin. And every time I'm like, yes, like, got dopamine. You got it, man. It's awesome. Yeah. But got them. Yeah. Got them. Store.collectingkeyspodcast.com. You can go there and

Dan Austin: [41:24] pick one of the T shirts. What's the favorite item on the store actually, so our listeners know?

Mike DeHaan: [41:28] It's not the BDE shirts, Dan.

Dan Austin: [41:29] It's just the I figured as much. Yeah. Really selfish. I just wanted to know that BDE shirt was popular.

Mike DeHaan: [41:35] I think we're the only ones that have bought the BDE shirt for people.

Dan Austin: [41:38] Oh, sorry. Guarantee it. Yeah. It's not that cool. Plus, you can't go to your in law's house wearing a shirt that says b d e on it with a guy's random dude's face on it. Just as weird.

Mike DeHaan: [41:49] Absolutely can. Yeah. So, I mean, especially during, like, lake season, like, what else do you want? That's like a True. We should need to

Dan Austin: [41:58] get some tanks. Yeah. I gotta get some tank tops for for the lake season. Get some

Mike DeHaan: [42:02] of those in there. Anyways, store.collectingkeyspodcast.com. Go check that out. And, yeah, guys, appreciate y'all listening, and here's to another 100 episodes. Talk to you guys next week.

Dan Austin: [42:11] See you.