How We Run Our Business While Overseas, What it really takes to SCALE, How to BRRRR Seller Finance Deals

Mike DeHaan: [0:05] What's going on guys? Welcome to today's episode of the collecting keys real estate investing podcast. Today is a catch up episode for Dan and I because I have been MIA for the past couple of weeks. But if this is your first time with us, this is the Wednesday Mike and Dan show where I Mike DeHaan and my co host here, Dan Austin talk about real estate investing business

Dan Austin: [0:28] Oh, yeah.

Mike DeHaan: [0:29] And everything in between. So cool. Well, I appreciate you holding down the ship while I was traveling the past couple of weeks. Yeah. If you guys follow me on Instagram at Mike underscore Invest, you might have seen my post a little bit. I was over in Portugal for a couple of weeks here. Just checking out, you know, what actually might be honestly my one of my favorite European countries that I've been to. Oh. It's probably the first country I've been to that I legitimately think that I could spend a very significant amount of time and not get sick of it. It's like a lot of other ones. The novelties kinda wear off, but it's just a super cool place in general. Strong real estate market too. So that's actually is an interesting point of conversation with it is, you know, as I was there, you know, when you're in the real estate business, that's always something that you just think about. Right? For sure. Estate in Europe isn't as massive of a thing as it is in The States. Home ownership, property ownership is something that's a little bit less common, especially in some of the countries that are, I would say, like on the lower end of the economic spectrum, which, you know, Portugal is a country that I didn't realize until I went there that was under a dictatorship until like the seventies. And then, you know, they sort of got out of that with like a revolution where they didn't even kill anybody. That they basically everyone was just like, you don't wanna fuck this. And they just like stopped doing the dictatorship.

Mike DeHaan: [1:47] And then but like from there, they had a lot of struggles and 2008 happened and it kind of ruined everything. But now it's finally starting to come out of it. You're starting to see, like, real estate things, I guess, opportunities present themselves. But it was interesting because one of the big things that I noticed there was how heavily they're pushing for, like, outside investment. Yeah. I've seen that. So as I would go around, yeah, I would walk past a couple real estate offices, especially in some of the beach towns we were in, and you would see a lot of listings. And they would very explicitly say that this meets the requirement for Portugal's golden visa, which is basically this perk that they have that if you bring a certain amount of money and you invest there, they will basically make you an honorary citizen and give you all of the perks, right, that will expedite a verse seven to go through the actual citizenship process. And then there would always be things talking about the rent potential, the Airbnb potential, you know, the upside of the neighborhoods, things like that. Like, that was what led most of the listings as opposed to, you know, desirable school district are the kind of things that you see in The States.

Dan Austin: [2:46] Yeah. I've heard quite a few people investing over there these days and like actually moving and living there. When I say quite a few, probably like half a dozen in the last year of people I've talked to that have lived there a long time or have made investments over there just because it seems like it's worth diversifying a little bit and have a full like landing spot.

Mike DeHaan: [3:05] Yeah. I mean, it makes absolutely. I mean, it's a beautiful area. It's easy to get to. It's unbelievably cheap for especially for being in Europe, which is, you know, usually kind of expensive. Dude, we we went to some of these restaurants. There's there's one night in particular, we were in this kinda small local town, and it was like a Portuguese tapas style. Chops traditionally Spanish do the same thing in Portugal. And we ordered almost everything on the menu. It was me and these two other guys. And we had a bottle of wine, and we had two desserts. It was like 12 things of food, you know, like that are all all shareable plates. Our total bill was a €100. It's not bad at all. Which is like a $120 for like so much Yeah. Just bomb food. You I was like, if we did this in The States, it'd be $500.

Dan Austin: [3:48] I paid a $150 for breakfast in San Diego last week.

Mike DeHaan: [3:52] Exactly. Right.

Dan Austin: [3:53] Yeah. And it was like eggs and bacon.

Mike DeHaan: [3:55] Yeah. Yeah. So this is just like, you know, fresh caught octopus, like all kinds of fish, like, you know That sounds amazing. Everything. It was awesome. Plus, like, plus the bottle of wine was I think €33 for like a super good bottle of wine.

Dan Austin: [4:07] Carlos Rossi. Or was it Franzia? Yeah. Exactly.

Mike DeHaan: [4:10] Yeah. Franzia. Yeah. They came in a box and they like bring it out on like a little cart. You have to they don't even give you a glass, you have to put your mouth under it and like twist thing. I bet

Dan Austin: [4:19] you probably don't even see that there. Like in stores.

Mike DeHaan: [4:22] No. Not really. Yeah. Yeah. Not really. I mean just I mean, that's always a thing in Europe in general is alcohol culture is just so different and it's so cheap. Yeah. I mean, there was one one night when we were in Porto and we were going to watch the sunset over like the main area, which is a big thing to do there. And I went and got two bottles of sangria from the store for two It's euros good stuff.

Dan Austin: [4:42] It's like mad dog basically, right?

Mike DeHaan: [4:44] Pretty much, yeah. Yeah. And know, just like whenever I spend time overseas like that, I always just it's like spending time, especially in areas where you're kinda off the beaten path a little bit and you're around a lot of locals. It always just makes me realize how much so many Americans need to travel, especially with like how often everybody here just complains about everything. And then you go places that

Dan Austin: [5:06] Right.

Mike DeHaan: [5:07] Are just like simpler, right, in nature.

Dan Austin: [5:10] Yeah. It's like a perspective. Exactly.

Mike DeHaan: [5:12] Like, why do people complain about 99% of the stuff that we have going on here? Like, you know, in like legit, like decent countries, people have like actual problems. It's not like you need to go to Afghanistan to find people with actual problems. You know? Mean like Yeah.

Dan Austin: [5:27] I think too, even for just a lot of people, just move out of your town and go around the country and see other stuff too. Yeah. There's like, but I think just to speak to your point, like the vast majority of people are super limited in leaving, and it's expensive and I get why a lot of people in America can't do it, but like, just leaving your own town that you live in more than once a week to go to, you know, Mexico. Or once a year to go to Mexico for a week, know? Like get out and like travel, see things, get a little bit of variety, you know, meet new people.

Mike DeHaan: [5:55] You know what the crazy thing is though? Like it honestly isn't that expensive. So our trip that we just did around Well you're affluent. Well yeah, yeah. But like when you compare it to traveling in The United States, it is one to one similar. Right. And honestly, depending on where you go overseas, it's actually cheaper a lot of that time. Yeah. So like our flights over to Portugal were cheaper than when I went down to LA for my grandma's funeral in March.

Dan Austin: [6:18] Oh, yeah, yeah, I agree. I don't think that international travel is cost prohibitive. I just think travel in general for many people, the way in America they prioritize their, I guess, their dollar, account which where they spend their money, that people just don't do it because of that cost prohibition.

Mike DeHaan: [6:33] Yeah. So the time component is so huge too because we don't have a lot of PTO here for a lot of people. Right. And so people have to choose between going home for Christmas or traveling for their kids spring break to freaking, I don't know, comp or whatever or going overseas. Go get drug for a week. Yeah. Yeah. Right. But you do need more time to go overseas because you have the travel time which is longer and you're also just completely booked for the first like couple days because of jet lag. Right. Yeah. That does suck. Either way, if you have the means to do so, and if you're listening to this, most people probably do. Right? Or you should get like save up for it. Or you will. Yeah. For sure. I do think it is a good like eye opening thing to just like get out of The US and just go see You

Dan Austin: [7:14] know? Yeah. Travel is such a good thing. That's one of the, I feel like, pillars I look at as a parent and things you can provide to your children, and not as just unique worldly perspectives. And Yeah. To do that, you you know, you could I guess watch National Geographic channel, but I don't think that that counts as Yeah. Learning new cultures. So I think that's vastly important compared to anything you can teach your children too, is to understand and be understanding of other cultures, see them experience, and then you can actually like make really educated decisions as an adult of what you would wanna be and do in life.

Mike DeHaan: [7:48] Exactly. And you know, in a time when I just feel like all of our media, and I see this stuff, you know, even like GoBundance and things like that recently, where people are like, I feel like the world just feels so heavy right now. There's like a lot of stuff going You go over a lot of places. I know I went to several countries over the past couple weeks. It doesn't feel that way there. Yeah. People are just like legitimately more chill about stuff.

Dan Austin: [8:11] Yeah.

Mike DeHaan: [8:11] Right? And just like the lifestyle is completely different. And it's not because they're over there fucking around. They just have like different views in life. Like they just are like not as worried about, I don't know, the political stuff that we have here. Just don't necessarily know. But the funny thing is is they still have those problems. It just doesn't consume their culture like it does here for some reason.

Dan Austin: [8:31] Sure. Yeah. So exactly.

Mike DeHaan: [8:33] Anyways, but yeah, man, I appreciate you holding down the the ship a little bit. I was gone. I was able to hop on a couple calls. I know we had some ups and downs. And we actually had a pretty challenging first week. Honestly, challenging. Think it went well. Interesting first week because you were traveling too. So I think that was one of the first weeks that we've had since we've started this business in general where we've both been gone.

Dan Austin: [8:52] Yeah.

Mike DeHaan: [8:52] And then you were able to kinda like do some analysis and and pick up some of the stuff for that second week. So what are some of your takeaways for people that wanna be able to build a business that allows you to step away a little bit? What were some of the things that we picked up? Where where have we hit it on the nose? Where have we missed?

Dan Austin: [9:07] Well, I I guess I would say the two things that I think about most is like being able to delegate and then also trusting your staff to do the work, but then you as a person being able to delegate and let it go, which also means you need to trust your staff to do it. You also need to be okay when things miss because inevitably, you know, there's always kind of these last minute things that you don't realize that you are controlling or you have to like be part of to make it happen. And so then being okay with a miss on that when you step away and just kinda throw it over the fence and don't get upset if it doesn't get done properly because it's really on you for not actually fully delegating that process or fully being outside of that process. There's just a ton of stuff. I think the best part about not being around is you realize what you are still needed for. Yeah. And so, being able to step away at some interval I think is really good. Like step away, recognize that there's gonna be some emergencies and fires that have to be put out, and those are probably the first places you should work on when you get back to actually delegate or to add systems, like more systems or make your systems more robust around those areas.

Mike DeHaan: [10:18] Yeah. Absolutely. And I and I think the thing that things that get overlooked when you are always present is like the small stuff. Mhmm. You said that to me, it's like it was very apparent, the small knowledge gaps in certain things that apparently only I have, which when you said that and that message to me, I couldn't even think about what that would have been. Right. Because I feel like at this point, I've given everybody everything.

Dan Austin: [10:38] Right. Yep. So Yeah. I think there's just like little things that everybody builds up over time, and you're right, you don't know until something like, does it work? And you're going, well, that didn't work. Mhmm. Or I guess, too, if you're getting messaged about stuff and getting questioned about things, that's probably a knowledge gap in the team. Yeah. Or a perceived knowledge gap, but more more or less a responsibility gap in understanding what part of the decision making process has been delegated. Because sometimes, your staff might have a 100% capability in your mind to do something, but in their mind, they need you to make the decision. When really, you're like, I'm okay with you making the decision. Mhmm. And as they get the opportunity to make enough of those decisions, then they're able to kind of figure out what the boundaries are of that decision making and learn what kind of decisions you would make, or learn that you're okay with decisions that you don't make not being perfect.

Mike DeHaan: [11:30] Yeah. And that that's a big thing too is when, like giving people that confidence, but also I guess the thing that I discovered in the first couple days was it's not even always necessarily a knowledge gap, but more just like a communication gap where people don't necessarily know who holds the knowledge that they're looking for. Right. Because they've always just sort of come to me or to you for stuff. And then we'll just reply a quick answer when and it's funny. All of a sudden, like, the concept of, like, an org chart just, makes sense to

Dan Austin: [11:57] me. Yeah.

Mike DeHaan: [11:57] Yeah. Well It's like if we were able to like more specifically lay that out and what everyone's roles and responsibilities are, which we do for each individual, but that's never been like made aware to the whole company. Right.

Dan Austin: [12:07] Right. And as you're transitioning, so the tough thing is too when you're transitioning additional responsibilities to staff, people, you know, all that sort of stuff, there's always this inevitable growth issue, and like, it's a double edged sword because as as a leader or an owner of your company, you should be the glue that holds the organization together, But the problem is, if that glue is absolutely imperative to people being able to find knowledge or to get things, like you're the connector, that's a problem. Mhmm. Because ultimately, if you started your business and you run your business, like you know every little frack of the business, like you know every little corner and creek of everything, and it's impossible for new hires to know that sort of stuff, but as a result, you end up becoming that that kind of like glue that finds the knowledge or connects people, and if you can still be the glue organizationally and culturally, but then allow your staff to figure out how to connect to the right people, that's like the ultimate goal, right? Because then you're no longer relied upon to say, well, what should I do here? Who do I talk to? Or where is this? Just like simple little things like that build up. Mhmm.

Mike DeHaan: [13:12] Yeah. Yeah, absolutely. You know, it's it's the compounding issues and that's where I feel like a lot of people's business tend to explode. Right. Right? Or implode, more that depression goes. Explode. Because those those little things will start to just stack up over and over and over again, and all of a sudden it just peters over the cliff. Yeah.

Dan Austin: [13:29] Would say though, overall it was, our team did a really good job when we were both gone, and then last week when you were gone, think everybody stepped up in general and really made a a big dent in things that we were currently working on before we're traveling, but also just kinda knew in general what to do, knew in general the next steps. And so, I think overall is good, my analysis for me. Mhmm.

Mike DeHaan: [13:52] Yeah. Awesome. Yeah. That's good. And because I mean, it wasn't like it was an easy couple weeks either. We had some some challenges with some closings. Yeah.

Dan Austin: [13:59] A lot of challenges.

Mike DeHaan: [14:00] We had some major challenges with a couple of partners that are part of our partnership program who like, honestly, out of the woodwork suddenly became like major issues that we've had to deal with. Yep. And we were able to sort of like get the ball rolling, and I'll be dealing with those this week. But it's just I think that's why it's also important to just make sure that your general processes and your vision is kind of outlined so that when there are sort of, I guess, hurdles that are thrown in, the team at least knows how to jump for them.

Dan Austin: [14:27] Right?

Mike DeHaan: [14:27] Totally. So but yeah. And then also too, I'll say as like a owner or like a CEO, it's valuable thing about, like, doing travel like this while your business is operating and being able to sort of trust in the process to run, is for me it was very valuable to be able to spend a lot of time just thinking without having to be worried about the constant daily noise, which is so difficult when you're kinda just in the treadmill. And even though everyone says you need to work on your business, not in your business, it's hard to do when like your business is right there and you're kind of always working in it. Yeah. Right? But to like having that, I guess, air gap, right, of, you know, me being overseas, because even if I had availability, I couldn't really do a lot because I was nine hours ahead. You know? So like my day to day availability was just different. But it gave me a lot of time to just sort of think and do some new planning, and it was, you know, it was well aligned with Alex Remosi's $100,000,000 leads presentation that came out the day that I left, and so I would like listen to that audiobook and just put some thoughts and stuff together on it.

Dan Austin: [15:30] I was listening to it, I was like, oh my god, there's so much information in here, there's no way I could just only listen to it. Need to visually see it.

Mike DeHaan: [15:37] Yeah. Yeah. So I I have like a notebook with it, so I could like take some notes in. I found myself very regularly just like rewinding it for like five to ten minutes and like real and listening to it over and over again. Yeah. But yeah, no, I I I have some copies of the hard book and what I plan to do is the same as what I did with offers, and I'm still doing with offers actually, is like listen to it and read it and take notes on it and go section by section and then plan to put some stuff But it's so funny you say that though because this is this is one of my biggest sort of pet peeves with like the entrepreneurship space right now. As there's all these people that are just such, I know what is, I think what do they say, they're mental masturbators, Like they're always just like, I need to consume everything. But there was like this whole thing of like, I listened to the e book like in the first I'm like, you didn't get anything out of it if you listened to that book just like four and a half hours straight.

Dan Austin: [16:25] There's no way you could, unless you're a genius.

Mike DeHaan: [16:27] There's no way. It's literally impossible. Right? I think that's kind of the problem with a lot of people and why they feel like they consume a lot of good content but don't get anywhere. It's because you just it like just goes in one ear and out the other, and you never actually like actively are listening and trying to put put into action any stuff in there.

Dan Austin: [16:47] Yeah. Like my goal, like when I read books, which I rarely anymore read books because I freaking hate reading, like unless it's a topic on Yeah. Or something that specifically I want to know or read from a business standpoint, then I'll read it. And like recently I have, this year I've read a handful of books, but my goal is always to have like a a one page document, because you will forget immediately what's in that book. I don't know how people like when you're, especially instructional like with the $100,000,000 leads, that's very instructional. Like that's a textbook that reads like a a novel, almost, you know what I mean? Like, he does a really good job telling the story of things and really lining things up, but it's a freaking textbook. And so, if you can put all the ideas pictorially or with bullet points, or both, or whatever on a one page document, I think you can reference that and be like, oh yeah. Assuming you're going to actually implement what you've read, otherwise why'd you read it?

Mike DeHaan: [17:42] Yeah. Yeah. Yeah. But, you know, that's Most people though, they don't read it to apply it. They read it to say that they did, or they'll say that they read 50 books this year.

Dan Austin: [17:50] Most of them, yeah, was gonna say, most people read books, and they have no reason to read the book, because they don't, you know what I Yeah. Like they're preparing to maybe be a business owner, preparing to be in real estate, so they just keep reading books, and keep reading books, but none of it actually aligns with anywhere you're at, so the applicability of it is like not there, which is the big part of like reading, like to learn, and then practicing is like the 51% of the reading and learning, right? You have to put it into practice and realize how bad you suck at it, and then adapt that to your style, adapt that to your business, or whatever you're doing that that book is applying towards. Otherwise, you're just reading, and like you you said, mental masturbation, there's no there's no use.

Mike DeHaan: [18:32] Yeah. And well, and also too, the problem is is it becomes productive procrastination for people. Right? Like, they they will read these books to hold off from doing the actual hard things on their business. So I've talked to people that are like, I'm getting ready to start my business, but I need to read traction first, so I know how to run my business the I'm right like, honestly, I've I've read traction, I guess, once early on in my career, and I was like, okay. I kinda get what they're saying. Didn't put any of it into action. And then we went through a phase earlier this year, we were like, let's try and like do that. And ultimately, like, is like a lot of freaking work that we aren't ready to do right now, but it was very applicable. Right. But

Dan Austin: [19:08] You know what was funny though? EOS, reading that, like reading traction, the whole thing when you actually can use it, it's way harder to do. It's so much harder. Like, when you read it, like you said you read it before, could apply it, you're like, oh, I get it. Like, okay, that totally makes sense. But then if you're reading it knowing how to like plug it into your biz, or knowing that you need to plug it into your business, then it's it's a total then that's why there's like, eos implementers and all that sort of stuff out there, because it is fascinatingly challenging. Yeah. And same thing with like, you know, reading the Hermosy, $100,000,000 offers, $100,000,000 leads. It's a great book to read, absolutely hard to implement if you aren't on your toes and actually really trying to like plug this in at the full capacity that he's offering.

Mike DeHaan: [19:51] Yeah. Well, I think I think the biggest takeaway with all that, right, is it's just so important to take like imperfect action as fast as you can and be worried about wasting time or losing money, and just understand that that's the price of the education. Know? And I think that there's this whole stigma of like, I don't know if it's like the the fear of failure comes from just like our school system where you just like need to be getting a's and things like that all the time. Right. You kinda have to take your licks in any sort of business. Yep. And honestly, if you go through and you hit it out of the park right away, you got super lucky, you know, or you're, I don't even know why that would happen. But it's like, it just, besides luck honestly because

Dan Austin: [20:30] I don't think you can. Yeah. I don't think you can because I also strongly believe, especially when you're reading or you're learning from somebody else, even if you're hiring a consultant to come in and help you do something in your business, like, it still has to be adapted to you. So, using the school grading system, if you were to implement a system or a process or something that you learned and you did it like like you said, imperfect action, and you got a d from the traditional, you know, scorecard of of the school system, that's awesome because you've got that d and then you have all the other bullshit that you maybe didn't succeed on according to whatever societal norms are, and then the rest of it, just adapt to your business, and you adapt to yourself. You know, it's like, you can't go and, there's a reason why there's people out there that are social media influencers, and like, these are the five steps I took, and it's like, absolutely you took those, but that's for you, that's your brand, that's your personality, that's how it works for you. Not gonna work for this, for everybody that way, so that, you need to take the basics of what they're showing you and talking to you about, and adapting it to you, and if you can't do that, then you're just gonna come off trying to be like x influencer or whatever that you're learning from. Exactly.

Mike DeHaan: [21:40] Yeah. And that's why also too, if there's anyone that ever tries to sell you on like, you go from I'm brand new to I'm making my salary in like a month or thirty days or whatever bullshit people's about there, there should be an immediate red flag that BS has at all. Right. Like ever. For sure. So cool. So I guess, know, business wise, I know we had a couple deals that got done while we were gone. I got to wire a $160 while I was sitting on a catamaran in the Mediterranean for a loan Yeah. That we put Which was, you know, I was like, I feel it's like this baller status right now. But we closed in a property, we had some loans, we had a couple closings.

Dan Austin: [22:20] Yeah, was funny that whole story where it was like, I'll just dive into that because like that was one of those things where I was like, oh, I've over committed myself dollar wise to multiple people because we have a transaction. Well, one of the biggest reasons why is because a friend of ours called and asked if we could, you know, do a loan. I like, absolutely, man. Like, we got the money in the bank. I'm like, let's do it. And we regularly do that through our our lending, our Harmony lending business, which regularly that fund taps out because we just know so many, I would say, good people that we know, like, and trust that we lend to anytime we get an opportunity. But, on one of our partners is we're doing a double close, and so we had a seller that wanted to use their contract and wanted to use their title company, and they wanted us to be the end buyer, which we are because through our partnership program, but typically our partners will end up taking title on the property, right? Mhmm. And so, we're like, okay, we

Mike DeHaan: [23:10] can make that happen, because

Dan Austin: [23:11] they were selling at a good price, they're like, here's the rules, you can buy my house at that price if you follow the rules. So it's like, yeah, okay, cool. Well, because of that, we need to have cash reserves to be able to close on it, and then we're immediately taking the property, the title, and moving it over to our partner's title company, and using a PSA to sell to them immediately, so the same day, it's a double close at two title companies. So a lot of risk there, and so we need to have those funds available at least for several days, and so, I was like, oh shit. I told Aaron, I was like, we'll do a loan with you, and then I was like, oh crap, know, in a week we're gonna have to spend that money too, so I double spent it. So, I text Mike on Slack, was like, hey, you got some cash you can, you know, just throw in there? He's like, yeah, think so.

Mike DeHaan: [23:53] Yeah. Yeah. I was able I was able to figure it out. But like I was like on a boat going like in and out of like service because we were along the Amalfi Coast. Don't know Amalfi, the whatever the Southern Coast is of Portugal. Amalfi's in Italy. And it was like every time it would like get in service, I would like refresh my account, like my login. And I was like, just just trying to get it to like go and then like it would like fail and then I was able to get it going.

Dan Austin: [24:17] Yeah. That's funny. That was good. That was actually a kind of fun day because I went out to the house that we had bought a couple weeks ago and neither of us have walked it or seen it or we just basically kind of bought it, right? Because we knew it was a good deal, we obviously got pictures, but I went out and walked it and was looking at the neighborhood, I was like, that's sick, this is nice. Like, everybody's grass is green and cut, there's sidewalks that are clean. The house we bought is actually the shooter is one of the neighborhood, which I appreciate. Brand new roof though, good final siding, all, you know, it was built like 2005, so it's like the true traditional, which isn't the first one we've bought, but I mean, the first one I think we've bought to keep is a rental or a, you know, some longer exit. And so, yeah, I mean, that obviously needs work, right, but the exterior is pretty tight and going in on the inside, it just needs your typical carpet paint upgrades, and so I was

Mike DeHaan: [25:07] like, damn, this is badass. Nice. Well, I mean, that's the old adage. Right? You wanna buy the worst house in the best neighborhood, and this is definitely that. And and the re it's the first rental that we bought this year just because of interest rates and things like that. And the only reason we bought this one is because it was on seller finance.

Dan Austin: [25:21] Mhmm. You

Mike DeHaan: [25:22] know, we're buying it at a discount on seller finance with what are we at? Like 5% down, and then we have a 5% interest loan with like a fifty eight year amortization or something crazy. So our monthly payment's super low compared to what we're gonna be able to rent it for. And then our plan is to actually rent it on a lease to own. So we'll be able to get someone to come in, put, you know, 10% down. We'll recover all of our down payment. They'll be responsible for the maintenance and everything like that, and then we should have all of our cash out as well as some pretty decent cash flow on a month to month basis. So it's basically like a BRRRR method by using seller financing and a kind of way to play that similar model with the current interest rate situation, which makes it really challenging.

Dan Austin: [26:05] Yep. I think I did a Friday Focus. I can't remember which Friday Focus, but it was like 55 or 56 Yeah. On the deal breakdown of that one, like all the details, and talk about what exits we were going to do with this one. And so we'll keep updating everybody on this, and we'll do another Friday Focus deal deep dive on what the exits Yep. Six. Yeah. Friday Focus 56. And we'll explain the whole process to you guys so you kinda get to see. I mean, who knows? Hopefully, we make money, we might lose money. You'll have to tune in and watch. Find out.

Mike DeHaan: [26:35] I think for us to lose on it, something really bad would have to happen. Something pretty crazy.

Dan Austin: [26:39] I think the only I think the only thing that's the only thing that's different that would maybe be different is I'm kinda like, I don't even wanna do a lease option. I wanna just keep this thing forever. I'm in love with it now. You know

Mike DeHaan: [26:50] that's not our MO though.

Dan Austin: [26:52] I know. But you know what I mean? It's like a lease option. I feel like I'm giving away I'm giving away part of it. Know what I mean? I'm like, I kinda wanna keep this.

Mike DeHaan: [26:58] Oh, see. I just wanna sell everything right now. I just don't give a fuck.

Dan Austin: [27:01] Yeah. I know. Well, I was like, well, maybe we should sell another single family and then just double down on this place and start buying Vinyl Villages that we keep for on that five to seven time horizon because honestly, now's the time to buy those, or it feels like, I shouldn't say now's the time, it feels like there's opportunity in the Vinyl Village with interest rates the way to they pick up some of these on seller financing and whatnot, or just better terms, and if you can reposition some of the equity out of other properties into those, you know, there probably is a better appreciation curve in the coming five years on the newer, better houses. Yeah.

Mike DeHaan: [27:36] We should, we honestly should look into that, just like selling off like a lot of our random older single single families that we now have such a low return on equity on. I know we talked about this with our our Mhmm. Episode that actually did super well about our rental properties worth it. Yeah. But like, it were kind of us at that point with so many of ours where our return equity is so low. I think you're completely right. Like, if we sold a lot of those and we just targeted heavily, like, seller finance stuff that we could get with, a much lower interest payment or, like, a super low down payments, we could probably accumulate a lot more assets Yeah. You know, without having to rely on the banks and everything else. And there's definitely opportunity, especially out in Idaho. There's so many peoples. Like this one, for example, they owned it free and clear because it was somewhere that I think they lived, what, like ten years ago when they bought it. And then they retirees and

Dan Austin: [28:22] I don't even know what that was because I actually I skip traced them and they live in a $5,000,000 house in Italy on the coast, like, on a bluff overlooking the ocean in Maine. Really? I'm like, wild. Oh. Yeah. I know that. If look if you look out because they put their they had to put their address on all the documents of where we're gonna send them. Nice.

Mike DeHaan: [28:40] And I looked

Dan Austin: [28:41] it up. Was like, that's like baller status. Like, I feel like they're maybe connected to some politicians somehow to have I think he maybe lives, like, next to Joe Biden or something like that.

Mike DeHaan: [28:50] Who lives next to Joe Biden? That way, dude. If he lives next to Joe Biden, he's owning a house in Idaho. Like, yeah, that's the greatest way to get immediately Right. That shit. Right. Banned from Idaho forever. Right. Right. You know, like, because like, there there are a lot of people that are like that up there. Okay. And the problem is is that they've had such huge appreciation with their houses, they don't wanna sell them on the market because they will be giving up a lot of the paper gains they feel like they have. But on seller finance, we're willing to pay a little bit more for it if it has, you know, a little down payment and the past is good quality. Yep.

Dan Austin: [29:21] But, you know Totally. There's three things I keep coaching people on on these types of seller finance deals. You have to have some upside. Mhmm. Are you getting badass cash flow, like sick cash flow, like just, you can't say no to the cash flow? Are you getting a ton of equity, like are you buying the equity, like really good, like $100,000 on a $500,000 property, would say is pretty good equity, right? That's kinda what we're doing on this one actually. Or are you getting just sick ass terms, like really good leverage, right? So it's like principal only, by the time the balloon hits, you're gonna be able to sell this thing, and because of the spread on the leverage and appreciation over time, you're walking away with great money. So now, if you can break even after set asides on cash flow, or you're paying a little bit more because you have a ton of equity, and you're sitting on it, it changes the terms of the game when you think about traditional investing. So if you look at those three things, and you're going to negotiate with a seller on one of those three things, I okay the deal. Like, I get a lot of people ask me, well, what would you do in this situation? I'm like, do you have one of those three things? If not, negotiate one of those to be badass, and then you could be walking away with a great deal. Even if, imagine this, what if you lost $200 a month on a property, but you were getting a $100,000 given to you, basically?

Dan Austin: [30:32] Or

Mike DeHaan: [30:33] like you're having massive pay down. Mean, Good deal. That's what we've done with those little bout ish properties, is we're losing every month on those, but because there's 0% interest, like, debt pay down is it's not a $100,000, but it's out like $10 a year, a little more $12 a year. Right. Something like that. Yeah. So so even though we're technically losing $200 in cash, like, we're at still like a net positive $10,000 a year just because the principal pay down is so huge on that.

Dan Austin: [30:57] The pay down, and then you think about over time the appreciation, and we did buy those with some equity in them as So it's like you look at those, you start lining those things up, and it's like, I guess I tell people, I'm like, well, say you had to sit on a property for three years and you lost $200 a month, so $2,400 a year. So what is that, 7,200? Mhmm. $7,200 over three years? Is that my math sound? So $7,200 over three years in order to get a check for a $100,000 at the end of it. Everybody would make that investment. Yeah. Right? Well It's like put your, you know, putting your money on black, right? No one you're gonna get that money.

Mike DeHaan: [31:30] Yeah. But I mean, that's not saying that you should always just buy for appreciation or debt paid on things like that. Like, you all wanna have some reserves, but if you're in a position where you have like a healthy cash reserve, and it doesn't matter if something weird kinda happens, then you can start to explore that. But if you're someone that's new on your journey, you should absolutely be trying to get as much cash flow as you can early on because that's what's going to be your insurance policy for when bullshit does happen with the house.

Dan Austin: [31:52] This is the second point of the conversation I always point people to. So you and I, we have set up our portfolio and look at our portfolio as a way to absorb those losses in order to take bigger risks and take on projects that normally we wouldn't have done when we were earlier in this game, because we didn't have the portfolio cash flow to absorb it. So for example, this property that we just bought, we don't even have a plan, I mean we talked about it on paper what we're going to do, but we start debt servicing here in a couple weeks, it's $1,800 a month, we're not even blaming, like our portfolio will absorb it, and it's allowing us to make the best decision possible for this property, instead of jumping right into it, and worrying about, oh, we gotta get this thing sold, we gotta do this, we gotta restabilize it, it's okay. Like, if we don't wanna restabilize it, because interest rates are crazy, like, we can sit here just on the seller financing and pay $1,800 we don't have to sell it, and the reason why we're able to do that is because we have a portfolio that does absorb these, and will they all be winners? Maybe not, because we're we're using it to take larger risks, but when you do win, the idea is that

Mike DeHaan: [32:59] you win big. Exactly. And, you know, I think that's a that's a big reason too that I'm a firm believer, and if you're gonna do the rental property game, you should go big or don't do it at all, honestly. If you're gonna try and go, like, and buy three or four single family homes, you're gonna eventually get yourself into trouble because you're gonna have expenses that come up, there's no way your cash flow is gonna be that insane Unless you lie about it on Instagram and say that each one makes you $2 a month, which I know it's not true. Right. But, you know, but I but I rent every closet out at its own bedroom, you know. Going and establishing like a relatively sizable portfolio or balancing out with an active income business is just so so important. But, you know, a lot of people like to ignore that and just try to like get to their minimal cash flow as soon as possible and not have insurance policy. That's a great way to, you know, feel good for a year or two, but then ultimately have a hard time in a couple years when stuff does inevitably go wrong. You know, you can just never predict. It will happen. Even while I was gone, one of my properties had a flooding situation just because I was out of town. That's what happens. The second you leave town

Dan Austin: [34:03] It's the same property that's

Mike DeHaan: [34:04] had it. Fucking one, dude. Oh my god. It's like the fourth time. And and you know the weird thing is? Every August that I've owned it. I've owned it for four years. Every August, there's a water situation, and I don't know why.

Dan Austin: [34:17] We'll have to chat about that, figure that one out.

Mike DeHaan: [34:19] Yeah. It's really weird. And I've I've gone and I've you know, they've checked the pipes. We've checked like the plumbing for the entire house to see if there's like some sort of weird thing of, like, where it's, like, back flowing from somewhere or whatever. One point, it they said it was roots, but then, like, the people came to clean out the roots and there were no roots. One time they said that there was an issue with, like, wallow in the pipes, and then the person came to fix it. They're I don't even know what they're talking about. One time it was there putting tampons on the toilet. This time, I don't even know what the oh, actually, no. They said that this time it's because basically underneath the toilet, it wasn't directly attached to the pipe. There was like a gap there, so like it was causing an issue. So we fixed that. Like, I don't know. It doesn't make any sense. I have no idea what's going on.

Dan Austin: [35:04] It sounds like, yeah, we have a property in our portfolio that's like that, and every six weeks the floor drain and the laundry backs up, and I got a call from Roto Rooter, they're like, I just wanna get confirmation that you're okay with this. I was like, yeah, but I'm not paying you. They're like, wait, what? They're like, yeah, I'm not paying you. Was like, if you guys go out there, because I know Roto Rooter's also notoriously expensive, like $500 to do nothing. Yeah. And so they're like, okay. I like, yeah, call the tenant and if they're gonna pay for it, you're welcome to go out there. And so they did. They went out there and the tenant paid for it. Because I was like, I don't know what they're doing, but they're doing something to make it. It's the one where we have the state renting from us. So I was like, Oh. I don't know what they're doing over there. It's something weird. Right? And so I was kinda like, you know.

Mike DeHaan: [35:44] Freaking flushing rubber duckies down the toilet, dude. They do all sorts of dumb stuff.

Dan Austin: [35:49] But it's kind of a similar issue where you're like, don't know. It's kind of a mystery. So, yeah, that sucks, man.

Mike DeHaan: [35:53] Anyway, part of the game. That is property ownership though. But at the same time, because I have a decent sized portfolio, I don't really care. It is what it is.

Dan Austin: [36:00] Right. That's not hurting you every month to do that.

Mike DeHaan: [36:03] Yep. Yep. So cool. Either way, man. I'm glad to be back. I'm super excited to be reconnecting with all of our instant investor members. I know we had a lot of stuff going on, and I'm excited to get back to some calls because Yeah. We have a lot of things to do to start prepping for the next little bit with that. So if you guys haven't heard of our instant investor program before, it is our group mastermind where we are starting to get some people that are making some real money in there. So if you are interested in hearing more about what that looks like, basically, we give you the entire blueprint to build out business that's 100% identical to ours and a community of people that are making, at this point, the type of person getting up as much money as we are. And So we're killing it out there, man. They are killing it. But you can hit me up at Mike underscore Invest on Instagram, and I'd love to chat with you if that's something of interest to you. Anything else before we wrap up here, Dan?

Dan Austin: [36:50] No, man. Nope. That's it. Easy and good.

Mike DeHaan: [36:52] Cool. Alright, everybody. We appreciate you all listening. You could share this with anyone who's interested in real estate business or just some good banter. We would appreciate it. It's the easiest way to help grow the show. And besides that, if you, go and leave us a five star review, I really appreciate it. You're on a good streak there of getting five star reviews, and then it's always comes to net some flows. That also helps us show up better on the charts. Takes two seconds, helps out a ton. We greatly appreciate it. So anyways, guys, thanks for listening, and we'll talk to you all next week. See you.