Importance of a Lead Manager, How VR Might Effect Real Estate, The Gotcha's of "Buying A Business"

Dan Austin: [0:00] Us, that's one system we've been working on is that because if you're not properly following up or managing your leads, things fall through the cracks super easily, and now you're just, like, letting money drip through the cracks because those are deals or leads that could turn into deals. So when it gets messy, you wonder why, and we see this with a lot of newer investors, especially solopreneurs, where they're not really doing proper lead management or CRM management, is they're just running and gunning. They're kicking ass. They're still making money, but they're like, oh my gosh, dude. My CRM, I have so many leads that I'm not following up with. I know I'm doing a poor job. Like, that's like one of their number one issues that they have when they're starting out. And so that's why for us, when we have so many sales reps, like, it gets out of hand really quickly.

Mike DeHaan: [0:45] What's going on, guys? Welcome to this episode of the collecting keys real estate investing podcast. This is episode 118. If I could start seeing the number. I haven't done that for a long time. I should actually start doing

Dan Austin: [0:55] it again. I haven't noticed.

Mike DeHaan: [0:56] This is one eighteen. This is the Wednesday episode, the Mike and Dan show, where I, Mike DeHaan, and my cohost here, Dan Austin, talk about real estate investing, business, and whatever else we feel like.

Dan Austin: [1:10] I gotta close my Twitter. Sorry.

Mike DeHaan: [1:11] You gotta close your Twitter. Watch it. Got all your porno feeds on there.

Dan Austin: [1:16] Scrolling through God. Well, there's just it's such a hateful platform. There's so many I mean, it's all hate on Twitter. Love it.

Mike DeHaan: [1:22] That's all hate on Twitter. It's all porn on TikTok. You can't escape debauchery with all the platforms people use. Yeah. That's why I've never gotten into TikTok because like, honestly, one of the the first things that happened was, you know, I got TikTok like, oh, you need to like be on there. There's a lot of people using it whenever I log on. Literally, the first, like, three things are just like girls shaking their asses. I'm like, this is not good for me. Like, my my my marriage. So I'd be on here. Yeah. Well, you say you gotta train the algorithm. I'm like, yeah. But the problem is I pause on all those. You know? I'm a man. That's what happens. It is subconscious.

Dan Austin: [1:55] It's subconscious. Subconscious. Yeah.

Mike DeHaan: [1:57] Absolutely. Of, like, 15 year old boys getting on there. Dude, when I was like a middle schooler, high schooler, freaking doomed.

Dan Austin: [2:04] Good night. Like, six hours later, man.

Mike DeHaan: [2:08] Wouldn't have Seriously though. Right?

Dan Austin: [2:10] Yeah. Yeah. It's a problem. That's why it's so engaging. Yeah. Yeah. And that is why the US government does not want our children on it. Yeah.

Mike DeHaan: [2:17] Yes. That That in China. That in China. Yeah. Yeah. But I mean,

Dan Austin: [2:20] the gods got But China knows what we really want.

Mike DeHaan: [2:22] Well, totally. I mean, they they talked they talked about that forever. They're trying to poison the generation, and they're doing so very successfully. And it basically, you know, you fuck up like the newer generation, then it creates just issues for everyone in the future. Yeah. That's like a old CIA

Dan Austin: [2:36] thing that they've talked about since the Cold War. Well, Russians are trying to do the same thing, but Of course. The I think if you look at the demographics, China will implode within seventy years, so it won't matter.

Mike DeHaan: [2:47] Yeah. Probably. I don't know.

Dan Austin: [2:48] I have no idea. That's what the other experts say.

Mike DeHaan: [2:50] Yeah. But I mean, that's what, you know, The US did forever. Look at the entire Middle East. It was when it destabilized all those countries and now they kind of are in bad spot. But anyway, that's a big digression right off from the start. Yeah. That's weird. I promise we don't start we're not just all political on this show. But, yeah, real estate has been crazy though. We had a big, I guess, overview of all of our marketing with our one of our in house guys last week. And pretty much every single market that we are in, our cost per lead and cost per deal are like plummeting right now. Like in like, which is good way. It is selling season. Yeah. We have had Yeah. A huge increase in response rates on everything. And it's kinda funny. We we get to the point where we just have such a surplus of leads right now that it's hard to sort of figure out when you should be marking some of them dead. And you kind of end up with this zone where you have a lead that the guys will have a lead that they maybe wanna try and squeeze something out of just because it's gonna button something to choose from. So they'll push them off to the side to review it another And it'll be like, the notes are like, oh, well, they were super nasty towards the call rep.

Mike DeHaan: [3:58] They told her to go fuck herself, but they also said that they're getting divorced. So there's a motivation there. It's like, maybe we should keep the line open just in case something comes together.

Dan Austin: [4:08] Is this the the intermediate, the dot dirty laundry, dirty laundry pile?

Mike DeHaan: [4:14] Pretty much. Right? Like, can't quite decide if you're gonna clean it or not. Like, I

Dan Austin: [4:18] wore it. I wore it a little bit, but not enough to wash Exactly.

Mike DeHaan: [4:21] Right? You're but then eventually, what ultimately happens, you just throw it in the laundry, and that's what happens with all these leads too.

Dan Austin: [4:26] A week later, it's in the laundry Yeah. The dead lead basket.

Mike DeHaan: [4:29] Yeah. Week later, two weeks later, you come to your senses, and you're like, I just need to wash this thing and get rid of it, you know, which is totally fine. But it's been crazy, crazy busy. And the thing is too, with all these things, I don't know what it is, but with all the different markets that we are in, there's always an inverse relationship between the number of deals that we have in process in any market and how helpful the title and escrow company is. Maybe that's just because in the busy markets, everyone's busy, so they're like slammed. I don't know. But like, you know, was it in Memphis right now where we're closing a bunch of stuff? Completely unresponsive title and escrow.

Dan Austin: [5:08] Yeah. Yeah. They don't it's like, hey, by the way, we're not paying you to do a title and escrow, right? You shouldn't answer the phone. Smokes. Yeah. Yeah. You think that they'd be a little more responsive when you're doing that many deals with them too. I know in Spokane, our escrow agents reach out to us and like wanna know us and make sure we're happy.

Mike DeHaan: [5:25] Yeah. Just, it's funny, you forget about how valuable that role is to your company Yep. Until you have one that sucks. I think it

Dan Austin: [5:34] might be the most valuable role as an off market real estate company. The most valuable third party role is probably your title and escrow agent.

Mike DeHaan: [5:42] Yeah, absolutely. Because I mean, if you have a good one that kinda like gets the wholesale off market game, they know how to navigate the interesting sellers you have, they know the different kind of situations, They understand that it is different from a retail transaction where you have someone that is like organized and is gonna show up on time and do all those sort of things.

Dan Austin: [6:02] Yeah.

Mike DeHaan: [6:02] If the title and answer company isn't prepared for that, it just turns into a freaking headache, and you and home have to do their work for them. Yep. But if you have a good one, I mean, they'll go to bat. Like ours ours here, we had a deal a little while back where we had to do, like, a very last minute change on the transaction because, basically, the seller got to closing, and it was off $33 from where she needed to be. Yeah. And so we had to do an addendum to, like, the the documents, essentially, after she had signed.

Dan Austin: [6:31] Mhmm.

Mike DeHaan: [6:31] And our title and escrow, I guess our escrow agent drove to her house, got it notarized at her house, and then closed the deal. It's like, that's that's customer service right there.

Dan Austin: [6:40] That is legit. Yeah. And you gotta remember, like, title and escrow companies are like any other sales their their sales organization. Right? They they happen to sell title and escrow, title and or escrow services, right? And so they wanna make you happy, and if your title and escrow agent doesn't wanna make you happy, you should probably go somewhere else, to be honest, especially if you're just localized, you're working in one market, and you have multiple choices, go build those relationships with them because they're just as hungry to do that. Mean, I still get calls from other escrow agents to go to coffee and lunch because they want me to go over to their escrow company.

Mike DeHaan: [7:11] Yeah. And then you ghost them, you don't show up because you're too busy recording a podcast with me.

Dan Austin: [7:15] I did do that. I felt so bad. That was a weird interaction, that whole situation last time. What they are, it's an important piece of the puzzle, you gotta have a good one, and if you're not happy with them or they're not willing to like go the extra mile for you, there's somebody out there willing to do it. Trust me. Some companies you're gonna find out right away, they're like, we just don't do assignments, perfect, check them off your list, this is somebody you're not gonna work with for anything. It's not like their fault, it's just like, you have to have someone that does assignments, and that also means that they really don't deal with investors in general, they're probably more of a retail shop.

Mike DeHaan: [7:45] Yeah, and that's fine. Know, people have their niches. People aren't gonna be, you know, square They're definitely not gonna be square pegging They're the trying

Dan Austin: [7:51] to figure out their own stuff.

Mike DeHaan: [7:52] But, yeah, besides that, I mean, stuff is cruising. We've been really pushing the team, I think, to the limits right now. We've been super slammed. It's always indicative of we need to make our process is getting strained or our team is getting strained when I pop onto the CRM, and all of sudden, I'm like, this is a freaking disaster in here right now. It's just so unorganized. And it seems to happen about once a month. Right? And typically too, it is followed by when we have a major influx of leads after it's been like a little bit slow. Yep. People just are less organized. And the funny thing is too, especially if you have a sales team or even if you're running your own sales, you'll you'll know this. I was going through and there was tons of stuff that didn't have notes. It wasn't updated in the current status, all those sort of things. And I was talking to some of the sales guys, and they know exactly what's going on with every single conversation. Right? But I'm like, yeah. But what happens if you leave? What happens if this doesn't go anywhere for four months? Are you still gonna remember?

Dan Austin: [8:49] Right.

Mike DeHaan: [8:49] And having that bookkeeping I don't know. Bookkeeping isn't the right word. That sort of like good housekeeping, I guess, is really, really important, especially if you're gonna do any sort of scale.

Dan Austin: [8:58] Yeah. Was gonna say, like, us, that's one system we've been working on is that because if you're not properly following up or managing your leads, things fall through their cracks super easily, and now you're just, like, letting money drip through the cracks because those are deals or leads that could turn into deals. And so when it gets messy, you wonder why, and we see this with a lot of newer investors, especially solopreneurs, where they're not really doing proper lead management or CRM management, is they're just running a gun, and they're kicking ass. They're still making money, but they're like, oh my gosh, dude, my CRM, I have so many leads that I'm not following up with, I know I'm doing a poor job. Like, that's like one of their number one issues that they have when they're starting out, and so that's why for us, when we have so many sales reps, like, gets out of hand really quickly, and and it's kind of a bummer because the speed to lead matters, and then as leads age, and you didn't properly follow-up with them, they're just they're gone.

Mike DeHaan: [9:48] Yeah. Absolutely. I mean, they're gone, and that can be like the profitability of your business.

Dan Austin: [9:53] Yeah, they're in our pockets then.

Mike DeHaan: [9:55] Yeah, though,

Dan Austin: [9:56] right? You know? Or some other wholesaler that's gonna execute a great follow-up process.

Mike DeHaan: [10:00] And I think that's the biggest area that a lot of new people need to improve on too, and you know, our instant investor folks, that's one of the big things we focus on. Even on our coaching call today, we had a conversation where some guys were diving into their KPIs, and trying to figure out Mhmm. Where exactly their best leads and deals and stuff were coming from. And everyone always seems to think that we have like a really detailed process on all the stuff we look for. And ultimately, we keep it very simple. Right? We just look at how many leads come from each type of marketing, and that's about it. And we just focus on sales. Mhmm. And that's the biggest thing. If you are in a phase where you're doing some marketing and you're trying to figure out how to make your marketing better so you can close more deals and you're like a one or two man show, you probably need to focus on sales Yeah. And get better at that. And then you won't need to focus on your marketing as much. And that's something that's so understated in this. And the two kinds of that are the closers and then the the lead managers. Right? So people that actually do that follow-up with all those leads that are slipping through the cracks that we're just talking about, you know, and that's something that's easy enough to outsource too. So the episode that was this past Monday, Greg Brooks from Rocket Station, they have VAs that are already trained up to do all of this. We have our lead managers from there, and they absolutely crush it. And it's been the easiest plug and play.

Mike DeHaan: [11:14] Yeah. And since they've been with us, are reviving anywhere from eight to 15 leads per week that our guys have are going on and, you know, half the time turning into deals. Yep. Like, that's huge right there. Right? And that should absolutely be a focus we're trying to figure out, kind

Dan Austin: [11:30] of like, why your business isn't growing or not closing things. Absolutely. You want your sales to be focused on the hottest and and most fruitful leads, and letting your lead manager create and revive those ones that ended up going cold for whatever reason, or getting them just back in general to communicate with us after Yeah. Whatever happened. I do wish there was a way, I wish I could honestly say there's a secret sauce, because then I could sell it and bundle it, and like, hey, come buy my secret sauce to marketing and sales. Just name it after an animal. Right? We got like the I'm gonna call it gator sauce.

Mike DeHaan: [12:00] We got the narwhal method, know, some random fucking animal. The narwhal. Dude, what a cute little animal. Oh my gosh.

Dan Austin: [12:08] Do you know what a narwhal is? It's a was it a whale? Is it considered a whale? Or is it a Yeah.

Mike DeHaan: [12:13] It's a whale with I got with a tusk, a horn.

Dan Austin: [12:15] Yeah. Yeah. Yeah. It's a cute little I've got a ton of stuffy narwhals around my house, dude. But Yeah. It would be nice, but really, we get asked so often, what are you doing different, or like, what are you doing that's unique? It's like, you know, we have our systems, of course, but really, it's showing up and being consistent, and you're 100% correct about the marketing. There's only so much you could do on marketing, and if someone is gonna come to you and be like, dude, we can provide better marketing for you, it's like, nah. Yeah. You can't. Because you don't need better marketing. You need like a good set of copy, and you need a good standard mail letter that you're going to go and send out to people consistently. The list, the data management, you get that dialed in, there's nothing fancy there, you just follow a good procedure on picking some motivation, you don't gotta get all, don't have to divide by seven and find the remainder or anything, you know, it should just be simple, right, month over month, kinda hit your motivated list, and then just do that, and then like you said, then once those leads come in, the breakdown is just crushing the sales. A lot of people don't crush it on the sales, and that's okay. We actually had somebody on our call today that was worried, hey, I just don't know that I'm good enough at sales to bring somebody on to teach them the sales, and that's actually a really good point, because I don't think it matters, if you're not good at sales, that you could still bring somebody on that might actually Totally, I mean,

Mike DeHaan: [13:33] and that was our first experience, we brought on our our first acquisition manager too. And the thing is too, if if you're, like, new new and you're not good at the sales, and you're just not working your leads, even bringing someone that kinda sucks at sales, but it just works the leads is gonna be better.

Dan Austin: [13:47] Right.

Mike DeHaan: [13:47] So, like, our our first acquisition manager that we brought on knew pretty much nothing about real estate. Right? And we brought her on, and we just told her like what to offer, and she was really good at like the people part of it. And she closed seven deals in her first month that were already in our pipeline. 20 even new Yep. New opportunities. Right? So yeah, it's just something that gets overstated a lot. Sorry, overlooked a lot rather. But Absolutely. Either way too, if somebody tells you that they have some secret sauce, or they have some fancy name like Geo Arbitrage or they have You need to pull that

Dan Austin: [14:23] one out.

Mike DeHaan: [14:24] Mean, come on,

Dan Austin: [14:25] It's Cole, you're better than all marketing. It's all marketing.

Mike DeHaan: [14:27] It's all marketing, right? They have the gorilla groups or the elephant challenges or whatever the hell people do. Yeah. They're all just trying to sell you something. Yeah. You know, that that's the most unfortunate thing about this business is you can just repeat the same stuff that we're doing. And we're very open about what we do. I mean, if you listen to all of our episodes, Evan had an episode a while back where I listed out the exact direct mail copy that we send that we close deals with every single month. And it's not crazy complicated, but people just wanna pretend like it is. Yeah. If if you wanna, like, hear about some 22 year old that's discovered like the secret thing, but they're not telling you that they're really just like buying houses from their dad's rich friends, you know, you can go you can go listen to Bigger Pockets instead. They'll they'll give you that overview and all that.

Dan Austin: [15:13] Yeah. They'll give you the high level. Yeah. 10,000 foot view of how I became a billionaire by '22.

Mike DeHaan: [15:18] Yeah. Right. I became a billionaire by '22 with my dad's $100,000,000 rotating credit card. You know?

Dan Austin: [15:23] Gosh, dude. Yeah.

Mike DeHaan: [15:24] I don't think of anyone that's that big.

Dan Austin: [15:26] But anyway, you guys get the point. You get the point.

Mike DeHaan: [15:28] So we need to talk about something though, Dan. It's a very important issue. Oh, great. You caught me. I know. You're very excited. And I actually do think this is an interesting topic, but it's something that's popped up a couple times on different news feeds. But it is virtual reality and how that is going to affect real estate values. Okay. K? And there's an interesting I know, you're rolling your eyes. There is an interesting take on this though, where basically people are saying that and this is all driven by Apple's new VR headset that I guess is supposed to be super fancy,

Dan Austin: [15:59] which also just sounds like marketing. Which probably isn't nearly as good as what's already on

Mike DeHaan: [16:03] the idea. Like, I literally don't know anything about the tech behind it. But basically, the thought is as the VR becomes better and better, there's going to be less demand for nicer properties, for land, like things of that aren't gonna be as important because people are gonna be spending more time in the virtual world. Right? All of a sudden all of the earthly things

Dan Austin: [16:27] we gonna talk about the metaverse again and how that's gonna just, people are gonna Here's love why I think the whole argument that virtual reality will change people's complete perspective. So I think augmented reality has a really huge application in a lot of things. Yeah. Education, construction, there's just a ton of great for augmented reality, which is where you're still seeing the real world, but it's augmenting in, like, imagine building a building and you have to look at where the pipes for the plumbing go, versus where the electrical wires go to make sure they don't Totally run into each makes sense, you can do that. But why I think it's kind of a stupid argument is people, we're humans, and this is for the same reason why I don't think AI, although it can do detrimental damage to the world, it's not going to completely wreck the human race because at the end of the day, humans still like to be challenged, and they still like to do things, and still like to feel experiences like in the real world, right? So say you can go and get, you can put on your VR headset and just stare at the wall, and it looks like the ocean, you're like, oh, I don't need to go on vacation. It's like, no. That's not true at all. People still enjoy that real feeling, and I'm not saying that as an old, stodgy person that doesn't understand technology. Anything, it's like, oh, I'm gonna go climb a mountain on this VR headset.

Dan Austin: [17:41] That's really cool as like an opportunity, but there are people still that are into climbing mountains still gonna climb a mountain. Like that challenge, that physical challenge is going to be something you can't overcome.

Mike DeHaan: [17:50] I think that when it comes to novelty sort of things like that, that are lifetime experiences, sure. I think you're absolutely right. I think that when it comes to the actual real estate portion, it's more things like some of the smaller novelty stuff that people have in real estate that they currently value will become a lot less important. Like what?

Dan Austin: [18:11] Give me a good example.

Mike DeHaan: [18:12] For example, having a home theater. That's a thing that people pay money for that adds value to it because they want that theater experience. So something like that, right? That's a big thing.

Dan Austin: [18:23] I can see that going away, yeah.

Mike DeHaan: [18:25] Having even a large living space in general, if they're not gonna utilize it. That's the thing where people put spaces to entertain, Right? Like dining rooms, large backyards, even places with like general views and things like that. I don't I I do think that there's will be less demand for stuff like that in the future.

Dan Austin: [18:42] No. That's dumb. No. I don't agree. Basically, you're just saying people are gonna just wanna play video games all the time instead of having the bocce ball court that I'm going to put in my Like, you're gonna just do Apple VR bocce ball,

Mike DeHaan: [18:54] which I think is fun. Yeah. Instead of bocce ball, dude, they're gonna be playing freaking Beat Saber in ultra four d.

Dan Austin: [19:01] I don't even know what the hell that is. But I so I guess I don't totally disagree on, like, the real estate side of things, but I also think, like, 90% of why people have those items in their homes is to keep up with the Joneses anyways, and they're still gonna wanna have some ego. Yeah. So are they gonna have, oh, have six VR headsets so I can have more friends? You know? Or is it gonna be like, I still want the badass VR home theater where we sit in the room with the nice luxury couches and the popcorn machine, and then we all put VR headsets on to watch the movie? I could see that.

Mike DeHaan: [19:29] No. You don't get like bring your friends over, they're at their house, you're at your house, you put on your own VR headsets and you just hang out.

Dan Austin: [19:35] No. No. People still want human interaction. Like there's like there's that human element that you can't get over it.

Mike DeHaan: [19:40] See, this is where the generational divide between you and I really shines because I have friends and people younger than me especially that like the bulk of their social group is 100% on the internet, and it has been that way.

Dan Austin: [19:52] I believe that, but like would you do you not feel satisfied when you go and see them in person at all? Absolutely, I do. Like more so than like a text message.

Mike DeHaan: [20:02] I do for sure, but I would say that that's where I sort of lean on the older side. But if I look at some of my cousins, for example, that are in like their early mid twenties, that grew up playing online video games and those sort of things, and especially they went through college during the COVID era, they're extremely comfortable with Oh, being 100%

Dan Austin: [20:22] totally, and I'm comfortable with that too, having a good relationship with somebody, I mean shit, you and I don't even see each other in public very often anymore, unless we're at a conference. But like, I just still think there's that human element that you can't eliminate the need for people to come to your house and show off your new quartz countertops. I

Mike DeHaan: [20:38] know. I think that's kinda the

Dan Austin: [20:39] big question. I do think there's some other generational nuances that are changing what people want and need out of a home, but I don't think it has anything to do with VR.

Mike DeHaan: [20:48] See, I feel like what will happen is we're gonna end up with basically yet another divide in the already divided groups of people, where there's gonna be the plugged in and the unplugged. Mhmm. Right? There's going to be communities of people that just like live in their little 400 square foot flats that are always plugged in. They have cheap living. They, you know, do their whole thing, and that's where they get their value. And then we're gonna end up with the people that are like, I don't care if I live in a single wide that's from 1975, I'm on my 10 acres, and that's what makes me happy. You know, and then there will be spectrums on that on either side. Yeah.

Dan Austin: [21:22] Yeah. Yeah. Yeah. I get it. But it you know what? It's a good here's another analogy. It's like how I've always thought about runners. Right? There's a big divide between people that go into the gym and actually get fitness, and people that just go and jog outside for no good reason. Yeah, they're fucking dorks. There's a divide, and just like the VR people, I'll be able to walk into their house and take their VR off their head, because I'll be used to walking around in the environment and be like, now you got shit. Just like a runner, like you can't run forever.

Mike DeHaan: [21:46] Yeah. You can't run forever. I was like, say about runners because we're both meatheads in case you guys are new to this, but I was like, well, you can run really far, but you're gonna call when you have to remove your refrigerator. I mean, none of your runner friends can help you. Exactly. Exactly. And if I gotta run wherever you're going, I'm gonna get my car. So I'm definitely have a I'm a benefit there.

Dan Austin: [22:07] Right? Yeah. I just say runners are always running. Running from their problems, they're running for life, you know, they're always running from something. That's funny.

Mike DeHaan: [22:15] I forgot a lot of people that listen to this that are probably super into that too, so sorry. They're probably Yeah.

Dan Austin: [22:19] A lot of real estate people are into running. They're either super into weightlifting or super into running. I feel like those are the two dichotomies there.

Mike DeHaan: [22:26] There's something about people that are into business or high level CEOs, things like that too, that are just really into triathlons and marathons and these long endurance sports. Yeah. And I don't know if it's like the mental discipline that's associated with it that they like or what, but I don't know, I definitely just don't fit that. Yeah. But they love it. You know? People train like that like crazy.

Dan Austin: [22:49] Yeah. Like the iron the Ironman athletes that yeah. They're always some successful entrepreneur or CEO of a company.

Mike DeHaan: [22:55] Totally. Yeah. When they're but they're like the CEO of of some Fortune 500 company when they're not training three hours a day for their, you know, Hawaii Ironman. Maybe that's what it is, is they're the only people that have time to train like that. Everyone else is too busy working.

Dan Austin: [23:08] When you're a CEO, well, because there's a lot of thinking as a You gotta consume a lot of information, and to do that, you gotta be active, otherwise you just turn into a blah blah.

Mike DeHaan: [23:15] Yeah. I guess. I don't know. But, yeah, outside of that though, I don't think there's anything too crazy in the real estate world that I've seen. I don't even know what rates and stuff are looking like right now. I feel like just kinda been They're a little

Dan Austin: [23:27] over 7% still. They're high. I haven't seen them coming down.

Mike DeHaan: [23:30] I feel like in the general news, the real estate market is just so not cool anymore.

Dan Austin: [23:34] They're definitely not talking

Mike DeHaan: [23:35] about it.

Dan Austin: [23:35] No. Inflation's kinda like, they're still there, but they're not really talking about it. There was some interesting conversation. Who was it? Maybe Aaron Amuchastig, you said this? He was explaining I don't know if you guys follow him on Instagram, but I think I don't even try to spell his name, but I think he was talking about it like how the inflation, even today, which is a little bit lower, still brings into account on the twelve month rolling average two of the highest months of inflation last year, which would have been May and June, or April and May. And if you cut those off, inflation's actually getting quite a bit lower already, and so that would indicate that maybe, in a couple months, they might actually pause on rate increases, or the next time that the Fed meets up, they'll pause on the rate increases. And so, I don't know what your perspective on this or if you have a reasonable crystal ball thought here, but if they start pausing, does that just mean people with money are ready to start moving with it? I

Mike DeHaan: [24:31] don't know.

Dan Austin: [24:31] Especially if they pause and then they hopefully this is my I hope that they don't try to decrease rates too soon.

Mike DeHaan: [24:38] Yeah. I mean, it's just so hard to even know what's going on. Well, problem is too, we're kinda nearing the election run up season. You know, election season's two years Yeah. These days. The presidency is such a freaking joke because So dumb. You know, they get elected. They spend the first year just like basically giving the middle finger to the other side and just like changing everything. Then they spend the entire like the second half of their term getting ready to try and get reelected. So nothing ever actually gets done, right?

Dan Austin: [25:08] Oh, dude. It's pretty bad.

Mike DeHaan: [25:10] And so now right now no one's gonna make any moves because they don't wanna like jeopardize their whole campaign. So I I I don't know if they're gonna do anything. Right? They're just gonna kinda sit there and wait and see what happens.

Dan Austin: [25:22] Well, obviously, the sitting party is really incentivized. And the Fed, mind you, has does not get controlled by the executive branch or any of the branches for that matter in the government. The Fed's kind of separate, so they are free to make their decisions. But if they're leaning one party or the other, they may, during election season, do something that would boost the economy or make it feel like the economy's doing because that's always a data point for some reason, even if it's a small snapshot. So if they decide to lower rates in the maybe Q four of this year, I just think that would be too soon and that you'd have a lot of money flooding right back into it. The stock market would react very, very positively, which would drive inflation back up. Yeah. It's kinda one of those things like you just gotta let this run its course so that we can all be happy again in the long term from a real estate perspective.

Mike DeHaan: [26:10] Yeah. So it is interesting though looking at just the uncertainty with the rates. So something that, we were on a GoBundance call, was it last week? So GoBundance is a group that Dan and I are in. It's like a millionaire's mastermind with a lot of high level thinkers in there. Like pretty much every a player you can think of in the real estate space is in there. Some awesome people. Brandon Turner, super big names all throughout it. But the CEO was saying that they're doing so the CEO now, he was a personal assistant of one of like the founding members that's worth like several 100,000,000. Now he's done very well for himself too. But they're saying what they're doing to basically hedge the inflation risk or, the interest rate risk is all of their, like, lines of credit, anything that they have that has adjustable rates or potentially revolving grades, they are drawing all of them and then paying to lock them at whatever the current rate is. Right? So even right now, if they're pulling it at 7%, they're worried about it potentially going up to 12% in the next couple years. Pulling all of them, locking them at current rates, and then putting them into basically like a what do they call it? Money market fund.

Mike DeHaan: [27:20] Thank you. The money market accounts that pay like 5%. So they have like a little bit of a balancing out the expense that they have, a little bit of money coming in from that. And then just waiting to see what happens, because that way if rates go up, they're still at a lower rate. If rates go down in the next year, they'll just refinance. Yep. And they'll just get that that rate adjusted, which will have an associated cost with it. But if you look at the opportunity cost of money, you know, if you're someone that has like lines of credit or things like that that you use to Mhmm. Buy property, use it to lend out, to use for loans, use it to operate a business, things like that. If all of sudden the rates increase 50%, 60%, like, would be extremely detrimental Mhmm. Versus the holding cost that you would have right now just drawing the entire thing.

Dan Austin: [28:05] Yep.

Mike DeHaan: [28:05] You know? And and like, when they're talking about what they're doing, they're pulling like multi 7 figures. So they're gonna be taking on I think they're actually gonna be taking on almost like multi 7 figures worth of holding costs just to be sitting on those loans. Just to keep that money.

Dan Austin: [28:20] But it does make sense because there is some interest rate arbitrage there because if it does, I mean, if you're pulling a seven and it hops up to, you know, even eight, but say hypothetically, it does hop up to to 12% and you're locked in at seven, I mean, the prices for what they're investing in are going to adjust whether they're buying businesses, investing in businesses, investing in startups, investing in real estate, whatever, they now have the upper hand because everything cash is key. Equity and net worth is awesome, but cash is super critical in a time like that.

Mike DeHaan: [28:49] Yeah. Well, think that the key thing is that you're taking the question, the unknown factor away from the whole thing. Right? And you can project five years of business with a 7% expense on your money Yeah. Versus it's hard to do a five year projection if you don't know if next year if it's gonna be 15% or it's gonna be 5%. Right?

Dan Austin: [29:10] That's absolutely correct. It's so hard to project or to actually plan your business if you have no idea what's gonna happen. So if you can at least reasonably predict your future, you can make such better, such more informed decisions. Yeah. And now, if you're gonna put 7% money into a 5% money market account, you just have to worry about making 3%. Mhmm. If you make 3% and don't lose any, like, you're winning in Yeah, my

Mike DeHaan: [29:33] I think that's great. I think the moral of the story is, right now, even though rates are kinda high and stuff is expensive, making a shift towards getting as much fixed rate debt as you can, especially these people that bought stuff with revolving debt in the 2021 and '22. We talked about this last week with the commercial places that are gonna be starting to crash here because they were buying revolving debt at, like, 3% several years ago. If you're able to get in front of that, right, and lock in some debt for long term, even if it's not where you wanna be, just do it. And then if you gotta refinance, just pay for it. Like, now then at least you can just, like, work the expense of that into your budget, and you're not just like hoping that it doesn't get worse sometime in the future. Because honestly, who knows? That that's the big question that we have right now. So Yep. Exactly. Who knows? Anyways. So, yeah. Big picture. I guess the moral of the economy is is who knows? And it's funny. And even like while we're doing this, I just googled real estate news and nothing titillating at all. Nothing titillating? Oh man, you're not getting titillated today? How uninteresting real estate is to the general population right now, or the only things that come

Dan Austin: [30:42] Yeah. Up I mean, what is going on in the macro stage of real estate? I haven't, you're right, haven't seen any major news coming up on anything. Everybody's just kinda riding it out. They're like, okay, we're here. 7%, we're here.

Mike DeHaan: [30:52] Yeah. It's always just some sort of extremist thing depending on what side of the political spectrum the news outlet falls on, right? So for example, Yahoo Finance, which is like pretty liberal, the first thing that shows up is housing is now unaffordable. We're 75% of homeowners who are considered middle income buyers. And then the first thing you scroll down, and it's like, people with a household income of $75,000 a year cannot can only afford up to 23% of their properties. I hate the break to you. If you make $75,000 a year, you're not middle class anymore as as a household. If you do that as like an individual, sure, that's fine. Go marry someone else that makes that much money or more. You're not making $1.50 a year. Yep. If you're a single income household doing $75,000 a year, that is going to be below the poverty line here very soon, that's the unfortunate truth.

Dan Austin: [31:38] Yeah. Inflation has definitely driven that number up. 75 seems like a lot, even a 100 k seems like a lot, but really in reality, it's slowly, it's just becoming less and less. You gotta do more and more, so don't ever be satisfied with your whatever salary, because whenever you attain the salary you wish you had, eventually that is not in middle class or wherever you think you are.

Mike DeHaan: [31:57] No way. So sorry, was just reading on this article. The three metros with the fewest number of listings considered affordable. Number three, Spokane, Washington.

Dan Austin: [32:12] Really? Good old Spokane.

Mike DeHaan: [32:15] Where we're located. Our home,

Dan Austin: [32:16] our backyard. It's got the least affordable. Hell yeah, it's got the least affordable. Have you looked

Mike DeHaan: [32:21] at things lately? Dude, totally. Well, compared to the average income here, absolutely. It's insane. I don't know how people afford anything.

Dan Austin: [32:27] Yeah, and the and the A player agents in town, they're not slowing I see some listing, I've seen a couple agents out there doing some listing, I'm like, gosh, dang, you're Like, crushing they're like $800,000 listing after $800,000 listing, just popping them off, know what mean? Of course, that doesn't mean they're selling them, but you know.

Mike DeHaan: [32:42] Also, here's the thing about the $75,000 a year thing before. People always blame inflation for that. The thing that I don't really ever hear this discussed, is there's the people that make that much money. We never talk about all the other people that are crushing it, right? And that are going out of their way to make more money, and are higher income earners, which is more and more people every single day. Yeah. And everyone wants to blame the government and inflation for the increased costs. It's like, no. It's competition, right? And there's other people out there that are simply doing better. Like honestly. Yeah. Right?

Dan Austin: [33:19] I think that could be an element, especially in a country where there's a desire for immigration, where immigrants wanna come. Yeah. They're gonna come and compete too. And they're gonna do well for themselves because this is the land of opportunity. I think that's a good thing because it raises our economy in general to have better, brighter people. So, you have that, plus people that are listening to Collective Keys podcast, they're bettering themselves. Totally. Well, mean, but not only that, but

Mike DeHaan: [33:44] just people that are getting into the workplace that are being offered more money because they need workers. There are people right now that might be listening to this that have been working at the same job, have great skill, but have been working for ten years, right, and aren't making that much money. Go get a new job. I bet you get a massive pay bump.

Dan Austin: [34:01] Yeah. There's definitely opportunity out there, whatever industry you're in, whatever career you're in, I think there's opportunity for you to get that pay bump by going somewhere else.

Mike DeHaan: [34:09] And I think that the biggest takeaway is, if you're in that zone, you're a single income earner, and you're doing that, just don't expect to be able to buy your dream home. You need to focus on making more money. Right? Or have a path or a direction for how you're going to do that. It's not like you need to go and quit your job, then find something next week. You're gonna make a lot more. But be learning how to run a business, be learning how to invest, be increasing your skills so that you can make more money, or work at a company that has upward momentum. Otherwise, you will get left behind. Right? And that is ultimately like the circle of life. Right? Like, people I guess this is the difference between a capitalist view and a socialist view. Socialists think it shouldn't be that way. Capitalists are like, I don't know. It's the pull up your boot shop sort of mentality. Right? You gotta eventually take control of yourself.

Dan Austin: [34:55] What, this would be an interesting conversation, what do you think, if you're working a job and you're like, I'm gonna change career paths because I wanna make more money, what would you pick?

Mike DeHaan: [35:03] Just like, if I could do anything?

Dan Austin: [35:06] If you had to go work for somebody else, yep. Probably some sort of sales role. Sales, okay.

Mike DeHaan: [35:10] I mean that would fit me, my personality. And also too, has, depending on what it is, it has a lot of upside, yes, momentum. And also too, the barrier to entry for that is a lot lower than high paying technical jobs.

Dan Austin: [35:23] It is, yeah. Yep.

Mike DeHaan: [35:24] So if I was gonna go and try to be like a I don't know what a high paying job is, something like medical, right, I have to go to school for that. Sales, medical sales. Medical sales, I mean, but even then there's still a lot of schooling.

Dan Austin: [35:37] There's a lot of training. Yep.

Mike DeHaan: [35:38] But getting into like like, honestly, right now loan sales, if you're gonna get good at that with interest rates right now, you'll freaking print money.

Dan Austin: [35:44] Right. As they come down, you'll be really well positioned.

Mike DeHaan: [35:47] Some of the richest dudes we know have loan brokerages. Mhmm.

Dan Austin: [35:51] I know, I thought about that too. I'm like, that's actually not a bad model. If you really can get into it, learn it, build out your network, and then expand.

Mike DeHaan: [36:00] Yeah. Yeah, think that's what I would do. But I don't know, what about you?

Dan Austin: [36:03] Like, I used to think that it would be into a trades business because then, or a trades role, because then you can typically go start your business and scale it. Right? So I know quite a few people that started out, you know, working in the trades, even even my brother, this is what he did. Started out in the trades, making good money, you know, in the deep 6 figures doing that, but then leaving and then starting your own business within that trades, whether that's electrical, plumbing, roofing, all that sort of stuff. I think those folks tend to have opportunity, and the competition's so much lower. For sure. Honestly, because they're not sophisticated. It's like Cody Sanchez is always talking about buying boring businesses. Construction can be inherently boring, you just have to have systems, and the people that I see that are super successful, the only difference between them and the solopreneur plumber, for example, that just turns the pipe wrench, is that that person that is successful stopped turning the wrench, hired somebody, took the sacrifice, and implemented systems. Mean, And then you can just scale it. Marketing, sales, right and there, and you can take any business. Yeah. But, there's one thing there, there is a barrier to entry in some of these, the technical trades. The people that have the ability to do systems, and are the most successful, understand what they're doing. Yeah.

Dan Austin: [37:20] As far as the business goes. I've never been an advocate, like, oh, you have to do before you can sell it, but like, man, some of those folks that I know that worked in the trades, they have such a first mover advantage because they can walk into any room, or any building, or any job, and be like, I know exactly what needs to be done here.

Mike DeHaan: [37:37] Yeah. I think that that is such an important thing that can't be understated, and that's just kinda something that I hate about the currently the current, like, Cody Sanchez movement. I think she's awesome. I think she's really proud of what But she as with everybody that starts to blow up on social media, there's always the people that come in, consume that content, and take it completely out of context, and just try to make it Sure. They try to square peg themselves into that. Right?

Dan Austin: [38:03] Yeah. They start square pegging. Yeah. They go to biz buy sell and buy the first thing that sounds interesting.

Mike DeHaan: [38:09] Exactly, right? And there's people that I've talked to, they're doing this, they're like, yeah, I'm currently buying a bookbinding business. It's like, well, do you know anything about No. Do you have any managerial experience? No. Then what business do you have buying a business that employs 45 people?

Dan Austin: [38:25] Sure.

Mike DeHaan: [38:26] Something that you are not a subject matter on. Like, well, they have a COO who's been there for fifteen years. It's like, yeah, but what happens if that person leaves? Which they very well might. Yeah. And they're just like, well, this is bullshit, and they exit.

Dan Austin: [38:38] Yeah. There's a lot of risk associated with that.

Mike DeHaan: [38:40] There's a lot of financial risk for you, but you're also taking into account like, not taking into account the livelihood of all the people who work there and rely on that paycheck to feed their families that you're not gonna be able to run.

Dan Austin: [38:51] Yep. 100 A percent agree.

Mike DeHaan: [38:52] I don't know what that is, but it's been I'm starting to hear about that more and more, and there's so many people that have zero entrepreneurial experience that are like, I'm gonna buy a small boring business to get financial freedom, and it just doesn't make any sense.

Dan Austin: [39:04] Yeah. Which is great if you really can dedicate and do it, but like to your point, some of these you have no business owning.

Mike DeHaan: [39:11] Like Totally.

Dan Austin: [39:11] If it's a laundromat, okay, go and own a laundromat. I you know, that's fine. But like when you're talking about buying proper businesses because the numbers look good, but you don't know how to operate it, that's a pretty scary Not that it can't be done, but there's a lot of people's lives at stake and other things. It's not as simple as it's made to seem on a thirty second reel.

Mike DeHaan: [39:32] Yeah. I just think it's important that people look at the whole view.

Dan Austin: [39:35] Yeah. The full perspective of what you're getting into. Same thing with real estate, right?

Mike DeHaan: [39:38] Mhmm.

Dan Austin: [39:38] There's a lot of people that are like, Yahoo, I'm in real estate. I've got an Airbnb now. They don't have any idea of what that means to own that property.

Mike DeHaan: [39:47] Mhmm. Yeah. Or like how to run any of those businesses, or or do any of that stuff, or how to screen tenants, and they're like, oh, but it's a single mom, she's so nice. She's been evicted 18 times.

Dan Austin: [39:56] Right. Did you write a credit report? What's that?

Mike DeHaan: [39:59] Anyways, point being, you should make sure whatever you're doing that you are controlling your own destiny and be educated in whatever you're getting into. Because you you gotta make a big move at some point if you wanna get anything done. But if you're just trying to keep up with the Joneses in the entrepreneurial space, you're gonna get bit. And so you gotta make sure that you actually understand whether that means you're paying for a coach, you're partnering with someone, you're finding a mentor, you're joining groups like GoBundance or whatever else. Don't just like go to biz buy sell and buy a business or just go on the MLS and buy the first property that's missing a roof. Right? You will get yourself in your trouble. Anyways. Alright, Dan. Anything else before we finish up here? I'm good, man. I'm gonna go preorder my Apple VR. Apple VR. So you can sit in your 500 square foot basement, and maybe your your wife can VR upstairs, and you guys can, I don't know, watch a movie or do something else? I don't know. In our separate bedrooms. I mean, to be fair, you snore, so I wouldn't be surprised if you move in that direction.

Dan Austin: [41:03] Oh, please. Come on.

Mike DeHaan: [41:05] Alright, guys. Well, thanks for listening. Hope that you enjoyed this episode. Please share it with anybody else. You know, I I was actually thinking about this recently. There's like 7,000,000,000 people in the world, and less than point 001% of them know about us. And that's kinda messed up. So you should go to increase those odds. Yeah. I'd like to get it to at least point zero one. I feel like that would be pretty good.

Dan Austin: [41:28] That's like a whole magnitude. That's a lot.

Mike DeHaan: [41:30] That's the what? Like 70,000,000 people?

Dan Austin: [41:32] But if we can, mean, holy smokes, you can't stop us. Yeah. If that happens.

Mike DeHaan: [41:36] So that's the goal. I wanna be in front of point 01% of the world's population. That's the new goal.

Dan Austin: [41:41] So

Mike DeHaan: [41:41] anyways, go and share with everybody. It's the greatest way to help us grow. And if you wanna learn how to find off market deals and get rich with some discounted properties, you should go to collectingkeyspodcast.com/free, and we'll give you the five step guide about exactly how we did it start and we continue to do so every single week. So thanks for listening, everybody. We'll talk to all next week.

Dan Austin: [42:02] See you.