Just Getting Started

Speaker 1: [0:02] Welcome to the collecting keys real estate investing podcast with your host, Mike DeHaan and Dan Austin. From wins, losses, horror stories, and tactics for optimizing your business, Mike and Dan take a real uncensored deep dive into the ins and outs of running a full time real estate investment and wholesaling business.

Mike DeHaan: [0:26] Hey. Just a quick note. You'll notice I introduced the show as the No BS Real Estate Investing Show. At episode three, we changed the name of the podcast to collecting keys. So just ignore that. Sorry about the confusion. Alright. Episode one, the No BS Real Estate Investing Show. This is our new podcast. The goal here is to be talking real investing with real investors. So sort of moving away from the fluffy, you know, we just started and now we're super rich or like, I've been doing this forever and that's why I'm super rich that you get across all the other podcasts and to talk about the real struggles and challenges and wins that you get from running this business. My name is Mike DeHaan and I'm here with my business partner, Dan Austin. Are doing, Good.

Dan Austin: [1:20] Good. It's a good day. It's Friday.

Mike DeHaan: [1:22] Yeah, Friday. Yes, for this first episode, we basically just kind of sort of review the week and just tell some stories about what we've had going on and sort of see where things take us. Should be about thirty ish, maybe forty five minutes if things get a little crazy. But, yeah, thanks for listening. So it's funny. I was going through everything this week. We had a crazy week this week. I think what are we at? Five or six contracts on the week, which, is a big one for us since like last October. I was thinking too, October's officially our crazy month because I think two years ago in October, we decided to do this thing full time. Then last year in October, we had our first, I think, 6 figure month. And now so far, contract wise, this will be our biggest month ever in terms of contract count. So we're at right now. We already have more in the hopper. So I think we just basically got to get ready for this month every single year. But I thinking too, kind of the weird thing about looking at the scale of our contracts is it really says a lot about how weird this business is when we signed a contract for a $30,000 mobile home, the same day we got a contract for $1,300,000 like mobile home park and they're completely unrelated from each other.

Dan Austin: [2:38] Yep.

Mike DeHaan: [2:38] You know? Yep.

Dan Austin: [2:40] Yeah. I would say too, like, it feels like maybe there's like, you know, the peak, the summer slow down and then all these people that thought their house was worth a million bucks, but it's a really piece of crap. October hits and they're like, ah crap, I guess I'll sell to these guys.

Mike DeHaan: [2:54] Yeah. Right.

Dan Austin: [2:55] You know what mean?

Mike DeHaan: [2:55] They start, I mean, has been a lot of that around. Even talking to other flippers that have just been trying to do the whole tail thing where they basically buy it and don't fix anything up and then they just try to throw it on the market for these tiny margins. Mean, people are having those properties sit now because you know, I think the frenzy of this past year, which has been absurd, is starting to die. Know, people don't want to be paying premium prices for these crappy houses. Exactly. But I know it's been interesting looking at, you know, just the breadth of our sellers too, because man, this mobile home that we're dealing with right now, have you talked to James at all about this dude? No, haven't. Like the big concern I have is don't even know how this transaction is gonna go through because this guy doesn't have a phone. Like he received letters from us because the mobile home was just an absolute wreck. So, basically what he did is he got our letters and like went to his neighbors and like, he's like, Hey, I need your phone. You need to call these people. So then every time we call back, it goes through the neighbor. So like the guy doesn't have the internet. He doesn't have phone. Like he apparently gets mail, he doesn't drive.

Mike DeHaan: [4:04] He never leaves it. So I was talking with James this morning. Was like, How the hell are we gonna even close this deal? You know, gonna have to get our title company to, I don't know, like drive somebody out there every time he needs to get something signed.

Dan Austin: [4:16] Yeah. Hiring a mover. It's kind of like Tony, right?

Mike DeHaan: [4:19] Get him a

Dan Austin: [4:20] driver, some beer and tell him we're gonna meet him there.

Mike DeHaan: [4:24] Yeah. I mean, that's how James sealed the deal too, is he brought the dude a couple beers.

Dan Austin: [4:29] I love it man. The sailmanship.

Mike DeHaan: [4:32] Yeah, right? But I know it's interesting too, because this deal I floated on a couple people and a number of investors were already aware of it because he's getting foreclosed on with a tax foreclosure. Oh. And so the guy's like completely screwed. So I don't know what the exit is. And that's one of the challenges with these sort of deals Is like, how do we, you know, like, what do we, where does this person go? You know, like they obviously don't have a lot of options.

Dan Austin: [5:00] Yeah. They can't really go up from where they're at, right?

Mike DeHaan: [5:03] Yeah. Yeah. Right. It's always the, It's always like the weird ethical sort of line with this business. It's like, well, you have the rights to buy the property now. Do you like displace them? You know, you can assist them so much to try and find somewhere. But at the end of the day, if they're not able to make a decision themselves, what do you really do? But you know, I guess at the same time though, the option is he can make, you know, $30 on this mobile home that's a disaster or he's gonna get foreclosed on and then the bank doesn't give a shit. Let's go throw them out in the street.

Dan Austin: [5:36] Yeah, exactly. And you get to that point where we're the best option, right? Honestly, like you lose it, get nothing, or you come to us and get something.

Mike DeHaan: [5:45] Yeah. Know what? Investors get such a bad rap, but I don't think people really understand that situation most of the time. You know, because and also too in this, mean, every now and then, you know, we'll buy stuff that's definitely worth more than we buy it. But like this thing is just such a disaster. I mean, James couldn't even get in the door because it's so full of junk.

Dan Austin: [6:03] That's the other thing too. It's like, if you have like a native connotation about what we're trying to do here is like, I don't see anybody knocking on his door helping this guy out. We're actually helping him out.

Mike DeHaan: [6:15] Yeah. I mean, at the end of the day. I know it is. It'll be fascinating to sort of see how that one unfolds. But yeah, I know. We got

Dan Austin: [6:24] It's that one figured another typical wholesaler transaction. You think you've seen the worst and then the next week comes around.

Mike DeHaan: [6:32] I know it's just nonstop every single time. You know, we got that one and then this one on the South Hill that we have coming to, like the larger home, trying to figure out the strategy with it. But this is the perfect example what we were saying before. You know, these people, this house is completely trashed. They've tried all this DIY work. It's super outdated. And they had it listed for just like an obscene price for so long. Then lo and behold, it didn't sell. You know, so now we're gonna be coming in and we're gonna be buying it to fix it up. But, yeah, that whole situation, it's interesting to try and figure out, I guess, the best solution for those people at the end of the day. Because they're definitely gonna be making less than they potentially could if they fix it up, Do but they want to spend $50 to do so? Or

Dan Austin: [7:24] do they have the capacity, right? Honestly, that's what we do, right? We match a solution that's mutually beneficial. Know, we have what's just cool about our business too though is like we have so many levers we can pull. Like the better you get at this business, the more levers you learn how to pull. Right? It's unlimited. It's not a typical real estate, MLS contract, earnest money and you only do this and if you're lend I only accept this kind of lending, you know, all these other things that you see in a typical contract. It's like, okay, what do you need? Let's see if we can provide that. If we can, that's okay. Yeah. But Exactly. More often than not, we can. Yeah. Exactly. Exactly. Think it's more than just we pay cash and close fast. Yeah. Right? Exactly. Right.

Mike DeHaan: [8:09] There's more so much more than that. Yeah. So, yeah. Then, you know, half these deals we close on and the other ones we we, I guess, wholesale them or assign them to other investors or basically we sell them for a higher price than we have the contract for and we sort of collect a small fee on the spread.

Dan Austin: [8:26] But Well, I think that's good to touch on, Mike. Maybe let's talk about why. Because like if you just hear that, like you're a new investor and you're like, wait, so you talk these people into selling their house for something less than it's worth. Why wouldn't that other buyer just go buy it?

Mike DeHaan: [8:41] Yeah, and that's always the question, right? The people don't really understand and it's really no different than like a real estate broker. Know, like if you go and you list your property on the MLS, I think just the main difference is that we don't have to follow all the same rules and guidelines as a realtor does. So, you know, some people can get shady with that, but at the same time, it also gives us the freedom to not have to, you know, do all the same processes that a realtor does that can really be restrictive in terms of if there's issues with the property or with title or things like that. I mean, about this house at the lots that we just, I think actually closed today. That whole thing had a medley of title issues. Imagine if a realtor was trying to work that deal to sell it, they wouldn't have freaking done all that nonsense. I think

Dan Austin: [9:29] it's the big difference too is, I mean, there's a lot of realtors out there every city, right? There's much Yeah. There's a lot fewer wholesalers than there are realtors in any given city, right? Yeah. Some really good realtors will figure that out and they will do a full service, right? Like they will help their sellers out, help their buyers out whatever way they can. They're rock stars and they will do everything they can with their limitations. We're wholesalers like we are willing to do that, right? We're 99.9%

Mike DeHaan: [9:55] of realtors aren't willing to walk

Dan Austin: [9:56] through that with them. We are, that's how we make our money. You know, we're not going after the million dollar listing that's perfect and they're paying staging and all these sorts of things. Going after the folks that honestly can't do that, don't know how to do that, property's not worth it to do that or they have totally different needs. Yep. But the other thing I think about like, what we're doing is like why we buy at a discount is because we have the relationships to the buyers that these people don't have and that's valuable, right? So yeah, yeah, we are getting at a slight discount sometimes. But like, it's because we know the buyers, right? The buyers don't know the sellers. Sellers don't know the buyers and we're the people that connect to them. That is kind of what a real estate agent does too, right? Except for the real estate agents kind of often, I don't want to talk bad about them, all they're doing is blasting it out to everybody so they can see it on Zillow and the MLS, you know, whatever. And that's their advertisement, right? We're coming in and we're one to one, right? We're going connect. We have a we have a buyer that we know wants this type of property and we have a seller that needs to sell.

Mike DeHaan: [10:55] Yeah. Well, I think one of the biggest differences as well is when we do this, we are on the hook to buy the property. Exactly, yeah. Unlike a realtor that has no actual stake in your property besides their commission, like if it doesn't close, we're still legally obligated to purchase it. Yeah. And I think, know, and when we're doing these assignments. Yeah, how's Oh, your go ahead.

Dan Austin: [11:18] No, you're good.

Mike DeHaan: [11:19] I'll say, how's your rehab going?

Dan Austin: [11:23] 20th Avenue, right?

Mike DeHaan: [11:25] I mean, we don't want to say the address necessarily, but yeah, sure. Oh. It's funny. Say that again? Yeah, the rehab that you're working on.

Dan Austin: [11:35] Oh yeah, yeah. Or kind of short term rental or that's going really well.

Mike DeHaan: [11:40] Seems to be going better than the last one.

Dan Austin: [11:43] Yeah. Oh yeah. I mean, we should do a whole show on contractors actually, but we finally got one we like. And when you learn as an investor, you want to get the cheapest price, but you pay for it in the end, right? And so he's not the cheapest guy, but it's going really well. Think, you know, we're four weeks into a total rehab and we're 80% done.

Mike DeHaan: [12:02] Yeah.

Dan Austin: [12:02] Right? So this will be a six week top to bottom roof, new deck, kitchen Yeah. Two new bathrooms. I mean, it's it's a legit rehab. It's not a quick one, but we're doing it quickly, which is awesome.

Mike DeHaan: [12:15] I mean, that's pretty good because you think about we're moving four weeks into it. That's how long the other one sat vacant when that dude, like, went to jail, the previous contractor.

Dan Austin: [12:21] Yeah. Exactly. But that's good. You get what you get what you pay for. I mean, it hasn't gone with hiccups. We had some subs with the drywallers where had to go and tell them we're not paying them what they wanted to get paid because the drywallers took a week longer, which kind of delayed the project so we would be ahead of schedule. I mean, drywallers came in and like, yeah, we'll be done by Friday. It wasn't a lot of drywall work. Right? It was just, you know, some patches and, you know, put a new wall up and so we had a new drywall there. So not a ton. But when I came back to check on the next day and the mud was still wet and they weren't there, like, well, we're waiting for it to dry. And I'm like, dude, you gotta put heaters and fans on this thing, right? Like, that's what drywallers And they told us to go buy those and do it. No, Like, I'm not paying you for the drywall to dry. I'm paying you to work on the drywall. But yeah, they got pretty upset, paid them about half of what they should have gotten. But hey, you did half as good of a job as I expected, even at investor prices.

Mike DeHaan: [13:17] It's such a freaking It's just such a weird time right now where it's because they're so in demand because real estate's so hot and just like labor's so short that they can do anything. I'm thinking like we did this project a little while back where we had to repair this chimney. And they gave us like, we had the quote, was it for like $1,500? And then they go and they do it and they send us like the bill for like $4,200

Dan Austin: [13:44] best part about that one was we didn't even own the property after we had already sold it.

Mike DeHaan: [13:49] We had already sold it and that they're getting all pissed off. We're not gonna pay them extra just for like finally showing up. Yeah. The only reason we did that was because we wanted to do the person who bought it from us, right? And not screw them over. Yep, exactly. It's just everywhere. Or even talking to other people. I've been hearing stories about people that have their contractors squatting in their properties because the contractor doesn't have a place to rent or they got kicked out of their apartment or whatever. So yeah, I'm going live in your rental and work on it while I live here. But I mean, that'd be fine if they weren't disruptive, but of course they're doing stuff like smoking cigarettes in there. Of course. Leaving trash. They're using the toilet that doesn't have plumbing that works. It's just like, you know, it'll be interesting to sort of see what happens with all that sort of situation after the market. I mean, I don't think it's going to be taking a dip, but it's definitely going to be taking a turn, you know, especially after all the employment stuff sort of starts to level out here, which will happen after a while.

Dan Austin: [14:57] Yeah, there's a market cycle, right? I mean, half these people, call themselves contractors, A, they don't even have a GC license. They don't have any bonding usually. And investors, we don't mind that usually because we're like, dude, just go in here and whip this thing out for us.

Mike DeHaan: [15:10] No, of course we mind that. We're always, everything's 100% permitted and licensed Exactly. By the

Dan Austin: [15:16] Absolutely. But that is the crux of how we do business, right? It's unless you're running your own construction crew, if you're you're like us, where we're not running our own crew, so to speak, I mean, we should have been by now. But, you know, you're looking for a good price because people will I mean, highway robbery sometimes when I when I get quotes, I'm like, are you kidding me? Like when we were first getting drywall quotes for this rehab, our contractor was down there. And the drywall got straight bass and like, what do you think? How much should we charge him? And like, kind of like, wink wink and the guy and our contractor was like, I don't know, call him. Figure it out. Because the guy called me and he wanted like $8,000 for this job. I was like, are you kidding me, dude? This is $8,000 I'm like, come on, man. And I just was like, no, I'm not playing that game. Because what he was trying to do is well if he'll pay 8,000, I'll charge him 8. But if he'll pay 4, I'll charge him 4.

Mike DeHaan: [16:07] Yeah. Just come on When we do the same shit with houses though, it's like, oh, you'll take 200 for the house? I I know it's worth $2.75, but if that's what you want, that's fine.

Dan Austin: [16:18] If that's what you think it's worth. What was that deal we were doing that's funny where the guy was like, our MAO or max allowable offer was like, I don't know, 100? The guy's like, I think it's worth 25.

Mike DeHaan: [16:30] We had that one down in Knoxville really recently. We sent these letters out. It's how we do most of our marketing is by sending direct mail. And we sent out these letters that basically have like an aggregate between the tax assessed value and the Zillow value. And on the letters, it gave them like an offer price. And the offer price for this house that came up between whatever the database created letters pulled from, like $115,000 The lady that called in, she was just like the sweetest lady. She's like, Well, this house is actually really bad. Like, I appreciate your offer. It's like, But actually I think it's only worth 75,000. And we're like, Okay. Whereas, I I think that big thing of that being Knoxville, that Southern hospitality. So we got that in Spokane, people would be like, I want $50 more than that because I hate you. Down there, and the thing is that's funny too, is he went and we looked and we're like, yeah, she's probably right. There's a lot of work here. That number was way too high that we put on that postcard. Exactly. I know it's the same thing. She could have definitely leaned on that and it would have killed the whole deal for us.

Dan Austin: [17:37] Sure.

Mike DeHaan: [17:38] I know it's just funny. So that rehab's coming along. About two weeks out on that. And then, yeah, there'll be a short term rental for us. Now we got to figure out the furniture situation. And then that whole process. So yeah, I mean, the base of our business has just been in traditional rentals. I guess you have a couple student rentals, but I mean, that's almost like a traditional rental. It just has a slightly different like, but even then, mean, honestly, it's probably easier because you just get the kids to find themselves for the next batch. You don't have to do that.

Dan Austin: [18:11] Yeah. And they want to leave after one or two years, right? So it's actually better in a lot of cases. I love them. They're great properties, but sometimes students are kids. Right. You know, have problems. But yeah, I think we have single family, small multifamily, long term rentals is fair game. Yeah. Now we have all in the same month, got what, two?

Mike DeHaan: [18:32] We had two short term rentals

Dan Austin: [18:34] locked up. So we're figuring it out right now.

Mike DeHaan: [18:36] And both of those are, they're kind of that way because of location. I think they're prime short term rental location, but, you know, it's a different thing to figure out. Something that I've sort of been thinking about as I've been going through that, we've getting these other deals is honestly just like single family homes as rentals are going to be harder and harder to make sense in Spokane because just the cost that we're starting to have to rent things out for and people are still trying it. There's some of the worst properties in Spokane right now that are for the most obscene rental rates. Honestly, it kind of makes me self conscious to be a landlord because our stuff's nice. I got to say once we're done with them, they're nice properties. New kitchen, all new flooring, have landscaping. It's all fresh and done up. There's some of these properties that no one has touched since 1974 that people are now trying to charge $222,300 a month for rent. And it's like, yeah, no wonder people are getting all pissed off. Legislation is gonna come slap it down on us. Yeah.

Dan Austin: [19:35] It's totally absurd on some of these people and they're just trying to take advantage of the opportunity and that's great. But it's just like, it's not going to last for those types of people because you got to think of like long term CapEx. Then what we find when we're getting these deals, lot of times it's other investors that want to sell out. And they've got all this delayed capital, All this deferred capital maintenance. And it's like we come in and we fix that. Right? Yeah. We put the new roof on, we replace windows when we need to, we make the furnace actually work. Mean, property before we rehab and the first thing worth, we were just living in this like, what the heck?

Mike DeHaan: [20:07] You know what I mean? Right. I know.

Dan Austin: [20:09] So it's just like little stuff like that, that it's just like it's expensive and people think about that. And same thing with short term rentals, like, you know, both of our new short term rentals will work just fine as single family long term rentals.

Mike DeHaan: [20:21] Well, because we buy at a discount. I mean, that's where that's where the way we do business is so key. I think the people that are really going to get bit are the ones who are buying these nasty properties at retail and then trying to really jack up these crazy rents.

Dan Austin: [20:36] Yeah, hoping for appreciation so they have equity in it, which they, you know, for the last two, three years in our markets, in most people's markets, that's worked, right? They're like, Oh, look on this one I did or my buddy did this one and then it was worth $75,000 more next year. With zero value add, It's like, yeah, but that doesn't happen forever.

Mike DeHaan: [20:55] I know. God, that was almost like pisses me off too. It's like, come on, like you didn't even have any pride in what you just did. Like you literally just put some people in a crappy situation. I couldn't make all this money on it. Don't know. Makes us look bad. Maybe that's why I'm always trying to justify how we help people so we don't sound as scummy as them. Right.

Dan Austin: [21:15] I think we do. Honestly, even when you talked about it earlier, we have an interest in the property once we're in a contract, and we were we should be closing on it. We don't always have to. Yeah, we can lose our we're talking about losing earnest money, right? Which is not that big of a deal in the grand scheme of things, but I would never done that. You know what I mean? Yeah. Like, we're always like, well, if have we to close on it, what's our plan? We always have that plan to close on it just in case and whether that's a double close, whether that's, oh, let's just suck it up and rehab it, flip it or turn into a rental. Like we've had that. Yeah. We're also buying right so that we don't really have to do that if we don't want to.

Mike DeHaan: [21:49] Yeah. Yeah. I mean, I think we've only had the one that we had to break off and that was last year and that was just a whole Yeah. Don't even count that

Dan Austin: [21:56] one because that one is so unique, right? And that one we were upfront with that person, right? Yeah. A duplex that wasn't a duplex legally could be a duplex anymore. So it totally changed our price. That price didn't work for the guy. Yeah, it's okay.

Mike DeHaan: [22:08] Exactly. Well, kind of. I mean, we talked him down on the price and then we couldn't figure out the strategy for it. Then And we didn't want to buy that property because it was in such a Yeah. Bad But the people that flipped it, they did really well though. Like, I mean, the rehab, but they were 100% benefited from the market gone bananas over the next year.

Dan Austin: [22:27] I think that they made much money on it, but maybe they did.

Mike DeHaan: [22:30] So it's funny. So if you look at it, they basically listed it for like a crazy high price, price dropped like $50 and it didn't sell basically all through the winter and just like sat forever. And then if you look at that paper trail, they actually accepted a price at like above their initial asking price.

Dan Austin: [22:47] Oh shoot, yeah. Went 100%

Mike DeHaan: [22:50] just benefited from the most obscene real estate appreciation that The United States has ever experienced or the world.

Dan Austin: [22:57] Pure luck, yeah. Pure That's

Mike DeHaan: [23:01] what it takes though, man. And that's the biggest thing for people starting out is everyone always kind of looks for these perfect deals and tries to make everything, you know, won't like make a decision if it's not a 100% sort of like BRRRR where they're gonna be able to refinance all their money out or it's gonna be like X amount for a flip. So at the end of the day, I mean, you and me, lot of our growth has come just from like buying stuff and then sure things go well and we've lucked out from that, you know.

Dan Austin: [23:27] Yeah, it's like you gotta be in the game, right?

Mike DeHaan: [23:31] You gotta be in the game to a win anything. But you you know,

Dan Austin: [23:35] you hear a lot of times on podcasts, you know, you like to bring in like this this person that has the story about how they made $300,000 on a single deal from doing this one thing. And it's like, that was awesome that they did that. But they were in the game, right? And they're not always talking about the other small wins because that big one is so sexy to talk about. But you're not going get those big wins and those big if you're not in the game. But those big wins happen. Like we've had them where we're like grinding, grinding, grinding and all of a sudden like it just pops up and like holy cow, that was awesome.

Mike DeHaan: [24:03] Yep, yeah, exactly. And also too, people need to keep in mind whenever you listen to any media, especially like the ones that are trying to sell you success or easy money or whatever, the numbers that they give you, I guarantee you are super inflated. A little fluffy. I I'm guilty of that myself. I've been on different things and it's like, Oh yeah, we made $100,000 last month. It's like, Well, actually we made $87,000 but you round that up, it sounds way better.

Dan Austin: [24:32] It had some costs in there and the stat and the other. Yeah, yeah. Yeah,

Mike DeHaan: [24:37] it's funny. But yeah, so something that I wanna add into this every episode. I wanna have a good, I guess, like a learning lesson or horror story or something that you've had from the past week or two weeks. Do you have anything? I know I was on vacation last week, so you might have something more interesting. You

Dan Austin: [25:02] know, I would say from last week when I was kind of running the sales team, just a big lesson for me. I don't know if it's quite a horror story because it felt like a horror story while we're in it was, you know, just our marketing. Right? How we dropped it and where we dropped it and the deals we're getting. I mean, we're getting so many leads coming in, but they were junk. Right? So like, how do we pre screen that? So like, I think it was towards the middle of the week. Finally, had to like geographically prescreen that. And when I'm saying prescreen, I mean, for on-site appointments, because the way it works, so it comes in, our our lead manager takes it, and then schedules an appointment. And everybody wanted an appointment last week, but somewhere two, three hours away, and there's no way we could keep up with that. And some of them were just garbage. Right? And so, like, as we look at our marketing and where we drop it, like, making sure that we have kind of a strategy because the county we chose is a big county. Right? It's not what we're used to. And and I don't think that our lead manager and act manager were prepped for it. I certainly wasn't prepped for it to see that.

Mike DeHaan: [26:01] I wasn't prepped for the response that we got. That's for sure. We've got

Dan Austin: [26:04] some We definitely were one of the only people marketing in that county right now, which is good. Right? It was, in my opinion, a success. But it's just like, how do we make sure that we prep our team because they were definitely spinning for a bit, And I was spinning too trying to come up with all the MAOs for them and stuff like that. Finally, just have some massive break and you have to kind of draw the line somewhere and then build up from there instead of worrying that, oh, we're going to miss a lead. Yeah, but when you're, you know, you might, but when you're like kind of going crazy 10 different ways, you're missing a lot more leads. So you got to kind of niche down and focus on like one's one foot in front of the other on some of these things and prepping the team to make sure that they understand that. And that's also another lesson that we've learned with like our leads managers. You know, he doesn't live here locally. So he does not understand the map. Right? And what that means. Right? And so keeping him up, you know, up to speed on that beforehand was kind of a big lesson.

Mike DeHaan: [26:56] Yeah, sure of having a remote team. And I think a big lesson from that too is, you know, and this is something that honestly, I think only in the last couple months we've really gotten better at is being willing to say no to stuff because it's not worth your time. Know, when we got started, you want to be pursuing everything. But after a while, get all these like weird, like commercial leads and lots and, you know, all nonsense. I'm sure there's opportunity there. But you know, when you're in the realm of residential and it's kind of your bread and butter, just want to stick with that, you know, not do anything, like not try to recreate the wheel to try and squeeze out a deal, you know, especially when you have more opportunities coming in. Well, had a good one that I wanted to talk about, which is that this was kind of our first experience with this situation. We've heard about it. But when you're going to assign these deals, you know, sometimes the end buyer that's gonna be buying your contract, they can be kind of shady bastards, you know. So we had the first situation this past week of one of our sellers calling us and being like, yeah, who the hell is this guy that's calling me saying he's buying this property?

Mike DeHaan: [28:00] You know, and generally when we assign a deal, we don't necessarily disclose it to the seller. You know, it's in our contract that we have the ability to do that, but, you know, not everyone's necessarily gonna be privy to it. But all of a sudden we have the seller calling us saying that this person saying that they're buying it. And, you know, we've it's kind of sort of come up with other sellers before and usually they're cool with it. But at the same time, if people start making things sound shady, sellers are gonna get nervous. Especially because most sellers are already nervous that they're working with us without a realtor and it just feels foreign to them. So we had to still I mean, we're still navigating that. I don't even know. Did you talk to that guy today? Yes. Yes. How'd What'd it he say?

Dan Austin: [28:40] It's fine. Yeah. I mean, it's hard to gauge, right? We're across the country, first of all. And he's generally a nice guy, but it's just he didn't really say much. But it's just like, you know, hey, like, you got to understand what we're doing here. Not only did he talk to the seller, he like talked to the tenant. And it was like, negotiating with the tenant. You know, this is a unique one because the guy owns a property next door. He's a rental. He owns a lot of rental properties, but I don't know that he was trying to be shady. Think he's just trying to cover his bases, which to him is no big deal because whatever, right? Yes, he's not out anything. But us, you know, we're out and like teaching him to understand the wholesaler like model of like, you know, don't disturb the tenant or, you know, don't contact the seller like if, you know, because he doesn't want more leads from us. It's like, well, we're not gonna give you more leads if you keep doing this to us.

Mike DeHaan: [29:31] Exactly and since he owns so many properties you'd think that they would understand that. And it's funny that's one of the reasons I assumed he wasn't being shady because he doesn't wanna, you know, because I mean our fee on that's only $5,000 which for us is very small. Mean, you take into account our commissions for our guys and then our marketing costs, that's practically a breakeven deal. Yeah. Yeah. You know, and for for this guy to be threatening all future opportunities for $5,000 if he really does own a bunch of stuff, just doesn't make any sense. But either way, I think a good moral of the story is making sure that, you know, maybe when we have buyers being talking about that, right? And it's being like, hey, you know, just because it's obvious to us doesn't mean it's obvious to you.

Dan Austin: [30:12] But yeah, totally. Especially with new buyers. This is this is a new buyer in a remote market. Right? And so that's a really good learning lesson is like, you know, making sure that they understand that like, hey, just so you know, you know, don't contact the seller or the tenant or this deal goes away kind of thing. Don't try to go around us, you know, whatever you want to try to do, whether you're trying to do it on in good faith or bad faith, like that's not how we play ball, but being upfront about it. And I think people are understanding that, you know. And if they're shady, they're gonna try to do it anyways. And you're gonna know that they're not a person on your buyers list anymore.

Mike DeHaan: [30:46] Yeah. Right. Yeah. But, you know, then you gotta you gotta break that off, which I mean, at least it's like a small deal, you know. I guess we could have another one like this freaking one up here that we tried to assign and somebody sent it to the sent our opportunity to the seller and the seller decided they want to move forward with us anymore. Even though in that So in that situation, that's perfect example of, you know, it was disclosed to the seller at that point, and they're actually completely screwed. Like they are so far underwater on their property. They can't sell it because it doesn't have a kitchen. You know, it doesn't have basic living situations. But now they're gonna and they're getting foreclosed on. But because he now feels sketched out by the situation, he's gonna lose his house. He can walk away with nothing instead of walking away with like fifteen or twenty grand or whatever we were basically gonna allow him to do.

Dan Austin: [31:37] Yep. And that for him too, that's always unique too because it's an ego thing, right? Not like he's like, Oh, whatever. It's that we might be making more money than him.

Mike DeHaan: [31:45] I know, right? Yeah, exactly. And there's more upside for us than it is for him. But it's like, okay, dude. But yeah, the thing, that means that's the thing too is these buyers, I think a lot of people, don't understand, you know, when you are bailing these people out of these situations, there are going to be skittish individuals just in general. They're going to have trust issues because, you know, people that get into those situations always have some way that they've been wronged by like their family or like whatever, you know, whether or not it actually happened, I don't care. But, you know, so then something comes up and it makes them nervous, and they're just gonna let the ships burn, right? So now not only is, you know, are we missing out on our fee and the end buyer that we had signed it to is making that on a deal, but the seller is now completely screwed. And like, you've now condemned them to a terrible situation because they're not, they're not gonna be thinking rationally about it anymore.

Dan Austin: [32:37] Nobody wins in this. Nobody's winning. Everybody in this situation is losing. The guy on the buyer's list that did that is not getting anything. The seller is now not getting he's foreclosing. Yeah,

Mike DeHaan: [32:49] but it's foreclosing. Yeah. I think at the end of this month he'll be losing his property.

Dan Austin: [32:54] Should call him Yeah.

Mike DeHaan: [32:55] Yeah. Honestly, probably should. I checked it. It's still, I mean, it's still sitting owned by him. But yeah. Anyway, interesting. Cool. Well, thirty two minutes. Think give us a good little runaround. It's a little insight into what our our typical week looks like. And, yeah, as we get going with this, we'll start to figure out our structure and our flow. First one, give it a trial. But

Dan Austin: [33:18] Yep. Yeah.

Mike DeHaan: [33:18] If anybody actually listens to this, appreciate it. Thanks for listening. More. Yeah. Come come back for more. Every week, they'll be coming. Yeah. Alright.

Speaker 1: [33:28] Thanks for listening. Please leave us a review on iTunes or wherever you get your podcasts, and check us out at collectingkeyspodcast.com for tips and guides on starting your own real estate investment and wholesaling business.