Key Annual Maintenance To Save Your Rental Cashflow

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: [0:25] What's going on, guys? Welcome to episode 54 of the Collecting Keys Real Estate Investing Podcast. Take two because I announced episode 56 last week, not last week, an hour ago. I don't know, man. I think it felt like

Dan Austin: [0:38] we skipped a few, but.

Mike DeHaan: [0:42] Well, I I got thrown off, you know, because traveling and then trying to get caught up with, like, our different recordings and stuff. I, like, have, a little spreadsheet, but because we have, like, the Friday focuses and stuff now and everything's all mixed up. And then we were this is technically, like, our one year anniversary episode Okay. Which we've been doing this thing for a year now, which was, I guess, technically, our one year was the one that came out last week with Corey and Ryan from the weekly juice. But we can treat this one as our one year episode, I guess, which means nothing's gonna change. I mean, we could be like one of those podcasts where we just, like, get wasted over the course of, like, an hour.

Dan Austin: [1:13] I thought we were gonna do a giveaway. We're gonna give away a house, like, to Giveaway. To the to the seventy sixth caller that calls in.

Mike DeHaan: [1:20] Yeah. They the seventy sixth review that we get Gets a free house. On iTunes gets a free house. So currently, we have 15 reviews. So what we need is for six sixty people. Get

Dan Austin: [1:33] out there and get it done.

Mike DeHaan: [1:34] Sixtieth person. In fact, we actually have a house right now that you can have. We would be happy for you to take it because it's a piece of shit. Shoot.

Dan Austin: [1:41] I didn't think about that. Yeah. You could take over the taxpayer on that thing. You could. We don't have to deal with it anymore. Stutt. 76 reviews. You get the house. It's a beautiful two one bungalow in the South Spokane Valley. You'll love it.

Mike DeHaan: [1:55] Yeah. It is beautiful. One that we picked up a while back and we're just starting to deal with now. But, yeah, in one year, man. It's just pretty crazy that we've been doing this. But I remember when we started it and our goal was to get through 10 episodes, And now we're at Right. 50 54 of them. Almost at 56 again. Jesus Christ.

Dan Austin: [2:14] Yeah. We didn't even tell anybody that we had a podcast for at least 10 episodes because we're like, yeah. We're gonna this is gonna suck anyways. So

Mike DeHaan: [2:20] Well, that's what everyone says to do. They say don't even, like, tell anyone or do anything with them until you have 10 because people are way more likely to listen to them if they can see that you have a little bit of a track record. And, also, too, if you're like I mean, I think a lot of people do, they post, like, three episodes, and they're like, go and post on their social media. Oh, I launched this podcast. You should go listen. And then they get, like, three downloads, and then they get super disheartening. And you're like, why am I doing this if no one's listening? Right.

Dan Austin: [2:44] Well and, honestly, it does. And you kinda suck at first. Like, I sucked at first. Like, it takes a while to get in the groove of, like, how to do this.

Mike DeHaan: [2:51] Yeah. You wanna know what I think is the most common thing that is said to me when there's, like, people that have been listening for quite a while, and they talk about, like, oh, yeah. You guys have really found your stride. You know, it's it's really good. I think that Dan's really started to come out and shut. Right? Yeah. Dude, I That's the number

Dan Austin: [3:08] just like I was like, the mic turns on, man. It was hard for me to get over that. I don't know what it was.

Mike DeHaan: [3:12] I know. I I will always remember our first episode because I think I just sat there. Speaking of which, if you ever go listen to the first episode Don't. Just don't. It sucks. Even though it's our most recorded, our most That's gonna be

Dan Austin: [3:22] the most downloaded one. Yeah.

Mike DeHaan: [3:24] It is. We're not far enough away from it yet, but it's literally me talking and Dan just staring at me for, like, thirty minutes.

Dan Austin: [3:31] Yeah. Yeah. I'm not a very good interrupter. Right? And so I gotta get better at that. That's what I've been working. I just gotta interrupt people now.

Mike DeHaan: [3:37] Yeah. Yeah. It's funny. But yeah. It's come a long way though, man. And then I feel like this past couple weeks as well, things have just started to take off. I mean, the wholesaling business is going well. Like, it's been Mhmm. You know, up and down with the market. Yeah. Doing good. To coming back from my trip, I feel like we've turned it up and things are starting to happen. And then all of a sudden, the instant investor program started to take off. We got, I think, four new people hopping in this week. Mhmm. Some good traction coming there and, you know, lots of good things.

Dan Austin: [4:05] Yeah. I'm excited about all of it. Like, the funny thing about, like, saying, like, the wholesaling stuff's picked up. Like, we haven't changed our marketing, and none of the deals that we're closing now are from new marketing. It's just that consistency

Mike DeHaan: [4:17] Yeah.

Dan Austin: [4:17] Marketing every month. Exactly. Some months you're like, oh, I don't feel good about that. But then the next month you're, like, surprised. It's just like sweet. You know what I mean? Yeah. And I and I think like our September was in line with our historical lows for the business. Mhmm. And the funny thing is is people hear that. And this is like the same kind of people that try to time the stock market. They're like, well, the worst months in the stock market are I don't know. Well, I'm just gonna say, like, February through June. So they always pull their money out. Like Yeah. I don't know that that actually helps you. Same thing with like, well, I've heard that in wholesaling June or September. I've heard in my local market those are slow months. I'm just not gonna send marketing that month. Well, that's just not how it works. You have to have the leads. You have to have that consistency. And, yeah, some of your marketing is not going to actually land. That's why you get a 1% response rate or 2% or on on the high end. You know? And so it's a numbers game.

Mike DeHaan: [5:08] Yeah. And, I mean, and a big part of that too is just because someone receives your marketing Mhmm. Doesn't mean they're making that decision right then. Like, there's a lot of people that received our marketing in September that decided to reach out to us in October, but their gear started turning when they received their stuff in September. But they just were choosing to not make, you know, a move at that at that period of time. So that's where that consistency is so important. It's like that with every business. You know, it's like people say I mean, it's all about brand recognition. Like, I I've heard people say things like like, why would Coca Cola spend, like, you know, whatever million amount of dollars to advertise a Super Bowl? Everyone knows Coca Cola. Right. And I was like, they do. But it was highly likely that you weren't thinking about Coca Cola until you saw that. And I guarantee you that they have a metric for how many people buy Coca Cola immediately after seeing that advertisement because it was not on their mind, and then it was. And they're like, you know what sounds good? I'm gonna go buy Coke. And they freaking go down to the corner store or do whatever. They text their wife who's out the store buying more nachos, and they're like, yeah. Can you get some Cokes for my, you know, rum and Coke or whatever I wanna have on

Dan Austin: [6:09] My rum and that's right. They called it a rum and Coke for a reason. I didn't even think about that. Yeah. Exactly. Yeah.

Mike DeHaan: [6:16] It's not a rum and cola. A generic cola. Oh, man. That's how you you know, you gotta sort your life out. But, yeah, what what I quite liked in South Africa, the traditional drink that they have at their barbecues there, they call they call them a brai. You're having, a brai cookout. And, they drink brandy and cola. Right? So it's, like, super sweet, super high alcohol, but it's such a popular drink there. When we went to the rugby when we were down, you can actually get it in a can. Oh, nice. Yeah. So it's like a a brand new cola in a can, and it comes in a tallboy.

Dan Austin: [6:47] Oh, that's I was gonna say, is it small or little? Because,

Mike DeHaan: [6:50] yeah. It's big. 480 grams

Dan Austin: [6:52] of sugar between the cola and the alcohol. Yeah.

Mike DeHaan: [6:55] Yeah. Yeah. But you get pretty plastered on those because, you know, brandy is not exactly

Dan Austin: [7:00] No. That's good. It's good stuff. I don't know how you could well, I guess because you are no. Never mind. I was gonna try to do the whole, like, south versus north hemisphere, what time of year? Because you can't drink brandy in the summertime. It just feels weird. So, hopefully, it wasn't warm out.

Mike DeHaan: [7:14] You can if it's mixed with cola and you're having a barbecue. Touche.

Dan Austin: [7:17] Right on.

Mike DeHaan: [7:18] Yeah. And then and they say depending on how much you like your guess is how much brandy you put it, and they measure it by finger. So if, you know, it's a kind of a shitty guess, you do, like, one finger of brandy. And then if it's, a good guess, you put three fingers of brandy. So that way it's, like, more

Dan Austin: [7:30] When I come to your house, you just give me the bottle. That's how good a friends we are.

Mike DeHaan: [7:34] Here you go, bud. Pretty bud. Yeah. Yeah. But anyway so, yeah, got some good stuff going on though. We got a few wholesale deals closing that we've been trying to get done for a while that we're just kinda delayed because of buyers being weird, sellers going sideways. But, I mean, the four that we have closing this month, what, 76,000 in

Dan Austin: [7:54] Mhmm.

Mike DeHaan: [7:54] Revenue. So have a decent month here for October. Got a flip listed, just kind of your

Dan Austin: [8:01] Yeah.

Mike DeHaan: [8:02] Nightmare project, which was mostly a nightmare just because if you guys remember back a while ago, we talked about the owner occupied tenant. Well, I guess it was a owner occupant. We bought the house. They became a tenant, and then they immediately submitted a maintenance request for all the shit that they had been neglecting for the previous four years, which we didn't fix because they were supposed to leave, and none of the stuff was necessary. And the thing too about that,

Dan Austin: [8:26] it was a maintenance request to fix the sink in the apartment they supposedly weren't living in.

Mike DeHaan: [8:31] Exactly. Yeah. So it shouldn't have mattered at all. Because they

Dan Austin: [8:34] didn't wanna pay rent in that apartment. Yeah. It was it was all dumb Yeah. Anyways. Whatever.

Mike DeHaan: [8:38] Yeah. But we got the one on the market, though, and I don't know if you've had any interest or anything in it yet. Have you heard from a realtor?

Dan Austin: [8:43] I have not.

Mike DeHaan: [8:46] Shoot him a text. They're like, at least, like, give us something.

Dan Austin: [8:49] I don't wanna be, like, the nosy client, but I kinda also wanna know if I've had

Mike DeHaan: [8:52] any showings. It's been a week almost. Feel like

Dan Austin: [8:55] you can ask. I'll hit above to see where we're at.

Mike DeHaan: [8:57] But yeah. Yeah. So this is great. So yeah. We're we're listed with another realtor who's some of their staff I know listens to this podcast. So, if you're with the FAR group, go ahead

Dan Austin: [9:08] and Get your shit together and sell this place.

Mike DeHaan: [9:10] No. No. It's like, Dan Dan might be reaching out, but hopefully it's sold by the time this one comes out.

Dan Austin: [9:16] Yeah. That'd be great. Yeah. You know, we know this market just takes longer. I mean, the houses I've got listed now, well, I guess I just have one. It's about to close. It's just, like, slow. But you you get them. You know, like, I'll I'll go like a week without a showing, and all of sudden I'll get a random showing. And then I'll go another like week and I'll get three showings. And then all of a sudden they just one of them's an offer. It's not like the offer you want, but it's an offer.

Mike DeHaan: [9:38] Yeah. That's how it used to be, though. I mean, with back before the last two years is, I mean, it would take two to three months to sell a house. Especially this one, it's kinda like a higher price point. You know, it's gets a slightly unique property in the way that it has, like, this ADU and the layout and that sort of stuff. But, I mean, it looks great. Like, you did a good job with the rehab, which, I mean, I fucking hope so. It's been so far over budget. But Even guys like us go over budget. I mean, have we ever not gone over budget? I feel like that's kind of the general rule for flipping houses is you always go over budget.

Dan Austin: [10:09] Well, it's always budgeted in, like, plus 10% at minimum. That's for damn sure. You just gotta know that. Yeah. Minimum.

Mike DeHaan: [10:14] But yeah. So we got that one listed. Hopefully, that will go see you. And that was kind of our last, like, big rehab that we had sort of as the market started to turn. Yeah.

Dan Austin: [10:23] From a flip standpoint, I don't see us. We didn't have anything else sitting up because we've had that. So we have we're sitting on inventory this year because we bought so many deals, and we finally this is, the last bit of what I would call our inventory. Now it'll be looking at opportunities from a different point of view for us.

Mike DeHaan: [10:37] Yeah. I mean, yeah, it'll start to level out here. But because we have that, and then the only other rehab we have right now is our little micro homes that we bought on seller finance last year, which are kinda different because we're debating on if we just wanna knock them down and, like, build a build on these lots or if we wanna like, we actually have one, but but I guess Jeff gutted it, and we're just gonna, like, list it. Did you put you put

Dan Austin: [11:01] on the Not yet. I was actually thinking about that this morning. So I would just talk through it, like, game plan this thing. So, yeah, we have two houses. Technically, I guess we paid $10.05 for each. Would that be is that what we paid?

Mike DeHaan: [11:13] Mhmm. Yeah. Something like that.

Dan Austin: [11:14] Yeah. Yeah. I mean, if you because we bought them on on seller financing on the same note. It was, 210,000 for the total purchase price for both of them. So even if you knock them down, it's not like the lots were cheap, but they were renting and they were cash flowing.

Mike DeHaan: [11:25] Yeah.

Dan Austin: [11:26] When we bought them. And then the tenants moved out of the one, which was a piece of crap. So we started gutting it. It's a double piece of crap now. And yeah, we can spend the money to fix it. But we're like, the challenge when you're doing seller finance, keep this in mind is it's not easy to bury your money out unless you're just like, don't care about the guy or gal that you bought the place from on seller financing. Who's like, really don't want my money back yet. You know, if you're just going to refinance it and there's no prepayment penalty, I guess we could do that, but it's not even is it worth doing, you know, for this little teeny 500 square foot thing? We could drop $50 in it easily. No problem. Yeah. The whole back of the house was rotted, just floating there. It's not an it was we couldn't tell that when we first bought it, but, like, it was it's just rotted out anyhow. So the idea being is like, what if we tear it down? Well, I got a quote. It's like $6 to tear it down. And then you've gonna have like an asbestos test. Think you have to do according to the city, is like $2, all that sort of stuff. So say you're 10,000 into just site development, getting this thing cleared out. We know we can build a house Mhmm.

Dan Austin: [12:23] Paying another GC for 315. So then if you think about the lot plus the teardown, which is at 115 plus 315, where does that put us at? 490 all in? 490?

Mike DeHaan: [12:37] I think you added some numbers there. Did I? The maybe. So so the lot's 105, 315. Or did I miss how much did have the teardown?

Dan Austin: [12:45] I just said 10 k total for that. So that puts you at $1.15. So I have $4.30. $3.15. Yeah. Where did I where did I get those numbers? You're right. I did add some numbers in there.

Mike DeHaan: [12:54] Holy crap. I'm as I hope it's not, 500. I mean, even $4.30 is still pretty high.

Dan Austin: [13:00] No. Okay. So it's, $4.30. So that's maybe what it appraised for when it's done on a new build. If it's a new build, 1,700 square foot house. Yeah. But the idea being is what if we sold it and took that 100 and Mhmm. We could price it up for 120 as is and then move that money over, tear down the house next door, and then build it. Then your net is quite a bit less into the property. So I talked to the owner about that yesterday, and I was like, I know we told you we weren't gonna sell these right away, but, like, we're kinda thinking about selling this because the house you sold this is such a piece of crap. Yeah. And that was and he's like, well, as long as it's still, like, backed up by something, as long basically, as long as I still can have recourse and get an asset back if you don't pay me. Mhmm. I was like, well, we could just put it on the one next door. And he's like, yeah, that would work. And then, like, two minutes later, he's like, but but then if you don't pay me, I only get that little house back. I was like, yeah. Yeah. I was like, you're right. I was like, you're right about that. I was like, but we might tear it down and build like a $400,000 house on it. He's like, oh, he's like, yeah, that'd be great. I'd do that. So he's like open to that idea, but he wants obviously his money to be to have an asset to protect it. So if we we're not gonna stop paying him, but he doesn't know that.

Dan Austin: [14:09] So Yeah. That's where we're at. So I mean, that's kind of the deal. Right? You you basically, the way I look at it, and I'll just finish this up, is net we owe him about a 180,000. If we sold a lot for a profit of $1.20, we basically have a lot for 60, which is a great deal in Spokane. Yeah.

Mike DeHaan: [14:25] Yeah. I mean, yeah, that is a great deal. You know, I I mean, there's a lot of different things we could do there too. Like, whether we roll it over there, we roll that into our fund, you know, which which we can we secure different loans and stuff that we do for people, or we have several other projects where we have other investors that we could probably trade them out. Cash out. Yeah. So, like, because we we actually have some places that we have private money that has more expensive money than this guy. Money is 0% interest. Right? 0% interest. Yeah. Yeah. He just wouldn't didn't wanna have a huge paycheck. Mhmm. So, I mean, we got a lot

Dan Austin: [14:55] of options with it. But To complicate this further That's already complicated. Is the tenant The tenants the caregivers for the tenants that are in the one house, because they're special needs adults that live in the one house, said that they wanna lease to own both of the houses as is.

Mike DeHaan: [15:11] See, but, like, I don't people always say that, though. And then you're like, okay. Cool. You need $10,000 per house secured. And they're like, oh, I thought that I was gonna pay you, like, the same amount of rent, and you're just gonna, like, give me the house in three years. That's like, what the fuck? No. That makes no fucking sense.

Dan Austin: [15:24] Exactly. They they're like they don't understand lease to own at all. But if they actually say they did come up with $20 for, like, a down payment and they were willing to pay, like, a cash flow number, I like that. Mhmm.

Mike DeHaan: [15:35] Yeah. And and something I'll say about this whole situation too, if you listen to this and your eyes glazed over and you're like, I don't even know what the fuck you're talking about. We had no idea how to do any of this when we jumped into this deal. What we recognized was that we were getting, you know, $200,000 in cheap debt on these lots that we were 95% sure were worth a decent amount more than what the debt was. It was 0%. And our philosophy was cool. Our risk is relatively low. We'll jump into it and just sort of, like, figure out how to do this. Right? And that's something that, you know, a lot of investors, they always, like, wanna have a specific box that they don't do out they don't solve problems. They don't do all these things. But if you wanna do this as a career and you wanna make, like, actual money, especially in this current market that's so tight, you have to be solving these complex issues. This is something like with our instant investor folks too. They've all been coming across these similar sort of situations where people have been, like, passing up on these opportunities like, oh, it doesn't really make sense. And having, you know, us help them sort of look at these different problems so they don't have the problem solving skills yet or working with the community, we're able to be like, oh, so that deal that you were looking at, maybe you should do a novation.

Mike DeHaan: [16:43] And, you know, instead of, like, trying to buy it because the expenses are so high on the financing and they're like, oh, well, I don't have a crew to do this novation. Well, it's like, cool. This other guy that's in your market, this awesome community does. You guys should work together, and you can JV it. And it's like, oh, look at that. We just solved the problem. Now you guys are doing a deal. Right? Or, like, there's all sorts of different ways to do it. Or we have some other people that one of them got a lead that was not in his market. He didn't know how to analyze it and how to figure it out. So it's like, well, we got somebody else in the group who is in that market. What if you guys figured out something together and you did this deal together? And now you know they're sort of solving a problem and they're doing things outside their box. And they're gonna be making real money because they're willing to do that. So, you know, like, if you wanna do this business in this market, you have to solve problems. You have to collaborate with people. You have to educate yourself on how to do these complex things. It's sort of the only way. The days of, you know, finding, like, some family who's been trying to sell their house for four months, they can move across the country, and they just wanna get out of it, those days are are gone.

Mike DeHaan: [17:42] Even with the way that the market has sort of started to turn over, we're not gonna have that just because of how much equity people have gained. People are gonna be a lot less likely to walk away from it unless they're really desperate. And a lot of those people are coming with baggage, you know, honestly. And then on top of that, there's also a ton of people like us who have now gone in, I would say, like, institutionalized this sort of business, they're gonna be taking up all those easy deals. Right? Like, if they

Speaker 4: [18:07] do come up at all.

Dan Austin: [18:08] Yeah. We're and we're looking at the easy deals, and we also have the the wherewithal to take on these deals. Like you said, like, we're literally breaking down our solution or our to this deal that we bought that we didn't know how to buy at first. So we but we knew to your point is like free debt is pretty cool. Free debt that comes with a cash flowing asset is really cool, regardless of how the other numbers worked out. And so that's why we jumped on it because we knew there was value there where, you know, other people may have or looked at it and said, well, it doesn't hit all three boxes that I want. I want free debt. I want to cash flow a bunch of money and I want no risk. Well, that's nah. Yeah. So we're trying to do here is like on, on air, like figure out what's our best solution to exit now that we're in this, you know, kerfuffle with, we don't really want to rehab this house because we don't love it that much. We love the debt associated with So now how do we get creative and figure out how to, how to keep that debt, which I really like the idea of cashing out another investor that we're maybe paying 8% or 7% interest and replacing with 0% interest debt. That's pretty cool. Yeah. Yeah.

Dan Austin: [19:09] Exactly. And there's yeah.

Mike DeHaan: [19:10] It's all about solving problems at the end the day, whether that's sellers' problems or your own problems. So cool. Well, speaking of solving problems, it is a this is my attempt to shift for our educational portion of this podcast. It is the end of the summer, start of the fall. You know, there are a lot of people that listen to this that are in markets where the weather gets shitty. And as the weather starts to turn, you need to make sure that you're maintaining your rental properties and you're doing things appropriately, right, to for so they survive the winter because sure as hell, most of your tenants are probably not gonna do that. For this portion, we are gonna talk over the main things that you gotta do to prepare your rental properties for winter, sort of how to go about organizing them. But really quick, a few words about our instant investor program, and we will jump into that.

Speaker 4: [19:57] The instant investor program is our twelve week group coaching program, which includes a self driven course and access to our private investor community. We will take you through the full process of how we find our leads, how we market, how we do our sales and follow-up, and how we determine the best strategy for every opportunity that comes our way. On top of that, you will also join a community of other like minded investors nationwide that are all marching towards the same goals, and you'll have direct access to Dan and myself so you can continue learning and growing with us as we continue to adapt and grow our business. So whether you're a new investor or already established, our systems can help take you to the next level. So if you think you might be a good fit, go to the instantinvestorprogram.com and schedule a call, and we can have you talking to motivated leads in as

Mike DeHaan: [20:37] little as two weeks. Alright, guys. So preparing your rental properties for the winter months. Obviously, if you live somewhere like Arizona where you don't have these, you don't need to worry about these. You gotta I don't know. There are probably other problems you have to worry about, maybe. I don't know. Like, old people dying in your properties that's all you have is Old

Dan Austin: [20:57] old people and the air conditioning shuts off and they just probe. Yeah. That's a real thing.

Mike DeHaan: [21:02] That's a tragedy. Things that we don't have to worry about in the Pacific Northwest, really. But if you live somewhere that has winter or has you know, whether that's snow, that's heavy rain, that's cold, whatever, the winter months are a real problem for your rental properties, and it's something that you need to account for as you are sort of going through the year. You know, you can't expect your tenants to do it, like, even if it's part of your lease. That's one of my favorite things that when we talk to a lot of these sellers that are like, oh, yeah. As part of our lease, our tenants had to maintain x y z. And then you show up and you're like, hey. Surprise. They didn't do that. And, you know, they've been there for eight years.

Dan Austin: [21:38] One out of 50 tenants will actually do something like that, or they'll be proactive. You know? Like, we have one tenant where he's like, I cleaned the rain gutters that I installed myself. Like, oh, thank you. Like, that never happens. I

Mike DeHaan: [21:49] know. Right? Yeah. But he has a vested interest because he's the one that paid for the rain gutters.

Dan Austin: [21:53] Exactly. Yeah. Now. Yeah, exactly.

Mike DeHaan: [21:54] You know? So he has some pride of ownership. But, yeah, preparing your properties for winter, there is a bunch of things that you have to consider.

Dan Austin: [22:02] And it's not just winter too. Think it's just like this annual. The wintertime's a good time because there's a slowdown. It seems like you have less tenant turnover, generally speaking, around the holidays. And it's like a a time where it's like, you know what? I should do some stuff. Because here's the thing. I'll tell you. I'll be honest. Like, when I buy a property, once I stabilize it, I hate going back to it. I never wanna think about it once I stabilize it. Whether you're managing it yourself or you have a property manager, like, you still need to do some annual things to make sure your properties are good. Because generally speaking, they won't be if you just lease set it. You can't set it. Forget it. I mean, that's the problem.

Mike DeHaan: [22:33] Yeah. Yeah. That's true. So I guess how do you manage it though? Because I mean, we have a bunch of them that we have to maintain. I mean, I don't maintain them.

Dan Austin: [22:40] I'm Yeah. I mean, hit miss. It's hit miss. Because we do have different property managers, and we do have some stuff we self manage, and we have some properties where supposedly the people are managing it in some level or fashion. Right? We have some unique leases with with that. But what do we do? I mean, I guess so one thing I'll start with is like this in this concept of an annual walkthrough. Like, I hate doing that. I don't like it, scheduling it around my schedule and all that sort of stuff. But you do you should do that. Like, we have these one tenants that were placed in, I don't know, six months ago, whatever. And, like, I kept getting the utility bill because they didn't start their utilities. So they're like, we're gonna shut your power off. I was like, I don't really care. And I, like, messaged the tenant through our tenant portal and then text them because I have their phone number and no response. They obviously went and called and got the utilities switched over, but they never responded to me. And I'm like, oh, I see what kind of tenants these people are. I'm definitely gonna walk their house because they seem like people that are dumb and will do stupid things to your house by just leaving them. Just simple communications.

Mike DeHaan: [23:45] What property is this? I don't know if you even told me this as Glenn. Oh, okay. Have they been there for six months?

Dan Austin: [23:51] Something like that. I don't know. Maybe five, four, four months, whatever. But very problematic. Yeah. Anyways, you know, when somebody texts you, especially the person that owns a house you're living in, it's generally nice to be like, oh, no. I did not know that. I'm sorry. Or something simple. So, like, that's my indication that, yeah, I should probably walk it. Also, because when you go walk it, if you go inside like, go inside of

Mike DeHaan: [24:09] it and if it's trashed, like, tell

Dan Austin: [24:11] them to knock it off. Like do something about it, be proactive about it. And also make sure that'll let you know that you're not going to renew their lease because you don't want them trashing your house. Glenn, our property is a brand new place. We just renovated it. I want them trashing it. We spent a lot of money on it to make it nice, not to be a rental, but it is a rental now. And that should mean we have lower CapEx, lower turn costs, all that. But if they're trashing it, that's not the case. So like an annual walkthrough, and you don't have to do it yourself. You can hire somebody to do it that you trust, like a handyman to do it. Mhmm. But there are like, just, like, little things you should be walking around and paying attention to. And for us, anybody that's, like, north of, I don't know, whatever that line of longitude or latitude is, whatever whatever the horizontal one is. One where there's, like, winter. Yeah. Exactly. Whatever that one is. It's, like, making sure everything is winterized. And what I mean by that is, like, here's a good story. Like, we had a house that we bought that we didn't own that long before winter, and it was an Airbnb. And, like, the washer machine, the pipe that goes in the washer machine's on the exterior wall, which you never wanna put plumbing if you can avoid it on an exterior wall of a house because it freezes, especially if it's a 100 year old house with shitty insulation. And so the pipe froze, the drain pipe froze. And so it was flooding water into the house. And so we had to go in there during the winter while a guest was there and it costs us a pile of money to like unfreeze it and put heat tape on it.

Dan Austin: [25:31] Like those are like little things when you walk a house prior to getting cold, like look for that stuff, look for your spigots. If are they, is it a frost free valve? If it's not, you should probably, make sure there's a shutoff valve to it. Cause they will like freeze and like leak. I remember walking by one one of my rentals, and there was, like, a four foot icicle coming off the spigot, but it was not frost free. And their shutoff valve on the inside was still leaking. So that just creates, like, a massive problem. Again, I was walking away one of my personal rentals just last week, and I turned off the sprinkler valve so the blowout guys could come in. And the freaking valve was leaking, and it's in the ceiling. So it's, like, leaking actively. The tenants didn't tell me it was leaking actively. I And could have relied on the sprinkler guy to shut it off, but I wanted to go there and just to check on everything. But that thing was leaking. This drywall is all soft. Was like, damn it. So I gotta figure that out. But that's something that would have gone on for a year probably and would have grown mold and would have happened while the tenants were there. And I would have had to pay extra just because it's so much harder to do stuff while tenants are there. So that walkthrough, I think, is critical because it helps you look for things. And I'll just one more note, like, on that.

Dan Austin: [26:37] Like, we had this issue on the same property a couple times, but one time I had to go there to shut the main water of the house off, and the the valve was so old, it just disintegrated in my hands. Okay. And so now I have this valve that I can't do anything with. And it was in the wintertime and it's like the worst case scenario. So find when you buy a house, find the main shutoff valve and make sure it's good. Just pay a plumber $250 to replace it if it's a crappy old one. The thing literally disintegrated my hands under the house. I'm like, what do I do? Like, nothing in the moment. Right? You're just kind of screwing yourself.

Mike DeHaan: [27:09] But Yeah. So I think I think big thing is, you know, when you're winterizing your house, pretty much anything that could cause any issues with water, you wanna make sure that you're good. So if you have any exterior plumbing like that, make sure that's frost v valves. Sprinkler blowouts

Dan Austin: [27:21] Big ones.

Mike DeHaan: [27:22] That's something that often gets neglected. We've bought so many houses that have just fucked up sprinkler systems because they never blew them out, they froze, and they burst. And that and the thing is too, is you find, like, a good landscaper, like, they'll actually remind you because they won't get reoccurring revenue every single year. Right? And if you can't find someone to do it, we've seen crackheads going around with, like, the rental air compressor from

Dan Austin: [27:42] Yeah.

Mike DeHaan: [27:43] Home Depot on their truck. They'll they'll blow it out. Like, they might break in the process, but at least, you know, it'll freeze. So, you know, like, getting that done, you know, cleaning out your gutters to prevent ice damming, right, or or anything similar there. One of the first flips I actually did several years ago, we did it kind of in the early winter, and we had like, we couldn't see how bad the roof was, but we had gone and, like, replaced a lot of the soffits because there was water damage. And then it snowed a shit ton in, like, March that year, And it built this huge ice dam again. Oh, no. It just rotted out all the soffits again. I knew it twice. So I didn't even, like I didn't even know that that was a problem, and we didn't think to clean the gutters. And, of course, the Craigslist contractor hired at the time who fixed the soffits didn't Mhmm. Clean the gutters or anything. So lesson learned there. So, you know, taking care of that. I mean, any sort of, like, yard cleanup is gonna cause water issues. Right? Like, even if you have something like like, I've seen some places where they'll have, like, different sort of foliage or, like, things like that that sort of force water to sit at the base of the house, and so then it, like, seeps into the basement and all this sort of stuff. We actually dealt with that at the sixth place because there was so many leaves that, like, the grass was never draining because the water was never getting into the grass. It would just sit in the leaves and would eventually just seep into the basement, which was a dirt basement or a flood. You know?

Mike DeHaan: [29:03] So, yeah, anything related to water, you definitely wanna take care of. Yeah.

Dan Austin: [29:07] Water is the big thing. Yeah, walking around, making sure things are sealed up. We had a nice dam on one of our properties. Had nothing to do with bad gutters. It was just a it's a low sloped roof, and that winter allowed that to happen, just because it was like this long Yeah. Long freeze thaw, all that sort of stuff, snow built up, and it was leaking in through a window. It was coming up and around. Water will find its way And so just making sure you have all the places that you can see a problem, have those, like, safed up and ready to rock and roll because water is your enemy. For some reason, like half the time, tenants just don't tell you. They don't they don't pay attention. They don't even notice it.

Mike DeHaan: [29:45] Yeah. And then when you

Dan Austin: [29:46] get on the inside, because you're doing your annual walkthrough and so you got the whole exterior, that's a good time to walk through all the bathrooms, check the P traps, check the caulking on the bathtub, make sure that they're not leaking, you know, outside of the shower and softening up your drywall, ruining your floor. Because water is the enemy and, and it, that, those are things that make it costly to own a property. And if you can prevent them by spending a little bit of time or money, it will help you just a ton just to get out of it. The other thing I like doing when I'm on the inside is like, so of course we just check all the plumbing, check all the valves, flush the toilets, all that sort of stuff. But is HVAC, making sure you can either get it serviced or just make sure, like if you have a furnace, what are your, are they replacing it? Do you have a system in place to monitor them replacing the filters? Yeah. Cause filters I've had a hap, I had a hap and this isn't on my bad on one of my student rentals. I just hadn't got down there to replace the filter for them because they hadn't been communicating with me. Was like, oh, in the summertime it gets kind of weird with students.

Dan Austin: [30:41] They're just here and gone. Well, they're like, yeah, the air conditioning's frozen. It won't, or the air conditioning won't work. I'm like, uh-oh, Immediately knew it was. The filter was so clogged that it froze the whole thing up, and that's not good. And then it flooded the basement when it thawed. I'm like, oh, the basement's flooding. I was like, yeah. I know. Mhmm. So it's just like that stuff.

Mike DeHaan: [30:58] That is super valid, like, heat sources as well because, you know, you're right. People try to do these things like, oh, I'm gonna have you know, send them a furnace filter, and they're gonna swap it out. I remember I tried that once, and I went to

Dan Austin: [31:09] One of my stackers.

Mike DeHaan: [31:10] For something completely unrelated, they had a stack of ones that they had never swapped out. Like, literally next to the fucking furnace. Like, it would take them two seconds, and they just didn't do it. They would just go and chuck it down there.

Dan Austin: [31:20] When you think they'd be incentivized to have clean air in their home, but they're not. I don't know what it is.

Mike DeHaan: [31:25] Yeah. But, you know, what what will happen is the furnace will give out, like, half through the winter. It always happens in winter because they're running it like crazy. And then they'll care, and they'll be calling you. And then you'll have to do some BS, like put them in a hotel or something because the whole house is, like, 30 degrees, and they have two children. Exactly. This is not definitely not based off of a real story that happened with a non paying tenant that I was so livid about. You know? And then she had the tenacity to complain the hotel I booked wasn't nice enough. And when she wasn't paying me rent in her place that she didn't maintain and didn't take care of the furnace.

Dan Austin: [31:56] Yeah. People are wild like that. That that's the case. That's an edge case that happens more often than you think. Wow. Yeah. What a pain. Yeah. But it's it's good to have a like, just in general, like, just have a checklist so you can avoid a lot of these things and that'll help you along the way. You know? Yeah. We probably have a checklist somewhere that we follow.

Mike DeHaan: [32:13] I think that you should make one. I should. Dan, and then we should, we should give it away at collectingkeyspodcast.com/checklist. For free. For free.

Dan Austin: [32:22] It's a freemium. Yeah. I'll I'll that put together because we do have that. And just so you guys know, like I'm not doing this on all my properties. I'll do it on some of them, but we have people we can send to do that sort of stuff. Cause if you don't trust your property manager to do it, which I wouldn't trust them right away, they should be able to do it, for you. But like, you know, hire a handyman that you trust, say it's $50 an hour, it's an hour per property. And say you have, you know, 10 properties, $500. And they're going to go around and they're going to do like little bits of caulking. They're going to make sure you're winterized on your spigots and that your, your valves are all operating. Go through the inside and make sure there's no leaking. Make sure the furnace filters are good. Like, that is worth $50

Mike DeHaan: [32:58] to me, like, for every property

Dan Austin: [32:59] an hour just just go and do it.

Mike DeHaan: [33:01] I mean, even, like, a $100. That's something that is so easy to wanna be cheap on, especially if you have a bunch of properties. But, literally, if you don't do that and it leads to, like, a 5 or $6,000 problem in, like, a year or two, you should have just spent, you know, the $100 for the past couple of years.

Dan Austin: [33:14] Absolutely. Like, don't be that's the thing. Just don't be cheap, especially in weatherization things. Don't be cheap on weatherizations, plumbing, all that sort of stuff, cause those are things that damage your home the most. Exactly. Because then what ultimately happens, you

Mike DeHaan: [33:25] have to spend the $5.06, $10,000 to fix whatever the situation is, or you have to sell your house to us for 60¢ on the dollar because you can't afford to fix it.

Dan Austin: [33:34] Exactly. We'll be happy to fix it for you.

Mike DeHaan: [33:36] Yeah. So perfect. Cool. So you can go to collectingkeyspodcast.com/checklist. You can get this checklist that Dan may or may not put together. If you go and look for that and it's not there, go ahead and send me a DM because it means that we immediately forgot after we finish this podcast. Yes. Exactly.

Dan Austin: [33:51] I will do it.

Mike DeHaan: [33:52] Yeah. Either way, that's the accountability right there. I think that'd a good freebie for people. Anyway, guys, so getting into winter, take care of those rentals, I guess, going full circle. Anything that's gonna cause issues with water, anything that might be affecting your heat source, those are just, like, super basic things that you would want done in your home. So do them for your tenants as well. And if you don't do them because you don't wanna spend the $50,102 $100, a, your shitty landlord, b, that's on you when something happens in your property and costs you a hell of a lot more. For sure. So definitely do those things. But alright, guys. Well, thanks so much for listening. Please go and leave us a five star review wherever you listen to your podcast and share this with anyone who might find it entertaining or helpful or wanna learn about real estate or whatever. Besides that, you can follow us on Instagram. I'm at Mike underscore invest. Dan is at investor man. Dan, if you want to learn how to invest like we do and buy huge discounted properties and join our rapidly growing community as well of other like minded investors. Go check out instantinvestorprogram.com and schedule a call with one of us. We have a ton of new things that are coming to their to that whole program here very shortly. My goal is to have everything sort of, like, built out and to release around Thanksgiving time. If So you go and you register for that, we can tell you about them, but there's a bunch of stuff coming, so I'm super excited.

Mike DeHaan: [35:06] But, anyways, guys, thanks so much for listening. And, Dan, any last words?

Dan Austin: [35:11] No. Peace. See y'all next week.

Mike DeHaan: [35:13] Peace. See y'all next week. Alright. Thanks, everybody. Bye.

Speaker 1: [35:17] 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.