LIVE from KEYS CON

Mike DeHaan: [0:00] There's like some really solid friendships

Dan Austin: [0:02] Oh yeah, forming connections.

Mike DeHaan: [0:03] And looking back, just like some of the best connections that we have, you know, in the real estate community, and also just as like on a personal level, some of my best friends I've met at real estate events just like KizCon here, that I would call some of my best friends Yeah. Like, period. People you can trust

Dan Austin: [0:16] Yeah. You know, that you like. Yeah.

Mike DeHaan: [0:18] And they're, like, like minded just with life and kinda what they wanna do. So it's really fun to be able to bring that. What is going on, guys? Welcome to today's episode of the collecting keys real estate investing podcast. And we are here live today from KeyzCon. And, this is kind of an ironic thing for me because I'm a pretty big podcast listener, and I really hate whenever a podcast that I like have in person events and they decide that they're gonna record a live episode because the sound quality is always kinda shitty. Yeah. And it's always a little bit offbeat from They always have the camera guy almost knocking the TV off the wall behind. Love it. But so, you know, I figured we might as well do the same thing because that's what you're supposed to

Dan Austin: [1:03] do when you're real podcaster. It means this way.

Mike DeHaan: [1:05] Means you're a real podcaster. Yeah. Exactly. When when we're sitting here while the camera guy's running around and we're just screwing around on our phone drinking high knees.

Dan Austin: [1:11] Right. And trying to adjust lighting and all that kind of crap, then, you know, it's never right.

Mike DeHaan: [1:14] Yeah. So but, yeah, down here in Scottsdale for our first ever Keyescone event, which you might have heard us talk about a little bit on different episodes. So with this, what we did is we had 15 members of our instant investor program coming down here to do a two day event where they are doing a big deep dive into their business. We're doing basically a mastermind combined with, like, a boot camp, I guess. And, you know, it's our first time doing this, and I realized as I was going through the afternoon session focused on team building that apparently make things extremely dense.

Dan Austin: [1:45] Yeah. Yeah. We I mean, we went through a lot of stuff. So day one has been great. We're gonna do day two tomorrow as long as everybody can, like, survive the networking and the the late night we're gonna go do Topgolf after this as a group. But, like, I feel like the engagement regardless, the minute everybody got on the ground has been, like, zoned in. So even though it's dense, everybody's really enjoying the content, and then able to the cool thing about this group is, I'll say, you can tell that most of them can apply it right when they get back. It is. It's not irrelevant content, but also they're ready to consume it.

Mike DeHaan: [2:18] Yeah. I mean, and and the thing is too, whenever you join groups like the instant investor program or different coaching programs, mentorship groups, whatever they are, the connections that you make are the real value outside of just like working with the coaches or whatever. Yeah. I mean, it's it's actually been really fun here because a lot of these guys, they've met each other on Zoom calls and different things. They never met face to face. And you can already tell, even though a lot these dudes met each other the first time, like, just yesterday, there's, some really solid friendships. Oh,

Dan Austin: [2:47] Forming connections.

Mike DeHaan: [2:48] And looking back, they're just, like, some of the best connections that we have, you know, in the real estate community, and also just as, like, on a personal level. Some of my best friends I've met at real estate events just like Keith's Con here I would call some of my best friends, period. People you can trust Yeah.

Dan Austin: [3:02] You know, that you like.

Mike DeHaan: [3:03] And they're like like minded just with life and kinda what they wanna do. So it's really fun to be able to bring that to a lot of our

Dan Austin: [3:08] Well, the interesting thing too, I think about anytime you're in like a group setting and you're with people that are at the same point of where you're at, and let's be honest, as a business owner, sometimes you're suffering. So you have this shared suffering and you get through it together and the bond you get from that is like 10 x of what you can get from any relationship in the same amount of period of time.

Mike DeHaan: [3:28] Yeah. Yeah. Like something that most people just can't relate to. Absolutely. But as an entrepreneur, they say like entrepreneurship is lonely. It's really Yeah. It's not necessarily that you don't have friends, it's just that people don't necessarily understand Yeah. The same

Dan Austin: [3:40] So the the point of going to a mastermind is that you find new people. This isn't a conference, like you're gonna go get at your day job, right? This isn't where you go and look at vendors and get free stress balls.

Mike DeHaan: [3:49] Yeah. Is where you meet is where you

Dan Austin: [3:51] meet people that are doing what you're doing and doing what you wanna do at different levels and degrees, and you all like learn from each other. Yeah. And because of that, like the relationships that you carry on, like I've noticed that from these types of masterminds, I'm like way more likely to talk to the people afterwards because either they reach out to me or reach out to them for a specific reason, but also you just enjoy it. Yeah, right. When you have that person that like, kinda like with our partnership, when you're in the like the trough, you have somebody to talk to and be like, man, should we keep doing this?

Mike DeHaan: [4:18] Yeah.

Dan Austin: [4:19] You know? Yeah, right. Ideally, that your partner is at the height of the trough. They're not at the bottom with you, so you pull each other up and down as

Mike DeHaan: [4:26] you go. Yeah. Yeah. It's funny compared to like a corporate event. Think, probably back when I was at Boeing, I remember going to this. It was like whatever aerospace event up in Seattle, and they sent a bunch of people up to it, And literally, everyone there was part of different corporate machines. And their intention was they wanted to be something like this. We're gonna, like, make connections and come back. And I remember literally everyone there, no one even talked to each other. When they lunch became available, it was like Disneyland, dude. Like, they, like, open, like, little cafeteria, and everyone, like, went sprinting in there to get their free lunch. Get their meatballs. Yeah. And then everyone just went home afterwards. Oh my And I like, what a giant waste of freaking time.

Dan Austin: [4:59] Did they get the stress balls?

Mike DeHaan: [5:00] Yeah. They did. Yeah. Had like Mouse pads? The sweat the stress balls, like, you know, the t shirt for whatever electronics company that you don't care about. Like, for some reason you take, and then you pretend you're gonna use it at a gym shirt, but you don't.

Dan Austin: [5:12] No. I think some of those the shills though, they do wear them. That's their normal shirt next year. Know what

Mike DeHaan: [5:17] They start wearing them till, like, casual Monday or whatever. Yeah. With their jeans. Yeah. So anyways, if you guys are interested in coming to KeysCon, go and check out collectingkeys.com, and check out our instant investor program, and then maybe you can come to the next one because we're planning to make this an annual thing moving forward. So, yeah. Let's talk about real Yeah, estate

Dan Austin: [5:33] real estate. Yeah. Thirty one percent of millionaires

Mike DeHaan: [5:37] feel poor. Thirty one percent of millionaires. Yeah. So you said that right before we got on here, so where'd you read that? I don't wanna quote it. I think it

Dan Austin: [5:43] was like CNBC. I just saw it on

Mike DeHaan: [5:44] a piece

Dan Austin: [5:44] feed, so I don't wanna quote that, you know, it's just

Mike DeHaan: [5:46] like, So click you don't know that they actually like surveyed like a rich district of like New York City, so of course they feel poor. Feel poor,

Dan Austin: [5:53] exactly, but I think it just speaks to where we're at in the market. I mean, we talk about this all the time with like interest rates, inflation's obviously affecting that, so things are becoming more and more challenging for people to acquire properties.

Mike DeHaan: [6:06] Yeah.

Dan Austin: [6:06] And cash flow is tough to come by. If you have money like wealth through real estate, like a million dollars, be a millionaire or more, it's locked in there. You don't feel like you can do anything with it. So yeah, everybody's in a tight spot right now.

Mike DeHaan: [6:19] Yeah. Well, I think one of the biggest things that people tend to not realize is that being a millionaire can happen on paper doesn't necessarily mean that you, like, have a million dollars you can just spend on stuff. True. Because, like, million dollars in cash is nearly a lot of money. I mean, a million dollars on paper these days is not. Right. I mean, just looking around, like, here in Scottsdale, we were driving around looking at Zillow. We're driving to the Airbnb, and, like, every single house that we were passing was worth, like, 3 or $4,000,000.

Dan Austin: [6:41] Exactly.

Mike DeHaan: [6:42] Right? It's, like, every single one of those people, obviously, is wealthy, but able to afford that. But I guarantee you there's a whole generation of people probably bought these houses when they were like, you know, a couple $100,000 and are now multi millionaires just by circumstance.

Dan Austin: [6:54] Absolutely. Right?

Mike DeHaan: [6:55] But most of people probably don't have multi, you know, 7 figure income, they have multi 6 figure incomes.

Dan Austin: [6:59] Totally. Yeah. It's like it's just like the STR bros

Mike DeHaan: [7:01] Yeah.

Dan Austin: [7:01] That bought a house in The Smokies. Bros. That that's a nickname. Right? STR bros. The STR Bros that bought a house in The Smokies and now they're a millionaire and then they think that they are big time real estate investors and they're trying to figure shit out, but they can't because it's like, man, you bought a house and all your wealth is locked up and that doesn't mean you can do anything with it. They never built the skill set to get to the next level, they just kinda luck of timing.

Mike DeHaan: [7:22] Yeah. I mean, I don't know, it adds its own value because it allows you to use leverage, right, allows you to have some sort of financial security

Dan Austin: [7:27] Right now.

Mike DeHaan: [7:28] Think it's huge. Yeah, I mean, you can still use leverage if you want, you can get a line of credit, it's not too guess

Dan Austin: [7:31] you could. I mean, some people can, some people I

Mike DeHaan: [7:33] mean, I think the biggest thing with all that, if you have that equity wealth, but you're not trying to do anything with it, it doesn't really mean anything.

Dan Austin: [7:40] Sure. And I guess my point would be is, like, they don't have the skill set to do that. They're not gonna get creative because they might not know how to go get a line of credit. Yeah. Like, in a real way.

Mike DeHaan: [7:47] Well, probably don't have a need to. They can be like my neighbors, my current house, before they got separated, their whole thing, you know, they like I know they wouldn't got a line of credit. They went and bought a boat to, like, finish their basement, like, all this outrageous stuff, and ended up selling their house, what I'm pretty sure was a loss because they were so hyper levered.

Dan Austin: [8:02] Yeah. Because they didn't use the line of credit to get an asset. Like, you and I use our line of credit to acquire assets and to continue to invest in real estate. That's only reason they're there, right? And you set them up as a line of credit as a short term credit to be able to do something and then back out of it and reuse that money and repurpose it somewhere else because, like, taking, like, true equity out of your property right now is just next to impossible. It's so hard, and you're not gonna wanna do that anyways at the interest rates because if you're using your cash flow to own that property, you're not gonna your cash flow is probably gonna go away if you underwrote the deal like three, four, 5%.

Mike DeHaan: [8:32] Yeah, right. That's true. Honestly, biggest concern I have is people that are doing stuff like that and trying to put it in a passive investments

Dan Austin: [8:38] Right.

Mike DeHaan: [8:38] Right now. Because there's such you know, we've talked about this. You guys listened to last week's episode. You really don't know some of the crazy scams that we haven't seen going. Oh, yeah. Like, there was the whole Crofton Frost thing, which actually have been really fun to listen to some of the guys here who are from that area and, like, know of that company. So if guys didn't hear that last week, basically, there was this big accounting company. How's all these syndication coming out of other things? But they were doing taxes for these companies that do, like, tens of millions of dollars in revenue. And those companies paid the CPA firm their tax amount so they could go and pay the IRS. And they basically just said, like, you know what? We're just not gonna pay their taxes for them. We're just gonna steal all that money. And they stole, like, hundreds of billions of dollars. Totally. But you're starting to see that on, like, a smaller scale too. And kinda one of the things that you're seeing everywhere is this really common trend of like these older I don't wanna say older, these smaller real estate investors posing about how you shouldn't buy real estate anymore. Should just invest in like notes or invest privately because you're gonna get better returns with current interest rates. So they're like, you know, oh, you know, go get a line of credit on your house, go and, you know, refinance to put money in these notes Get cash out. And then they have a little blip at the bottom and they're saying, I'm also raising money, you can give me a note for 10% Right.

Mike DeHaan: [9:43] And I'll pay you that. But those people will just absolutely steal your money.

Dan Austin: [9:47] That happening to people, but also remember everybody's incentivized to do something when they're when they're giving you those pitches. Look at the fine print in those and see what they're doing, and yeah, sure, investing in a fund or a REIT might be a good choice, Obviously, underwrite the operator. If you don't know who the person is that you're literally going to be investing with, you can't do good underwriting, you're going to likely get your money stolen. I shouldn't say likely. There's a good chance, there's a better chance. You and I have invested with other people. We've invested in loaning money to people and also in syndications, but it's like we know the operator, we look at the track record, it's not just somebody we met online that was pitching like, hey, everything you're doing is crappy, why don't you come invest with me instead?

Mike DeHaan: [10:29] And just give me the money, yeah. Right. I mean, we we even had a guy that was in our instant investor program for a while, and he decided that instead of doing the wholesale or, like, off market residential thing, he was gonna get in a multifamily. Mhmm. And I said, that's fine, know, not mutually aligned or whatever. He left. I reached out to him just, you know, coincidentally, I wanna check-in with him. He's also went to Gonzaga like we did. He's from the Pacific Northwest. That's how he was doing, but not the money that he was planning to use to build his residential company, his residential off market company. He instead invested it in, a multifamily deal. And that dude has now, by all intents and purposes, stolen his money. Jeez. Right? Like he hasn't gotten any paid returns for it, it's past the deadline, it's supposed to come back, it was supposed be kind of like a bridge loan.

Dan Austin: [11:09] Right.

Mike DeHaan: [11:09] And he's, you know, essentially been scammed from what it sounds like.

Dan Austin: [11:12] So for various reasons, that person would start that scam, right? They either just started doing it now or they're running a Ponzi scheme and they need the money to pay off previous investors.

Mike DeHaan: [11:20] Well, I think the thing is though, is like not even all these people are necessarily malicious. I think there's a lot of people who understand like the gist of real estate, or they probably had some success in 2021, and they're trying to ride that same momentum, but they don't know how to operate in an environment where there's 9% interest rates. Totally. And like, you know, the extra strategy isn't as clear, or like the future isn't as clear as it was

Dan Austin: [11:40] to you. They don't have the skill set to continue to operate, and that's the thing about real estate investing, it's a long term game, and if you can't stay active long term and learn the skill sets to stay active in all the markets, you're not going to be successful. Like, it's okay to not be active if you just don't have that skill set, you're not willing to take the risk, but to be active just to try and do it, but not actually know how to do it, you're gonna lose every time.

Mike DeHaan: [12:01] Yeah, exactly. And I just think it's super important to be cautious if you're somebody who has come on to like your current wealth position by half of a stance, by having a bunch of properties in the Smokies

Dan Austin: [12:12] Right.

Mike DeHaan: [12:12] Or by having a house in Scottsdale that suddenly quadrupled in value. Right. Or if you have, like, people in your family that fit that mold, that they just, like, kinda lucked out into that, and they're not Yeah. They haven't grown that by having a business or some sort of operation, that they protect that. Like if you have a business owner, you know how to make money, you have a little bit of the ability to sort of deal with that and shield yourself from the risks, but a lot of people aren't in that situation. So

Dan Austin: [12:34] So that reminds me of like this idea, the conversation of all these people like the Frost and Croft, Croft and Frost or whatever the hell their names were,

Mike DeHaan: [12:42] who cares? They're like a eighties band.

Dan Austin: [12:44] Right, exactly. Seriously, dude. Like, and they kinda look like they should be in eighties band. Especially that

Mike DeHaan: [12:48] one guy. He's weird. Freaking slimy. Yeah. When your CPA opens up with his PDF that talks about how he's worth 700,000,000 and he's gonna be worth 1,000,000,000 in the next year, that guy will steal your money.

Dan Austin: [13:01] Totally, yeah, especially a guy that's like handling other people's money. Yeah, right. What I wanted to make the point though is so we're gonna see like, we're seeing those things blow up, right? Those Ponzi schemes, those issues because the market's going down, people are They're

Mike DeHaan: [13:12] getting desperate.

Dan Austin: [13:13] They're getting desperate, but the other thing, when you talked about people saying, hey, invest in my fund, like don't invest in real estate right now, sucks, but invest in me and invest in my fund, There's a lot of that going on, and then there's people that are well known people. Like, you and I know, everybody knows, they're on the big shows, they do the big shows, that are failing to perform, and they're continuing to sell themselves, sell their funds, sell their syndications, and sell the invest with me stuff. Yeah. Which is more interesting because people are like, I trust you. You're associated with a brand, or you have a really strong brand, and in the past you've done well, but you're not doing well right now, but they're not disclosing that. Yeah. So people are investing with them and taking a risk for potentially no or three to 4% returns.

Mike DeHaan: [13:58] Yeah. Or they'll even just do, like, kinda weird stuff that isn't necessarily aligned in the pitch that they sold to their investors. Sure. So I heard one story. This is from a very prominent, I would say, like, real estate personality. It's been in bigger pockets. I don't wanna give him my name, but he wrote the book about flipping houses. Wow. You can go and look that up yourself.

Dan Austin: [14:15] You dropped that one.

Mike DeHaan: [14:16] I didn't say who it was. Good. There's lots of books on flipping houses. This is true. But he had a deal they raised a bunch of money for. I know people that invested in this, they were underperforming on their pref, so they weren't paying people out. But they had in their agreement that they could go and choose to make a, basically, a donation, like a charitable donation with the proceeds. It's meant to be like a tax play. Sure. Okay? They missed their pref and instead went and made that donation. Right? Whereas all the people that are expecting to get that money back on like a recurring basis, they're like, woah. Woah. You should pay us back first.

Dan Austin: [14:48] Well, no shit.

Mike DeHaan: [14:48] Instead of making the donation for the tax benefit for yourselves, but they as the operator gotta choose. And so they basically told all their investors, well, it sucks. You're not gonna get your 7%, so we're gonna go donate to whatever this group is so we can get our tax deduction that we need. That's even worse. So that that's that's kinda fucked up. Right? Like, because they're

Dan Austin: [15:05] That's worse because they have the decision that they could make, and like, they're taking a personal benefit instead. That's like like taking the prep yourself instead of to your investors. Yeah. It really is. They're using a loophole to do it though.

Mike DeHaan: [15:16] Yeah. But but even worse, k, so we'll move on with that one. There's another deal with a very, prominent company, and there's something else. This isn't necessarily shady. This is the biggest guys taking advantage of their position of power. Mhmm. K. So this group is very, very large, and they basically were a primary investor on this deal that a smaller firm brought to them. Mhmm. So the smaller firm brought about $6,000,000 and the deal, they went part in with this much larger company and had their agreement documents, whatever. This was like couple years ago that they went into this thing together. And fast forward, now the exit strategy on this deal is looking a little bit funny. And the larger company, they had buried in their agreement that they at any point could buy back the smaller firm's shares for a price that they deemed to be worthwhile, that they deemed to be fit. And so this was a couple weeks ago. Okay? The smaller company got basically a letter that said, hey, so that $6,000,000 investment you made, we've now deemed that's only worth $10. So we're buying that from you for $10. So here we go. And they basically just There goes $12,000,000. Right? And I don't know what the full story is with that. But probably I would guess that the exit on the property no longer makes sense. But everyone that invested it with that smaller company with a $6,000,000 fund, their money's gone.

Dan Austin: [16:30] That smaller company's brand is completely tarnished because they decided to partner with the big boys that just took them to

Mike DeHaan: [16:35] to the Just took them to cleaners. Yeah.

Dan Austin: [16:36] There's nothing you can

Mike DeHaan: [16:37] do about it.

Dan Austin: [16:37] There's nothing they can do about it, and then you could you could try to use lawsuits and all that, but as a smaller company and a smaller investor, what's the chances of you going against a billion dollar fund?

Mike DeHaan: [16:45] You're not going to.

Dan Austin: [16:46] You're not going Ever.

Mike DeHaan: [16:47] It's literally impossible.

Dan Austin: [16:48] Yeah. That's yeah. Contracts are written for a reason.

Mike DeHaan: [16:50] Yeah. So there's just weird stuff. I don't know. I think it's why it's so important to, like, honestly be like all these guys here and be trying to figure out how to be in control of your own destiny.

Dan Austin: [16:59] Right. Well, and surrounding yourself with other people, like so okay. Actually, let me start here. So there are other groups and masterminds

Mike DeHaan: [17:05] Mhmm.

Dan Austin: [17:05] That you and I know about that we choose not to be a part of because the way that they pitch things is just, like, unethical.

Mike DeHaan: [17:11] Or it's like it was like Garage quick scheme, whatever.

Dan Austin: [17:12] It's Garage quick scheme stuff, and it's not the right way to do, and that stuff never lasts. Mhmm. And when you're with those types of people, you're going to last as long as that guru lasts, right? And so with with the folks when you find a group, like I feel like our group is, of high value, high ethical people that wanna do things the right way Mhmm. And wanna be in the game long term, you're going to win so much more because you have this support system around you. Yeah. That's the thing, because if you're in a get rich quick scheme, they don't give a shit about you. Like, you're in those masterminds that are like that, they don't care about you, they're there for themselves. These people are like, and even if you show up here selfishly like we all do to a group, like, hey, I want to be better, you quickly realize like, oh, the dynamic here is like, I give, the more I give, the more I get. And it's just, I don't know, I think people overlook that when they're choosing what group to be part of.

Mike DeHaan: [17:58] Yeah, well, think that exists because it's kind of like a natural thing. You know, most people, if they're not sociopaths, if you do give them something, they feel obligated to give something.

Dan Austin: [18:05] Right. There are

Mike DeHaan: [18:06] some sociopaths. There are, yeah, they exist everywhere, you can't escape that, but

Dan Austin: [18:09] What do the names rhyme with that we would know? I don't know. You're chopping big people out here.

Mike DeHaan: [18:13] I didn't say anyone's name. I guess you didn't. Sorry. So but no. No. It's interesting to see as a whole. But what's our business as a whole doing right now, though? Like like our personal business. It's been a really interesting week for us because we're here at this event, and this is the first time that we have been away, and also our two main, like, operators are away as well. So, like, the sales team and everyone is kind of fully autonomous right now.

Dan Austin: [18:37] Yeah.

Mike DeHaan: [18:37] It's always a good it's always a good test on the system. So I'm gonna be really interested when we get back to go and see, what their call numbers and stuff look like.

Dan Austin: [18:44] Like the KPIs?

Mike DeHaan: [18:44] Yeah. I I would bet they dropped a little bit, but at the same time, they're still doing their reports and things. Yeah. We're still getting

Dan Austin: [18:49] things moving. We just had one of our clients here talk about a deal that they're go they're underwriting right now, think, as we speak, because they're gonna hopefully something up.

Mike DeHaan: [18:55] Yeah, one of our partners, yeah.

Dan Austin: [18:56] And so yeah, I think things are gonna move because we built that system, but they've never seen, we're still at that point even though with our big team, like things still maybe slow down a little bit, And you can let the train go for a little bit longer than it used to, remember, I mean, like, there used to be, like, if we were both gone, like, there was nothing that happened.

Mike DeHaan: [19:11] I know. Right. No problem.

Dan Austin: [19:12] And that's a failure on our part, but also just the maturity of your business, right? You can't start a business and then all of a sudden be at the point to where you can delegate everything and it works well. At least our train runs for a little bit longer now.

Mike DeHaan: [19:22] Yeah, right. I mean, and there is a level of when you start to reach some scale where you can bring in people that are more a players that it looks like a more mature business. Sure. Because that's something that we really struggle with. I think a lot of new operators struggle with is when you first start bringing in staff members, they kinda like work for you. Right? And like I remember even our first very first employee, she would literally tell me, oh, I work for these two guys.

Dan Austin: [19:43] Oh, yeah.

Mike DeHaan: [19:43] I was like, well, no, you technically work for a company. Yeah. But like it felt like you worked for these two guys especially because we we outnumbered her. Right? But when you start to have a grow large enough team, then there's much more like a natural company dynamic.

Dan Austin: [19:53] For

Mike DeHaan: [19:54] sure. So people feel more inclined to do their job.

Dan Austin: [19:56] Right.

Mike DeHaan: [19:56] So there's not like a gig where they just work

Dan Austin: [19:58] for something like Well, yeah, and then they have responsibility to each other at some point, right? You know, when you have like, I guess, peers in your company that also rely on you for success, then you feel that obligated, so if the boss isn't there, then it's like okay, maybe I wanna do it for you, like you're saying there's like a give take in a normal human that's not a sociopath.

Mike DeHaan: [20:16] Yeah, right, yeah. So at least you hope so.

Dan Austin: [20:18] At least you hope so. Yeah, but you know. Also like, as a business owner, you set the culture and we were talking about that earlier today here with these guys, like you have the responsibility as the owner to set that culture. You have a culture regardless, and you are responsible for like, if you let it just get created into this like really crappy painful place to work, that's what it's gonna be. Exactly. If you want it to

Mike DeHaan: [20:38] be a certain way, which I

Dan Austin: [20:39] think most people, I know everybody here is like this, but most people that start their own business and like have employees, like they want to do it because they're either running from something or they they want to create their own thing and they don't subscribe to whatever culture is at company x y or z, you know I mean? Yeah. And so they are building something and then they forget though that they are building a culture. Yeah. They're just like building and they're like, oh, I'm hiring people and doing this, and the next thing you know, you're like, man, this sucks working at my own company.

Mike DeHaan: [21:06] Yeah. Right. Well, that that was actually big folks that the one I think today is like, think about all the reasons that you probably do wanna leave your w two or you wanted to leave your w two before you did, and don't create that same environment for other people. Right. Like, don't have to. Like, honestly, a lot of that happens just because, you know, I would say, like, lack of intent by the employer or employers that

Dan Austin: [21:23] aren't necessarily It's lack of intention. Right?

Mike DeHaan: [21:25] Yeah. Mhmm. It doesn't a

Dan Austin: [21:26] culture doesn't build itself. Uh-huh. Well, I guess it kinda does. A bad culture builds

Mike DeHaan: [21:29] itself. Yeah.

Dan Austin: [21:30] But, like, without intention, you can't build the culture you want.

Mike DeHaan: [21:32] Yeah. That's very true. Yeah. And then when it comes to, like, larger companies, though, that have been around for, like, legacy companies, that sort of, like, dies when the original founder leaves.

Dan Austin: [21:40] Right.

Mike DeHaan: [21:40] But

Dan Austin: [21:40] The original intent of that.

Mike DeHaan: [21:41] Exactly. But everyone starting a smaller business, you can drag that out for probably the length of time that you want to run the business. Totally. Honestly. So it's one of those things that, like, it varies so much, like, what it needs to look like for everybody, you know, and, like, not everyone like, if you are gonna be, like, a really small shop, you need to understand that if you are gonna go to things like this or go other places, things will slow down a lot more. But I I also think that, like, that phase of business where it's, like, you and, like, you know, one to five employees Mhmm. Is probably the hardest phase because you have no redundancy. You have no backup plan.

Dan Austin: [22:12] It's tough. Yeah.

Mike DeHaan: [22:12] Could do inevitable. I shouldn't say you don't,

Dan Austin: [22:14] but many times you don't have the revenue to build in the redundancy, to build in the business continuity, to build in the safety mechanisms because every person is a key employee in your business at that point, but that reminds me too of like as you build your business, you tend to have a key employee, right, or you want to have a key employee, you need a key employee, and for some people that's like an executive assistant for that, one of our key employees is here, so you know, he's participating as well, and so like I think without that, at some point in time, like you just get kind of like put in the grinder as the owner because you become the only key employee, and people rely only on you. And so as you build your business, think about, like, what am I when I'm hiring a person, what am I doing for them to create their, like, own path to be, like, key in their role? You know? Because otherwise, you know it. Like, if you become the most important person in every role, guess what? Even if you have employees in that You're role always gonna be the that they ask questions to, and they're going to be the one that does most of the process, but then you have to finish it.

Mike DeHaan: [23:11] Yeah. And that same can go whether you're trying to wholesale, you're trying to flip, you have rental properties, whatever you're trying to do. Mean, had a good test because we finished up a reno, actually today, like this morning on one of our properties

Dan Austin: [23:22] that we bought. Yeah. Photographer was there noon today.

Mike DeHaan: [23:24] Yeah. You said that our contractor asked if he wanted to walk it. It's funny you told me that, and I could see in your eyes that it really bothered you that you weren't gonna be was like,

Dan Austin: [23:31] I need

Mike DeHaan: [23:32] to walk this thing. Yeah. So you can make sure they did the right shade of alabaster white.

Dan Austin: [23:37] Exactly, right? Like, we know our system's on that so well at this point, like, I walked the property with him, I told him exactly what to do, I trust him, I know the work he's doing, and so I know if I said, hey, here's the carpet I asked you to put that the carpet went down. I know that I picked the paint, the paint went on the walls, I know all the steps, and I trust it, I have to trust it, right? And so we'll find out when we get the photos tonight from the photographer.

Mike DeHaan: [23:58] Well, at least you're hoping. I mean, good contractors, you're fine, but I've heard the horror stories of like where the contractor put like a little sliver of carpet like in the corner

Dan Austin: [24:05] Right.

Mike DeHaan: [24:06] And then they like, they take a picture like this Oh yeah. It looks like it's

Dan Austin: [24:09] No, there's that, and I so I don't think this should be a common practice, but we have in our system, even with the previous contractor we had, like, we had him dialed in so well that there was a trust between us that I would still walk it because I'm building a relationship with him and he wants to see his work being completed, like getting recognized by me as the owner, but like I didn't need to, like when you're in a pinch like this, I don't need to, you know what mean? Why do I need to if I already have built that trust with you and we have like basically proven that trust over a period of time? Will that bite you in the ass eventually? Maybe. Probably. I wanna do it with a new contractor, that's where you hear the horror stories where people are like, oh, well I heard Mike and Dan talking on the Collect and Keys podcast that he didn't walk that one property after he finished. It's like, yeah, but this is like hundreds of properties that we've done, you know what I mean? Like we still do it, we just make sure that just like any other system, like trust but verify.

Mike DeHaan: [24:55] Yeah. It's a hard thing. I think that in the real estate world especially, that part is probably one of the hardest.

Dan Austin: [25:00] It is

Mike DeHaan: [25:00] absolutely I the mean, even for me, I have a couple rentals that are within driving distance of my house, And I'll be lying if I'm not tempted every so often to go and like drive by and see

Dan Austin: [25:08] Just what's check it out, yeah.

Mike DeHaan: [25:09] Even though I'm not gonna see anything, you know, the people that live there are good, I verified the tenants, they're paying rent, like I know it's fine.

Dan Austin: [25:15] Yeah.

Mike DeHaan: [25:15] But the problem is too is if I do do that, the only thing I'm at risk of is being pissed off.

Dan Austin: [25:19] Sure.

Mike DeHaan: [25:19] Because I'm like, why is the grass so

Dan Austin: [25:20] much shit? Exactly. Yeah. Exactly. Yeah. And that's the things too is like having right the right property manager, if you're gonna proper manager, if you're gonna self manage, having the right systems in place where you don't feel like you even need to do that, you know what I mean? And I mean, I I do the same thing with my student rentals because I still manage those, and I have to be careful because I'm like, ugh. I have like eight college girls living in one house. I know when I walk into it, I might not be happy with how they're maintaining the property Yeah. At that moment.

Mike DeHaan: [25:42] At that moment.

Dan Austin: [25:43] Because there's a lot of dirty laundry on the floor. Girls, I don't know what it is, where they got all these clothes, they don't do laundry, it's always in piles. Yeah. And maybe like a clean pile, dirty pile, a kinda dirty pile, I have no idea why. Like it's weird. Their beds are never made, you go in there, you're like, alright, I'm gonna leave now. I don't wanna see something that I shouldn't

Mike DeHaan: [25:59] see, you

Dan Austin: [25:59] know what I mean? Like, you know, it's just like so gross, but I know like if I go in there, generally speaking, I'm probably gonna be unhappy how they keep it, so I just try not to.

Mike DeHaan: [26:06] Yeah. Was that you that had to pull the tampons out of toilet, or that somebody else that told that story?

Dan Austin: [26:11] I feel like you had to do that.

Mike DeHaan: [26:12] No. So we had to flush them out of the toilet, like we had to put the freaking No.

Dan Austin: [26:16] I don't think I've had a I've had, like, lots of bad stuff come out of drains, but I don't

Mike DeHaan: [26:20] know about tampons. Yeah. Yeah. Forget.

Dan Austin: [26:21] I think it was

Mike DeHaan: [26:21] one of our one of our guests. They told a story about how they had to pull out a bunch of tampons, and then they felt super awkward about it because it was, like, a bunch of colored girls. They just left like the Home Depot bucket that was full of like a ton of them. They pulled out the pipe like in the bathroom. Oh, I've So they saw it and then it was not No, a problem

Dan Austin: [26:36] have signs. I've been like when I first started landlording, I was in one of my properties where I had girls, and I was in the basement doing work, and I was overhearing their conversation, and I was like, bro, I gotta get

Mike DeHaan: [26:47] out of here.

Dan Austin: [26:48] This is not I don't wanna hear what they're doing with other people in my house. You know what I mean? I was like, oh my god. So I left.

Mike DeHaan: [26:55] Yeah. It's probably a good call. Yeah. So anyway, it's a it's a real people business. You always get involved in people stuff, whether it's acquisitions, tenants, things like that.

Dan Austin: [27:02] We just

Mike DeHaan: [27:03] can't let it bother you, but cool. So anyway, yeah. So Key's gone today. So let's just loop back to that real quick. We did focused on them, focused on the team this afternoon. So our theme for day one was people. We're gonna try and, like, get this to be a thing that's consistent every Keystone that we do. So day one was focused on people. So we said the operator, the investors that are here was the morning, and then the afternoon was about the team, and then tomorrow, focusing on skills. So we're gonna be diving into sales skills in the morning, managing a sales team, which is a skill, and then focusing on opportunity recognition in the afternoon, which will be diving into like subject twos, innovations, and bunch of things.

Dan Austin: [27:38] Yeah. It's important like we touch on why we're touching on that too because like obviously, especially you as the operator, you're one of the most important you're a key employee in your business, and so you need to know that you can do the right things and you're the right person for the role. Mhmm. And talking about your team and how to hire and build them, but then the skills, what we've recognized in this business is you're running a sales organization. So you need to understand how to build a sales team, the sales skills. You might not be the best salesperson, but you need to understand that's a very big focus in this business, and then the skill of recognizing opportunities through your sales process. Those are the two main skills we're really pitching to people, which I think is overlooked at a lot of events because people come, they're like, well I want to know how to market better. It's like, we can teach you that on a video, like a Loom video, that's not what we're trying to do here. There's a lot of other skills like learning how to flip houses in rehab, like go to a rehab flipping boot camp or watch YouTube, it's all the same. This nuanced and the most difficult challenging approach that nobody else wants to talk about is what we're talking about tomorrow and what we talked about today.

Mike DeHaan: [28:31] Yeah, and the sales part honestly is the most important part of any business, especially this business because so few people are willing to do it. Absolutely. And as a real estate investor, if you can control the pipeline, whether it's for yourself or for other people as a wholesaler, you're instantly the coolest person in the room. Totally. Right? And you can make a hell of a lot of money because you control the number one thing that everyone wants, which is opportunity. Totally. Yep. Right? So we're actually excited for it. It's gonna be really fun too. So a lot of these guys don't know, might hear me, there's a couple in the background, that a lot of them are gonna be making sales calls

Dan Austin: [28:57] Sales with each other tomorrow.

Mike DeHaan: [28:59] We're doing a new game called Sales Roulette that I invented two days ago, and it's gonna be awesome. I'm super super excited because some of these guys have been adamant to remove themselves from sales, but I still believe if you're gonna manage the sales staff, you need to be able make sales calls yourself at least a little bit, so For sure. It'll be cool, but anyways, anything else? No, man. No. Cool. Out of here. Right on, guys. Well, thanks so much for watching this episode. We really appreciate you all. And if you wanna come to KeysCon next year, you should go to collectingkeys.com and check out our instant investor program. Sign up for that, and you can qualify to come to the event that we'll be doing next summer. Besides that, guys, please share this with anyone who might find this interesting, might be entertained by real estate, talking about business, or just listen to two guys talk about whatever else we feel like and appreciate it. So thanks, everyone. We'll talk to you next week. See y'all.