Making 6-Figures with Zero Marketing w/ Cam Cathcart

Mike DeHaan: [0:00] Real quick before we jump into the show, we created the collecting keys podcast to be a real estate investing podcast that is created by real estate operators for real estate operators. And we want operators everywhere to know what it really takes these days to be successful in this business rather than all the fluff that all the other content creators and podcasters out there make. And so one of the challenges with this is that it's challenging to grow because most operators are too busy out there working. Right? And they aren't always learning or actively seeking new learning material. And so if you could please share this show with any fellow operators you know, you know, you can text it to them, you can post it on your socials, you can leave us a good review that you then share somewhere, that would be amazing. But really, whatever, it really helps us continue to get excited to create content, and it will also help you because everyone that you expose us to will get better as a real estate operator and close more deals. So if you could do that for us, it would really need a ton. And otherwise, we appreciate you guys, and let's get into this episode. Cam dropped a nice little bombshell that he's, like, literally stopped doing marketing altogether.

Mike DeHaan: [1:09] What is going on, guys? Welcome to today's episode of the collecting keys real estate investing podcast. We have a great one for you today because we have Cam Cathcart joining us on the show this afternoon. If this is your first time here, this is the real estate operator show made by operators for operators, so you can continue to grow and expand your real estate business in these ever changing times that we have going on right now. So we're gonna talk about kinda what we're doing in our business, what we're seeing in the economy, and, yeah, kind of whatever else comes up today. So my name is Mike DeHaan here with my cohost, Dan Austin and Dylan Cook. And then Cam, you might recognize from the Better Life podcast with Brandon Turner. Outside of that, Cam, why don't you give us a really quick intro, kinda what your business looks like at, like, a basic level, thirty seconds, and then we'll kinda dive into some stuff here.

Cam Cathcart: [2:01] Yeah. I own a house buying company in St. Louis, and then we are we have a rental portfolio. We have a fund that is keeping long term single family rentals, and then we are flipping primarily. And so have done around a 100 houses a year for the last five years. 2024, we did not do a 100 houses. We did around 70. Yeah. It's a fun company.

Mike DeHaan: [2:24] Yeah. So it is an interesting company. And then It's

Cam Cathcart: [2:27] an interesting interesting times for sure.

Dan Austin: [2:29] To say the least.

Mike DeHaan: [2:30] Yeah. And you and me did a one on one deep dive. You know, if I was a professional, I would have looked up what episode this was. But, you know, this

Dan Austin: [2:37] is a part time thing for me, man. But It was episode between one and four hundred

Mike DeHaan: [2:41] and fifty. 1450. Somewhere in there. It was in November that it came out.

Dylan Koch: [2:46] It was right before I joined the show, actually. Because I think I told you that you should have came on the show after I listened to him on the Better Life podcast, and then you guys connected.

Dan Austin: [2:54] Wow. So it's all you, Dylan.

Mike DeHaan: [2:56] Was it that long ago?

Cam Cathcart: [2:57] I thought it was longer ago. I thought it was like in the spring of twenty twenty four.

Mike DeHaan: [3:02] It might be, man. Last year was one of those years that kinda just blinked and went by. I don't know. Oh, yeah. Here it is. Episode three thirty. Shit. You're right,

Cam Cathcart: [3:10] dude.

Mike DeHaan: [3:10] It's just July. The only yeah.

Cam Cathcart: [3:12] The only reason I know it was earlier was because when I was on the interview, I was like super high on not not high high. Maybe I was, you know, but super high on real estate. Like, we had an incredible q one and q two. Yeah. And literally since then, we've still had good months, but Uh-oh. I remember I was I was so pumped at around that time, and now it's a different story. Damn.

Mike DeHaan: [3:38] Maybe you got the Key's curse. Is that a thing that's been, like, destroying people that come on the show? That's when when every it comes on again?

Dan Austin: [3:44] Collecting keys curse, like, everybody behind us just out

Cam Cathcart: [3:47] of business. I'm trying to reverse it coming back on. Okay.

Dan Austin: [3:50] Let's do it.

Mike DeHaan: [3:51] Yeah. So awesome, man. Well, dude, thanks so much for coming on the show. We really appreciate you coming on. I was I mean, I wanna start with, I think, is an interesting topic, and we were chatting about this briefly before we started recording. So if if any you guys listened last week, we did a deep dive into our kinda q one KPIs and kinda the marketing stuff that's working for us. And we got on Cam dropped a nice little bombshell that he's, like, literally stopped doing marketing altogether, like, very recently. And so that was a very heavy spin on kind of what we normally promote. So I'd love to dive into that to start because, like, I mean, what what the hell are you doing? Are you wrapping up shop? Are you still finding deals another way?

Cam Cathcart: [4:29] So I think it first goes back to like kind of the way that we've built our company. And when I started, I bought primarily from connectors. I didn't even do direct to seller marketing my first eighteen months in the business. And I was really, really great at that. Because I one of the things that I'm amazing at is just building connections. And so I was at every local meetup. I was at every every real estate event that there was that was going on in St. Louis. I was shaking hands, kissing babies, doing everything that I could just make sure that every wholesaler, real estate agent, property management company, senior living facility, probate attorneys, they knew who I was. And I bought a ton of houses just through that. And so I did really well. Like, in my first year, I literally bought over a 100 properties just from connections.

Dylan Koch: [5:17] And Cam, you're flipping, like majority flipping. You're not you're not assigning.

Cam Cathcart: [5:20] Year one, I was not. Year one, I've we were flipping some, but actually year one was primarily wholesaling or keeping for ourselves. We kind of morphed into more of a flipping company in 2023 and 2024. And so, like, 2024, we flipped basically everything that we touched. But then we started doing direct to seller marketing primarily, We tried it all texting, cold calling, PPL, PPC, direct mail. In 2024, we had a really great start of the year and things were looking up. And then around July, man, we we were sending out, I think, I don't know, seventeen, eighteen thousand mailers a month. We were only getting about a point 01% point 015%. Actually, let me just pull up the exact number so I can tell you exactly what it looked like.

Mike DeHaan: [6:13] So you have point zero one five. So you're getting, like, 15 calls maybe on, like, 15 thousands worth of mailers?

Cam Cathcart: [6:18] Yeah. So, like Is it less than that?

Mike DeHaan: [6:21] Because their cards are expensive.

Cam Cathcart: [6:23] November, we sent out this is just the first one that pulled up when I was typing in marketing dashboard. 24,000 pieces of mail. We had 39 inbound leads, 19 qualified leads for a 0.16% response rate.

Mike DeHaan: [6:41] Okay. How many of those did you convert? None? Is there zero in there? Zero. Zero. Oh, shit.

Dan Austin: [6:50] Yeah. That sucks.

Cam Cathcart: [6:51] And I think a huge part of that is I've taken some time to reevaluate our business and the way that we do things. Our our follow-up is terrible. I will say that where and that's my fault is the business owner. That's my personality. I I'm not going on these seller leads anymore because I live in Maui. But I would walk into a house and had a process, but also I'm really great at getting people to like me and wanna do business with me. And typically, if I didn't buy the house, like get a signed contract when I was walking out the door, I would never talk to the person again. And so I haven't coached well on that. And so that was a huge part of that was my fault. And so I've had to reevaluate like what what's our follow-up sequence look like? And so there there is a lot of leads that we have gotten. Actually, I've been going through the all of our leads over the last two years following up now because I'm like, we just need to buy houses and make some money from this marketing that we spent. But really our biggest problem, we are sending mail to the same houses that every single big time wholesaling company is sending houses to. I mean, almost every house we went on, there was 35 other people at the house. Like there was one house that had 67 different companies that had mailed them houses.

Cam Cathcart: [8:03] That's insane.

Dan Austin: [8:04] Sounds about right.

Cam Cathcart: [8:05] And so in the way that we've always done things, and part of it's just because of the morality behind this and what I believe real real estate should look like. We are making a non contingent cash offer with a substantial earnest money deposit. We have zero outs whatsoever in the contract. And and I tell people, like, the reason that I do it is because I don't want their I don't I don't wanna renegotiate. I don't wanna shop this. Like, even if we are gonna wholesale, which is rare, it's still I tell them, like, you can take this to the bank. We're gonna close on it. And part of that is I've seen so many people hurt by the company coming in, offering way too high, putting a contingency until the day of closing, and then they show up to the closing table and say, hey, we need $50,000 off or we're not gonna close today. That person's already went and bought a new house or is under contract on a new house or has moved all of their stuff out. And it just ruins lives, especially because the people that we're sending mail to, their house is their only asset. We're not sending mail to multimillionaires that have multiple different houses and stock portfolios. Like, their house is their livelihood. And when you screw with that, I think that's a you're just a terrible person at the end of the day. And so the way that we have ran our business has been I don't wanna screw with anybody's livelihood. I want them to know what they're gonna get, when they're gonna get it, and I want it to be a guarantee so they can go start planning their future life.

Cam Cathcart: [9:26] And so because of that, our offers are typically less than a wholesaler because wholesalers don't have any risk. And our offers are typically less than somebody that's gonna come in and try and do a novation or something like that on it. And that's just the reality of the situation. And even though I can tell a seller all of the reasons why our offer is safer, like, here's what they're gonna do. I've seen this happen a million times. They're gonna lock it up. They're gonna shop it. They're gonna come renegotiate. They're gonna purposely wait until closing day to renegotiate. Like, try and tell them all that stuff. But at the end of the day, a lot of sellers that we're working with, they don't understand that. They understand I've got an offer at 200,000 from x, y, and z, and I've got an offer at a 165,000 from you. I'm taking the $200,000 offer.

Mike DeHaan: [10:15] And you're in India. Right?

Cam Cathcart: [10:17] What? I'm in St.

Mike DeHaan: [10:18] Louis. St. Louis. Okay. Those Midwestern cities.

Cam Cathcart: [10:21] Yeah. Yeah.

Dan Austin: [10:21] They're all the same. They're all the same.

Cam Cathcart: [10:23] And so that that was one of like, we were losing out on on every deal too. And most of it was to honestly wholesaling companies that aren't even based in The United States that are locking up everything over the phone. They're shopping it or they're doing it. They're getting the power of attorney and they're they're doing innovation on it. And I haven't figured out a way yet how to take them down or beat them. And we were really when it comes to to direct seller marketing, we were throwing away money. And so right now I'm processing through like, is there a better way versus Yes. Versus

Dan Austin: [10:58] there is. Yes.

Cam Cathcart: [10:59] There is. Because that's where I'm interested. How do I find sellers that other people haven't found? I'm interested in that because I don't know. I'm not an expert in direct to seller marketing whatsoever.

Mike DeHaan: [11:08] You go to another market. There is Yeah. I'm serious. You're already doing it for Maui. Right? You're already doing it for Maui. How different is it for you to go somewhere else? Like, you might have to find a couple more team members, but you already told me that they suck. Yeah. No. No. That's my fault. They're not following up. Yeah. They're already not following up like they're supposed to be doing. That's what I would suggest, though, like, if if you're running into that problem. But what do you think, Dylan? You're in a very competitive market as well.

Dylan Koch: [11:32] No. I mean, well, one thing, I we just went over my q one, you know, stuff last week, and a lot of my stuff was from follow-up leads from 2023 and early twenty twenty four. So that's a big part of it. Right? And those are probably leads that the people who are mass marketing now don't even have on their radar potentially. But I I wanted two follow-up questions. When you're sending out these offers, have you seen the property at least once? Because I feel like you can renegotiate if you, you know, let's say you lock it up for 200, then you go through it, and then it's, hey, everything you just told me was a lie. Yes.

Cam Cathcart: [12:00] And I I agree with that. So I would say our sales process is a little bit different. We will not make an offer over the phone. Gotcha. And and usually, like, we'll try and scorch the earth when if anybody else, you know, Steve Trang saying like, if somebody has made an offer over the phone, we'll make a joke about it being monopoly money or, know, like, hey, that's not a real offer. If anybody if somebody hasn't came and walked to your house and put together an actual rehab budget, it's not a real offer. We're not making an offer unless we've walked the house and we put together ARV and reupload.

Dylan Koch: [12:32] Okay. No. That's a good follow-up clarification.

Dan Austin: [12:35] Yeah. That's fair.

Mike DeHaan: [12:36] Yeah. There's a lot of pieces, and it's I mean, the follow-up piece is is such a massive thing, though. Right? That there probably is deals that you've missed out on that didn't close for whatever reason or another that you could capture now. And it's funny because you're talking about how good of a salesperson you are in person, but now it's been more challenging building that team. I feel like that's so common. You know? Because we're Dan and I, you know, Dan and I are as Dan is my original business partner from way back when we started in 2019. And the blessing and the curse that we had is we're bad salespeople, like, honestly. When it comes to, like, b to c, like, seller sales, we suck. We tried to

Dan Austin: [13:12] force people to sell us their house. We're like, if I give you enough data, you'll definitely sell me your house for cheap.

Mike DeHaan: [13:17] Well, we're we're both engineers by degree. Right?

Dan Austin: [13:19] And so we would go

Mike DeHaan: [13:20] into these houses like, yes, ma'am, who recently lost your husband, your your ceiling, you know, isn't good for what we're trying to do with it. Like, it was it was pointless. But so that forced us to learn to be good leaders, and so we're able to build a sales team. But then we have, like, our competitors that were the opposite problem where they were great at sales. Then as soon as they start trying to hire, it actually becomes like a disability on their business. Right?

Cam Cathcart: [13:44] That's a bull's eye on our business where I I am incredible at sales and feel comfortable enough to say, like, out of most people that I know, I I would be at the very top. Like, and I can

Mike DeHaan: [13:55] I'm waiting for your pitch right now.

Dan Austin: [13:57] Whatever. You

Mike DeHaan: [13:57] don't mind my credit cards right here. What's the program? Let

Cam Cathcart: [14:01] me tell you guys about it. But I and I'm I'm really great like it having empathy and sitting with somebody like for instance, actually, this was here on Maui. We just bought a a house that would actually be fun to talk about the way that we worked it out. But I sat there with for three hours with her, and her husband had a stroke in 2021 and passed away. She lost her job during COVID, and she got a job, and then the fires here hit. And she lost her job again, and then she got in a car wreck. And literally was able just to sit there and process for three hours with her. And then create an offer that was a win win for her and for us. And and I'm I'm good at that. Systems, processes, I'm not an engineer by trade, so my my mind doesn't think like that. My mind doesn't think in the terms of follow-up. It's like, either bought the house or, you know, onto the next one. And so I've had to learn, and I'm still learning. I'm in the infancy stages of learning how to move from being a real estate investor to a business owner, if that makes sense.

Dan Austin: [15:02] Makes a 100%.

Cam Cathcart: [15:03] I think I'm a phenomenal real estate investor. Like my wife and I, when it was just us two, we were making over 7 figures a year. And then when we've scaled our team to 15 people, I'm making nowhere near like literally penny like 30%, 40% of what we were making is when it was just us two. And I know, like, for my goals and the life that I want, I can't be a solopreneur, but I'm just trying to figure out that shift, if that makes sense.

Mike DeHaan: [15:33] That's the trade off though. Right? Is, yeah, you're making less money, but you get to live on Maui now instead

Cam Cathcart: [15:38] of Exactly.

Mike DeHaan: [15:38] Saint Louis. Right? That's a harder thing for you to do when you're out there having to, you know, hit your your own follow-up and, you know, walk your own appointments and doing everything.

Dan Austin: [15:47] I mean, that's the biggest transition that we talk about, like, in our program with people, and, like, Dylan can attest to this is, like, there's a huge difference between an investor, and it it is. It's a transition between a real estate investor and an entrepreneur, and I think most all of us get into the business because we wanna be real estate investors. And you quickly realize, like, this is badass, and I can make a lot of money, but I have to work like a dog.

Dylan Koch: [16:06] Cam, how quickly did you go from you and your wife to a team of 15? Like, it was that like a balls to the wall or is that like gradual?

Cam Cathcart: [16:13] It was it was gradual over the last five years. It wasn't like we went from two to to 15. But one of the things too that I struggle with, and this is just I think any business owner that struggles with is what I'm really bad at is wanting other people to think like me and act like me. And so a really great example of that is when I was doing all the acquisitions myself, and I didn't have any leads coming in, and I didn't know where where my next house buy was going to be, I would go buy a stack of Starbucks gift cards, and I would drive to every property management company in St. Louis. And I drop it off. And I would I would talk to them and say, hey, if any of your clients are looking to sell a house or their portfolio, please give me a call. I would go and walk into just randomly walk into probate attorney's offices and ask if I could talk with them. I would I would go door knock. I would do anything and everything that I could to buy houses and it paid off. And it's just hard to get other people to have that type of not not even necessarily ambition because all of our guys are hard workers, but the creative thinking skills, I guess, maybe, if that makes sense.

Mike DeHaan: [17:28] Well, they have to have, like, the the buying. Because what you're describing right now literally sounds like my personal hell. Like, I would never That do sounds horrible. I would never do that. Yes.

Cam Cathcart: [17:39] I I think that's important is also they have to have the personality to do that, which that is I built my business that fit my personality. And which is why we are heavily reliant upon connector leads because that was I love that. First of all, like I could go to a meetup every single night. I could go to every single real estate conference that's ever hosted. And that that's like my dream is just hanging out with people. And and so that's why like connector leads were so valuable in our business because it's what I loved and it's what we were good at. And some people don't love that or they're not good at that or that's not their passion. And so like learning how to manage that has been really tough, I guess.

Mike DeHaan: [18:22] Well, they need more of a box. Right? Especially if they're gonna have, like, kind of more of a fixed ceiling on what they can make. The extra mile is only gonna go so far because this kind of business do you mind if I ask how you pay your guys? Because you're flipping properties too, like, for almost always. So are they getting paid, like, on the profitability, or is it, like, a fixed fee per deal?

Cam Cathcart: [18:43] It's on the profitability. So it's commission based up on company net profit per deal.

Mike DeHaan: [18:48] Sure.

Cam Cathcart: [18:48] And there's a different split based upon whether it is a marketing lead or it's a connector lead. So if it's a connector lead and they source it all themselves, they're gonna get a higher split versus being a lead that I paid for. That's another thing that we have ran into, especially because we didn't do the volume we wanted to do in 2024 and we weren't as profitable as we wanted to be in 2024 where they didn't make as much money. Like we had one guy who who made close to 200, but outside of him, everybody was below 60 k ish.

Mike DeHaan: [19:22] That's such such par for the course for sales team though, dude. Like, that's so common.

Dan Austin: [19:26] And all they're right now is all connector leads. Right? Because you said you shut off direct to seller marketing. So their their job is essentially to go out to all these meetups and Yep. Talk to people. Do they ever have, like, a conflict with that? Because, like, say, you what do you have? Like, four salespeople if they're all going to the same meetup. Is that a problem for them? Or, like,

Mike DeHaan: [19:42] Find out that like Becky standing in the corner has a house for sale and they're like trying to fuck it. Yeah. Like

Cam Cathcart: [19:47] So that's a really great question. And we've we have gone back and forth with this. So we have kind of pigeonholed like, you are in charge of real estate agents. You are in charge of wholesalers. You are in charge of probate attorneys or property management companies. That doesn't mean that Justin can't go to a meetup and meet a wholesaler, which Justin's in charge of real estate agents, can't meet a wholesaler and build a connection and buy a house from them. It doesn't mean that every house that come but he's not spamming wholesalers or going through his Rolodex and sending text messages or emails to wholesalers. So it's not weird where it's like you get

Dan Austin: [20:24] It's not duplicative.

Cam Cathcart: [20:25] You get six emails from Rebel City acquisition managers a week from different ones. But it's it's not a great system. But, again, I'm not a good system builder. So

Mike DeHaan: [20:35] It's so interesting because we run such different businesses in the same industry. Industry. Vastly Vastly different. Different. Right? Like, honestly. Like, like, so different. You know? And almost what you're describing is like a real estate brokerage, honestly. Right? Like, where you have all these people that are out there with their own sphere of influence that is going and finding these opportunities and they're bringing it back. And then the house is is making the bulk of the money. If you can give me about thirty six seconds, I just wanna share our scale community with you. So scale stands for scaling cash flow assets, leverage, and equity. It is our exclusive community for real estate operators looking to take this game seriously. In the community, you can hang out with myself, Dan, Dylan, and other operators around the country who are all working to be the best in their market. We recently did a survey, and every single member said that the community had directly contributed to major growth experience in the last twelve months. On top of that, you get all of our processes around marketing, sales, building a CRM, and you even get preferred relationships with Lowe's and different financing slash lenders so that you can get your deals 100% paid for without a headache. So if that sounds like something you're interested in, go to collectingkeys.com/scale. Let's see if you're a good fit.

Mike DeHaan: [21:41] Do you not have concerns about them? Because what you're doing, I would say, is an easier thing for them to go and do on their own

Cam Cathcart: [21:48] For

Mike DeHaan: [21:48] sure. Versus, like, versus what we do, which, like, the barrier to entry is being willing to spend $30,000 a month on freaking post cards.

Dan Austin: [21:56] Mhmm.

Mike DeHaan: [21:56] Right? Like most people are just never gonna do that. But yours, they could just go and do it themselves like tomorrow.

Cam Cathcart: [22:02] Yeah. I definitely I don't have concerns about that. I think that if you were going to do that, you would have already or there have been some people that have came on to my team and they've been open and honest and like, just wanna learn and I wanna go do it on myself. And and for me, I'm a very open arm handed person where it's like, dude, I'm I'm all for you. This will sound that you guys get it because you're all entrepreneurs, but not many people have what it takes. Like we have the money to close on every single deal. We have the infrastructure to rehab houses. We have an in house agent who's able to list at 1%. Like we we have have the infrastructure that we have all the systems and processes that it takes. We have the buyers list if we wanna wholesale the house. They can, but I think that they can be more successful working under my umbrella.

Mike DeHaan: [22:51] What's your thought on that, Dylan, since you're recently in a new hire? So Dylan's been a one man operator for years. Okay. And he just brought on his first hire, like, a month ago and is now living on Easy Street going to the gym while his guy just closes up the deal.

Cam Cathcart: [23:05] Easy Street.

Dylan Koch: [23:05] Yeah. No. What was my thought on what? Like, this is the transition from

Mike DeHaan: [23:11] Yeah. Basically, just like that transition and like building the systems, because you've been very good at sales, Dylan, but also your background's in pharmacy. So you weren't like coming in with a silver tongue necessarily, as I'm assuming.

Dylan Koch: [23:23] No. But I am I would say I'm more in Cam's side of the coin than I am in your guys'.

Mike DeHaan: [23:27] We we get it. You're not a fucking dork like me.

Dylan Koch: [23:30] It's my biggest thing, and I think I was more price conscious at the beginning, and, like there's not really even a reason for that, because I would have had the money to do it. But I was just like, I can't spend money, I need to have these high profit margins, so I'll just do all the work myself. But now that I've brought someone on, the it's been the day feels a little bit lighter, because I know I don't have to pound through 50 to a 100 phone calls a day. Right now it's going through the CRM and saying, okay, now can I give this one to Tony? And I do like the more higher level strategy thing, like I'm still buying rental properties, you guys aren't. So like, I'm better like, okay, have this much money to bet bet in the account. What can I do to best deploy that? And a lot of the times it's spending on a more marketing. I guess a roundabout way of answering your question is, I have gradually liked the transition, but I don't want a team of 15. Like I think I can do me, Tony, a project manager, a VA and my assistant, and make probably 7 figures, at least I hope, then be happy with that in my own little market.

Cam Cathcart: [24:23] One of our insta our insta was to live in Maui and get to spend a lot of time with my kids as they're in this young season of life. And like, could you do that still with a team of five? I think that was one of the reasons we did scale was because I wanted to be able to have people really be able to run the business for me. What I've learned is that's not really the case. But that was it still is in the back of my mind. Maybe I'm one hire away from somebody that's just gonna be able to do. But do you think you'll be able to do that?

Dylan Koch: [24:53] I have a 6.5 old home. So like, we're recent father too. And I think with those five people and, you know, Dan and Mike had probably tested this too with their team size. But I do think that's possible. I mean, the past two years doing it myself, top line was six hundred and six fifty. And I probably have fifty percent fifty to 60% margins on that. And so this year, it's gonna be, you know, we're on pace to do a million this year after q one, and I'll probably have fifty percent forty to 50% margins. So yeah, you know, I think it's doable, I can see the light at the end of the tunnel.

Dan Austin: [25:23] How many hours are you working a day right now, or like, I guess is there a transition?

Dylan Koch: [25:27] It's still obvious of the transition from getting Tony involved, and my CRMs is still a mess.

Cam Cathcart: [25:31] Right.

Dylan Koch: [25:32] So like it's getting that kind of backed up and running.

Dan Austin: [25:34] Maybe six months from now that'll belly out for you.

Dylan Koch: [25:36] Yeah. You know, but I don't mind working forty hours, at least right now. Right? And maybe when I my kids get older, but I can be flexible with that. I can work seven to 10PM or if, you know, five to nine in the morning, and then have some of the day to do, you know, hang out with the kids or the wife.

Mike DeHaan: [25:50] Yeah. So the difference for Dan and I on that is we've had each other. Right? And so having business partners has pluses and negatives. Right?

Dan Austin: [25:58] People that care equivalent to you as well as helpful.

Mike DeHaan: [26:01] That's like the big positive. The negative side is, you know, Dan and I, we're splitting the compensation. Right? And so we each have our own ability to have freedoms. Like, I've traveled a ton over the past couple years. We had a small team. Like, I've it's closed deals while I've been traveling around all around Africa and Asia and everywhere else. Dan's able to take time throughout the day whenever he wants to do stuff with his kids, and there's never, like, a problem with that and stuff isn't going to get dropped. But we're also splitting the conversation in half.

Cam Cathcart: [26:30] Can I ask you guys some questions on your your partnership?

Dan Austin: [26:33] Yeah.

Cam Cathcart: [26:34] So I and I've rarely seen partnerships that work out long term, and you probably have heard that before.

Mike DeHaan: [26:38] So have we. That's the weird thing. Because we didn't realize how lucky we've gone.

Cam Cathcart: [26:42] So exact

Dan Austin: [26:43] we've also had other partners before on other businesses. And I'm gonna preface this with one statement that I heard yes yesterday or today, that relationships are 300% stronger if you're willing to talk shit to each other and make fun of each other.

Cam Cathcart: [26:55] I believe that.

Dylan Koch: [26:56] Well, man, then you guys are at 3000%.

Dan Austin: [26:58] In a playful way. Like, not like I'm not trying to demean Mike, but there is something to that, and we do have that in our relationship. So go ahead. That might just be it. We talk shit to each other.

Cam Cathcart: [27:08] Yeah. Which is is is a huge part. I I saw Instagram story the other day, and it was a guy who like had emergency surgery, appendicitis. He almost died. He was going septic. And his wife got on his phone and there were a text from his best friend that something about like, hey, man. I hope you're dying right now. Or like, I heard I heard your he's like, I hope I never have to see you again. Thank god.

Dan Austin: [27:30] He was

Cam Cathcart: [27:30] like, most people won't understand, but this is a true best friend.

Dan Austin: [27:33] Yeah. Exactly. He's not That's the truth.

Cam Cathcart: [27:35] Thoughts and prayers. I love you so much. It was like, hey, man. Pumped about this. I never get to see you again. It's amazing.

Dylan Koch: [27:40] I put myself in your well three hours ago. Yeah.

Dan Austin: [27:44] That's our partnership right there.

Cam Cathcart: [27:45] So do you guys have like have you had an agreement of a big decision in your company? Who has the final say? Or is there a final say? Is it like, hey, if we both aren't aligned in this, we're not gonna do it?

Dan Austin: [27:57] No. No? No. I would say this, and I'll let Mike answer. I would say we respect each other's opinions. And so if I was like, I'm a hard fucking no. Like, I'm not I can't get on board with this. Mike would respect that and vice versa, but also openness to being talked into it. Yeah. We're we're also on the same wavelength a lot

Mike DeHaan: [28:15] of the time, so I can't really think of a big decision that we've made where we kind of both weren't already thinking the same thing. Like, we've been like that forever. And there have been a couple of things where you've been different on certain things. Right? So one example, it's very relevant right now. Dan has had an interest in doing, like, new build construction for a while. I have zero interest in that. I just don't care. I don't wanna put my money into it. I don't wanna put business money into it. So Dan's doing that himself. Right? We're we're not, like, mutually exclusive to each other in everything that we do. And, you know, that's fine. Like, I don't care. Like, I'm not, like, expecting to get paid because of work that Dan's doing or something that he's putting into it. It will detract from his attention on our business that he's doing that. I'm okay with that. Right? Like, it it's it's fine.

Cam Cathcart: [28:58] Is the relationship so cohesive too? Because one of the things that I hear all the time is like, yeah, Mike was traveling the world and I'm here running the business. But it sounds like you both are very aligned and like, hey, we're we're working really hard and have the same type of work ethic and.

Dan Austin: [29:14] Yeah. Yeah. Pretty much.

Mike DeHaan: [29:16] Yeah. Totally. I mean, and we're we're messaging each other on Slack at 09:30PM, a lot of nights, honestly. On Sunday, we're both grinding away. And then even then when I'm, like, traveling and stuff, because we built the business to be virtual from the start, I'm not, like, disconnected either. Right? So, like, I literally signed to for a flip with the mobile notary once. I was on a cruise on the Nile River in Egypt. And I, like, just got on with the mobile notary, you know, and just did the signing. Cause I was the one that signed the deed, and so I had to had to do all that.

Dan Austin: [29:45] I would think that helps actually, because that goes along the lines of communication is having, like, you know, Slack and text. I mean, Mike and I could communicate with each other on 12 different platforms at any given time. But in general, I don't know that there's an hour a day that goes by, twenty four hours a day that we're not communicating in some way, to be honestly. And I think that helps though because, like, the animosity could build up. Right? Like, if Mike's traveling and I'm like, oh, man, I wish I could had Mike told me about this. Like, there's tons of things. Like, it's not like things perfectly transition if he's out of the country for a month. I can hit him up and be oh, yeah. I got you. Right? Stuff like that. Like, we can communicate really well where if it was like discreet, like Mike's gone for a month not doing anything and not able to support me because he forgot to tell me something, that would be like, shit, because now I have a month to be mad. You know? And so I think that communication and being open about it in constant is super helpful. And the some of the partnerships we've had with people, they're probably good communicators, but they don't understand the cadence at which we communicate, which is quite often and and openly.

Mike DeHaan: [30:47] And, like, we don't worry like, we're not gonna screw each other over because we're not those kind of people. Right? You know? And we've had really hard times. That's actually probably another thing, honestly. The first deal that Dan and I ever did together, fucking shit show. Like, such a nightmare. Like, literally everything about it was so bad. So we got all those challenges out of the way Yeah. At, like, step one. Yeah.

Cam Cathcart: [31:08] Yeah. Nothing has ever been easy from that

Dan Austin: [31:10] day forward. Yeah.

Mike DeHaan: [31:11] No. Like like, literally, that we bought this stupid duplex. And I remember standing outside, I just kinda walked it with the contractor, and I had just found out we're gonna have to replace the furnace. And our contractor had just installed a fence that he was gonna charge us a whole new fence for $7,000 that we didn't approve, but he wants us to pay for it now. And there's, like, all this other stuff. And I was we were standing outside with Dan, and and I was like, do we just sell it? Because we now have a $30,000 invoice for all this work that we did not have.

Dan Austin: [31:39] After we've already spent $60 probably by

Cam Cathcart: [31:42] that point. Yeah.

Mike DeHaan: [31:43] You know? But we just gutted it out. And then to make it even better, once we did all that, the tenants that were in there that told us they were gonna stay no matter what, they left, and we had to gut this entire unit. And so we ended up having, like, an 80,000 surprise across this deal, and we figured it out. And we just turned it to a rental. And, like, some of that involved Dan and I being there in the crawl space, like, laying moisture barrier with, like, antivirus mice shit everywhere, like, doing the hard work and, like, getting our hands dirty and some bonding thing. Right? And I don't know. Like, it it's never gonna be more of a pain than that.

Cam Cathcart: [32:16] For sure. And being there from the beginning together, like, knowing we both were in crawl spaces. We both like, my wife I remember one time we had a plumbing issue. This is, our first rental property, and it was leaking all over the house. And I had to go and fix it at 02:00 in the morning to save the house from getting flooded. And nobody understands that unless you've been there from the beginning.

Dan Austin: [32:37] Yeah. And I think it goes along with, like, if you're really flippant with your relationships too, like, it's just like marriage. Right? If you're if at any point in time in the back of your mind, divorce is an option, then that's probably gonna happen. Because, like, marriage isn't easy every day of the week. A partnership's not easy every day of the week. So in the back of your mind, if you're like, fuck it. I could just YOLO and leave. Yeah. Then that's probably an option for you, and that's where you're gonna go when the things get hard.

Dylan Koch: [33:00] Yeah. Pour more money back in and you guys have had some big phase changes, like, you know, you guys explored the franchise models, you scaled nationally for a while, brought that all back down, you were buying rentals, and now you're like, fuck rentals. And like, the fact that you guys have stayed congruent on all that through a lot of times is is actually the more surprising thing to me. And the fact that you guys both, like you said, have similar skill sets. Usually, you want complimentary stuff and you guys are you define your roles pretty good is what I'm trying to say.

Cam Cathcart: [33:26] Explain to me the no rentals. I mean, you guys are in a different market than the Midwest, so that that's probably a big part of it. But

Mike DeHaan: [33:34] Yeah. So so properties up here cost more than $50,000, Cam. So we can't just accumulate all of them. Yeah.

Dan Austin: [33:40] You can't trade them like baseball cards anymore.

Mike DeHaan: [33:42] Yeah. Right. Yeah. So the cash flows have just not made sense, especially for the equity that we can get on our deals. So, like, for example, I have a my little portfolio that I have left that's, like, just owned by me and my wife before I started working with Dan. At its peak, it was worth about it's, like, $3,500,000. Right? I had just under $2,000,000 to equity because of how much it had grown. And I lost $15,000 in cash flow on that. So I was like, why would I do that when I can especially we have this this lending business now. I can just take all of that money, go and put it into hard money loans at twelve percent and three points, and make, like, $200,000 a year in net cash flow.

Cam Cathcart: [34:26] Yeah.

Mike DeHaan: [34:27] Right? And I guess it's not as cool on, like, on Instagram, you know, where I can go and say, here's

Cam Cathcart: [34:32] Yeah. You are a freaking loser on Instagram. No doubt about it.

Mike DeHaan: [34:35] Yeah. Well, totally. That that's why no one follows me. Right? I'm a yeah. But it just becomes an opportunity cost here. Yeah. And then

Dylan Koch: [34:43] And their return on ad spend is seven half x, where Cam's is apparently zero.

Cam Cathcart: [34:47] Your return is seven?

Mike DeHaan: [34:49] Yeah. Seven and a quarter. We did it this morning on our our scale call.

Dylan Koch: [34:53] Mhmm. Yeah. Mine's like nine.

Dan Austin: [34:54] No. I would yeah.

Dylan Koch: [34:55] Yeah. Promise you.

Dan Austin: [34:56] Yeah. 700%.

Dylan Koch: [34:57] I'll send you my spreadsheet. Should come to the scale. You should join scale too.

Mike DeHaan: [35:01] We'll teach you how

Dan Austin: [35:02] to do it, Cam.

Cam Cathcart: [35:03] I just

Dan Austin: [35:03] You're doing it wrong.

Cam Cathcart: [35:05] Yes. Yes. Of course, I am. There's no doubt about it.

Mike DeHaan: [35:09] Yeah. For 2024, our our total ad spend right now is $6,262,200. And our money on the books, so this isn't all collected, but it's forecasted, is about 460 k.

Dan Austin: [35:22] Yeah. And that's not a lie.

Mike DeHaan: [35:24] That's not a lie. That's just straight out of the the books, man.

Dan Austin: [35:27] So if we spent a 100,000, we'd probably have 725,000 on the books.

Mike DeHaan: [35:32] And the only reason that we're not is because we currently have two other partners that run help run our local business. Right? We they were our competitors. We joined up with them, and they don't quite have the appetite yet, but we're slowly getting them there. To go.

Dan Austin: [35:44] Yeah. And does that ad spend include our radio? I can't remember if you pulled that out or not.

Mike DeHaan: [35:48] That does include our radio.

Dan Austin: [35:49] Yeah. So that's radio, which is not that we just started that at 5 k a month. So our actual ROAS is pretty high compared to that.

Mike DeHaan: [35:55] Yeah. So if I if I drop our radio, it's gonna be significant. Will be at, like, nine or 10 x.

Dylan Koch: [36:00] My 2024 is 747%.

Mike DeHaan: [36:03] So skeptical.

Cam Cathcart: [36:04] He's like he's just like, you guys are liars. I I don't, guys. I just don't. I I How's that I trust you guys. Yeah.

Dan Austin: [36:11] But we've historically, like, our ROAS, I would say historically has been probably between five and eight, somewhere in there even on like bad quarters and good quarters.

Dylan Koch: [36:19] Even when you're like nationwide, wasn't it like similar to that?

Mike DeHaan: [36:22] Yeah. Yeah. So when when we were nationwide, was about four and a half and we had a big team.

Cam Cathcart: [36:26] Mine was between four and five until about July.

Dylan Koch: [36:32] But you're flipping everything too. So like your your conversion cycles are so much longer.

Cam Cathcart: [36:37] They're way longer for sure.

Mike DeHaan: [36:38] That's the challenge as well. So we're almost exclusively wholesale Yep. Which makes things move just that much quicker.

Dan Austin: [36:44] Although we we have the most flips we've had in on our books in like a year and a half.

Mike DeHaan: [36:49] Longer than that, probably since '21. Yeah. No problem. Carried five flips.

Dan Austin: [36:53] Yeah. You're right. Probably well, probably beginning at '22.

Mike DeHaan: [36:56] Big beginning at '22. Yeah. For sure. Yeah. So if I drop our radio, our ROAS is 9 point 36.

Dan Austin: [37:02] Yeah. Yeah. And I would say that radio hasn't contributed much.

Cam Cathcart: [37:05] I'm so pissed right now.

Mike DeHaan: [37:09] So can

Cam Cathcart: [37:09] you guys give me a breakdown of so are you direct mail, cold calling, PPL? Like, what are you what are you guys using?

Mike DeHaan: [37:16] You're not gonna like the answer.

Dylan Koch: [37:18] Yeah. It's mostly direct mail for

Mike DeHaan: [37:20] direct mail.

Cam Cathcart: [37:20] Yeah. And who are you using?

Dylan Koch: [37:22] Open letter or mostly Ballpoint?

Mike DeHaan: [37:24] Yeah. Ballpoint? We use Ballpoint for through the fall to going into, like, February. And then we had a couple issues. Like, they made some mistakes on a couple things and it happens scale wide, like, within our community. And I ultimately went to Justin. Was like, hey. Look, dude. You kinda, like, damaged the image. And so we switched back over to OpenLetter. But the funny thing is is, like, some of issues we've had, we just had them again right away with OpenLetter. So it's like, it's all the same shit.

Dan Austin: [37:51] It's all the same.

Cam Cathcart: [37:52] For us, a huge part of this, no doubt in my mind, is our follow-up.

Dan Austin: [37:57] Yeah. But are you using like ballpoints like data services too, or are you doing your own data?

Cam Cathcart: [38:01] So that that's another problem. We're using and I think think it's not a problem. We're using Ballpoint's data services. So what do you think that the difference maybe part of it's the market. Saint Louis is a highly competitive market because it's like that middle ground. But outside of that, what are your response rates at?

Mike DeHaan: [38:18] So we spent we sent 11,000 pieces for March. Where'd my sheet go? We got 60 calls.

Dan Austin: [38:28] Off 11,000 pieces. Off 11,000. So it's quite

Mike DeHaan: [38:31] a bit better than yours. It's still not hit out of the park.

Cam Cathcart: [38:33] 39 off of 24,000 pieces.

Dan Austin: [38:36] Yeah. We're so we're at half a percent. We're a half a percent response, which is about right.

Dylan Koch: [38:40] Like, Cam, that is that is so low that I would almost assume something went wrong somewhere. Like, your phone number was wrong.

Mike DeHaan: [38:46] Or Yeah. Again, sorry, Ballpoint. We're kinda blasting you. So, like, we literally had people that were within scale that that Ballpoint sent out their postcards that didn't have a phone number on them. And the only reason they found out about it was because they had a seller who got it and looked up their website and then reached out to them and said, I got this card from you and I was trying to figure out how to reach you because there was no phone number on this. And it literally just had like phone number like in brackets. Yeah.

Cam Cathcart: [39:12] Well, let me go back to when we switched over.

Dylan Koch: [39:15] And don't just check your proof. Your proof will look correct.

Cam Cathcart: [39:17] Yeah. No. I'm gonna go back to yellow letter.

Dan Austin: [39:22] Were you guys using them and your response rates dropped too? Or are you checking that?

Cam Cathcart: [39:26] Yeah. That's what I'm looking at right now.

Dan Austin: [39:27] Yeah. Because even nationwide when we had, like because when we're going nationwide, we had a pretty inefficient marketing spend, and that was still half a percent if I remember correctly. It's pretty close to that. So that's a good average in all the markets we're in. I wouldn't think St. Louis is that far off because we're in pretty competitive areas too.

Dylan Koch: [39:43] I mean, mine's a quote, unquote midwestern market. I'm just above 1%.

Cam Cathcart: [39:47] Our cost per qualified lead so that's different than just an inbound lead, but actually, like, per qualified lead was $1,300 in November and December.

Dylan Koch: [39:57] Yeah. Mine was, like, $225.

Mike DeHaan: [40:00] Yeah. Ours was 316.

Cam Cathcart: [40:01] Guys, I'm getting so pissed off right now.

Dan Austin: [40:05] I'm glad you're having this with us I'm

Dylan Koch: [40:07] glad you're in Maui, man. Go stare at the ocean.

Dan Austin: [40:09] It's a safe space here. It's a safe space.

Mike DeHaan: [40:11] Yeah. Ours is $3.16.

Cam Cathcart: [40:12] No, this is good. And I think the thing about marketing too is you're not you're kind of maybe not recession proof, but right now we rely on the ability of other people to make money.

Dan Austin: [40:27] Which is tough. Yep.

Cam Cathcart: [40:28] And I don't want to have to do that. I wanna know like, hey, we've got our funnel right here and it's producing every single month and we know exactly where we're at and we can turn it up based upon if we need to or turn it down if we need to. Right now we turned all the way down to off because we needed to because it wasn't producing. But part of of my problem is like, I just wanna move fast and spend money to fix things. And so even when it comes to like our ad spend where one month, I not doubled it, but almost doubled it because I was like, we must not buy be buying houses just because we're not doing enough. And so like throw more money into it. We've used, you know, we had need to sell my house fast. And then we moved over to motivated leads. And then we're changing up our our mailers every time because this one didn't work. And and maybe it is for me, I just need to be more patient and like, hey, just this works, continue doing it. Obviously, there's there's changes that need to be made, but I don't know. That that is why we turn it off because it it just felt like we were setting money on fire every month.

Mike DeHaan: [41:34] Well, I think the immediate things so what I think you're doing differently than us and all the other people in scale that are finding deals with direct mail all the time is we're pulling your we're pulling our own data. Pulling your own data. Yep. High quality data. Stack your leads. And then also too with the mail that we run, we do stuff that is like, I have a little sequence that we run.

Cam Cathcart: [41:55] Mhmm.

Mike DeHaan: [41:56] Of the, like, postcards and letters that we sort of alternate through that I think kinda build a story. We've refined it. We've doing this for five years. I can I can say with confidence, we have not not mailed people since January 2020? Like, every single month for five years and four months now, we've sent out a batch of mail to get leads. Never not sent it.

Dan Austin: [42:16] Yeah. That's a good point.

Mike DeHaan: [42:17] And so we have, like, this consistency with, like, how people have seen our brand and all this sort of stuff, which does compound build over time. But also within, like, the little sequence that we run itself, the way we do it is very structured to kind of, like, catch someone's attention and then get them to reanalyze a little bit more and then kind of to learn about our company. There's a lot more thought about it than just, like, swiping the credit card and saying, here go, Ballpoint. Just go and find me some leads because what they're gonna do is they're gonna do the most efficient thing for them to profit off you the most. So that's just a business. That's what they're gonna do.

Cam Cathcart: [42:48] Yeah. I mean, I have for sure Ballpoint has been far and away better, and I hope nobody from Yellow Letter or ARIA Printmail listens to this, but I I did not have.

Mike DeHaan: [42:59] That dude that dude Todd over at yellow the Yellow Letter's kind of a prick, and ARIA Printmail rips everyone off. So you can quote that. You can go and put that in the show notes. Max, our podcast producer, fuck those guys.

Cam Cathcart: [43:09] I'm not gonna say that much, but my experience with Ballpoint has been so much better, and lead quality has gone up. We haven't closed those.

Dan Austin: [43:19] Mhmm.

Cam Cathcart: [43:19] And so I I think it's an internal issue a little bit and then also probably the data that we're we're mailing to. And then I'm interested in just like that what response rates are in other markets because I part of it could be the St. Louis market too.

Mike DeHaan: [43:32] I think that was definitely part of it. It's one of the biggest, most kinda known markets for that out there. That's something else that has been very interesting from when we ran our big national company to even scaling back down to to Spokane is seeing how much it varies from market to market at, like, a very extreme level.

Cam Cathcart: [43:50] Yeah. And you have so many huge investors out of Saint like, first, Ballpoint is based out of Saint Louis. REI PrintMail is based out of Saint Louis. DealMachine is based out of Saint Louis. Like, there's so many companies that are based out of St. Louis. And then Sam Faster Freedom, I'm sure you guys have seen him on Instagram before. But his company's in St. Louis, he's built a huge following of investors through his program that are investing in St. Louis.

Dan Austin: [44:16] I wanna be surprised. There's probably something to it with that. I

Mike DeHaan: [44:19] There definitely is. Because I you know, Eastern Washington, there's, like, three companies, and I just looked at the population. We are the gurus over here. Yeah. I looked at the population, and the city of St. Louis proper isn't that much. It's actually smaller than here. It's 2,000,000 people as, like, a whole greater metro area.

Dylan Koch: [44:37] Mhmm.

Mike DeHaan: [44:37] But I know you're not marketing to 2,000,000 people. You're probably marketing to a pocket that's the same size as what we are just in a market that's being saturated by 50 companies. Yeah. Like, honestly. So cool. Alright. We gotta end up here. We're getting on time.

Cam Cathcart: [44:50] Oh, dang. And I could do this. I could do this all day.

Dan Austin: [44:53] I know. I know. This is a fun conversation.

Mike DeHaan: [44:54] I I see Dylan itching. No one needs to go in and take care of his his small child.

Dylan Koch: [44:58] No. I mean, that's good. I have this shit ton of stuff written down, but, we we're good.

Mike DeHaan: [45:02] Yeah. No. You're all good, man. We'll have you on again though, Cam. This is we wanna have, like, some recurring, like, a guest. Really quick, where can people find you, follow you, reach out to you?

Cam Cathcart: [45:10] Probably just Instagram is the easiest, and I'm not super active on there. I get in spurts and will post for two weeks straight, and then won't post for a month. But Cam dot Cathcart on Instagram.

Mike DeHaan: [45:20] Cool. Awesome. You can check out more of Cam on the Better Life podcast as well.

Cam Cathcart: [45:23] Yes. So Yes. Please do.

Mike DeHaan: [45:24] Yeah. Awesome, guys. Thanks so much for listening. Hopefully, you enjoyed that. Go and share it with your friends, and, go and tag all your friends and tell them how much better collecting keys is than better life. We'd appreciate that. Thanks, everybody. We'll talk to you guys next week.

Dan Austin: [45:37] See you.

Cam Cathcart: [45:38] See you. See you, guys.

Mike DeHaan: [45:40] Thanks for listening, everyone. If you want more from us, you can shoot us a follow on Instagram. I am at Mike underscore Invest. Dan is at Investor Man. Dan and Dylan is at Dylan underscore Does underscore Deals. Choose to follow and send us a DM to let us know what you think of the show.