Our Q1 Metrics and Marketing Breakdown

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. We went against my own advice where I'm always like, don't get into these big flips.

Dan Austin: [1:10] Who's your guy that does your massages?

Mike DeHaan: [1:12] Alright. We're we're we're starting the show with that. Jesus.

Dan Austin: [1:16] I know you got a guy, Dylan.

Mike DeHaan: [1:20] What is going on, guys? Welcome to today's episode of the collecting keys real estate investing podcast. This is the show by real estate operators for real estate operators so you can continue to grow and expand your real estate business during this ever changing market and economy. For this episode today, we have a pretty fun one. We're gonna be going through a little q one review, looking at numbers, kind of things that have worked to start off 2025, things that haven't. This is your first time to the show. I am Mike DeHaan here with my cohost, Dan Austin and Dylan Cook. You. And you can ignore that little quip that Dan started the show with. He just like, you know, he's really into massages and deep tissue work, he just always likes to know.

Dylan Koch: [2:00] You guys just like to fuck with me, is that's what it is? But Moabelle wants a show, so

Dan Austin: [2:04] just wanna see what Dylan says.

Mike DeHaan: [2:06] But, hey, you know, we don't we don't judge here, Dylan. You do you.

Dan Austin: [2:09] Well, here okay. There there is actually the reason why that popped my head, because there is a connection to off market real estate here. So

Mike DeHaan: [2:15] And getting your male massages?

Dan Austin: [2:17] Yes. So you know one of our buyers that lives in your neighborhood, his massage therapist that goes to his house is the tenant of that Spanish style home on the South Hill we could not wholesale because the tenant was such a butthole. Like it was such a problem, we couldn't get in and out of it. Do you remember that one?

Mike DeHaan: [2:34] Are you serious? Yeah. God, what a small world.

Dan Austin: [2:37] It was so weird on so many levels. Because I've met this guy and I'm like, dude, you let him in your house and he massages you?

Mike DeHaan: [2:43] How did he even figure that out?

Dan Austin: [2:45] I don't I don't remember.

Dylan Koch: [2:46] Dan was looking for his next massage.

Dan Austin: [2:47] Yeah. Right. I was like, hey, this guy looks familiar.

Mike DeHaan: [2:50] Yeah. That's you just go in.

Dan Austin: [2:51] He's got a five star review from my guy.

Mike DeHaan: [2:53] God, maybe that's why we've had some deals falling out of contract. You keep propositioning all the occupants of the home.

Dan Austin: [2:58] I've tried to get massages.

Mike DeHaan: [3:00] But anyways Yeah. It's weird as fuck. So, anyway, I don't know where we go from there. KPIs, baby.

Dylan Koch: [3:05] Yeah. We're gonna

Mike DeHaan: [3:05] dive into some marketing KPIs, some strategies, and trends we've been seeing to start out the year. So we're gonna get a little bit in the weeds and talk some numbers So you can kind of have realistic expectations around what it's taking to be successful in this business right now. It's also a pretty appropriately timed call because we had a a scale call this morning. And it's always interesting to hear I see a lot of people start to do this when they have some like lulls in their marketing and their business. So it's interesting to hear how people try to like completely just drop of what has worked in the past when there's like a little hiccup and try to do something completely different. So on our scale community call that we had today, we had one guy, he was talking about how he was trying to like take his teeny tiny marketing budget, honestly, and set like split it into these different markets now because he had a down session in one market, and so now he's trying to spread it out. Yep. And would you guess what happened? All of it failed. Right? Like like, they basically took the little tiny piece that wasn't working and spread it everywhere and got even worse results. And so what I did is I called on Dylan on that, and I said, Dylan, what does your business currently look like? And he did exactly what I knew he would do, and he outlined his perfect consistency that he's has, very narrowed and focused, and essentially challenged this guy's view and showed what success can actually look like with this business. Yeah. So we're gonna dive into the kind of marketing they've had the most success with, the cost per lead, the cost per deal, what our our typical revenue and everything's look like, so you can kinda know if you're on track with the way to do it.

Mike DeHaan: [4:34] And if you guys have any, guess, like feedback or you wanna know how your numbers look like, you can feel free to send me a DM on Instagram, my underscore invest. And I'm just curious what other people are seeing in this economy as well. So Dylan, we'll start with you. What's your kinda like overall, I would say marketing look like, your conversion rate, like everything else?

Dylan Koch: [4:51] Yeah. So we right now, we basically have, I guess technically three channels, direct mail being the the number one, and that's still like 5 to $6 a month in in spend. I have one cold caller, that's through Aaron Beals company actually, and I think that's like $1,200 a month. I that's pretty new. I think I only have like 30 total leads from them. Actually, tell you, $40.42.

Dan Austin: [5:14] That's cheap. What a good price.

Dylan Koch: [5:15] Yeah. It's not bad. And then PPL, and that's also rather new. So all in all, you know, this we spent like close to $30 so far this year.

Mike DeHaan: [5:26] Yeah. About 10,000 a

Dylan Koch: [5:27] month. Yeah. Cool. This is what it kinda breaks down to. And the total leads is a 116, you know, 42 from cold call, 44 direct mail, 28 PPL and two referrals. So that breaks down to like a cost per deal, like $200 essentially is what it comes down to. You blend all those together.

Mike DeHaan: [5:45] Cost per lead at $200.

Dylan Koch: [5:46] Oh, sorry. Cost per lead about 2 And 100 that's with like 11,000 spent in PPL with no deals.

Mike DeHaan: [5:52] Yeah. That's awesome.

Dan Austin: [5:53] Yeah. I was gonna say, have you looked at like how you break that out per per, because like obviously cold calling your cost per lead is 1,200 divided by 42 is that the metrics there? Like, it's pretty low, probably. Yeah.

Dylan Koch: [6:06] It's very low, but you know how we talked on the show, there's cold calling is more quantity than quality, whereas direct mail describing quality leads, but definitely getting more there.

Mike DeHaan: [6:14] Have you closed any of those yet?

Dylan Koch: [6:16] No. No. So what we'll get into is a lot of so I've had a pretty good q '1, and I'll just say the top line revenue is $257,002.27 and 73¢.

Dan Austin: [6:29] You're rich. That's awesome.

Mike DeHaan: [6:30] That's great. Off of 30,000 total spend, Yeah. That you have your I guess, not quite, you have your ROAS of a 19%. Is that is that your math right? Because if you're 30,000 spending at two fifty k, you'd be at like 900%. Like nine x

Dan Austin: [6:44] nine x.

Dylan Koch: [6:45] It's pretty close to that. And the reason why it's a little different is like some of these are like the referrals on there, referrals don't

Mike DeHaan: [6:49] have a cost for us.

Dan Austin: [6:50] Oh, they jack it up.

Dylan Koch: [6:52] So that kinda throws off it off a little bit. And the other thing I was gonna say is the the leads that closed in January, some of these are like old SMS leads that have been in the system for a long time, so it also kinda throws off the numbers.

Dan Austin: [7:02] The simpler leads probably got for you last Yeah. They probably are leads.

Dylan Koch: [7:06] I mean, they very well could be.

Dan Austin: [7:07] Yeah. Hey, can you throw me a bone on those?

Dylan Koch: [7:09] I paid you enough for what this service was there.

Dan Austin: [7:13] You did. You were a good client. You were a good

Mike DeHaan: [7:14] client. You should count those though. Right? It's funny, people always get weird and they wanna know the quarterly return on their marketing, what do you think is important. But the total closing cycle on in this business can vary such an incredible amount.

Dan Austin: [7:28] Mhmm.

Mike DeHaan: [7:28] And the one thing I can tell you is that when we you know, last year and the year before when we were in this big national business, we would always see a massive, I would say, in effectiveness in marketing and just like general better return in months like four and five versus the first three. Mhmm. Right? And a lot of that was because, you know, our typical time from like a lead coming in to actually sending a contract was like sixty to seventy days. Yep. You know? And one of the biggest challenges I think when people are starting this business is they try to go like month to month where they're looking at like, this is what my return is for this month, for this marketing spend. When realistically that's it's always gonna be higher if you're working your lead funnels appropriately. Right?

Dylan Koch: [8:09] Yeah. And if you've been in business for longer than a year, that you have a little bit of a stack to use. Totally.

Mike DeHaan: [8:13] Exactly. And as we've talked to so many people on this show, you know, we did weekly interviews for years on this, and the good operators that we would have on, we would always ask what their cost per leads and cost per deal was. And they were always kind of in the same vein. Mhmm. And whenever it wasn't in the same sort of zone, you knew that they were lying to you in some way. Right? Like they were exaggerating or they were like talking about signed contracts, but you didn't know they had a 50% drop rate or something. Like all the confirmed people Mhmm. Kind of fall in like a similar cost per deal and cost per lead. And it'll vary as much as like 60%, but you won't see anything that's like drastically lower or drastically higher. Yep. And so yeah. So you have your cost per deal of $19.53, 13 assignments in one flip.

Dylan Koch: [8:58] And that flip I had bought back like October '20 Cool. 20

Mike DeHaan: [9:01] But yes, that's revenue that you're claiming.

Dan Austin: [9:03] So that's one flip closing on the sales side? Correct. And have you bought flips since? Do you have like other contracts?

Dylan Koch: [9:09] I have two that are in the rehab stage right now. Yes.

Mike DeHaan: [9:12] Perfect.

Dan Austin: [9:13] Okay. So that would bump you up to like 15 or 16 contracts or something like that on total?

Dylan Koch: [9:17] Correct. Yeah. Those are not counted. Was usually don't count till I sell them.

Mike DeHaan: [9:20] So Nice. So do you have your projected revenue on that $2.50 number? Like from those flips?

Dylan Koch: [9:25] Yeah. So we have two assignments, one's 20, another one is about 15, so that's 35. And then this flip should make about 35 each.

Mike DeHaan: [9:34] Cool. And those are in here that $2.50 number?

Dan Austin: [9:36] No. They're not. Yeah. So those are just projected?

Mike DeHaan: [9:38] They're not. So you should add those though, So that because that will be I mean, even if they vary a little bit. Right? That's kind of how you so your your return on Aspen's even better though.

Dylan Koch: [9:45] If you count those as projected revenue, then yes. Totally.

Mike DeHaan: [9:48] Yeah. Yeah. Mean, like, even if the market drops or you have some issues or things that happen, can still kinda get in the range. Right? Like, you're experienced enough that hopefully, unless something very drastic happens, you're not gonna have a $35,000 shift that makes your flip go to zero.

Dan Austin: [10:02] Yeah. I hope not. Golly. That would suck.

Mike DeHaan: [10:04] It could happen. I mean, that happened to us in 2022. The biggest loss we ever had, it was supposed to be like a $60,000 profit and pre into a $150,000 loss, but that was also an extreme situation. Mhmm. You know?

Dylan Koch: [10:15] Yeah. And so both of those yeah. I mean, I'm usually pretty close with what we come in at this point. And so, you know, yeah. I mean, if you count both of those, those would be good.

Dan Austin: [10:24] Another $70. Sweet.

Mike DeHaan: [10:25] Yeah. I mean, you're you're right on track. And for your little, you know, one person business, you're crushing it.

Dylan Koch: [10:30] Yeah. It's been good. And now that we brought Tony on, who's just in my AM, like, I'm finally starting to get the CRM caught up, where I'm just like hoping that I felt like the past two weeks, I've kind of taken a step back, but it's that whole take a step back to take three steps forward kind of a thing. Yeah. Mhmm. And, you know, once we get the ball rolling here, now my job goes from acquisitions to how do I feed them more leads and, you know, coach them through that process.

Mike DeHaan: [10:53] Yeah. Totally. But you'll be a business owner. There you go. Yes. Now that'll continue to grow. Yeah.

Dylan Koch: [10:59] Earning my wings one by, you know, once a week.

Mike DeHaan: [11:02] Yeah. But what'll be interesting is what you do tend to see happen is you'll have a slight increase in cost per deal, efficiency will drop. Right? Because these things there won't be quite as much care as you'll do yourself.

Dylan Koch: [11:13] Okay.

Mike DeHaan: [11:13] You know, it won't be drastic with, like, one or two employees, but it'll happen, a little bit. And then when you start to add more people into the pie, you always sort of see a move towards that inefficiency.

Dylan Koch: [11:22] And it's like the whole net it's a net profit discussion, Jack. Rather have a staff of 15 people, but make 20% profit margins, or five people and make 50 profit margins, you know, as that look like.

Mike DeHaan: [11:33] And there's no right or wrong answer, it's just your choice. Right? And what what role you want it to be? Exactly.

Dylan Koch: [11:37] Yeah. On the revenue side of things for the audience, the on a per deal, it's like 18,000, but the direct mail right now is like 28,000, while cold calling and referrals about 7,500 apiece.

Mike DeHaan: [11:49] Nice. Okay. Yeah. So your direct mail is crushing it.

Dylan Koch: [11:51] Kind of. Yeah. Props that up a little bit. But the blended I think is about right for my market, about 18 k. Yeah. Cool.

Mike DeHaan: [11:57] Alright. Yeah. So on our end, we're similar vein, we're a little bit more expensive. We also have a little bit of more waste in our business currently. So our total lead flow is at $1.97, total contract signed so far is 25, And out of those 25 right now, our projected revenue is 415,000. We've had one, two, three, four flips that we're taking down two that we are currently three that we're currently working on, one that we're closing on here this week, two innovations we have going on, the rest have all been wholesales. Our total ad spend right now and so we spend about $5,000 a month on radio, just kind of growing to take for brands kind of our long play. So if you look at our actual, like, traditional ad spend, we're at 48,000 for the year, 48,180. Cost per lead, $245, and then cost per deal of $22.94. So our return on ad spend is about 8.6. You add in that radio, everything comes down. But the value of the radio for us is we're trying to, like, carve out a bigger, just a kind of like brand presence here. And so we kind of view that more of like an overhead cost and like a marketing cost, but we still do put it into our general marketing budget. Mhmm. Right? So if we did that, then our total spend is about 62,000. But, yeah, one of the biggest challenges that we've had, it's just like kind of inconsistency with our marketing and stuff. So we we really face a lot of challenges with direct mail, which we talked about on the show, stuff getting delayed with the weather and everything else. But still despite that of the 25 deals we've signed, 16 of them are from direct mail. So what's that?

Mike DeHaan: [13:39] 70% of our deals, two pay per lead, three of them from online PPC, one from cold calling that our lead manager kinda does on the side. It's not a cold calling company, so she gets slow, she'll get on the dialer, and then three from referrals. And so the benefit of having hedged the direct mail by having somebody that's on is if we didn't have, you know, if we weren't running a pay per lead, if we didn't have PPC going, if we didn't have a system of a person cold calling, right, we'd have only had 16 deals for the year, which would be very very different sort of setup.

Dan Austin: [14:11] It'd be way worse.

Mike DeHaan: [14:13] Be way worse. Yeah. We probably would be sitting down at about your revenue, Dylan, but with three times the spend almost. Right?

Dan Austin: [14:22] Yeah. Yeah. The other thing that's interesting though, so like, what was the number, Mike? 400, what thousand that we've got?

Mike DeHaan: [14:27] 415,000 is our total expected revenue for the year so far.

Dan Austin: [14:31] And all of that is not all of that. I would what do you think? 80% of that still hasn't come in for the year?

Mike DeHaan: [14:38] Yeah. So so Dan, our actual cash collected this year is only 106,000 so far.

Dan Austin: [14:43] Yeah. So three quarters of it's out.

Mike DeHaan: [14:46] Mhmm. Yeah. It's either in project deals that should be closing over the next month or, you know, that's not quite that long, like three weeks, and then some flips that we have out and going. Right? And so you if look at like our total cash that's out, actually, let me look at the down payment, everything. If everything closes over the next like three months, say with our flips and everything else, between now, if we close no more deals between now and then, we'll have about a $600,000 swing.

Dylan Koch: [15:17] I think you said four flips. How much do you have, you know, tied in down payments and carrying costs in those two? That's the other part.

Mike DeHaan: [15:23] Tons, dude. Yeah. Have like a $150.

Dan Austin: [15:26] Yeah. And so that definitely, yeah, we've got quite a bit of money wrapped up in those things and then just being able to sustain not having the money when you think you are, I mean, we, for some reason, like, we've always had to deal with weird shit. This is off market real estate, but this year we we've got we're currently actively working on a lawsuit where a seller backed out. We've got trust title issues, like trustee title issues. We've got this one deal. This is wild, dude, where, like, this guy says that his job is to be a fiduciary consultant, and he somehow got this old guy to deed his house into a trust and then made him the trustee. And so he's the only one with the right to sell it, which we found you know what I mean? Like, so we're just stacking up these silo issues and they delay a week, a month, you know what I mean? And all of sudden, you're like, do we look great on paper? But you gotta be able to still drop 20 in marketing to keep it going, and so Uh-huh. That really hurts people, and then they wanna stop marketing, or they wanna reduce their marketing budget until they get money in the bank, and it's like, you really can't do You've gotta keep moving. Yeah.

Dylan Koch: [16:27] Or you gotta be able to hit the phones for ten hours a day.

Dan Austin: [16:30] Right. Do something. Yeah. Totally. Yeah. Guess.

Dylan Koch: [16:33] Yeah. And you know, that's the dangers of like the smaller operators, and I don't know if you I, you know, even put myself in there, if you don't have some reserves in the bank, like, this is where it's safer to wholesale than take one down because something could go definitely wrong and you could get screwed. I mean, like that's the reality of it.

Mike DeHaan: [16:48] I know. That's one of the reasons this business is so hard though, right, is because it's a at its core, it's a debt driven business. Mhmm. And there's such a, it's a very expensive business to run. People don't realize that when they get sucked into wholesaling and flipping as like a get rich quick scheme Yep. Is you need money to make money in this business, right? And the understanding like the ups and downs of the cash conversion cycle is really important and, like, the velocity of money. Because, like, the funny thing is one of these flips that we bought, we bought it while it was slow. I will also say that we bought it while I was out of the country, so I did not get a say in it.

Dan Austin: [17:27] Well

Mike DeHaan: [17:27] yeah.

Dan Austin: [17:27] But this deal Also, I never walked it. I just I just was like, I think it's a good project. Turns out that might not be.

Mike DeHaan: [17:34] Yeah. Well, it's it's a decent project. Yeah.

Dan Austin: [17:35] But it's It's a good project.

Mike DeHaan: [17:36] But it's taken so much capital, right, that comes out.

Dan Austin: [17:40] Well, yeah, there's some other caveats to it too. It sucked up some caveats and way too much time just due to the contractor selection from a referral.

Mike DeHaan: [17:49] Yeah. Yeah. And there's just there's some little things there. But like, we went against my own advice where I'm always like, don't get into these big flips when you're trying to because this whole endeavor, we're trying to launch like a new endeavor with some new partners. So we're kinda going off of their financial tolerance and everything else. Mhmm. And I went against my own advice of don't buy a big flip too early because it fucks up your cash availability. And sure enough, what did we do? There's like a 100 and something thousand dollars in that that property almost right now.

Dan Austin: [18:16] Well, the good thing is is Mike and I are capable of funding the entire business.

Mike DeHaan: [18:22] Which is what happens, right?

Dan Austin: [18:23] Which is not necessarily a good thing. Yeah. But like we are not a lot of our listeners out there are people like, you don't have that. Right? Like Mike and I have had previous experience with previous businesses where we were able to have capital reserves and we're able to be like, okay, well, Uh-huh. If you want to, I can loan on this one. Because the other flips that we've done, basically, Mike and I have completely funded a 100% of, like, purchase price, everything Yeah. Out of our pockets because that's the only way to keep it going.

Dylan Koch: [18:48] Well, financial management is important, the conversion cycle. A direct mail lead is probably gonna take longer from cash out the money in, you know, versus a cold call might be quicker. So like when if you're like just starting, like I'm always you wanna like teach someone how to do sales eventually, my thing is just buy a dialer, mojo, whoever, buy a list Yeah. Just call people, get the reps in, and then just try to assign it to somebody. Yeah. Reverse wholesale if you have to.

Dan Austin: [19:12] Yeah. Don't try to do anything sexy. I

Mike DeHaan: [19:14] mean, and it and it works, right? The problem is most people don't wanna commit that, you know, but there's there's really this is Hermosy concept I always like is there's three main resources in business. Right? There's money, there's time, and there's energy. And if you don't have one, you gotta make up for it with the others. Mhmm. Right? If you don't have any money, you gotta make up for a time and energy. It's amazing to me how many people don't have any money, but they still think that they're gonna be like the exception to the rule. Right. They're like, I don't wanna work. It's like, but if I, me, because I'm a special snowflake, if I spend $2,000 a month on direct mail, I'm gonna get a deal from that eventually. I'm like, you're probably not. Yeah. Because also too Yeah. It's not like it's something that will compound over time like where our average cost per deal from direct mail is, you know, $3,000 or whatever. If you spend $3,000 over three months, that you'll get a deal too. That's not how it works. No. Because you're gonna be mailing what like the same people or like new people, like there's a compound effect that has to happen.

Dan Austin: [20:09] If you go and ask anybody, your first cost per deal is probably like, could be like $10.15, $20,000 because you haven't

Dylan Koch: [20:16] Oh yeah.

Dan Austin: [20:16] Fucking done anything yet to have it any lower. Mhmm.

Dylan Koch: [20:19] My PPL channel is a good example. I'm 11 k in, no deals. No deals. There you What if I was just starting with it? Yeah. Right? Like Yeah.

Mike DeHaan: [20:25] Well, say that, but actually you would probably you'd be where I would expect that to be Right. Honestly. Yeah. Hopefully over the next several months, you can worth work those leads, you'll start to close something because the average time to start converting on a new lead channel is usually sixty to ninety days.

Dylan Koch: [20:39] Yep. But if you're also sitting in the cubicle and you need to answer the phone call and you can't do it when you're working there, you're not gonna close that lead, someone else is.

Dan Austin: [20:47] Yes. Dylan's gonna close it. Because Tony's out there working it.

Dylan Koch: [20:50] Totally. Yeah. Right.

Mike DeHaan: [20:52] Yeah. That it's such a a different business than it used to be. And we've had people, you know, that ever come through scale and stuff that have jobs and different things. And what do they do is they they go home and they sit on their dialer for four hours in the evening and they're calling sellers and they're grinding, and it sucks, and it takes them kind of five or six months to get it off off the ground. But then once the momentum's there and they start working the old lease they generate and stuff starts to close, we've had several people that have come through and quit their w twos to do that, but I never envy the situation that they go to go through to get there.

Dan Austin: [21:24] It's hard work.

Mike DeHaan: [21:24] Because it always sucks. Yeah. It's so much work.

Dan Austin: [21:27] They gotta put time in.

Mike DeHaan: [21:28] Hey. So you've heard us mention our scale community before, and I don't have a lot of time, so here are the quick highlights. In scale, you get all of our processes and systems that we use to do about a 150 deals every single year. You also get a community of investors that are verified crushing it in their markets. Otherwise, they wouldn't even be members. And that way, you don't have to waste time with nonstarters like you find in other groups. You also get preferred relationships with marketing companies and even lenders that will give you 100% financing. If you just heard all that and said, nah. I don't really need it. That's not gonna help me. I don't know what to tell you. You're lying to yourself because all those things are guaranteed to help you explode your business and buy more deals next year. So go to collectingkeys.com/scale, and let's see if you qualify.

Dylan Koch: [22:10] The other avenue to this too is, like, I'm still trying to buy some rentals this year too. So, like, it's like how much do I I stack? Because, like, if you wanna be quote unquote lendable to banks, I want you to see a big stack reserve. Right? They don't really give a shit about the equity in a flip that you have until Yeah. It You know, if I'm making an offer on this 12 unit building, but I wanna deploy more capital into the marketing, it's like, there's just another balancing act that you have to do for this and having a down payment and you have adequate reserves, like, all this stuff.

Dan Austin: [22:36] Well, that goes back to your point about hustling and just wholesaling, reverse wholesaling, assigning your deals. Like, if you wanna get in a lot of people get into this business because they wanna make quick money and they wanna buy rental properties. Like, buying rental properties should not be your priority. Buying flip should not be your priority as you're getting into this. It should just be to make those quick quick turns on cash and learn how to do the business. And then once you're established, now you can even maybe think about looking at rentals. Like, Mike and I right now, we're not even looking at rentals. Like, that's just not even in our our purview, and we're pretty experienced. We probably could, like, it's just not our thing. Mhmm. You got a lot of experience still, and some of the some of the folks, you just get over your skis too much trying to do too many cool, sexy things, and you just spin your wheels. Six months in, you drop $10.15 grand, and then you quit.

Dylan Koch: [23:20] I think you guys do scale, and you know, I've heard some of the conversations, it's like, if you commit to this, and you go three months and you have to spend 15 k, like, can you survive? Yeah. That's a good litmus test, you know, for people to take, because if they can't, then it could go that way.

Mike DeHaan: [23:34] Right.

Dylan Koch: [23:34] And at least you're not a bullshitting and, know, promising too much.

Dan Austin: [23:37] Yeah. If you pay me $15, I'll make you a millionaire. Yeah. Right. I promise. Pinky promise.

Mike DeHaan: [23:45] Yeah. And it's just important, you know, the whole point of this conversation is to have realistic expectations around kind of what it takes.

Dan Austin: [23:49] Yeah, exactly.

Mike DeHaan: [23:50] Right? And I think the biggest thing too is having the patience to, you know, kind of chug along, try different things, and then having the discipline to actually track things correctly so that you can look backwards and you can make decisions on your business.

Dylan Koch: [24:04] Yeah.

Mike DeHaan: [24:05] Right? And that's a big thing a lot of people don't do when they come in as they don't have tracking numbers, they don't have a CRM. That's one of my favorite things. And like even successful people are like, so I do I get so freaking frustrated with like GoBundance guys who are all like high net worth guys who wanna do this business but refuse to pay Yeah. $200 a month for freaking Ari Simply. Mhmm. Because they're like, I just don't feel like I need that. I'm gonna use a spreadsheet. I'm like, how do you track anything, dumbass? Yeah. Like, I'm like, oh, I have a VA who takes the calls and, like, manually plugs them in. No. That's dumb. That's like a dumb thing to do that's gonna just lead to errors.

Dan Austin: [24:40] Pay a thousand dollars a month for a VA so you don't have to pay for a CRM.

Mike DeHaan: [24:43] Pay two So you don't pay $200 a month. No shit. But, yeah, you know, and just like setting yourself up correctly at the beginning Mhmm. Or at least like close enough, it will get you to the point where you can actually track your progress and make decisions on how to actually be effective moving forward.

Dan Austin: [24:58] Very true.

Dylan Koch: [24:59] Another thing about the quick money is, you run your business better, and honestly just probably sleep better at night, if you have a $100 in the bank.

Mike DeHaan: [25:08] Sure.

Dylan Koch: [25:08] Mhmm. Right? You're not rash to make decisions, like the guy earlier who's trying to squeeze stuff out of his tiny marketing budget. Like, you get desperate, you try to make deals work. I've done it, I'm not immune to this when I was at the beginning. Right? You spend twenty hours on a deal that was never gonna work in the first place, and then Yeah. You might hurt your reputation as buyers, like why is he sending this piece of crap out?

Mike DeHaan: [25:26] Right. Right.

Dylan Koch: [25:27] So there's this these downstream effects of not being in a position of power, especially when it comes to financials. Yeah.

Dan Austin: [25:33] You gotta you wanna operate from a position of strength. Yeah. There's a another podcast I listen to, and this is loosely related, but I wanna drive the point home with this, is that they were quoting another some famous person that wrote this in an article that how people, like the average Joe, like us, feel successful in life is that their stage in life essentially changes for the better year to year, meaning your net worth, whatever that means to you, grows year to year. And so when your net worth doesn't grow, like, that's when you don't feel good about what you're doing. And so when you're coming into this from a position of strength, you're obviously, you want your network to grow. You want your business to grow. But what we've talked about this whole episode is there's these episodic ebbs and flows where it actually goes down and your cash position goes down and you're like, oh, shit. Like, am I gonna lose all my money? Look, I'm worse off at this moment than I was three months ago when I started this. Now, oh man, I wasted money, what a bad decision, and you start spiraling. And in reality, you're just in this episode of like kinda going down before you can go back up, and it's always gonna do this, but over the years, and Dylan, you can attest this, it's going up. Right? Up into the right. But there are these downloads. It's just like looking at any graph in the stock market.

Dan Austin: [26:44] So it was an interesting take for me when I heard that statement, I was like, oh, I could see how that could really hurt people if you decide to call it quits at the wrong point in that that cycle.

Dylan Koch: [26:52] Well, like you guys talked about, it's better to track this stuff over quarters and not months. Mhmm. Right? Like one quarter could one month could look terrible, but your quarter looks good. Even over on a year by year basis. Totally.

Mike DeHaan: [27:02] Yeah. I also think on that note, well, I don't know if I fully agree with that, because I think it that's determined by how much personal value you put on your net worth, which I think varies a lot.

Dylan Koch: [27:11] Well, and I don't look at

Dan Austin: [27:12] it as net worth, but if you well, that's why I made the comment of like, what is like net worth? What is your position in life? Is your position in life getting better or worse? And so if you feel like your position in life is better worse this year than last year, you automatically are don't feel good, like mentally. Like, you're not mentally healthy because of that.

Mike DeHaan: [27:28] Sure. Yeah. But like, that's how it gets getting into like philosophy of of life.

Dan Austin: [27:33] I didn't write the article. I'm just saying it's a good observation.

Mike DeHaan: [27:36] Totally. But then I think also too, kind of on that note where the importance of the trends of that, right, which is you always hear, I feel like it's like business gurus that are trying to, you know, really, I don't know, flex or or relate to the the lay person. They'll say dumb shit like, you know, do you know how exactly how much money is in your business bank account right now? I check mine every single day. It's like that doesn't freaking matter, and it's not a good representation of your actual situation. Right?

Dan Austin: [28:02] I mean, I check mine every single day.

Mike DeHaan: [28:04] Yeah. But like, does it affect you emotionally if it's low?

Dan Austin: [28:07] It doesn't make me make a decision. No.

Mike DeHaan: [28:09] There's people that do that, and they're like, man, it's low. I gotta close a deal today. I'm like, do you though? Or should you just focus on what's gonna make you, like, quantifiably more money over the next three months instead of making a quick buck right now?

Dan Austin: [28:20] What's the time horizon which you're operating?

Dylan Koch: [28:22] Yeah. There's a there's a thing between like when you're maybe younger or even if you don't have any money, I don't have anything to lose.

Dan Austin: [28:29] Totally.

Dylan Koch: [28:29] And then everybody gets to this certain step where like, oh, I've actually accumulated some wealth. Now my priorities are changing to I don't wanna lose it.

Mike DeHaan: [28:35] Mhmm.

Dylan Koch: [28:36] Right? And never that number is different for everybody where that is, but Totally.

Mike DeHaan: [28:40] I'll actually say, I think that's a big reason that I've been drawn towards the lending piece. Right? As opposed to holding rental properties, because rental properties have more downside risk that's out of my control versus doing loans. Right? And so, like, sure, there can be downside in, like, the market and different things, which I would still be exposed to via loans. But at least when I when I'm carrying the debt, I am able to service that debt at a discount. The other person is the one that's guaranteeing that for me. I'm not being guaranteed myself with a debtor that can come and take my ass right if I if the market goes sideways. And then also too, I am getting more recurring consistent cash flow. I don't have to worry about all of a sudden a furnace imploding and needing to spend $10,000 to replace it. And and sure, I will get less returns with my money being in loans than if I had built my big portfolio because I don't have debt pay down, I don't have appreciation, I don't have tax benefits, all that sort of stuff. But at this current point, I am okay with that because it will bring consistent growth and opportunity, which is what I want.

Dan Austin: [29:43] I think if you think about it this way, here's another way to also put some perspective on it is 1% of a $100 versus, you know, 1% of a billion, like, kind of the bank model is like banks make small margins on money, but they have a lot of

Mike DeHaan: [29:57] it. Mhmm.

Dan Austin: [29:58] You know, if you're investing in rental properties, the idea is you're gonna get a huge compounded return because you're getting all these different if you add up all the different benefits of owning real estate, there is some downside risk like in all of those areas.

Dylan Koch: [30:10] Yeah.

Dan Austin: [30:10] Where with the lending business that you're talking about, the downside risk is a little bit more limited and because that you get a less return, but just do a shit ton more loans and then you'll still net more money.

Mike DeHaan: [30:20] Yeah. Exactly. And there's also two, I went in this the other day, You always wanna have three potential exit strategies with everything, which I I really like this. And when it comes to rental properties, you really only have one exit strategy once you own it, which is to sell the property. Right? When it comes to debt, you can either sell your debt. Right? You can take back the home if things get weird and you can sue the person, right? Or you can basically raise money to replace the debt. So you still service it, but you basically get the money back, right? And so there's all sorts of different ways that you can structure it in order to get that money back, which is a lot harder to do with an actual rental.

Dylan Koch: [30:56] One thing I guess too, that's like, is we're diving into these KPIs and these metrics, and I've been looking over my business since, I guess 2023 is my first full year doing this. Like 2023, I thought it was a third of my business, I probably sold to hedge funds. And then that stopped abruptly. 2024, a third of my revenue is probably SMS, then that stopped. Mhmm. Right? So I don't know what it's gonna be this year. That's good, you know, a third of it's gonna go away, but each year, you know, that revenue has basically still risen each time. Right? And so it's the trend of what worked before won't probably, may not work in the past, but you just gotta figure out what does work and what's currently working.

Mike DeHaan: [31:32] Mhmm. Yeah.

Dan Austin: [31:33] Yeah. We were in it's fun. We've had we've gone through as an industry through a lot of different changes. We have. There's been a lot of ways to make money, but those ways have also gone away, like you're saying with SMS and all these other things that just disappear. And so those things, a lot of people were it was easy money and the ones that are still around yourself Dylan, the ones that adapted and overcame when that revenue stream disappeared, and that's how you stay in the business long term.

Mike DeHaan: [31:54] So with all the knowledge from q one, what are you doing doing going into q two Dylan? Any changes in strategy, marketing?

Dylan Koch: [32:02] Well, I think a lot of people overcomplicate it, where they're like, I need to do this AI focused landing page, and all this bullshit. When in reality, just go back and look at your closed deals, see what list they came from, see what marketing channel they came from, and then do more of that. Mhmm. So I'll probably do continue to do direct mail. I'm gonna give PPL like two more months, and if I don't close a deal by like month five, I might turn that off and try something else, or maybe try a different provider of who I use for that.

Mike DeHaan: [32:25] You definitely should.

Dylan Koch: [32:26] We'll continue to do cold calling, and then, I mean, really what it comes down to is, I need to find the balance of how much Tony, like my new AM can handle. You know, what is too much of a workload, and then kind of adjust from there. Then I'm still handing all the dispo side and I do wanna buy like a million dollar plus building this year. So that's one of my other goals.

Mike DeHaan: [32:46] Yeah. Bingo. I would say on that last piece, a decent AM can handle 80 ish active leads a month Okay. Of like decent opportunities. At that point, they start to get a little bit frazzled, especially if they're at walking appointments, things like that. And that's sort of like looking at their long term leads as well as their active leads. If you have a lead manager, you can stretch that number further. That seems to be about the average. Mhmm.

Dylan Koch: [33:12] That's good. That's I mean, that's a reference point. I had no clue what to look at before. Yeah.

Mike DeHaan: [33:17] And it and it's kind of like speculative. You know, we haven't fully tracked that. I can just look at like a total leads that we used to generate versus the team size we had for each one. It seems to be about 80. And then if you bring in lead manager, you can get it to like low hundreds.

Dan Austin: [33:28] The golden ticket for that is if you get your lead manager AM to be like friends work together, like that lead manager is gonna be helping them out so much. Exactly. Like they're they they become a team. Right?

Dylan Koch: [33:38] Yeah. And you know, we've we've started doing that where, you know, Kimmy's the LM and she's gets an old lead shows at Tony in the little CRM and like, she knows to call or he knows to call herself. It's been good. I mean, it's definitely a transition and I find myself like, with the team that I have now, one, I I honestly work less than I did, I have been, you know, And which is kinda when the phone rings, I don't have this anxiety filled in my face, like I have to answer this call, like someone else is Yeah. Gonna answer

Dan Austin: [34:06] Or

Dylan Koch: [34:06] if he doesn't, I'll still answer, like don't get it wrong, but Right.

Mike DeHaan: [34:09] This is different. Can't turn that off. Yeah. That's great. But, yeah. And then on our end, what we're actually doing is, we're consolidating our marketing and going all in on direct mail for the next few months, mostly because where we live is very cyclical based on the seasons. And April and May here are freaking red hot. And so that's what's proven to be the most efficient for us. And so even we've gotten opportunities from other places, we're gonna put those on pause and just take the same budget and dump it all into direct mail to try and like kick up some additional opportunities.

Dylan Koch: [34:38] Are you gonna change any of the lists? Are you gonna go deeper or market to more people?

Mike DeHaan: [34:42] Just going deeper. Yeah. Bigger lists. Yeah. So we just did our our marketing direct mail order for this month, it was 17,000. We just placed that yesterday and it was basically just a much larger list.

Dylan Koch: [34:53] Dollars or pieces? Dollars. Dollars.

Mike DeHaan: [34:56] Yeah. So it's at $30.30 his postcards are like 35,000 pieces.

Dylan Koch: [34:59] Yeah. Okay. Are you stacking that?

Mike DeHaan: [35:01] Yeah. All stacked. Yep. Yeah. I mean, and like our actual stack list capability in Spokane, North Idaho is relatively small. So we got pretty wide into, like, seniors and just, like, kind of the big list too.

Dylan Koch: [35:12] Yeah. That makes sense.

Dan Austin: [35:13] Because Mhmm.

Dylan Koch: [35:14] I'm trying to think of own market. That would be a pretty big list for me to send out.

Mike DeHaan: [35:17] Yeah.

Dan Austin: [35:18] Yeah. And you guys got a bigger market than us probably?

Dylan Koch: [35:20] Yeah. I think we do.

Mike DeHaan: [35:21] Yeah. It's like 500,000 people is kinda like the whole like wider area and we get out just with our real spots too.

Dylan Koch: [35:27] I have a follow-up question to that. Are you still sourcing most of your data from PropStream or are you multi faceted in that?

Mike DeHaan: [35:35] Yeah. So we've been doing PropStream and then what's the other one, Dan? DealMachine? No. DealMachine.

Dylan Koch: [35:41] Ambella? Oh, PropertyRadar.

Mike DeHaan: [35:43] Oh, PropertyRadar. Oh. Yep. Yeah. We've been pulling some of the the niche list off those and stacking those together. And so it's been interesting to see, like, certain list sizes, how they vary, and then some of the stuff that crosses over, some of stuff that doesn't. Like, PropertyRadar has a lot more, like, bankruptcies and lanes and those sort of things. And, you know, crossing the property, like, quality seems to be similar. I was like, spot check stuff, I don't, you know, it's just impossible to check it at mass, but we are very lucky here in Eastern Washington that the access to public data is very very good. Uh-huh. So we don't typically have the data quality challenges that some other places have.

Dylan Koch: [36:19] Yeah. My main county, which is Hamilton County is very is usually pretty good too, but Yeah. Some of the neighboring counties you have to dive a little bit deeper in. Yeah.

Dan Austin: [36:28] It's challenging.

Dylan Koch: [36:29] You know, used to have that web scraper that did like the bots for foreclosures and stuff, but the something inside of Chrome or something changed and it like broke.

Dan Austin: [36:37] Oh, no.

Dylan Koch: [36:38] And it was just fine. But now the VA does it, or not my VA, sorry, my assistant does it. And honestly, it doesn't take her that long and she's more accurate. So I just can been rolling with that instead. Perfect.

Dan Austin: [36:49] Adapt and overcome, dude. Adapt and overcome.

Mike DeHaan: [36:51] Cool. Well, thanks for listening everybody. Again, go ahead and send us a DM. I would love to know what your KPIs in marketing strategy is going into q two. Get more leads because, you know, you might give me some good ideas. I would, I'd love to keep expanding and growing because this industry is changing more and more as more of these different marketing types become commoditized. And, you know, it's gotten competitive. Everything else has just been interesting to sort of see it unfold. But, yeah, obviously, if you're getting deals done, you find us when it works. So I'd love to hear about it. So thanks for listening, and we'll talk to you guys next week. See you. See you all. 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.