Post-Election Real Estate Trends and Tips

Mike DeHaan: [0:00] Really quick before the show starts, in case you haven't heard, we have a growing community of investors called the scale community, which is full of people learning to make massive income with their real estate businesses so they can reach financial freedom a little bit faster than building a rental portfolio solely over time, because honestly, that takes decades. And who has time for that? So if you're an investor who is serious about growing and creating a scalable business without needing to be a slave to it twenty four seven, then go to collectingkeys.com/scale and apply. And if you're a good fit, we would love to have you join the community. So, again, collectingkeys.com/scale. Go ahead and apply, and we'll see if you're a good fit.

Dylan Koch: [0:38] If rates are continuing to go up even when the Fed's dropping, to me, that's not really a good sign.

Dan Austin: [0:43] Hey there. Welcome back to another episode of the collecting keys real estate investing podcast, the show where we teach you how to make massive income, not just passive income. Dylan, it's me and you again today. How things going?

Dylan Koch: [0:58] I mean, they're going good, man. They're going better today than they were last week.

Dan Austin: [1:01] Yeah. I'm feeling you, man. We were, talking about that earlier in our scale community call. We do our coaching calls on Tuesdays and Thursdays, and, the Tuesdays one's always fun. It's middle of the day, so you got everybody in like work mode. Thursdays are evenings, so people sometimes are in whiskey or beer mode, but Tuesday, everybody's cut in really tight. Right? And I noticed in our business, and I think you mentioned the same thing, Dylan, that post election one week, so this will be two weeks post election, we already have leads coming in that are awesome. We were having kind of a slow, slow lead flow in October that slowed down as we got closer to the election. Then the election week sucked. I don't know that anybody was checking their mail. They were just checking their Twitter accounts and watching Fox News or MSNBC, depending on which side they were voting for. Anyways, nobody did shit, and we just didn't have a lot. And so then this week already starting even Monday, Veterans Day, we had a couple of really strong leads come in. I think we'll get one locked up for sure. The other one, I don't know. But you kinda have something similar. Right?

Dylan Koch: [2:06] Yeah. I mean, not only is it more leads coming in, but it's been like the ones who've been on the fence for the past two to three weeks that I really couldn't like, all the motivations were there, the timelines were there, but they just kinda wouldn't sign the dotted line. And we locked up three between yesterday and today that I'm just like, what the hell happened? Yeah. Kind of amazes me that, you know, some people make their decision making based on, you know, the election results. Didn't Totally. But that's what people do.

Dan Austin: [2:35] A lot of people do. How do you do this? This is actually a funny conversation to have. Like, say you're out on a seller appointment and the seller, you know, brings up politics. What's your strategy? Are you fluid during the conversation? Are you like

Dylan Koch: [2:46] I usually am. And like

Dan Austin: [2:47] Are you like, yeah, Trump, he's a he's a freaking racist. I hate him. What do you do?

Dylan Koch: [2:52] I don't know if I'll go to the that extent, but you can basically you can get a gist of like their political affiliation, the the way that they're talking, the context that they're using, and I'll just kind of agree with whatever they're

Dan Austin: [3:03] saying,

Dylan Koch: [3:04] to be honest.

Dan Austin: [3:04] Give the head nod.

Dylan Koch: [3:05] You're not gonna make a political enemy and then be able to buy their house, right?

Dan Austin: [3:08] Oh, absolutely not. You cannot change a seller's mind in the moment on politics, and you should definitely not. We had an acquisition manager, was like super liberal, and we had this one seller. Is the first time I witnessed it. Typical real estate guy, very conservative, in his 70s at this point in time, and this was the twenty twenty election. And so it was like Trump and Biden. And he was just going off on like, know, going Trump, go Trump, go Trump, can't trust the Democrats. And she just could not like hold it together. Like, so I was there. Of course, I can talk the language. And you're just like, yeah. Yeah. Whether whenever you agree with it, like, yeah. I totally get it, man. Like, that's what a lot of people are saying right now. You know what I mean? And you just you don't have to.

Dylan Koch: [3:56] And if you keep it ambiguous statements like that, like, it's fine.

Dan Austin: [3:59] You're not changing who you are or what you voted for. The same thing goes like when you have like one of those people that you're during the election, like, oh, man. I don't know. I guess Trump gets elected, know, who knows? I'm gonna leave the country. It's like, yeah, you know, I've heard a lot of people say that. You'll You'll probably need to sell your house, so like, I'll be here.

Dylan Koch: [4:15] I've seen some of the memes lately that's like, oh, if you're discouraged by the results, you know, and you're gonna flee the area, I buy and sell houses. And it's

Dan Austin: [4:22] like I gotta laugh at that.

Dylan Koch: [4:24] What a ploy. But

Dan Austin: [4:25] That's a great TV ad to be running right now, especially because it'll piss off a lot of your audience, but it'll also be pretty awesome.

Dylan Koch: [4:32] One thing that's with, you know, Trump's victory, he is the one that appointed Jay Powell in his first term as the Federal Reserve Yes. And then he, I guess, just in a news briefing the other day, someone asked him like, hey, what if what if Trump says you have to go? And Powell is basically like, he can't. Like, that's illegal. And I have no idea if he actually can or he can't. I know he appointed him, but I don't know if he has the right to like remove him either.

Dan Austin: [4:59] Yeah. Don't know. That's actually a good question. I do know that the executive branch has zero, technically, zero influence on BFED. They don't work for them. They they don't have any connection because otherwise you'd have negative political influence changing our Federal Reserve or whatever. Right.

Dylan Koch: [5:17] And they're supposed to be independent. Is that That's a topic maybe for another day. I mean, there's 14 FOMC members across all the different central banks across The United States. They have political affiliations, and most of the time it's still left.

Dan Austin: [5:30] A lot of times they do, because there are a lot of times they're economists or big bank CEOs at some point in time, and I believe it's a private. It's like is it private?

Dylan Koch: [5:37] Or is semi prized pseudo private,

Dan Austin: [5:39] like Okay.

Dylan Koch: [5:40] Government private enterprise. Okay. If you guys wanna go down a conspiracy hole, read The Creature of Jekyll Island.

Dan Austin: [5:46] But Never heard of it.

Dylan Koch: [5:48] Yeah. It's about how the Fed regime was. Basically, how it was created in 1913 and how it's private and basically other people rule the world. Anyways but Jay Powell has been more on the, I guess, hawkish side of they say, he's been more strict and keep doing QT, all that kind of stuff. And Trump is like, lower the rates, you

Dan Austin: [6:11] know, of course. Yeah.

Dylan Koch: [6:12] And you know, he's a real estate guy. It is where it

Dan Austin: [6:14] is. Yeah.

Dylan Koch: [6:15] But the past meeting the Fed went to, they lowered by 50 basis points. That was two meetings ago. Sorry. They just had one on last Wednesday, and they lowered it by another 25 basis points.

Dan Austin: [6:24] Which actually 100 surprised me. I did not expect that.

Dylan Koch: [6:27] Yeah. I don't think many people did. I think we talked about on the show, like most economists, like 90% thought it'd be a 25 basis point cut and ended being 50. So now we have between the two past meetings, 75 basis point cut, and everyone's like, this will ease the economy, like, you know, spending will pick up. What's happened though is like so like they can control the short end of the curve, which is the Fed funds rate, But the longer duration stuff, like the ten year, that's actually continued to increase. And a lot of the pricing that we see as everyday citizens is based on the ten year. That's your car loans, that's student loan payments, that's mortgage rates.

Dan Austin: [7:01] Yep.

Dylan Koch: [7:02] And so as these continue to go up, you know, it's kinda almost getting more unaffordable. You know, that was kind of the opposite of what everyone has thought.

Dan Austin: [7:11] Right.

Dylan Koch: [7:11] So I guess when I'm pitching this, it's like, okay, how does this affect us as real estate investors? Mhmm. If rates are continuing to go up even when the Fed's dropping, to me that's not really a good sign.

Dan Austin: [7:20] Yeah. To me that means inflation's still going up. And just I guess a little education, if I I believe I know this, and correct me if I'm wrong, Dylan, this the Fed fund rates is not directly tied to mortgage rates or anything. The Fed funds rate is the rate at which banks must charge each other when they're doing overnight lending. Is that correct?

Dylan Koch: [7:40] Correct. Okay. Yes.

Dan Austin: [7:41] So banks have to true up their balance sheet every single night. Say you're doing loans and you're taking deposits, say you do more loans and you take deposits, you need to true that up because you at the end of the night, the next day you have to have that money in your balance sheet, and you know you'll get it when you get deposits tomorrow, but you have to have it. So, they go out to the open market and you know Chase says, Yeah, I've got $2,000,000,000 I can loan out right now at this moment. And US Bank says, Cool, I need that $2,000,000,000 It's going to be at whatever the Fed fund rate is right now.

Dylan Koch: [8:06] It's low. It's like half a percent, but half a percent of billions of dollars is still a lot of money.

Dan Austin: [8:10] It's still a lot of money, right? And so that's how banks night, they kind of move all this money around to make sure everything is balanced because the balance should And be so that being said, a lot of times as that rate is higher, the banks are going to be less likely to do a mortgage, for example, right? Because they have to borrow more money at higher rates. And then they also like it's like risk on, risk off as well. As the rates get higher, things like deals get riskier. So then banks are like, well, I mean, that deal's a lot more risky if the interest rate's higher, so they're not gonna want a loan on it anyway. So it's kind of like this natural ecosystem or balance act, but they're not directly correlated.

Dylan Koch: [8:46] Right. And like the mostly, like the Fed has a lot of influence more on the front end of the curve. And what I mean by that is just shorter duration, really like two years or less. And they can do that from manipulating the rate. If you overlay, like the Fed's fund rate over the ten year, they pretty much correlate pretty well. This divergence that we're seeing now is kind of not unprecedented, but it doesn't happen very often. And so, like, that's what I'm trying to figure out, like, how wide can these things get from each other, and what does it look like if it closes? If the closing being the ten year and stuff comes down, or does that mean the Fed will have to hike again? I don't know the answer to that. I think the market will tell us, but-

Dan Austin: [9:22] that's pretty scary if they had to hike again. My thought was they were just gonna go through the end of the year and then even into q one and not do any more or rate cuts. I just thought they would just stop cutting altogether. And so when they did that 25 basis point cut, I was like, that's actually really surprising, and I wonder if they did it because they're trying to do more of a soft approach. You know what I mean? And say, hey, we know we're probably a little high, but if we just stop now, we just cut. If we stop cutting now, people are gonna get are gonna be questionable. And also with the election, they probably didn't wanna you know, they're probably trying to be apolitical, which I actually think Jay Powell has done a really good job, honestly. Yes. Like I do being apolitical through the last two elections, which is probably why he's still there. And so, like, maybe, that being said, as the end of the year comes, they'll just taper that off and try to not do rate hikes, but just try to stay flat for a few months. I don't know. That's kind of my feeling. It just feels like the mortgage rates went up. It feels like that's correlated to higher inflation, and I believe that the markets, although they get things wrong because when you put bad data in the markets, as in there's bad actors or illegal shit going on, you can't account for that.

Dan Austin: [10:30] But the markets, generally speaking, will adjust and account for things before they actually happen. Kinda like they're adjusting as they started believing Trump was gonna get elected closer to the election. Markets actually started adjusting and pricing that in.

Dylan Koch: [10:42] Yeah. Like the polymarket stuff too. I mean, money money talks, man.

Dan Austin: [10:45] Money talks, man. And people people get a sense, and people start it's almost like gambling, right? They start moving their money, and even the the betting markets changed as it gets closer to the election. And then Trump won and the markets shifted in. Now that there's certainty with who's going to be the president regardless, the markets kind of did another pop. You know what I mean?

Dylan Koch: [11:02] So for investors too that are out there, the Fed actually publishes something called a dot plot, And it's their basically like future projection of where they see the Fed funds rate going. As the data, you know, they update this in real time as data comes in. So it does change periodically. But you can just Google this and see what it looks like. And not only do they predict where they think it'll be, but they kind of give what are they called confidence intervals on how confident they are that they'll be right. And just from bringing this up, it says, for 2025, the Fed is expecting to cut borrowing costs four more times, bringing their key benchmark interest rate to 3.25 to three and a half percent. So if you're going into 2025, right now, they're positioning themselves saying we're gonna keep cutting. So I don't know, do that information with what you will. But it's just, I think the biggest takeaway here is watching the divergence between what the Fed's doing and kind of what the market's doing. Right. And seeing how those are going to come together.

Dan Austin: [11:58] Yeah. All that to be said, I don't know what the fuck's gonna happen. Yeah.

Dylan Koch: [12:02] I mean, no, most people don't. Everybody listen to this in six months and be like, well that didn't turn out how we thought.

Dan Austin: [12:07] I never thought Bitcoin was gonna go to a 100,000, and now I'm like, goddamn, it's going to a 100,000.

Dylan Koch: [12:12] Well, it's at 90 or 88 or 89, whatever it is. So, and that, you know, that's another, I guess, hedge against inflation. Know, people have real estate, that's why we buy real estate. That's another tool to have in your tool belt, in my opinion, but doesn't produce cash flows. It doesn't have tax write offs. It does, you know, you can't really leverage it like you can with real estate. So there are other aspects as being a good investor.

Mike DeHaan: [12:32] I hope you guys are enjoying this episode. We are seriously trying to grow this podcast so that the voice of what it really takes to grow a real estate business becomes kind of the norm versus the guru get rich quick BS that everyone is fed on a daily basis. With so many podcasts out there, it is hard for us to get discovered on our own. So a quick ask. Please share this episode on your social media accounts, be that a real story, whatever. And if you tag me at Mike underscore Invest, then I will give you a follow, and I will also send you a DM so that we can have a little chat about your business and any ways I could potentially help you grow. So, again, please share it on your socials. Tag me at Mike underscore Invest, that's with an s at the end, and I'll follow you, and we can have a little DM and convo about your business. And maybe I can help you grow a little bit, or you could just say what's up to. That'd be awesome. But appreciate everyone, and thanks so much for helping us grow.

Dan Austin: [13:24] Let me ask you about this Bitcoin because you're my you're one of my Bitcoin experts. It's actually funny. So I started buying again. I just put $10 a day auto drip, just buys, and I and I told you pre show I'm going to make some big purchases. As I learn more, I just don't know enough to be like, hey. I'm gonna drop a 100 k, put it in Bitcoin. You know what I mean? I I don't invest like that anymore. But anyways, so I just made a purchase on November 11 for $10, which is badass that I could buy it on a national holiday, so that's also cool. My last my last on Coinbase, I sent Ethereum on 01/30/2018.

Dylan Koch: [14:00] Oh god.

Dan Austin: [14:01] Yeah. I was buying something prob I think I was probably taking it to Binance, so I had to switch over to Ethereum. So I probably bought Ethereum and then sent it to Binance in Ethereum, and 950 something dollars was one Ethereum. That was the last time I I did anything. But should people be putting 1% of the net worth in

Dylan Koch: [14:23] this stuff or what? So this is my kinda take on that, real estates build the most millionaires. Businesses and taking asymmetric bets have created the most Yeah. Not billionaires, like at least worth $10,000,000 or more. Right. Yeah. That's a net worth or more. And so can you buy something for $80,000 that has the potential to be worth 500,000, a million dollars one day? You know, what kind of real estate can do that for you? You can't. Like, you can't buy a real estate with that kind of asymmetrical upside.

Dan Austin: [14:51] Okay. So can people be investing in Bitcoin and do the same thing that you have done in Bitcoin when you started investing? Is there still that asymmetric bet, or is it just now a mature thing where it's like, yeah, put some money into it, you're gonna probably outpace some of the other markets. Sometimes you will, sometimes you won't.

Dylan Koch: [15:07] My personal opinion, not financial advice, is that there's still plenty of legs to run. Yeah, it's at all time highs right now, but there's a limited supply. There's only ever gonna be 21,000,000, and there is infinite demand. You know? And you're just now seeing this from outside of retail. You know? You're seeing countries like El Salvador make it legal tender. There's Fortune 500 companies that are talking about putting on its balance sheet. Pension funds have done it, endowments have done it. And so if there's really a limited supply, which we know there is, and there's a continuing base of people who are going to buy it, the price has to go up. Right? The simple supply and demand. Microsoft, I think, is the biggest latest news because they're having a shareholder vote in December about if they should put it on their balance sheet. And I think if you get a company like Microsoft that does it, then that's just gonna open the floodgates for all the other major companies to do the same thing.

Dan Austin: [15:58] Is it that they would put it on their balance sheet because they think it's better than cash? Exactly. Their other alternative in a commodity would be like gold?

Dylan Koch: [16:06] Yeah. Gold is like a $17,000,000,000,000 market cap, so it's a lot bigger. I think Bitcoin's or like it's 1.5 ish. It just actually passed silver's market cap. So this thing isn't small anymore.

Dan Austin: [16:16] No. It's big.

Dylan Koch: [16:17] It's in the top 10 of just financial assets in general. Right. NVIDIA and Microsoft are still larger, but it's been around since 2009. A lot of people don't realize that, and the technology has kind of evolved. So long answer is I think everyone should have at least part of it in your portfolio. And if you are older, put 1% in. Put whatever you're comfortable with losing if you actually think it's gonna go to zero, and it would end up just being a naturally larger position of your portfolio the more that it grows.

Dan Austin: [16:43] I'm done. I'm just looking at my thing. I'm like, in 06/29/2017, bought seven Ethereum for $2,000.

Dylan Koch: [16:50] What I don't even know what Ethereum is right now.

Dan Austin: [16:52] I don't know what it is, but I mean, it's just a good reference point for how cheap it was. And I was buying, you know, some Bitcoin back then in 2017, and had I focused more on that, I probably would have done okay.

Dylan Koch: [17:01] I would say it's less risky today than it has been because earlier, like, you know, Western civilizations could ban it. They don't wanna go around the dollar. They don't wanna go around the currencies.

Dan Austin: [17:09] Yeah. There is a lot of weird stuff.

Dylan Koch: [17:11] Now it's so embedded, and that even has, you know, political favor. And there's a senator out of Wyoming named Senator Loomis? Loomis? I don't know how say her name, that literally is proposing a bill to have The United States have a strategic Bitcoin reserve. And they wanna buy a million coins over the next, like, think five years.

Dan Austin: [17:29] Wow.

Dylan Koch: [17:30] So it's so intertwined, I think, in Western societies now. Like, I don't think the odds of it being banned are very high.

Dan Austin: [17:37] I think, yeah, back when I was investing, started investing in it, it was like super dodgy. You don't know what's gonna happen. And then post 2020, it's like, it's just part of the economy, and everybody's accepted it.

Dylan Koch: [17:48] Yep. Exactly. But now, you know, you see these people on Twitter or X or whatever we're gonna call it that are posting financial advice. Oh, yes. And in my opinion, they're anonymous. They said they're not putting their actual identities to what they're saying. And like my favorite is this FI couple. Right? Like that post stuff on

Dan Austin: [18:06] Oh, yeah. Everybody knows the FI couple.

Dylan Koch: [18:07] And I just think they post some of the most ridiculous stuff. Like, before I even dive into the tweets, do

Dan Austin: [18:12] you have

Dylan Koch: [18:12] any burdens with any of this stuff?

Dan Austin: [18:15] Well, I would say this. If you are using a cartoon or a fake kind of persona, like, as your picture or whatever, I don't listen to fuck all you say. Because if you're not willing to put like your person out there, who you are, and I know like the Fight couple will say that they do, but I don't know if I've ever seen any of their faces. And so I just don't know that I would trust that because it's like they could be anything. They could be whatever. Like, who knows? Like, they're just saying shit. Like, I've never met the Fy couple. Have you ever met the Fy couple? I've never met the finance guy. Have you ever met them?

Dylan Koch: [18:45] No, I haven't. Haven't either.

Dan Austin: [18:48] I don't know where they go. I never see them saying that they're going to freaking any conferences.

Dylan Koch: [18:52] Like most media too. It's like, what can get the most views? What can get the most clicks? What can get the most engagement? And sometimes saying ridiculous things will get the most engagement. Yes. And that is not going to be beneficial to a large portion of society. Right. Totally not. Actually, going back to the ethos of the show, no one gives a shit if you get a 500% return on $50. Like, that's not gonna change

Dan Austin: [19:16] your life. Yeah.

Dylan Koch: [19:17] Right? Why Doesn't matter. Focus on making more money on top of basically everything else. Yes. Because you have unlimited upside, and in order to invest, you have to basically put in a significant amount of money to move the needle to change your life.

Dan Austin: [19:32] Absolutely. I agree. And I would add to that, like, you have to kind of buck the system in a way of what traditional people are saying because most of the traditional people you're listening on the Internet, the ones that are putting their faces out there, go ask them the last time they did something that they're talking about. Go ask, you know, Investor Girl Brit or Brandon Turner the last time that they actually operated at your level. It's a long, long time ago, and things have changed a ton. And so you need to be listening to people that are actually doing what you want to be doing and getting the results you wanna do Because passive income comes a lot easier than passive income. Everybody's talking about it now that passive income sucks, it's super hard to get. And it is, because to get a lot of meaningful passive income, there's no way around a shit ton of investing and a shit ton of hard work. I mean Yeah. We can all say that.

Dylan Koch: [20:18] Well, and anyone who was investing from 2010 to 2020 or 2022, even if you bought a crappy deal, the market kind of bailed you out as long as you didn't go insolvent. Absolutely. Like because prices kept going up, interest rates kept going down. So even if you didn't even do the the value add, like adding an extra bedroom, finishing it up, like, your prices just went up naturally. So you could cash out refi, or cash out refi and buy that new roof that you didn't have the money to buy the first place.

Dan Austin: [20:46] One of my best friends that got me into real estate investing, he basically him and I had lunch yesterday, he made the comment. He's like, I don't think I'm gonna buy any more real estate going forward. He's a side hustle real estate guy, works full time job, his wife works full time job, and they just bought, you know, one rental property a year for several years. And they have 10 rental properties. They're probably 40% or 50% LTV on these things, so they got a ton of equity in them. Refinanced them a couple times and gotten good money out of them. And his cash flow, he's making basically, his salary probably is what he probably makes in cash flow, if not just a little bit less than his salary, in passive, actual like net net clean cash flow. So he's done well for himself, and he's like, I just don't see the opportunity for me personally. Again, he's not a full time real estate guy. He's a side hustle, passive investor guy. He's like, think I'm just gonna focus on the stock market for the next ten years, like just dump my extra cash there. He's like, it'll diversify my portfolio. And so that that's really honestly good insight for his position where he's at, because he doesn't have the opportunity to turn up the dial on massive income, because that's not what he's doing. He's not flipping houses. He's not a full time wholesaler, off market guy.

Dan Austin: [21:50] He has a completely good day job that takes care of him financially. Now he's just trying to build wealth.

Dylan Koch: [21:55] Yep. And personal finance is personal. So like he can kind of do what he

Dan Austin: [21:58] wants. Right. Right.

Dylan Koch: [21:59] It's funny kind of on the same thread. I met with a seller today. I had coffee with like a guy that I haven't done this in a while, so it's kind of good to get refreshed, but he's 75 years old. At one point, this dude, two fifty like rental units. Wow. Like he had a massive portfolio at one point. And we were talking today, we're going through, I was asking about, you know, what he currently holds in this kind of stuff. And long story short, by the end of it, he's like, you know, young man, I'm really impressed. Like, honestly, I might call you for some of this stuff. Yeah. Like his words, mine were, like, I was getting started in today's environment, I would never have had the portfolio that I did. Wow. Meaning like, it is so much harder than it is today than it was in when he was building his portfolio.

Dan Austin: [22:37] Right.

Dylan Koch: [22:37] He built some of this stuff. He's like, I could walk down to the account thing, draw my plan on a piece of paper, give it to him, and they'd stamp it.

Dan Austin: [22:43] Isn't that crazy?

Dylan Koch: [22:44] No engineer, no architect. Can't do kind of stuff anymore. No. And it's just become so sophisticated. It's become so popular. So

Dan Austin: [22:52] Super competitive.

Dylan Koch: [22:54] It's hard. Don't get me wrong. But you just have to outwork everybody else or be smarter than everybody else. I don't know. There's not really ways around it.

Dan Austin: [23:01] You have to apply your resources in the best way possible. I like the Fi couple, what was that Twitter quote that you read me earlier?

Dylan Koch: [23:10] Oh, here, I'll I'll pull it back up. A 2025 goal, have a 150 in our brokerage account. We can take 75,000 loan at 6.5% charge by our brokerage. We can use that money to fund private real estate deals at 12 to 13% interest and keep the difference.

Dan Austin: [23:27] K. So they're gonna net 6% on their four zero one ks?

Dylan Koch: [23:32] Yeah. Right? I mean 6% interest only on the so on $75,000

Dan Austin: [23:38] So they have to pay six or six and a half percent interest only. They pull their money out, but it stays in their brokerage account. They go lend it out.

Dylan Koch: [23:46] Mhmm.

Dan Austin: [23:46] They're not earning in the S and P 500 or whatever they're invested in.

Dylan Koch: [23:51] On the 75 ks.

Dan Austin: [23:52] Right. Yep. On 75 ks. And according to the Fi couple, if my understanding is correct, and they're pretty real estate heavy if you follow their threads, they buy rental properties. They're like kinda like, buy one property a year for ten years, you'll never work again a day a day in your life. So now they're undiversifying themselves to go into real estate to net like 6% on their 75 k investment. So $4,500, that's going to take them a long time to get to $1.50, when they could also just make 7,500 by leaving it in the S and P 500.

Dylan Koch: [24:22] Right. And then this kind of the whole point of, like, some of these tweets don't make sense. So you're gonna do all this for 4,200, $4,500 a year annually. Yeah. Or you could just leave it in S and P 500 in a compound interest. And by actually digging at the loan, you're probably slowing that by a decent amount if you're really only compounding at the initial, you know, 75,000. Yep. So like this whole premise of, oh, I'm just now a private money lender. Like, you can say that. Cool. But if the goal is wealth and financial stuff, like, it just doesn't make any financial or mathematical sense to do that.

Dan Austin: [24:50] No, it doesn't. Or just cash it out, pay the penalty, and go make something like go do a flip and make the same amount of money that you have. So say you cashed out, you pay some penalties, say you got like $60, use that $60 for the down payment and the repair cost on a flip, you're gonna make way more money. It's like, okay. Mean, what's the point? You know what I mean? To do some of these stupid things that these people are saying behind their fake personas.

Dylan Koch: [25:15] Yeah. Going back to our earlier conversation too, you know, if the long end of the yield curve is actually going up, you're gonna start seeing money markets and CDs start offering five, five and a half, 6% again. So if you're a real estate investor, especially like in the multifamily or commercial space, as an opportunity cost, it does not make sense to go buy a six, seven, maybe even an eight cap, when you can go put your money and buy a ten year treasury or a CD or a money market at five and a half, 6%, and it'd be literally risk free and still liquid.

Dan Austin: [25:45] Yeah. That's exactly the key too. Liquid and risk free. Taking your money out to go loan to other people is really neither of those.

Dylan Koch: [25:53] No. I mean, they could lose a deal depending on Especially

Dan Austin: [25:55] if you're not a lender. And Right. Some of the deals that they post, I'm gonna pick on I'm gonna keep picking on the the Fi couple because some of the deals that they post, they're are preposterous. It's like those numbers are perfect. Right. And you're not a full time marketing machine, full time off market operator where you're able to develop your own leads and, like, out of 10 that you get, you wholesale nine and the one is maybe, like, a super good deal. They're too perfect. It's not true. It just doesn't happen.

Dylan Koch: [26:20] Yeah. They just see, like, the ARV, oh, what's 75% of that? And this is it'll wind up just so it's the perfect textbook thing, which we both know is, like, that never actually happens.

Dan Austin: [26:29] Never happens.

Dylan Koch: [26:30] Most of the time you're a little bit over. Know? Yeah.

Dan Austin: [26:33] Nine out of 10 times you're a little over. The tenth time is the one that keeps you saying that you're under.

Dylan Koch: [26:37] Exactly. But you know, still, even if that's the case, let's say you burrow a property and you're in for 10,000, and it's a 300,000 house. I mean hell, a 10% down would be 30 k. You're still out, you're still ahead.

Dan Austin: [26:49] Absolutely. I would call it maybe more like finance entertainment. Everybody's dreaming out there, they're scrolling through their social media, and they're just like, oh, that makes so much sense. I I can't wait till I can do that someday, or I'm gonna try to do that someday.

Dylan Koch: [27:02] Well, I think some of it is even based on like, it's expensive to live in. I'm not arguing that fact. And I will go on a hill and say it's harder for most millennials to live than it was for boomers if you just look at cost of living versus like salaries and employees, whatever. So they find like the crowd, like and all of the millennials, Gen Zs are like, it's so expensive to live, and now they become these personal finance gurus that just say, max out your four zero one k, invest in index funds. Like, revolutionary, but they're good at the marketing of things.

Dan Austin: [27:29] Yeah. Exactly. Yeah. They they build up a following, especially if it was built up at any time post 2020. I feel like there were some people that didn't exist on social media before 2020, and then they were able to make a good brand because they had a little niche. Right? They had some sort of niche that got excitement and got people behind them. And in reality, it's not like good rocket science. I mean, it's basic fundamental shit to invest money. The challenge is is it just takes longer than anybody will ever want to know. Not everybody was buying like me. I was so smart, Dylan. Not everybody was like me buying Bitcoin in 2017 and then sold it all before 2018.

Dylan Koch: [28:05] Yeah. Well, then you sold it. It's your own fault. But if the goal is to create wealth, and then be financially free, I think if you focused on basically, comes down to hard assets to me, because we're gonna probably be in a continued inflationary environment. It's real estate. It's Bitcoin, it's gold, it's other hard assets. Like that's why freaking like art for like things were also went through the roof for other needs, because there's not many of the unique ones. Right?

Dan Austin: [28:31] Totally. Supply and demand.

Dylan Koch: [28:32] It's just supply and demand. Yep. Well, how are we gonna transition all this back to our off market business, especially going into 2025? Know, I think I'm gonna increase, not increase, but maintain the level of marketing spend I've done the past couple times, and hoping that now that this election's over, and we're starting to see this pick up already, that cost per lead will hopefully come down a little bit. Cost per deal will hopefully come down a little bit. Even if my my revenue per deal is a little lower, the spread is still there to hopefully make 60% margins in the business.

Dan Austin: [29:04] I will say this. My experience, anytime the market gets tough, people drop out. And I would say it's been tough for quite a while now. It's gotten tougher recently with the election. I think that we're post election. I think we'll get kinda back to business, but I still think it'll be a little grindy going into the end of the year. And I think more and more people get discouraged. Somebody that started marketing four or five months ago, they dropped $20.25 grand into this business that didn't produce anything, and they're just discouraged, screw it, I gotta go back to the drawing board. All those people are gonna drop out. There'll still be some bottom feeders out there kinda nickel and diming some deals, but for the most part, those little solo or middle operators out there, they're gonna drop out, creates just more space and more opportunity for the professional operators who are consistently marketing every single month and consistently closing deals consistently, learning to how to get better at their sales, how to close more deals, how to get more creative on the deals that they underwrite. Guys like you, Dylan, you're gonna be out there. You're gonna keep doing it. We're gonna keep doing what we're gonna do. We're gonna keep driving forward because consistency and longevity in the market is how you keep this business going and the bigger your business gets.

Dylan Koch: [30:04] And like we talked about on the scale call today, let's say you've been doing this for a year or two years, and you have some leads, you know, built up in your CRM.

Dan Austin: [30:11] Mhmm.

Dylan Koch: [30:11] Go back through all of the people that you bought a house from, especially if they're an investor, like they're not a homeowner. And if they have another property, reach back out to them like, hey, man. You know, I bought this place from you in 2024, in February, whatever. I see you got another one, you know, I'm doing my homework. Any chance you're gonna sell another one in 2025?

Dan Austin: [30:30] Yep.

Dylan Koch: [30:30] And I would tell you, I've gotten many deals in the beginning of twenty four just having that one conversation with sellers.

Dan Austin: [30:36] A 100%. That's and I think that's such a great idea. That reminds me of like it's very real estate broker type because if you talk to any OG real estate brokers, every quarter they go through their call lease sheet. They might have two fifty people that they call. They're all past clients. They're just calling them to check-in. Right? Because they know if their client bought or sold a house at one point in time, they're gonna do it again, and they wanna be the first person that they call. They don't wanna be the forgotten realtor, they just go find the new realtor. They want to be top of mind. Same thing goes with your clients. A lot of our sellers are not going to be repeat clients because we know their situations, right? They're distressed, they move out of state, they do something.

Dylan Koch: [31:12] Exactly.

Dan Austin: [31:12] But those landlords, those people that have more than one property, those sellers that stick in your mind that you knew would be they're gonna be a great person to follow-up with, those are the people that we're talking about. Like, follow-up with those people. Just stay in front of them. Stay top of mind with them. They might not sell to you this month or next month, like but give them another call.

Dylan Koch: [31:28] There's one and just to prove this works, there's one seller where I've sold six of his houses. Wow. One guy, so you spent that marketing dollars one time Yep. And you reproduce the six deals.

Dan Austin: [31:39] Best one dollar marketing you've probably ever spent.

Dylan Koch: [31:42] Well, then it's just staying top of mind. It's call him every once in a while. And that's like not what a lot of people do. Right? Like, we've always appreciated the follow-up is what's important. But follow-up even with ones that if they have other properties, don't delete them out of CRM. Put them in one leads. Put them in something else, you know?

Dan Austin: [31:58] That's a super big tip. That's tip of the day from Dylan. If you have a lead that has more than one property, put them in your CRM as like more than one property guy, and then just call them every once in a while. You never know when they're ready to sell the next property. I'm that guy, I have multiple properties. If I sold one and somebody called me and was like, Hey, you ready to sell it? I might be ready to sell it.

Dylan Koch: [32:16] Or the guy that I had coffee with today, like I literally he responded to a mailer that was like a three bed, one bath, 1,200 square foot house.

Dan Austin: [32:25] Mhmm.

Dylan Koch: [32:25] And I just looked him up on the auditor site, and I see that he owns a shit ton of stuff. And so that's when I called him, was like, hey, let's, you know, let's figure this out.

Dan Austin: [32:32] That's the guy.

Dylan Koch: [32:33] And who knows if that'll end up turning into a deal or not? But if it does, those are like once in a lifetime opportunities.

Dan Austin: [32:37] You wouldn't have known hadn't you tried. Exactly. Yep. Exactly.

Dylan Koch: [32:41] Well, I didn't have anything else, Dan. Anything else you wanna riff on before we head out?

Dan Austin: [32:44] No. Let's get out of here. I think we've bored the audience too much. If you weren't bored though, hit us up on Instagram, investor man Dan and dylandoesdeals. Let us know. Let us know what, what you like to see from the show, actually. You know, we're kinda rounding out the year. We're middle of November going into December. We're definitely gonna continue doing the show. But, you know, 2025, new year, new me. Mike and I have always liked to change things up. So if you guys wanna hear or see something different on the show, definitely let us know. We're open to changes. So yeah.

Dylan Koch: [33:15] And if you wanna be on the podcast, you can DM me, and I'll see we'll see if you're a good fit or not.

Dan Austin: [33:20] Yeah. We'll see if you pass the sniff test. Definitely, DM Dylan. Alright. Let's get out of here. See you guys. See you.