Real Estate Has Changed — Here’s What Works Now

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, you would really mean a ton. And, otherwise, we appreciate you guys, and let's get into this episode.

Dan Austin: [1:05] Well, everybody keeps saying like, oh, yeah. I'm waiting for the buying opportunity. Right?

Mike DeHaan: [1:08] It's right now. 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 in the ever changing economy. And we are having a interesting time in the economy right now. Just big big picture. How it's gonna affect real estate, we don't really know. So as time of recording, we're recording this on the April 8. So a week before you guys will hear it. So things could completely change by the time this episode comes out. They likely will. But we are currently in

Dan Austin: [1:46] the middle of a little stock market free fall.

Mike DeHaan: [1:49] All the tariff stuff, like, spooked a bunch of people last week, and we've had the biggest, at least this is what I said last night when I was looking, the biggest like three is it three days, two day drop since like 1987? A three day,

Dylan Koch: [2:03] but yeah, I think. Yeah. I think you're right.

Mike DeHaan: [2:04] Of the stock market, and so

Dan Austin: [2:06] It seems like a really weird stat though, like what about the biggest two day or four day or five day? Like, what

Dylan Koch: [2:11] Yeah. What if the one day was bigger than the three day? Right?

Dan Austin: [2:13] Like Well, there's definitely been bigger one days than three days. So it's like Yeah. What's the what's the stat here?

Mike DeHaan: [2:18] That's why stats in general are always stupid. Right? Because you can compare them to whatever you want. Exactly. And you can spin them in either way to make them sound not so bad or way worse than they actually are. I mean, regardless, stuff is hemorrhaging pretty Yeah.

Dan Austin: [2:34] Boeing's up. I'm watching Boeing.

Mike DeHaan: [2:36] That's how you know things are fucked. Right?

Dan Austin: [2:38] Right. Well, they got they just got a contract. What do they what contract do they get? They got some sort of like defense contract. So that's why. Really?

Mike DeHaan: [2:45] Yeah. I'm surprised by that.

Dan Austin: [2:46] But Yeah.

Mike DeHaan: [2:47] Me too. I mean, just based off of their track record, I'd great. Now we're gonna have instead of the commercial planes flying into the ground, it's gonna be all the fighter jets that just crash from

Dan Austin: [2:54] the ground.

Dylan Koch: [2:55] Yeah. Their door just Right. Falls off mid flight.

Dan Austin: [2:57] I think that's what it was. They got the new sixth gen fighter jet, and I was like, why? Like, what are we doing? What do we need these for?

Mike DeHaan: [3:05] Yeah. That's that's problem. They're gonna be having these jets that are learning with, like, AI on the Internet, and all they do is look up planes and see 09:11. And they're just like, fuck. I guess that's what we're supposed

Dan Austin: [3:13] to do.

Dylan Koch: [3:14] My god. Jesus. That's dark.

Mike DeHaan: [3:18] Say, AI is pretty stupid. I've had it's been spitting out some dumb stuff. But it's been a been a big question around real estate with how this is gonna be affecting everything because the ten year treasury, which is what a lot of mortgage rates are based off of, took a big dump on Friday. It since rebounded up, but there's been an overall conversation going on around what is this gonna do with interest rates. And from what I've read to, that's kind of like the goal with driving the stock market down, is they're hoping to bring interest rates down, which will in turn make things more business friendly so that more business production happens since they're trying to, you know, bring stuff back stateside again. Whether or not that actually happens, I don't know.

Dylan Koch: [4:00] The previous administration I mean, really the past ten years, but they loaded up on a bunch of, like, short term debt. It's like two year treasury bills, and those are all coming due. And so the kind of the theory is like, we need to get these down so we can refinance this debt. Mhmm. And save honestly like billions of dollars on the interest expense. A lot.

Mike DeHaan: [4:18] So the the federal government when did what all the multifamily and commercial investors did and bought short term arms.

Dylan Koch: [4:24] Right. Yeah. Right. Pretty much, dude. Yeah. Exactly.

Mike DeHaan: [4:27] Yeah. Nice. Yeah. That's

Dan Austin: [4:29] funny. Which is just stupid because they could control interest rates. And when they were zero, they could have issued a lot of debt for like a long period of time.

Dylan Koch: [4:36] They could have bought a shit ton of debt. Yeah. Right? That it's all at different durations.

Dan Austin: [4:40] Fifty, hundred year, thirty year. It's your fucking debt.

Dylan Koch: [4:43] A lot of corporations like the apples and stuff of the world did that though. They're sitting on like Mhmm. Because they're fucking smart. I think corporate debt, the longest it goes is fifteen. But like, I I think they have like the fifteen year debt that they have like locked in at the two, three percents.

Dan Austin: [4:55] You could go longer. Right? Because Disney issued a hundred year bond back in the was it the seventies, eighties?

Dylan Koch: [5:01] So I think that's different than this I don't know. Maybe you can. I don't know if you can do that in today's world or not. I thought the most standard was 10 to 15.

Dan Austin: [5:09] I mean, there just might not be an appetite. It's it's just unheard of. But if you Yeah. I think

Mike DeHaan: [5:13] it was in

Dan Austin: [5:13] the eighties, Disney issued a hundred year bond, but it could reprice, which it did. I think it was like at fifty years it could reprice, and they issued it at like 9%. Could you imagine having a bond at 9% today? Like, that and it when I I learned about it when we were at the in the Zurp, and I

Mike DeHaan: [5:28] was like, dude, that would be dope.

Dan Austin: [5:29] Like Yeah. Just 9% fixed interest every month coming in?

Mike DeHaan: [5:32] Yep. Well, stuff like that would just never happen now because with the Internet and just the rate things change, there's no appetite for it. People don't even want stuff that's more than, you know, three years or five years a lot of the time.

Dan Austin: [5:42] Like, that's one of the reasons, like,

Mike DeHaan: [5:44] with our our lending business,

Dan Austin: [5:45] you know, we have all

Mike DeHaan: [5:46] these co lenders. That's been very interesting to people is because our loans are typically, like, six to twelve months. And the fact that people can get, like, a higher fixed yield for a year or less, they're, like, all about that. The interest, like the time frames that people have, think especially when times get weird, are significantly shorter. Because people are also worried about having their money tied up if there's a buying opportunity.

Dan Austin: [6:09] Yep. Right. Well, everybody keeps saying like, oh, yeah, I'm waiting for the buying opportunity. Right?

Mike DeHaan: [6:13] It's right now.

Dan Austin: [6:14] Right. Well, a lot of people have said this, like, just over the last several years and it's like, yeah, it is actually now, you know, but then what happens is uncertainty and people don't want to invest in uncertainty and it's like, gah, see, you aren't buying when you're supposed to be buying because you're a pussy. Yeah.

Mike DeHaan: [6:28] Well, totally dude. I mean that like that's that's a legitimate statement. Everyone's been saying that forever is they've been

Dan Austin: [6:33] It's it's here baby.

Mike DeHaan: [6:34] When stuff corrects they're gonna start buying. It's like, yeah, that that is the time right now.

Dylan Koch: [6:38] I mean, depending on which vantage point you have, if you're an off market operator, have an off market business, this could be the time where, I don't know, if you're a baby boomer and you're seeing your portfolio go down, but you have, you know, one rental property, two rental properties. In my opinion, that person might be more likely to sell now than they were, you know, a couple years ago.

Dan Austin: [6:55] Right. Yeah. Things aren't as rosy. Right? You know, you wanna hold when things are great, and then when, you know, people, the instinct is to sell when they don't feel so good.

Dylan Koch: [7:02] A flight to cash. Right? They're like, I'd rather just have the cash than this real estate.

Dan Austin: [7:05] Which is like a super bad situation. And I know of personal like experience with folks during like the two thousand nine, two thousand ten financial crisis that they were watching their their investments go down, and so they went a 100 cash after they lost like 40% of their wealth, you know, retired people, and then had to go back to work. It's like that is the dumbest thing you could do. So say you're 62 years old, I actually heard this argument, I thought this was the dumbest argument I've I've heard because they reminded me this story of like, if you're retiring this year, the economy is just killing you, you're you're not gonna be able to retire. It's like, yeah, what about the guy that retired five years ago and that guy that's gonna retire in five years? We're all in the same position because if you're choosing a retirement age in the 60 to 65 range and you're gonna live reasonably long, because like if you have a retirement, you're probably gonna live longer than the people that don't. Like, so say you're gonna live till you're 85 or 90, you can't just not invest today because you're retiring. That's just a really poor argument. It sucks that your income's gonna drop, but if you can't retire and weather a storm, you're not gonna be able to retire in ten years either because you just don't have the money to do it. So it's a really poor argument for what the economy is doing to a 62 year old.

Dan Austin: [8:11] It just sucks in general for everybody, but you have to stay invested.

Dylan Koch: [8:14] Yeah. Well, I've seen people like on X or Twitter, I can't believe all these people are rooting for a downturn, and what it was just to do with these people who are retiring. And one, you've had the best time to invest for the past forty years.

Dan Austin: [8:24] If you're You're a baby boomer. If you fucked up, like, if you can't retire.

Dylan Koch: [8:28] Yeah. Hot take. If you're a baby boomer and you aren't financially secure, you're an idiot with your money. Yeah. If you're down 50% the past couple days, and you're like near retirement age, you're probably just too exposed to equity. Yeah.

Dan Austin: [8:38] Exactly.

Dylan Koch: [8:38] Your balance is not where it should be for your goals. That's the biggest thing.

Dan Austin: [8:41] The other point though that I'm trying to make is like, just because you retire doesn't mean you stop investing. Like, you have to stay invested. Like, if you go cash when you retire, you're screwed. If you go 100% bonds Yes. You're going to run out of money unless you have, you know, a lot of wealth and your living expenses are so low. So it's just yeah. It sucks, but it sucks for everybody at the same exact amount of time.

Mike DeHaan: [9:00] Yeah. Well, and then also too, a lot of those people, you know, they probably own a primary home. I think a lot of people that are at that retirement age have that, so they have another nest egg there that they tap into if they need to. Right. Even though I tend to fall a little bit more liberal, I always have the have this issue on the liberal side is they always look at, like, the most extreme sob story for everything. I'm like, okay, bro. They're like, we need to change the entire situation in the world because there's a trans kid at my high school of 2,000 kids. I'm like, there's a fucking one.

Dan Austin: [9:29] Yeah. And and he might not be trans next year.

Mike DeHaan: [9:31] Yeah. Because he just really wants attention. And then there's there's like the same with like the older people like, well, what about the people that are retiring that now are gonna not be able to retire as comfortably? It's like, well, there's gonna be some that are crushing it that are fine. There's gonna be plenty that had zero retirement anyways.

Dan Austin: [9:47] They were fucked regardless. I think there's some level of like, in that same vein, I think there's just some level of arrogance of like, I think I know what's best for you. Yeah. Right? And so this is me projecting what I think would be good for you, not for me, but for you, and then trying to create some sort of story or policy around what would be good for other people. It's like, well, start with what's good for you and then look outward. Right? Like, if everybody would just start there, like, you probably we all probably kinda need the same thing ish. For sure.

Mike DeHaan: [10:13] Yeah. And ultimately, I think the the big thing with it, you and me talked about this the other day, Dan, is what you should be focusing on is instead of what the economy and everything else is kinda doing, like, big picture and trying to project these outcomes that you can't possibly project, just focus on getting better at your own skills.

Dan Austin: [10:30] Things that you can do.

Mike DeHaan: [10:32] Learning to make more money, you know, being able to find people that are still gonna be operating, doing business regardless of the environment and do business with those people. Because the one thing you can control more directly, especially if you're business owner, is your income.

Dylan Koch: [10:44] Yep.

Mike DeHaan: [10:45] Right? And you know what? Income means more revenue, revenue solves all problems, that applies to your personal life as well

Dan Austin: [10:52] as your business. Especially small business, man. Like it just small business, it goes back to like markets are local too, and and like what is your business and what are you trying to sell or you know, what is that product? You can actually really control that quite a bit in a downturn economy. Like, you could sell kind of anything and it depends on what area you're in, is it gonna be good or not? Like, I always use the experience of like coffee, like people are like, oh man, that's the first thing that people give up. It's like, not really, because those are some of the best businesses that boom during downtimes because people still want a 5 or $6 cup of coffee at a Starbucks or a drive through coffee stand. You know, people still wanna buy cigarettes, they still wanna buy alcohol, like, those are all fringe things that you don't need, but people still buy them and it what do they call that? You know, recession proof stuff.

Mike DeHaan: [11:32] Yeah. Well, I think the key is having the you know, in real estate, comes down to having those extra strategies. Right? Like, what is probably going to happen or trying to see it happen is investor loan interest rate, CSCI loans are now dropping below Fannie Freddie loans, which is weird in terms of interest rate.

Dylan Koch: [11:48] That is weird. That's super weird.

Mike DeHaan: [11:49] Like, Fannie Freddies are sitting in like the mid sixes. I've been seeing people getting DSCRs in like the mid sixes to even upper fives.

Dylan Koch: [11:56] There was someone in GoBundance, you know, creative finance wholesaling WhatsApp chat today that posted one at five point seven five. I think he was buying down the rate. It was a 65% LTV, but still, I mean, that's insane to me.

Mike DeHaan: [12:09] He's in my pod. Like, that's a legit lender. Right? Like, I actually don't know if he's buying down the rate

Dan Austin: [12:14] with that. That's just sort

Mike DeHaan: [12:15] of like how they operate because I have a big fund. But you're not finding that with Fannie Freddie.

Dan Austin: [12:18] What are the DSCR rates connected to? Are they actually connected to the the Fed the Fed funds rate somehow, or are they just

Mike DeHaan: [12:25] So they're allegedly connected to the five year, but really, at a basic level, they're connected to whoever's willing to

Dan Austin: [12:30] carry thirty year paper. Right. I guess that's my point is like, really they're not gonna flow as direct as like an FHA or conventional mortgage. Right? It's gonna be slightly different.

Dylan Koch: [12:39] No. Because those get packaged up and shipped off to Fannie or Freddie, where these like these might Yeah. Be on their books. So like, what's the risk appetite of the lender.

Dan Austin: [12:47] Right? Yeah. And and I think about this because something that we haven't talked about really is the fact that the Fed has not been buying, and I think they've been selling off their their balance sheet and mortgage backed securities. I don't know if they're still doing the quantitative tightening, but I know there for a while they're selling like big blocks every month, they're selling a block. Since '22,

Mike DeHaan: [13:06] yeah, it's been for a long time.

Dan Austin: [13:08] So like with that being said is they're not buying stuff, so does that reduce the demand for them? Because there's just there's nobody to buy these shitty mortgages. Right? No. The government tends to do it. And we're driven an economy driven by the American dream of homeownership and all that sort of stuff. And it's very common for people to buy a home instead of rent here in The United States because the the prices are pretty close, at least on paper, what it would cost to rent versus own. And so if they stop buying it, then those rates are gonna stay higher Mhmm. Than these DSCR rates where people are willing to take on a riskier they have a riskier appetite to buy these investor loans, which as we've talked about, they're finding out are not as risky as you would think. Mhmm.

Mike DeHaan: [13:46] Yeah. Well, because especially landlords have additional assets. So even with our our lending business, we've been talking to these hedge funds to do DSCR loans for people. They so heavily prioritize people that have experience

Dylan Koch: [13:59] Mhmm.

Mike DeHaan: [13:59] And that own additional assets. Yeah. It's not even like, oh, yeah. You get, like, a 20% better deal. It's like a 100% better deal. Like, interest rates

Dan Austin: [14:07] Yeah.

Mike DeHaan: [14:07] Almost, I don't know, two to 3% lower. Once you're 10 plus, they call that institutional.

Dan Austin: [14:13] Right? Which means I think that, you know, institutional buyers will buy those with no problem, I think is why they're talking why they call it that.

Mike DeHaan: [14:19] Exactly. And same if you have like good credit, like they'll get so heavily favored with these DSCR lenders. Mhmm. And it's because they want people that have additional assets to secure these debt. They want people that have a track record, and that's kinda where it's going. Yep. So, like, keeping that, like, in your your sort of view, even though I I've ripped on rental properties a lot over the past couple of years. Like, it could it is like a decent time right now that, like, if you do have deals that are a little bit on the fence that you keep that open as an opportunity because you could be getting cheaper debt. Because on the dispo side too, stuff is getting weird. You know? Because like we're talking about there is this uncertainty that exists. You're gonna find out really quickly who is actually a good operator and who just spends too much time watching the news and is trying to be an opportunist.

Dylan Koch: [15:03] Mhmm.

Mike DeHaan: [15:04] You know, like you had some notes here, Dylan, about trying to dispose some deals and having a hard time finding buyers for for different things. We've kind of had the same experience as well, but I think one of the weirdest parts about it has been you almost, like, can't guess when it's gonna happen. Like, we've had, like, some deals that, like, no one will be interested in that we thought were, like, lay downs. Then we've had, like, really shit deals that, like, people have been all over for some reason. You know? And and in hindsight, I wish we could go back and just, like, see what the headlines were that day when we send them out. No shit. You know, because I there's probably like something.

Dylan Koch: [15:36] You could go look probably.

Mike DeHaan: [15:37] I probably could. Yeah.

Dan Austin: [15:39] Yeah. There could be something to it. You're right. Absolutely.

Dylan Koch: [15:41] I don't know. The I'd send like, basically to people I've already sold before, so I know they're good buyers, I know they're in my market. And it was like crickets for a couple of them, and like, you know, luckily, know, they still sold, but it was definitely not the appetite that I was expecting.

Dan Austin: [15:56] Who's that second pass buyer? Like, when your when your guys that normally buy it from you, who who who are those people that are coming around?

Dylan Koch: [16:02] You know, like if the first round doesn't, I'll do a little bit of mass marketing, but my go to thing, like I've talked about on the show before, is I'll try to find the cash buyers that are in close proximity to that property, and basically skip trace and reach out to them, and that's worked out for me.

Dan Austin: [16:15] Gotcha. You probably have a lot more buyers in Cincinnati than we do in Spokane. Like, you might bump into a buyer that you haven't seen before, that just bought a deal down the road from one of yours?

Dylan Koch: [16:24] Oh, I'm sure. I'm sure there's plenty of buyers that I don't know. But yeah. Yeah. Okay.

Mike DeHaan: [16:28] Depending on the market, there's less of that than others. But I mean, like, understanding though, sometimes that isn't always an investor though either. Right? Like, it could now is like a good time to be doing more wholesale stuff or doing more innovation stuff and actually kinda like creating deals a little bit more and like really understanding those different exit strategies.

Dylan Koch: [16:48] Yeah.

Mike DeHaan: [16:49] 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. We we've talked about this forever, but I think going into the next little bit, if you're a one trick pony, it's gonna be really, really hard to be a transactional real estate investor where you're making money. You know, like, unless you're willing to take on immense risk yourself and buy all these properties and go on the retail market, which we are seeing people really lean into that.

Mike DeHaan: [17:50] But if you don't wanna be the person that potentially gets stuck holding the bag, you need to be able to to figure out these different exit strategies.

Dylan Koch: [17:57] I mean, on the the lending piece that you were talking about earlier, if you can quote unquote, burn out a property, let's say you're all in to advertise all said and done for 15 k, but now you have a 25% equity position that's breakeven on a $250,000 place for a year. Okay. Sell it after a year, get long term capital gains, and then like you're still gonna make a a ton of money on that. Totally. But you just have to be willing to wait the thirteen months.

Mike DeHaan: [18:21] Yeah. I mean, that's that's another point too. Right? Is if you are looking to hold on stuff, it doesn't yes. You ideally wants the cash flow. It doesn't need to anymore for DSCR. Like some of the the DSCR lenders, these hedge funds, they'll do that, like, a one point o DSCR, so you see it to break even with your taxes and insurance. It's not even including property management. Right? Or, like, there's even ones that will do it, like, a negative depending on your market. If you're in like a super hot market, there's ones that will do like a point 8% DSCR.

Dylan Koch: [18:50] So I mean, they have to be having the guarantor personally guaranteeing those. Right? Like

Dan Austin: [18:56] Of course. Yeah. Oh, yeah. It's all it's all PG'd, and they want four months of reserves. They want you to make put four months of payments in reserves, which then just cover your first four months of payments. So they're they're making sure that at least they're securing it a little bit more than, you know, than just throwing you a loan.

Mike DeHaan: [19:13] We're starting to see that a lot, even when on the hard money with some of these, like, institutional hard money lenders. As they're wanting you to do interest reserves upfront, they'll pitch it as like, oh, yeah. It's interesting. You don't have to make any payments. But then what they actually do is if you're getting Renault, they'll basically pull the first six months of your interest reserves out of your renovation costs. So you don't have to make a payment for six months, and they're not necessarily stacking it onto your total loan size. But they're still basically, like, claiming that early so that you're not, like, able to default, like, right off the bat. But we've seen more and more people starting to do that, which is a defensive thing that we saw people do back in 2020 as well. So I think that they're definitely concerned about some uncertainty.

Dan Austin: [19:53] I also feel like, and this was just an opinion, I don't have any facts on this just based on conversations we've seen and had Mike, is like, I feel like there's more and more big big money coming into the private lending space. Yeah. And with that, these finance bros have like little nuanced ways, like, if we did it this way, we could, know, we get a little bit more spread on it, you know, those sorts of things. You're like, well if we did it this way, then we could package this one up and sell it, because it would fit this person's needs, they're just taking instead of a holistic real estate underwriting view, they're taking that, and then layering on like a finance view of it, because there's so much institutional dollars coming upstream where feel like during the last little run up, you know, 2020 till till '23 or whatever, you saw it coming from the home, the high buyers and stuff, that's where the money was at. It almost seems like they like a lot of that dollar has shifted, like up above that, and now they're just in the lending stream, which is probably a lot less risky for people than trying to buy 10,000 houses across the country.

Mike DeHaan: [20:50] Yeah. Would think so.

Dan Austin: [20:51] It's just a feeling. I don't I don't know. It seems that way though.

Mike DeHaan: [20:53] Well, I mean, it's levered from the second you buy it. Right? Like, you're going, you're buying the actual assets, the market turns over, you're in trouble.

Dan Austin: [20:59] Mhmm. If you're

Mike DeHaan: [21:00] going and you're buying debt, it is levered by real estate and it's only, you know, 75% of what the real estate is actually worth, and you make the person go and pledge their entire portfolio and their unborn child.

Dan Austin: [21:11] It's all cross collateralized. Yep.

Mike DeHaan: [21:13] Right? It's much much better collateral position. Yep.

Dylan Koch: [21:15] Yeah. Rents are due. Like, yeah, the Rentspiration, all that stuff. One The thing annoying about a bunch of lenders is if you try to like shop, they're like, they want you to have like if you have five lenders, you'd have five different bank accounts at each different place, which is super annoying.

Dan Austin: [21:28] That is annoying.

Dylan Koch: [21:28] I don't try to do that anymore. I I basically like refuse.

Mike DeHaan: [21:31] If you're going to banks, just come just

Dan Austin: [21:33] come and

Mike DeHaan: [21:33] do it with us, bro. We'll get you I'll I'll give a shit where you have your bank.

Dylan Koch: [21:36] Hey, you're gonna get a shot at the next one. I'm a state So

Dan Austin: [21:39] Yeah? Yeah. We're do a DCR for you?

Dylan Koch: [21:41] Yeah. Maybe if you can beat my go to lender.

Dan Austin: [21:45] We'll beat him.

Mike DeHaan: [21:46] Yeah. We might be able to. You just gotta give us all the numbers, and what I do is I just fuck around with like their calculators until I get something that I know will look better.

Dan Austin: [21:52] Mike's like it's cheat codes. He's just trying to find the cheat code in the macro.

Mike DeHaan: [21:55] I'm just an exploiter over here. Like literally everyone that sent me stuff, I'm like, I'll say, send me like your best offer. And even if I like, we don't really make anything on it, I wanna do it just so I beat them.

Dan Austin: [22:05] Yeah. Exactly. Because

Mike DeHaan: [22:06] Robbie's the one who's doing all the work anyway. It's not like it creates any work for me.

Dylan Koch: [22:10] That's funny. We had a as a quick aside, we had a one of my washing machines broken, and we own these in one of my apartment buildings. And I posted somewhere, was like, who's people going to for for laundry machines? And someone was like, oh, you're doing coin laundry, I'd get this and this, but I wanted the card reader ones, like the instead of just doing coin. Mhmm. Because and they're like, well, if you have to go and and get it, I like, I have people for that now. Like you're like, Robbie does your work. I was like, I don't go and get these coins anymore. Like, my property manager does it. So it just was like, I don't care what it costs, it's what's the best deal out there.

Mike DeHaan: [22:42] Yeah. Someone else would grab the 0.25. Yeah. See, that that's how you know that you're in power now is when you haven't been inconvenient, but

Dan Austin: [22:47] you don't have to do it, you're like, that's fine. Someone else would do it for me. If I if I was getting coin op laundry, I would just want them to bring me quarters to my house. I just want buckets of quarters.

Mike DeHaan: [22:56] You would wanna do

Dan Austin: [22:57] that. I just want like 400 pounds of quarters just sitting in my office. It would just feel satisfying. Why? It's just satisfying. I love 0.25. I don't know. I have since I was a kid, like it's a it's a good coin.

Mike DeHaan: [23:07] You're kind of a hoarder.

Dylan Koch: [23:09] Your 50 state 0.25 all in your room somewhere?

Dan Austin: [23:12] No. No. No. I don't nerd like that. I just I just I don't know. Pile of 0.25.

Mike DeHaan: [23:16] Dan is kind of a hoarder though. A little while ago, he sent me a picture of his dump trailer that was literally 100% full with RTS mailers. Like years worth. Oh, that's funny.

Dan Austin: [23:27] Yeah. But where am I gonna where am I gonna put it? That's the question. I don't wanna put it in my garbage can.

Mike DeHaan: [23:31] You throw it away.

Dan Austin: [23:33] Oh, really? I so then okay. I have a family of four, so my garbage can gets filled pretty quickly during the week. I don't have room to put six boxes of RTS in my fucking box.

Dylan Koch: [23:43] You're probably not allowed to have open fires out there, are you?

Dan Austin: [23:45] No. God, no, dude. No. No.

Mike DeHaan: [23:48] But literally, it's this massive dump trailer.

Dan Austin: [23:50] It was a lot. It was a lot.

Mike DeHaan: [23:52] What you do is you just like, when you go for a walk every week, you know, every night, you like just put a bunch of them like in your pockets, you just go and drop them in your neighbor's recycling bin.

Dan Austin: [23:59] So that's smart. I should've done that. Side note, I had I did put a recent batch in my recycling bin, and it got windy because where Mike and I live, it gets windy sometimes. And it fucking blew them all over my neighborhood, dude. Like, all like, all over them. Like, 10,000 RTS.

Mike DeHaan: [24:14] Oh my god. We have like we've created an ecological crisis with all of our wasted mailers too. Yeah. Like, how big is your dump trailer?

Dan Austin: [24:22] It can hold a lot. Like, it's big.

Mike DeHaan: [24:24] It can hold a lot. Like, we we've like junked out whole houses with this thing.

Dan Austin: [24:27] It can hold like, yeah, thousands and thousands of pounds of weight with it.

Mike DeHaan: [24:31] Yeah. It was like overfilled with the fucking mailers.

Dylan Koch: [24:34] Not only with the thing how much money you spent in all of those, but how much money is in all of those, like that's gotta be deals that start sifting through there.

Dan Austin: [24:41] Oh. Oh, yeah. 100 percent, dude. There's definitely deals. There was a 100 deals.

Dylan Koch: [24:45] Do you have kids, Dan? Like, just go through and have them type in the addresses to your CRM and see if what they've sold.

Dan Austin: [24:51] Yeah. Right, dude. Kids kids these days don't know how to do that, they're all iPad kids, know.

Mike DeHaan: [24:55] Yeah. That's true. Yeah. Mean, can't mean, there's so many of them, you can even get a Filipino and do that.

Dan Austin: [24:59] Yeah. My daughter, so we set her up on like Facebook Messenger, so like, if we get her the iPad like when I'm traveling or something, she can message me. And she gets so lazy sometimes, she'll just send me voice memos. I'm like, come on. Like, with like three word responses, was like, yeah, that's this generation for sure.

Mike DeHaan: [25:17] Man, she's already sending voice memos, that's like one of my biggest pet peeves. I hate when people send me voice stuff.

Dan Austin: [25:23] I wanna make sure she

Dylan Koch: [25:24] do that. I'm gonna also communicate with Mike exclusively in voice memos going forward.

Mike DeHaan: [25:29] Yeah.

Dan Austin: [25:29] What if you're driving and you can't read a long text, you know?

Mike DeHaan: [25:32] So here's actually the great thing about how phones have come along, is you can send a voice memo and it will convert it into text.

Dylan Koch: [25:38] It'll transcribe it for you. Yeah.

Mike DeHaan: [25:40] So that's fine. But man, for a long time, like literally if you call me on my phone, my voicemail says, do not leave me a voicemail. I will not listen to it. That's literally what it says. I'm like, text me. And then every now and then, I'll I'll get like a a text from some random number, and it'll be like, hey. I'm from the bank. I just tried to call you and I heard your voicemail, so I'm texting you from my cell phone.

Dan Austin: [26:01] Like, I'm gonna secretly text you.

Mike DeHaan: [26:03] Yeah. It works great. That works. Yeah. I'm like, perfect. Yeah.

Dan Austin: [26:05] Will not call you back.

Dylan Koch: [26:06] So I mean, tying this all back, guys, I just I'm trying to figure out, it's really hard to see what this looks like in the next three months, six months, and even four years. Right? If the new administration comes in, all this could be reversed quickly. But I getting my 50,000 foot view and how I'm viewing investing specifically in my market is things are probably gonna be more expensive five years from now. Mhmm. It's nach more inflationary environment than not, just by default. So what's good is hard assets, and then just keep reinvesting in my own business, my own skill sets, hire some more people, and then hopefully take that money from the massive income and pour it back into more apartments, more buildings.

Dan Austin: [26:46] Yeah. I think it's reasonable. Stick to what you know. Don't I wouldn't I didn't hear you say that you're banking on retiring off of passive income in the next six to twelve months, so that's I don't that's a good thesis.

Dylan Koch: [26:56] I don't know. I think I'm too bougie for that. I don't wanna have like a passive income number like $25 a month. That's hard to deal.

Dan Austin: [27:01] No. I know. It's like 2,000,000 and that is easy. Yeah. Well, you true? This is true. I would add like to what you're saying there too is like the idea that people have around like real estate investing. I think in our business, a lot of times what people got us here, it's investing and you think it's a business like the rental property stuff, it's not a business. You have to have a business around it, but it's not a business. It's an investment. Right? And so whatever your investment thesis is, if it is to collect rental properties and all that sort of stuff, I agree with you, it'll probably be worth more in the future. And if not, there'll be some other tangible value you can get out of it, it just has to be part of your thesis. In the near term, if you're trying to get cash liquidity, you're trying to grow cash, a 100% what Mike said is like, you need to be investing in your business and how you can grow that cash. Your business not being rental properties.

Dylan Koch: [27:50] I'm doing another podcast, like I'm getting being interviewed by someone that's local to here. And one of their preemptive questions on there is, if you are a newbie investor with $10,000, how would you advise them to get started in real estate investing? My answer is gonna be don't. Yeah. You know, so I they'll see how that gets receptive, but

Dan Austin: [28:07] Casino. You're better off taking that $10,000.

Dylan Koch: [28:10] Yeah. Go put it on black.

Dan Austin: [28:12] Filming it and putting it on YouTube of you putting it all in black.

Mike DeHaan: [28:15] Yeah. What you do is you go and you hire a marketing company that helps you figure out to sell feet pics. You're gonna make you're at by more to higher likelihood of success than trying to get started in real estate right now.

Dan Austin: [28:26] That is part of my my strategy. But outside of the feet picks, to add my my thought on all these sorts of things is, I've actually thought about this recently. It's interesting because like there's a lot of different paths, like a like if you game theory it out, what could happen? There's lot of different paths that could happen and you're really building your thesis off of what you think is the most likely in the game of the economy in the world and all that sort of stuff. And there's always an alternate to what other people are saying in in the way of like, so you could say the tariffs are gonna increase, like the one of the big conversation, I think Dylan, you had this in your notes was like, tariffs could increase the cost of building.

Dylan Koch: [29:02] I mean, yeah, makes sense. Which also makes could make your insurance premiums go up.

Dan Austin: [29:06] It could, right? The alternative to that is like, okay, so tariffs, generally speaking, wouldn't be a one to one costing. So if you have like a 20 tariff, the product, say it's lumber, which is a big one because you have Canada north of us, don't know that lumber gets 20% more expensive, right? It might get more expensive. Right. I don't believe in

Mike DeHaan: [29:23] the whole like, well, it'll just some of

Dan Austin: [29:25] the commodity stuff that this will happen, but it's not like, oh, we're gonna bring US manufacturing back. Well, that doesn't help me make more money today or tomorrow or next year, maybe five years from now because it takes a long time to build these factories. Right? So I don't buy into that. But it might shift some of the commodity creation. But back to my point, which is it's not gonna be a one to one increase if it does increase it. But also at the same time is the economy is going downwards, and if people are claiming that's because of the tariffs, then the tariffs are actually bringing the economy down, which is bringing demand down, which will then bring prices down. Right? And at all that happens, you'll have housing prices going down in the near term, and then interest rates will go down and follow that because that's really the only option the Fed has to help the economy. Mhmm. And unemployment's gonna go up because that's been the goal for the last several years is to get unemployment up so that we have such, so we can reduce the inflation. And so if inflation goes down, then prices will naturally go down. And so could the tariffs create an issue directly as far as build costs go? I don't I don't think so. Think there's too many factors that can affect that.

Dan Austin: [30:25] And so my point being is there's always an alternative story. Now they might affect something else, completely different, I don't know. But I don't think it's going to increase the cost of building a house, and this whole idea of we don't have enough houses and the demand, I don't buy into that story. So there's all these alternative stories, and I think all you can do is just continue to invest in whatever makes sense to you, whatever your investment thesis is. For me, I like I'm a value guy, so I I'm not gonna go out and start buying and putting all my money in equities because I don't know that that's where I want it because it's not part of my thesis, but I'll continue to find places to put it in the stock market as I see prices go to a point to where I'm like, yeah, that's a pretty good price. It's a valuable company that's gonna continue to be valuable. It might be something worth looking at. Yeah. That's just kind of my thesis is like you you watch it and and take an opportunity to grow and buy things as as they become available.

Mike DeHaan: [31:16] Yeah. And I think on that same note, same thing with real estate too. Right? Like, you should be buying real estate that's actually valuable, not ones that you're kind of like forcing the pencil.

Dan Austin: [31:24] Or everybody's saying buy buy this, you know Yeah.

Mike DeHaan: [31:27] Storage units or whatever that asset class is. Totally. You know, and like like, what are what's real estate that's people are actually going to have interest in over a a longer period of time? Mhmm. You know, I I think in hindsight, looking at a lot of the people that I know that have sold out and are like, you know, Colbert Johnson's a a big person with this. Right? He's like, all of his buy and hold stuff is in San Diego. Mhmm. He's like, your cash flow's zero, but I'm pretty sure that San Diego's still gonna be pretty sweet in, like, ten years, twenty years. Like, people are never gonna not wanna go to San Diego. You know? It's got great weather. Like, it's like a certain vibe down there. It's a limited area. It's not gonna expand in either direction. Totally makes sense. You know? And I think that that so that's probably the principle if you're looking longer term. Like in the shorter term, with interest rates and things coming down and loans potentially getting more favorable, it probably makes sense to look at selling anything that you are trying to get rid of or getting ready to list those. Because if rates do drop here, you're gonna be seeing an increase in buyer appetite relatively quickly.

Mike DeHaan: [32:23] Mhmm. There's a bunch of people that have been sitting on the sidelines waiting for more buying opportunities, and that's gonna come from lower interest rates. All of a sudden, DSCR's are gonna be better. Things are gonna be more affordable. And so that's something to think about.

Dylan Koch: [32:37] Even when the word gets around too, Mike, I would go to even a seasoned investor and said, do you know what DSCR is right now? I'd be able to say 7%, not knowing that they can get it at the high fives, low sixes. Right.

Mike DeHaan: [32:48] Mhmm. Yeah. So, you know, something to think about that. Just sort of big picture. And then if you have like any real dogs, like ones that are dragging you down, get rid of them and leave them for the next guy. Mhmm. Leave them for the next person who needs to learn their own lessons that, you know, the property is not probably not gonna be as valuable as think it is. And that quote, unquote, cash flow that they're getting is really just gonna go to maintaining it. You already learned that lessons and move on and give that to the newbie. Yep. So cool. Alright, guys. Well, thanks for listening. Go ahead and share this with anybody who had interest in real estate or anything else, and we appreciate all you guys checking us out today. So thanks, everybody. Talk to guys next week.

Dan Austin: [33:24] See you.

Mike DeHaan: [33:26] 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 a follow and send us a DM to let us know what you think of the show.