Real Estate investing in Japan, Dealing with Business Disorder While Travelling, Marketing Issues

Mike DeHaan: [0:00] There's kind of like the phase of business, right? You're basically the person that needs to be working there all the time in order to make money. There's kind of the phase where I'm like, we need to be providing oversight to make money. And then there's kind of like the larger corporation where you can have that middle management that allows you to step away a little bit. Right. When you're in that middle phase where you still kind of need to drive the ship, it's like, remember that that term that we learned in business class in college of entropy, right? Where everything is constantly moving towards a state of disorder. That's just kinda like how it feels. What's going on, guys? Welcome to today's episode of the collecting keys real estate investing podcast. It is the Mike and Dan show, and I am your host here, Mike DeHaan, with my cohost here, Dan Austin, and this is the show where we teach you to make massive income, not just passive income with your real estate investing business, so that you can be rich now and not in like thirty years or whatever when your loans get paid off.

Dan Austin: [1:00] Rich now is nice.

Mike DeHaan: [1:01] Yep, yeah. So, I mean it's funny. I was talking to some of the guys that worked for us here earlier today, and they really are into the investing thing right now. They wanna buy properties for themselves, which is cool. But like, there's just this huge thing of people just trying to hyper leverage all the time, which makes a lot of sense. But if you don't have like a strong vertical income, and all you're doing is max leveraging all these properties forever, you honestly would be better off just having like a W two job, because then you'll be able to pay your bills. And you're still probably be doing pretty well when you're 65 versus just like hoping that no shit breaks in your properties for the entire lifespan, which they ultimately will do by the time they get paid down.

Dan Austin: [1:40] Yeah. Yeah. Cash is king, right? No matter who you are, what you're doing and real estate investing, the joke is you always feel poor but it's because all your money and all your net worth is locked up in the equity of your properties that you hope is there. And there's like this argument I I actually heard on another podcast with some guys that I really respect, and that this is a conversation they're having like like who cares about net worth, like liquidity is massively important, being able to like have cash now to make investments, but also to

Mike DeHaan: [2:07] like eat, which was one of the

Dan Austin: [2:09] things that you gotta be able to eat, you can't eat equity, you know?

Mike DeHaan: [2:11] Yeah. I think it's funny because that's changed a lot, I feel like over the last little bit because

Dan Austin: [2:15] Oh, yeah.

Mike DeHaan: [2:15] If you look at a lot of OG landlords, they didn't care about their immediate money at all. Uh-huh. All they cared about was their assets.

Dan Austin: [2:23] Right.

Mike DeHaan: [2:23] And I wonder what that shift has been, if that's like generational, if that's just like a sign of the time just because we do live in a more expensive society.

Dan Austin: [2:31] Well That's a big piece, like expensiveness of everything, and we're in an inflationary period too, so it feels even worse. But like, we're going through like this hand off of generations. Right? The boomers are retiring, and they have been. They're retiring from w two world. They're retiring from landlording, and I do feel like this is a cycle you can get caught in. Right? So, we're gonna see probably a lot of this with the younger generation investing because there's a bunch of new landlords out there. They bought these properties, they fixed them up, they bird them, they followed the process, and it worked out fantastic, but then it comes around to where five, seven, nine years later, you kinda have to repair that same shit that you just installed, or feels like you just installed. Like, talk to sellers all the time, oh, I just updated the kitchen, yeah, twenty years ago. Mhmm. But like, they're not going to want to do that, and so they're going to choose not to, and then cash flow, because they were told cash flow is like the best thing, and they're retired on their cash flow, living in their van down by the river, and they can't give up $10.15, $20,000 to like rebuild this property or add new flooring, add new kitchen and then refinance again because maybe the rate environment doesn't work or they recognize, damn it, that's gonna screw up my cash flow. So they just do nothing and then they turn it into slumlords that we buy properties from.

Mike DeHaan: [3:40] Yeah. Because like their casual can't keep up with the maintenance, you know, which is such a which is such a huge thing.

Dan Austin: [3:46] Exactly. It's a tough, it's a balance. It's really hard and like, I love cash flow, I love passive income, but you have to recognize like the reality of what that means.

Mike DeHaan: [3:53] Yeah. For sure. Which I mean, that's why we focus on this show on how to make real money, know, if you're doing things like wholesaling or flipping or you know, providing services like whether you're a general contractor or those sort of things. Those are all real estate specific things that you can do within the same business that also support your investing. And just focusing on those things instead of always just be investing yourself is how you can, you know, live a lifestyle while also being able to buy. Like, for example, I just got back from my second international trip for the year. I was in Japan for the last two and a half weeks. You guys have listened at all over the past couple of weeks. You've probably heard some pre recorded shows they recorded a while back. It's because I've been out for most of the month of November. Yeah. And traveling around Japan for for two and a half weeks with my wife. It's a cool country though, man. Like, tell you what, I've I've traveled a lot of places. That's like the one place that I've been that like I will absolutely go back to. Like it's not like, oh, it would be good to go back there someday, but like, I would go back there on like a very regular basis because I really like

Dan Austin: [4:54] Yeah.

Mike DeHaan: [4:54] The vibe of it.

Dan Austin: [4:55] What it seems like to me is it's like a densely packed island. Dude. Like there's just so much to do, so much to see in such a small area.

Mike DeHaan: [5:02] There is, but it's also like it's easy to get around because the train system, and they have the Shinkansen, which is like the bullet train, that you can take between the major cities and it takes like a couple of hours. That's awesome. You know, like like we took from on the last day when we were flying home, we went from Osaka to Tokyo on the on the bullet train and it took us like it was like two hours and ten minutes.

Dan Austin: [5:22] What does it cost you to get on that train?

Mike DeHaan: [5:24] Like $80. It's not bad.

Dan Austin: [5:26] For two hour, like that's legit.

Mike DeHaan: [5:27] Yeah. That's legit.

Dan Austin: [5:28] That's nice.

Mike DeHaan: [5:29] But the distance, it's it was like 500 miles. Right? So like if were to drive that, it'd take you six six and a half hours.

Dan Austin: [5:36] Yeah. It's crazy.

Mike DeHaan: [5:37] You just go get out of the train, you can just like zone out. We got to the train station like ten minutes before our train left. Just got on, had some food, went for two hours then got off and you're saying, that was awesome. But yeah, it's like very affordable to get around, like tons and tons to do. I really enjoyed Japanese people and like their respectfulness. Mhmm. Like even though we were surrounded by tons and tons of people all the time, both my wife and I are intrinsically introverted, It didn't feel exhausting just because everyone is very respectful of personal space.

Dan Austin: [6:06] Right.

Mike DeHaan: [6:07] And they're very sort of like mindful about how to not be a dickhead in crowded areas because they're used to it all the time.

Dan Austin: [6:14] Well, what about the other tourists though? Like you do run into that usually, is that just a different vibe there too or just less of that?

Mike DeHaan: [6:19] Dude, honestly, shockingly, in Kyoto, we saw a lot of tourists. It's like the touristy area. It's funny, a lot of people they love I actually was not a fan because it felt like the area that they had manufactured for my benefit as a tourist.

Dan Austin: [6:33] Right, yeah.

Mike DeHaan: [6:34] But I really enjoyed Tokyo and Osaka and Hiroshima because I felt like all of those places, they were just kind of doing their thing and you were a guest in their country. Yeah. So as a result, a, we didn't see a lot of tourists, and b, just because the tourists are such an extreme minority

Dan Austin: [6:49] Damn it.

Mike DeHaan: [6:49] Everyone is immediately peer pressured into just like doing what everyone else is doing.

Dan Austin: [6:53] Yep. The right thing.

Mike DeHaan: [6:54] For sure, right? And also too, think the kind of people that go to Japan are the kind of people that are gonna be like ignorant tourists that are like, you know Yeah. You know, I'm doing my once in a lifetime trip to Italy where I'm just gonna be obnoxious the whole time.

Dan Austin: [7:06] Right. Totally. Totally.

Mike DeHaan: [7:08] But, you know, so so they sort of conformed to it. But I mean, all people are very very welcoming, know, it was extremely cheap to like buy food and like do everything else there, it was crazy.

Dan Austin: [7:18] They

Mike DeHaan: [7:19] have an open container rule like all throughout the country. Do you know this? You can just like go into a convenience store and like buy like a whiskey highball and just like walk around the streets of Japan whenever you want and no one cares.

Dan Austin: [7:31] Dude, it's like Las Vegas.

Mike DeHaan: [7:32] It is.

Dan Austin: [7:33] But I'm assuming it's like less debauchery and less idiots.

Mike DeHaan: [7:36] Well, it'd be like kinda later into the night, like there's definitely some debaucherous behavior,

Dan Austin: [7:40] Sure.

Mike DeHaan: [7:40] You know, like they don't care, like you can just go and grab a drink and walk around and drink it, but it's you know, town with town, it's the biggest city in the world, know, 30 Wild. 6,000,000 people in Tokyo, right.

Dan Austin: [7:52] I remember my dad, because he, my parents lived there in the eighties, and he used to always tell me how cool it was, you could literally go and buy anything out of a vending machine, like anything, including beer. And this was back in the eighties, so the rule still stands apparently.

Mike DeHaan: [8:04] Well, can't buy anything out of vending machines. It's funny, several people made jokes about that, like when we were there, I Okay. Pretty much the only thing you see out of vending machines is like drinks, like like you know, water, coffee, but they have hot and cold vending machines, you can get a hot coffee out of a vending machine, is pretty rad.

Dan Austin: [8:20] You get sushi?

Mike DeHaan: [8:21] No, you'll you'll get food. Like so you you would No food. Very very rarely see like snack vending machines.

Dan Austin: [8:27] Right.

Mike DeHaan: [8:28] But it would only be kind of in like touristy areas. You wouldn't see it just sort of like spread throughout the city as it was, but you see drinks everywhere.

Dan Austin: [8:34] Right.

Mike DeHaan: [8:35] So in Tokyo they were saying that there is one vending machine for every 3,000,000 people, no sorry, for every 13 people in Tokyo. So basically there's like 3,000,000 vending machines just in Tokyo. Wow. Wow. But they're they're all over the place and everything's like 50¢, you can get your water and get your coffee, whatever.

Dan Austin: [8:53] Right. That's a good deal.

Mike DeHaan: [8:55] It was cool though. Like, anybody has the opportunity to go there, I'd highly recommend that you do. Plan to have a learning curve with like how to interact with people, to get around because nobody speaks English. Even in the hotels or like sort of like the larger, more touristy areas, you would be lucky to find someone that spoke English.

Dan Austin: [9:11] Jeez. Sounds like American hotels.

Mike DeHaan: [9:13] The twice. For for real though. But I was like, this is exactly how it feels for everyone else to come to The United States when no one speaks whatever their language is.

Dan Austin: [9:22] For The US, yeah, exactly. And we just assume you better speak English. Yeah. Like wherever you go, but it's not true there apparently.

Mike DeHaan: [9:28] Yeah. I think the difference is that there, they were very accommodating and they were professionals that just like communicating just with gestures. Yeah. Or like some places they would even have like a little sign where they could like point at like phrases that they would need to ask you and they could just like point to it and then you can like nod your head or or whatever so they you can communicate that way.

Dan Austin: [9:48] What about Google Translate? Did that work out well?

Mike DeHaan: [9:50] We used it a little bit but honestly a lot of the stuff was too fast paced that it was kinda cumbersome to do it.

Dan Austin: [9:55] So Got it. Yeah. Just kind of a pain in the ass.

Mike DeHaan: [9:58] Either way, Super super good spot, super fun country and I I recommend anyone who likes travel should go.

Dan Austin: [10:02] What about like investment in like real estate? I mean, you and I were talking like obviously the dollar against everything super strong, but super strong against Japanese yen right now. Yeah. Can we buy some stuff over there?

Mike DeHaan: [10:13] Yeah. So I I did a little reel about that on my Instagram, at mike underscore invests, and you know, just like looking into how real estate works there, it's very interesting because they're extremely open to outside investment.

Dan Austin: [10:23] Mhmm.

Mike DeHaan: [10:24] So the the real estate market crashed in Japan in like the late 80s, early 90s, and it kind of never really recovered. Right, so they had this huge bubble that went up and then it crashed, and then it has kind of like stayed stagnant since then, and they've had like a little bit of inflation, but not a lot. So as a result, they've had properties that have kind of stayed the same or have dropped in value, particularly because their population's declining. So their demand is slowly dropping. So they have a lot of, I would say like openness to outside investors that wanna come in and buy. So you can get like a traditional Japanese local loan from most banks, from what I understand. And their interest rates are super good because they don't have massive inflation like a lot of other parts of the world do. So you can get loans there right now between 34% on on like long term fixed loans.

Dan Austin: [11:15] Very cool. They do like really long loans there too. I think they underwrite like fifty six like generational loans.

Mike DeHaan: [11:21] Yeah, you get a hundred year loan, but have to live in the property or do those. As you're like an investor, you have to get like more traditional

Dan Austin: [11:26] Oh, like an investor loan.

Mike DeHaan: [11:27] Yeah. Yeah. Thirty thirty five year am seems to be the common one. But the a lot of stuff I was reading was saying that the biggest hurdle is just that the way they do business, like the customs and everything are very different. So you realistically need someone that is a Japanese local to be able to like have those conversations for you, or work on your behalf just because like, kinda like how you know when you're working with a loan officer here, if you do kind of like weird stuff, you send off red flag, you'll probably do it there without really realizing it. But I think if you could find properties, like there's probably some great yield, because people there tend to have money. It's a very respectful culture. The chances of getting like bad tenants who are gonna do weird stuff is gonna be generally low, and also landlord law in general is very landlord friendly across the country.

Dan Austin: [12:13] It would be interesting to see that then, like the returns, because I know historically like Japan has been, they always say like, oh, they've been in a recession. Right? They're recessionary environment for like decades, which would speak to the fact that you're saying they've got low interest rates, but also that they basically aren't gonna see a lot of appreciation in your assets, so maybe it's more of a cash flow play, what that would look like, which, like you're saying, it might be better cash flow because they're not gonna trash your units, you don't have to price in so much maintenance like you do for a lot of The US properties that we own, you know, you just always have to worry about somebody letting their dogs shit all over your house while they live in it, which is just mind blowing to me when you compare that to like a Japanese culture where they don't even let you have shoes onto their house, you know.

Mike DeHaan: [12:52] Yeah, right. And they're very very strict about that as well. Yeah, mean there's there's a lot of different parts to it, I think there could be an opportunity for sure for the right person. I think that the biggest barrier for anyone from the state should be finding that local person that's gonna be willing to work with you.

Dan Austin: [13:05] Yeah, yeah.

Mike DeHaan: [13:06] Because like even though they are very welcoming, they're definitely like, I would say protective of their culture, which makes sense. But I mean, it's kinda what their roots are. Like a lot of people don't know this about Japan, like, they went from being like a feudal system, where like the samurai ruled everything and it was, you know, like they were using swords and were very primitive, having airplanes within like a forty year span. Wow. Right? Okay. Exponential growth. And that's one of the reasons that like World War Two and stuff happened as well. I guess like they're all their conflicts they did throughout Asia is because they had the feudal leaders that were all of a sudden given modern weaponry.

Dan Austin: [13:41] Like hell yeah.

Mike DeHaan: [13:41] And they're like, what do we not go and do?

Dan Austin: [13:43] We're the best. Let's go fight these people. Right?

Mike DeHaan: [13:45] Yeah, exactly right. But that's also one of the reasons that after they lost World War Two, they shifted incredibly quickly because all of the sensible people were like, oh we don't need that shit anymore, we wanna be like you guys. And so, there's a lot of different quotes from a lot of people that were part of like the renovation of Japan after the war, that were like, I've never heard of a country that was just like so willing to change and just like upgrade everything.

Dan Austin: [14:11] That's good. The US was also like, by the way, we're taking away all your guns, you're not allowed to have a military anymore. So they're like, okay, fair enough.

Mike DeHaan: [14:17] Yeah. Right. Yeah. Yeah. Yeah. Know. It's like they did everywhere. But they also just like, you know, axe all the Right. The people that were leading that that conflict,

Dan Austin: [14:26] but Yeah. It is incredible because like what it is now for, when you compare it to other countries post World War Two, like how much Japan shifted in, they're like a technology leader, a leader in business industry, I mean because Just even like a simple example like Toyota, like how dominant Toyota is, like they basically have created and changed the entire automobile industry based off of one company's way that they process their improvements within the manufacturing system, which is basically what came out of like lean manufacturing is like Toyota.

Mike DeHaan: [14:54] Yeah. Yeah, and there's lots of stuff like that, right? And kind of the thing with Japan when you're going around, everywhere you go you're like, that just makes freaking sense that it does that. Like why doesn't everything do that? Even just like little stuff, like in all the bathrooms, everyone knows about the Japanese smart toilets, right, where everything has like a bidet and the heated seats and all that sort of stuff. But just in all the men's stalls for example, they had like a little area where you could set your child, if you like had a baby with you, that was like a little seat that was in there. So you could like do your business while also dealing with your baby. Was like, why does everywhere not have that? Well here they would just get busted off the wall all the time.

Dan Austin: [15:32] Yeah, and they like climb underneath the stalls and they put their hands on dirty shit because little kids don't have boundaries.

Mike DeHaan: [15:38] Yeah and because they don't have anywhere to sit, right? They don't like give somewhere to put them, so you have to kinda like deal with that. Yeah. It was like that.

Dan Austin: [15:43] You gotta hang them up by the coat hangs up.

Mike DeHaan: [15:44] Yeah yeah. Or or like the craziest thing dude, like the trains, when you're at the end of the line and the train needs to turn directions, gonna go the other way now. They're like, well people don't wanna sit backwards in the train, they wanna sit facing the direction they're going. So literally you can see it in the window, all the seats in the train, they flip a 180 degrees just automatic.

Dan Austin: [16:03] That's wild. That's wild actually.

Mike DeHaan: [16:06] Dude, insane. Pretty cool. Yeah. Just like just little stuff like that, it just always like makes sense. We're like, why is it not like that everywhere? I have no idea. But

Dan Austin: [16:14] We're all not that smart.

Mike DeHaan: [16:15] Yeah. Either way, I always heard before we went that it's a great country to go to and realize how shitty your own country is with a lot of stuff, and that is absolutely true.

Dan Austin: [16:24] Got some ah 's now. You gotta, you should come back and bring some of that technology back with you. Some of those concepts and ideas.

Mike DeHaan: [16:30] The problem is, in order for it to function, you need mass adoption, and the reason they have mass adoption is because they are extremely undiverse society.

Dan Austin: [16:37] Right. Yeah. There's a lot of Japanese people that live in Japan.

Mike DeHaan: [16:40] Yeah. It's like almost all Japanese people, right? They're all raised Japanese. We don't have all these different melting pot cultures that are sort of trying to cohesively live together. Either you're Japanese or you're a foreigner, and if you're a foreigner, they're like, cool, you gotta do it our way or else it will just not have anything to do with you.

Dan Austin: [16:58] Yeah. That is one of the, I guess, pros about being like the countries that are like that, there's like less diversity is that they have these really strong cultural backgrounds that drive everything, but then when they wanna shift or change or adapt, well, we're all kind of the same, they're all moving. I'm not saying that's the best way to go, but it definitely makes it easier, like, when you see them be able to shift after war or two like you're talking about, right? It's pretty incredible.

Mike DeHaan: [17:21] Yeah. I mean, they they didn't even have trash cans anywhere. That's smart. Like in the whole, any frickin' city, because all the people there are trained from a young age would just take their trash home with them.

Dan Austin: [17:30] Yeah. I mean, we're trying to worry about telling our kids not to do drugs, let alone frickin' pick up their garbage.

Mike DeHaan: [17:35] Right. We can't go anywhere here without saying trash.

Dan Austin: [17:37] Dude, it's so funny you say that. So you and I were talking about that when you got back and like literally, so we we pulled up, was it yesterday I think it was, was yesterday, Sunday, we went out, blah blah blah, just driving around with his family, pull into a parking lot, and I literally open up my door and I see like somebody took their entire Five Guys burgers, I'm like, order, like not the food or the garbage, just left it there. They just opened their door and kicked it out. I'm like, first of all, you drove here and either ate it in the parking lot and then dumped it or you just had it in your cart, I think that's a good spot to dump it. I'm like, and we have public trash cans for people to pick up, and so it just is a funny moment to have a coincident in that time. I was like, this is stupid. People suck.

Mike DeHaan: [18:15] Yeah. I mean, that is the stark comparison right there. Whereas like, Agora and Tokyo, you didn't see any trash. The only trash that you saw was in like, when it was gathered up in bags by like the night workers whose job was to go around and pick up trash.

Dan Austin: [18:27] Good deal.

Mike DeHaan: [18:28] Right? Yeah. It's it's crazy. Anyways, highly recommend people go there if you have any interest in travel at all. It's a great destination. Very very cheap right now with the yen. Surprisingly easy to get to. Mean for us from the West Coast, from Seattle, the flight there was like nine hours, the flight back was like seven hours and fifteen minutes. It's like honestly not that much longer than going to Hawaii.

Dan Austin: [18:46] And the funny thing is the cost like to go to Hawaii is like kind of incredibly high for like what you're doing, like the travel wise. So you can go like even further to Japan, that's another country probably for, I'm gonna guess, I'm looking at the tickets probably like a third less of the cost.

Mike DeHaan: [18:59] Probably, especially time of year depending on when you're going.

Dan Austin: [19:02] Like first class to Hawaii versus first class to Japan is pretty massively probably different. I should have to look that up on Google flights.

Mike DeHaan: [19:08] Yeah. Yeah. Anyways, cool. Well, appreciate you holding down the business while I was gone. How'd how'd everything go? Didn't completely collapse?

Dan Austin: [19:17] No, it went well, the team the team did really well. Of course, just things continue to operate. This is the interesting thing about where we're at in business is things will continue to operate without either you not like showing up like me or you could not show up for a week. And we're still gonna have closings, which is super cool. Properties will still close, properties will still get under contract, and we had guys getting things under contract just consistently. The difference is is just to continue to improve and optimize things to make them better because there are, because we don't have like a deep like middle management structure at our company, there's just opportunity for mistakes to happen or things to just kind of like, you know, get lulled into not well, if somebody's not continuously oversight Mhmm. We are kinda partially middle management as well as like the senior leaders in our company. So there's that piece, where I can see the next level up from where we're at is gonna be pretty awesome to always have that continuous improvement without us having to push it. But other than that, yeah, think all the team, everybody knows what their marching orders are, right? So they continue to march forward, they get stuff done, and we're, anything where, even though we're holding the ball, but we need things to move forward, it's still getting moved forward, you know, outside of the operations of the business, like the sales and marketing, like that stuff just kinda goes, but we also have all these other strategic things we're trying to implement, and those things just, you know, continue to march forward.

Dan Austin: [20:33] So that's been really cool to observe.

Mike DeHaan: [20:36] Yeah. I think one of the challenges with not having middle management, so like when you're not involved in the business, right, where everything, everyone knows what's happening, there's activity, there's energy that is going around, but it's just slowly getting messier and messier and messier and messier until you come back and you just kinda show it all the

Dan Austin: [20:53] You know, one of the most incredible things about business Yeah. That continues to ring true, that's along the same line, is how much inefficiencies can happen due to misunderstandings of communication. And due to communication, like if you're doing email or Slack messaging versus just doing a meeting, or doing a meeting and somebody walking away with a different point of view than than you meant, and then all this work is done and then it just takes somebody to step in, whoever that is, and say, no, that is not what we're trying to do, like, let's just eliminate all of this work that we're focusing on and just march forward, skip a few steps. And so that inefficiency, no matter what, just seems to be like in the business, and it's like how do you continue to pull that out so people really understand the vision and how to get there?

Mike DeHaan: [21:35] Yeah, well it's like all the challenges happen when you're passing things from one person to

Dan Austin: [21:40] the other. All the failures.

Mike DeHaan: [21:41] Right, just communication isn't working, especially when it's a virtual business even harder. So like, hey, we just launched our free subject to course, which you should go to clickingkeys.com/subtwo, you can pick that up for free. It'll teach you all of what pays more, we teach you just for 10 k. You can get it for free and it won't cost you anything. But we've been working on just like getting some of like the follow-up campaigns, things for that, to make sure that people are actually opening it, and the people that have like got in actually know where to get the link and all those sort of things, you know, newer company, newer online business, trying to figure that out. And talking with our team this morning, it just sounded like we have too many cooks in the kitchen. Yeah. And everyone's kind of expecting someone else to do one part of it, but no one's like bringing it all together.

Dan Austin: [22:21] You gotta have that one single person with a single view, Step, step, step, step.

Mike DeHaan: [22:25] Yeah, exactly. And you know, happens in every business at some level. I mean, even at larger businesses too, that still It's

Dan Austin: [22:32] worse at larger businesses.

Mike DeHaan: [22:33] Yeah, would say it's a lot worse at larger businesses, and it's made even worse by the fact that you have the one guy who you know, just is like the go getter, just does all of it, and you now have nine people on the team who don't do anything.

Dan Austin: [22:44] Which is most companies, right? Like most big companies, small companies we can't afford to do that. Yeah. And you really do have to like, get rid of that, this idea of like, that's not my job, because you hear that a lot in the government, you hear that a lot at large corporations, and some small companies too, like, well that's not my job, I don't worry about that, I just do what I'm worried about, like what I'm paid to do. When you're in a small business like this, like you have to have everybody marching towards the same thing and being willing to pick up the ball if it gets dropped, and seeing a ball getting dropped and picking it up as opposed to kinda turning a blind eye, or like you just said, assuming somebody else is gonna do that. Because that tends to mean that me or you are doing it, right? If there's an assumption that we're doing it. So, it's like how do we continue to shape that and all of our employees to understand that they know the exact processes of where we're going and that just means a lot of communication.

Mike DeHaan: [23:28] Yeah, it's a lot of communication, a lot of documentation, lot of making sure that people read the documentation. Yeah. And then the big thing as well is refining that documentation, which is something that I think a lot of people don't understand that we spent some good time talking about at KeyesCon as well is, once you have your SOPs, once you have things documented, you're not done, you now start it and now that's a living document to be changing forever.

Dan Austin: [23:48] Always has to be getting updated, and that's the easiest thing to fall off. Like you and I have done this in the past, where we'll create stuff and then it'll just never actually get updated and so nobody actually looks at it, because then they have to just go to the person that knows the knowledge, is usually me or you. And so it's like how do you actually commit to that? It's just like you have to do that, you have to, it's like we hired a guy to help us do it. That's one of the ways we did it because we know our personalities.

Mike DeHaan: [24:09] Exactly. Yeah. And and that's probably one of the biggest things of being a business owner that most people hate and why I think most people don't scale their businesses, but that's also what being an entrepreneur is right there.

Dan Austin: [24:18] Yeah, absolutely. Being innovative and making things happen and getting everybody, like, getting everybody marching in the same direction and understanding the vision and painting that picture is like, and getting them motivated behind it, that's that's a Exactly. Lot of

Mike DeHaan: [24:31] Yeah. So so here we are at the end of December. What does the end of the year look like? You know, we are always really big on pushing the marketing and sales as much as we can. I guess, like for us, for closings, we have quite a few closings to wrap out the year, which I'm pretty excited about, which will be good. The biggest challenges that we're facing next year, which I'm sure some of you were facing as well, SMS marketing as it has existed for years, is kind of on the brink of going extinct right now, just with all of the new regulations that have come through. I had a big meeting with our SMS team this morning, and they were walking through all this other thing to do, and it just feels so patchwork y right Sticky

Dan Austin: [25:12] and just doesn't make any sense kind of stuff.

Mike DeHaan: [25:14] It doesn't, and that was actually a big point of our conversation and I was like, okay, so we have a patch for right now that we can get going. What happens with, in three months from now, when this is no longer feasible to do, what's our next plan? So we're starting to piece some of those things together. In the meantime for some of our partners, we're gonna have you guys be going through and getting your own 10 DLC registrations, everything all set up so that we can still work with you and your markets appropriately because right now the SMS is just not effective. And it's one of those things that it's a major pain to deal with. I also think it creates a huge opportunity for people who are willing to do it correctly because now it has a higher barrier to entry to be able to market that way. Yep. So, you know, if you do market with SMS marketing, put in the time to to get stuff set up legit and write out what you can, but also make sure that you have a backup plan in case things go sideways. Just like we have people that we've worked with that only wanna do SMS, and I'm like, you need to be doing mail, you need to be, you know, setting up a brain, you need to the things because, just like with any sort of business, if you are dependent on one process to work, and that process no longer works, your entire business is growing.

Dan Austin: [26:23] Totally.

Mike DeHaan: [26:23] Like, you have to have backups.

Dan Austin: [26:25] Yeah, gotta have multiple channels, and anything you're doing, right, backups to backups, and like, just to think about this, this is a marketing intensive business, and so this should be like, that should be your primary thing. Like people I think maybe take it for granted that just they just assume lead flow is always gonna be good and you and I have seen it ebbs and flows. Like cold calling used to be a pretty popular thing, but then it really fell off like people's like success rate with that. And if you think about it like in real estate why that's happening is like, people are like, first of all, the phone companies are getting better at filtering stuff, and like people are just getting like numbed by that, they just assume if it's not a number in their phone that they're just not gonna answer, right? So, it's a hard system, right? And maybe cold calling will come back as texting falls off, I don't know. But if you were just a cold calling person, a lot of those people really fell off in the real estate game because that's all they knew, and then they couldn't spin up direct mail, or they didn't understand how to do that, they didn't spin up texting, they just kinda fell off. But like if you think about what are you gonna do, like just talking about even the holidays, like people shut down their business, if you think about that, that's one twelfth of your marketing ability, one twelfth of your lead flow, one twelfth of your business. Do you just, so you, are you just now operating on 10 or twelve, eleven or twelfths of your business, ten or eleven months out of the year? That's pretty dumb if you think about it.

Dan Austin: [27:37] No other company, Coca Cola's not doing that. They're a marketing business, like that's their whole shtick, right? That, they sell soda pop, but they're really market, a marketing agency for that. So it's like, think about that when you're looking at your different marketing channels. If one shuts off, what does that do to your business? If you're only doing one, it's gonna decimate your business.

Mike DeHaan: [27:54] Yeah, exactly. I mean, it's just like, you know, having different exit strategies. If you only know how to wholesale, and the market no longer favors wholesaling, or your state outlaws wholesaling, how are you gonna make money? You don't know how to do a double close, you don't know how to flip properties, don't know how to do innovation, don't know how to buy subject to, you don't know how to do lease option. You need to have a basic understanding of all of them. Even if you have one you prefer, that's fine. You need to have another basic understanding of what your options are so that you can pivot if needed.

Dan Austin: [28:20] Absolutely.

Mike DeHaan: [28:21] And when it comes to the marketing, a great way to do, to sort of like analyze it, is to look at what the people that are sort of like promoting different education, different coaching, or like part of their brand with different marketing endeavors and seeing how they're changing.

Dan Austin: [28:35] Right?

Mike DeHaan: [28:35] So, you know, the cold calling, this may be a thing of this immediately. Cool Rue Johnson, who's a he's he's coming on the show here in a couple weeks, I don't think his episodes come out yet.

Dan Austin: [28:45] But his whole

Mike DeHaan: [28:46] thing has been cold calling forever. That was his thing, he has a call center. His social media recently has shifted from this is how you cold call to find deals, to this is how you build a cold calling center for whatever your business is. That tells you something, right? The original play is no longer as effective as it was, you know, he's expanding his audience. Sam, if you you go and you look at people that are have been strictly around like, wholesaling or seller financing, right, or whatever it is, let's just say with wholesaling, and we fall into this as well, we're starting to get more into making sure that people understand seller financing, they understand subject to, they understand the different pieces of it, because we recognize that if people are coming in expecting to just be wholesalers, they will not be successful. Right?

Dan Austin: [29:27] This is a good conversation because you see a lot of people out on the internet, they're talking about their one niche that they're experts at, that they teach, like this is the way to being a millionaire, this is the way to freedom, whether that's talking about only doing this type of marketing, or only doing subject to, or seller finance, or land deals, really what we talk about, what we found success in is like being a holistic investor. You can't just show up and do one thing, know. Some people have tagged us as like, oh you guys the direct mail marketing guys, like, no. That's just one of our lead sources that we always do, because it consistently produces. Like there's nothing stopping you from being able to mail people, there's no technology in between that. It's like you mail people, they call back in. It's like

Mike DeHaan: [30:04] Makes sense.

Dan Austin: [30:04] As old as time, right? It's been like Sears and Robot catalogs, like this stuff works, right? We do other lead sources, we do other like lead gen, but we also do other things other than wholesaling, we do flipping, we teach people on how to buy and hold and stabilize their properties, we teach people how to scale their businesses outside of just being a wholesaler that can do one thing, because in reality, for longevity in this business, you have to be able to adapt and do multiple things and pull levers and be good at pulling levers when those levers are working.

Mike DeHaan: [30:32] Yeah, exactly. Yeah. And going back to just making sure you're able to pivot as well, even across different asset classes too.

Dan Austin: [30:39] Yeah.

Mike DeHaan: [30:40] You look back at the original guy, I'd like just have one expertise with Brandon Turner, and he started with mobile home parks, then he realized that he screwed up because everyone was going after mobile home parks. And all of sudden he was doing multi family, right? He was doing that for a while. You know what he's doing now? Self storage.

Dan Austin: [30:54] I was just about to say self storage, yeah.

Mike DeHaan: [30:57] That's what he's pivoted to now. Part of it is because of his opportunities, A big part of it as well is because he is recognizing that those asset classes that he became experts in are no longer going to be viable for him in the future.

Dan Austin: [31:07] Yeah. Or there's not enough quantity to do enough bleed flow for people. Right? And Sam, unfortunately, like single family, small residential is always in abundance, because it's the highest like number of assets, but that to be said, you do need to be have the ability to pivot your asset classes, and not that you shouldn't become an expert in anything, but be able to pivot and adapt as the market allows that, because like right now, everybody's talking about, what do you do? We're in a stalemate on, you know, these negotiations with sellers and buyers and all that sort of stuff. Well there's definitely other opportunity in your market, you just have to know where to look for it, it might not be an off market traditional wholesale deal.

Mike DeHaan: [31:41] Yeah. I think all this is to say that this is why it's valuable to always be learning and be like a true real estate professional.

Dan Austin: [31:48] Yes.

Mike DeHaan: [31:48] Right? And like understand how real estate works as a whole so that you can figure out the entire sort of sphere of opportunity you have. Because if you come in, I would say that when you're starting out, absolutely be a one trick pony. Get good at one thing, make your first round of many, make it you know, have a couple $100 in the bank so you can go and start to apply it towards other things. You can do that while even like picking something that is not optimized for the current market. You can go and you can BS your way to make some money. When you're trying to grow a business, you're trying to make like you know, 7 figures, multi 7 figures, that's when you need to start to expand your mind to the different opportunities that you have. Whether that's through marketing, whether that's through your investments, whether that's through your different opportunities or your ways that you're gonna make money like vertically, right? So you can make more, bring more revenue coming in. If you try to grow something like that to massive scale when it isn't fully aligned with what's available in the market, that's where you're gonna get stuck. Yep. So you need to be willing to pivot and also you need to understand that as we go forward into the future, things will continue to happen faster and faster, so you need to be willing to pivot more and more.

Dan Austin: [32:53] Yeah, and I'll just drive this point home with kind of the concept and the idea about people that wanna sit on the sidelines when their one trick doesn't work.

Mike DeHaan: [33:00] Mhmm.

Dan Austin: [33:00] Real estate's all about being in the game out of a long period of time, and if you wanna truly have a business, where you're making massive income, not just passive income, like you need to be able to adapt and shift, because like early, I would say mid late last year, talked to several people, I'm just sitting on the sidelines until interest rates come down, and it's like, that's fine, that's okay, but like, you're missing out on so much opportunity between now and whenever the hell that happens, because in business we can't just like guess and hope for things to happen, because that's not how you actually run a business that generates consistent income.

Mike DeHaan: [33:30] Yeah. And that's also assuming that they ever will

Dan Austin: [33:32] come down. Exactly. I don't know.

Mike DeHaan: [33:34] It could be thirty years for

Dan Austin: [33:35] all

Mike DeHaan: [33:36] Yeah, you exactly. Right, and the perfect example you mentioned before about how Japan's been a recessionary economy for like forty years, it's been about since the early ninety's, right? Imagine all those people that were real estate investors during the boom that they had in the 80s into the 90s, that were like, oh, well, guess I'm just gonna wait for the economy to come back.

Dan Austin: [33:54] Right.

Mike DeHaan: [33:54] Well, it's literally been a bunch of generations now and you know, thirty two years.

Dan Austin: [33:58] Totally, totally.

Mike DeHaan: [34:00] So you always try to project as much as you can, but understand that there's so many things that are out of your control and the best thing you can do is learn how to make money right now and not wait for the world to kinda be able to service whatever your goals are.

Dan Austin: [34:14] The world's not gonna adapt around your business model.

Mike DeHaan: [34:16] Cool. Anything else you wanna add in?

Dan Austin: [34:18] No, man. It's been good conversation. Good to have you back in the same country. Likewise,

Mike DeHaan: [34:22] man. Same continent. Yeah, I know. Happy to be back. I will say going from a to Asia is definitely much harder to work remotely than doing stuff in in Europe.

Dan Austin: [34:31] The time is weird, right?

Mike DeHaan: [34:33] Well, the time's weird because you're backwards. Because like in Europe, when I was there in August, in like the early afternoon, was like morning years you can kind of be involved. But there, because I was seven hours back, basically I always missed the morning. Was only ever available at the end of the day Yeah. Here, when everyone's fucking off anyway because it's the end of the day. Right? So it was never very productive. So just, if you're gonna try and run a remote business, Asia's hard if you're in The United States, Europe is much much easier, you can get by pretty well. Anyways guys, thanks so much for listening, if you wanna check out our free subject to course, we'll see what's in that Danny, teach people. Yeah, so that's Like, because you put it together.

Dan Austin: [35:12] Yeah, so essentially it's one of the courses we did for our instant investor group, we kind of adapted it, and it's honestly, if I could like tagline it, it's like teaching you how to do subject to the right way, and really dispels a lot of the myths that gurus talk about, and we just really break it down, and then at the end there's like literally an example of like how we've done subject to, and what the process should look like, because ultimately, what I don't like about half the people out there teaching anything in real estate, is they never take into account taking care of the seller on the back end, after the deal's done, and they don't ever take into account underwriting and and making sure that the buyer's going to be the right person for that seller. So, we talk about a lot of the protections you need to put in there, just to protect everybody in the transaction. So, it's really a quick one, I think it's thirty, forty five minutes, and it really is just like down and dirty, dispelling the myths and getting after what you really need to know, and how to do these things the right way.

Mike DeHaan: [36:05] Perfect. So if you have questions about how exactly to put together transactions, how to deal with some of the, you know, risks associated like the due on sale clause, the insurance situation, the property tax situation.

Dan Austin: [36:16] Mhmm.

Mike DeHaan: [36:16] If you're saying, I didn't even realize those were problems, you definitely need to check this out because these are the things that you know certain people online are not telling you or the risks associated with it. You should go to collectingkeys.com/subtwo. You can spell sub two however you want. They'll always port you the same place. You can use the number, you can do t o, whatever. You should grab that free course. Besides that, guys, we appreciate you all, and we'll talk to you guys next week.

Dan Austin: [36:39] See you.