Real Estate Investors: Here’s What to Do If a Recession Hits

Mike DeHaan: [0:00] Really quick before the show starts, in case you haven't heard, we have a growing community of investors called the scale community, which is full of people learning to make massive income with their real estate businesses, so they can reach financial freedom a little bit faster than building a rental portfolio solely over time, because honestly, that takes decades and who has time for that. So if you're an investor who is serious about growing and creating a scalable business without needing to be a slave to it twenty four seven, then go to collectingkeys.com/scale and apply. And if you're a good fit, we would love to have you join the community. So again, collectingkeys.com/scale, go ahead and apply, and see if you're a good fit. If you have your funnel built out and you know how to operate in an off market environment, you can actually get some really, really good deals right now. Today is Wednesday. It is our off market operator radio show. And on the collecting keys podcast, we teach you how to make massive income, not just passive income with your real estate investment business. So basically, if you're one of those people that wants to, like, I don't know, buy like a house a year and just kind of be like half poor for your whole life, then close to something else because probably not for you. But if you want to make real money, you want to build a real estate business, then you should tune in.

Mike DeHaan: [1:11] We do these three times a week. So go subscribe, share with your friends, leave us a review, and I don't know, it helps us out. It may it might help some of your friends be less poor as well.

Dylan Koch: [1:19] Mike, did you see it real quick? Did you see that the BiggerPockets podcast is now copying the collecting keys format?

Mike DeHaan: [1:24] Well, is BiggerPockets copying us, or is David Green copying us?

Dylan Koch: [1:29] Oh, I so I just listened to the episode 1,000, and they're doing three episodes a week. Some of it's like content, some of it, you know, just sounded very familiar to what we kinda do.

Mike DeHaan: [1:39] So classic, the the big dogs who are washed up and outdated are looking at people that are actually making waves and just plagiarizing them. And so I will be expecting a acquisition letter from BiggerPockets and wanting to buy us out here in the next month or so.

Dan Austin: [1:54] It's honestly quite possible. Like, out of like shows, you know, we are one of the best. I mean, they're also coming from what was the cohost? David Green and who? Was the other guy's name?

Mike DeHaan: [2:04] Mister like, mister rubrics something. I I don't I don't know. He had like some weird he had a douchey haircut and it's kind

Dan Austin: [2:09] of annoying. But yeah. He was the Airbnb guy. He was the Airbnb guy.

Dylan Koch: [2:13] He was the Airbnb guy. That's our

Dan Austin: [2:14] so we come from them. We're like top level, we're top tier. Just have to clean it up a little bit so that we can do it while people have kids in the car.

Dylan Koch: [2:21] Yeah. Yeah. I mean, well That's not that's not happening.

Mike DeHaan: [2:24] We we've slowly gotten better, but

Dan Austin: [2:26] We have gotten better.

Mike DeHaan: [2:28] Yeah. But anyways, I'm Mike DeHaan here with my cohost Dylan Cook and Dan Austin. And we used to listen to bigger pox back in age like everybody else. But, honestly, one of the reasons we started this show was because we were sick of what bigger pox had become. And so I'm glad that after almost three years of us making that realization, they finally caught on and figured out.

Dan Austin: [2:48] Scott trench was like, maybe David Green does not do good for us.

Mike DeHaan: [2:52] But for real, like and I'm I'm gonna say this on Aaron. Probably, it'll get back to somebody that knows him. Why is he catfishing everybody with his like new cover of his podcast? So David Green does not

Dan Austin: [3:04] look that good in person anymore.

Mike DeHaan: [3:06] No. Sorry, David. He announced his new podcast that he's doing on his Instagram, you can go look it up. And he posted the cover of ends a picture of him from like, 2006. He's like, young. Like, here's the thing

Dan Austin: [3:17] though, like, if you got progressively uglier over time, would you post would you of all people post a new picture of an old picture?

Mike DeHaan: [3:25] I feel like I've had like,

Dan Austin: [3:26] I just get a good angle, like

Mike DeHaan: [3:27] the thirties, glow up a little bit for whatever minor extent I can do that. Right? Like, I'm definitely not worse than I was when I met you in college, Dan, and was a 100 pounds heavier. Yeah. And I look like a little chubby 12 year old.

Dan Austin: [3:41] Mike is sexy. Gonna I'm gonna wake up. Sexy now. Yeah. No. You're good, dude. You're all in, dude. Keep it up.

Mike DeHaan: [3:47] Yeah. I saw

Dylan Koch: [3:47] It's just the the realtors have the business card from the your picture from thirty years ago. It's the same shit.

Mike DeHaan: [3:52] That that is that is David Green's, like, podcast cover photo for sure. I must

Dan Austin: [3:56] Bro, like can I

Mike DeHaan: [3:57] Come on? Can I can I

Dan Austin: [3:58] just say one little thing that to that Dylan? I literally my neighbors are selling their house, and I just watched the agent who I know, and that they have a billboard in town, and they dye their hair and all that stuff. Their picture that's on the billboard is not them because this lady could barely go up the two steps. I was like, oh my goodness So

Mike DeHaan: [4:15] it's like a different person completely.

Dan Austin: [4:17] Like it's like a forty year like forty year difference. Like, she is like an old lady now. Oh my god.

Mike DeHaan: [4:22] Yeah. Idiot.

Dan Austin: [4:23] If I

Dylan Koch: [4:23] was the person that hired them and they showed up, I'd be like, who Like, who are you?

Dan Austin: [4:28] No idea who you are. Oh, that's funny.

Mike DeHaan: [4:30] So we have some hot news today we're gonna dive into though, which by the time this comes out, this is gonna be probably old news because stuff goes so fast. But the economy has had a little bit of a meltdown, allegedly. I don't know. I don't

Dan Austin: [4:43] know It's gotta bounce it back today. I've heard.

Mike DeHaan: [4:45] This is why we're gonna dive into this because this is Yes. Sort of like justifies my views. But Dylan, you wanna give us like a quick too long didn't read about what this massive Yeah. Note that you sent us in Slack that I have understood.

Dylan Koch: [4:56] Well, I'll do my best because some of it's like, it has a lot of numbers and like figures in it. So I'll try to do my best to plot the pertinent facts. So basically, on Friday, which was the August 2, the stock markets were down a lot s and p down almost 2% down one and a half percent NASDAQ 2.4%. And people were speculating that it was due to the jobs report that came out from the Bureau of Labor and statistics. And they basically came in the unemployment went up is the big grasp there. And there was less jobs created than was anticipated. And that was really the big miss. They thought that there's gonna be 180,000 jobs created, and there's only 114,000. There's like a 37% off like either lowering. And the fear is the trend. So now we're we have like this higher unemployment and lower than expected job growth, leaving like analysts to think is the economy cooling down? And we might have going into a recession. That's like the main theme there. And then we got into Monday, and Monday was even worse. So they had bigger drops in every index. So 3% s and p, 2.6 in Dow, 3.4% in the Nasdaq, and the VIX, which is the volatility index hit 65. And for those listening, that's its third highest reading ever, only behind the crisis of two thousand and eight and COVID pandemic. Right? So like volatility is running wild. And people were trying to basically get into this complicated thing of the yen carry trade, which we can go into that if we want.

Dylan Koch: [6:19] But I'll stop there and basically say, what are your initial reactions to this is? And what should we be thinking about as real estate investors and off market operators?

Mike DeHaan: [6:28] So my initial reactions don't care. Like, I'm just blank it. When it comes to these sort of things, you know, if you're listening to this show, you're probably too poor to actually, like, focus on this stuff, just like being honest. Like

Dan Austin: [6:41] jeez. Calling people out here.

Mike DeHaan: [6:43] Seriously. I'm definitely too poor. I mean, you know, even if you're worth, like, $5,060,000,000 dollars, right, you probably can pay your own bills. If your stuff goes down, that's fine. You're not gonna get busted by this. What what I tend to look at when it comes to, like, the larger economic stuff, stocks sell off, those sort of things. A lot of it's so emotionally driven by something. You know, when you're talking about, like, the job creation stuff, I just I just googled unemployment. As of July 2024, according to Google, Bureau of Labor Statistics, 4.3% unemployment rate, which by a little chart they have is pretty freaking good. Historically, I mean, you know, going back to COVID and stuff, it was obviously higher, but it's been slowly trending up since 2022. But not like drastically like percent, like half a percent. I mean, if you go back to 2015, it was higher. Right?

Dylan Koch: [7:33] So Yeah. Like So it's not the overall level. It's it's more like the trend and the year over year and month over month changes that that they're kinda looking at.

Mike DeHaan: [7:40] Yeah.

Dylan Koch: [7:40] And I'll just

Mike DeHaan: [7:41] A 115 versus, like, a 140,000 jobs. That's like so I again, if you have 4,000,000 people in United States, right, that's like point 02%. No. More less than that. Point 002% of the population. Like like, it's such a that's such a small sample number. That's like, there's colleges that have more people than that.

Dan Austin: [8:01] So I guess I'll add some flavor to that, because I disagree slightly in the insignificance of it. Although, I agree with you, Mike, it shouldn't affect you. Right? Like, as a listener here. Because there's a lot reading into that, that a lot of those are government jobs getting created, so the government is, like, basically creating jobs that will sustain the government, and then taxes, they collect taxes to keep paying the government. Right? It's like, rate, I think there's like, I don't know, Dylan, do you know this? Like, is it like 20 something million government jobs exist in The US? It's something like that. It's like high. Don't know the absolute number,

Dylan Koch: [8:31] but I know if you look at that number compared to a decade ago versus now, they have grown exponentially.

Dan Austin: [8:36] Right. So there's a lot of that, but then you look at the unemployment is literally just active people looking for jobs. It doesn't include people that have not looked for a job in like six months, I think, it's like they stopped. So I think there's a larger number, right, of people on the macro level that aren't working. Those are just actively work looking for jobs.

Mike DeHaan: [8:54] You know what I would be fascinated to see? Because right now, you know, in the small business space, we we just hired two people today. We are actively hiring all the time. A lot of people that we know are constantly looking for employees. I would be fascinated to see how many job listings there are for American people versus overseas people. Because this is something I've been I've been preaching for years that people are so worried about AI and all this other stuff. That doesn't matter. What everyone should be concerned about if you're a white collar worker is the rise of quality that we're getting overseas for people that will work for a tenth of the price, that work three times harder, that don't take vacations, that never get sick, that have a fucking typhoon that wipes out their village, and they still show up. We had a VA show up to one of our calls the other day. He was on Zoom. He pointed his camera down. His feet were underwater in his own house.

Dan Austin: [9:46] Could you imagine that in The US?

Mike DeHaan: [9:47] And he was working.

Dan Austin: [9:48] There's people that if there's a half inch of snow on the ground just don't show up to work.

Mike DeHaan: [9:52] Yes. Right? And and like people are saying like, oh, man, you know, I I don't know how I'm gonna find a job. It's because people don't wanna hire Americans anymore, man.

Dan Austin: [9:59] I would add a little layer on top of that is like, I think there's also a misalignment qualifications for Americans to do work. You know what I mean? There's a lot of jobs out there where people just aren't qualified.

Mike DeHaan: [10:09] Absolutely. I mean, that that that thing is I would say the higher tier jobs, I would bet if you're a higher qualified person, it's probably very easy to find a job right now. And then if you are have a lower tier job, it's extremely hard to hire anybody because nobody wants those jobs. And so that leads to kind of, like, this economic challenge that we have. I hope you guys are enjoying this episode. We are seriously trying to grow this podcast so that the voice of what it really takes to grow a real estate business becomes kind of the norm versus the guru get rich quick b s that everyone is fed on a daily basis. With so many podcasts out there, it is hard for us to get discovered on our own. So a quick ask, please share this episode on your social media accounts. Be that a real story, whatever. And if you tag me at Mike underscore invest, then I will give you a follow and I will also send you a DM so that we can have a little chat about your business and any ways I could potentially help you grow. So again, please share it on your socials. Tag me at Mike underscore invests, that's with an s at the end, and I'll follow you and we can have a little DM and convo about your business. And maybe I can help you grow a little bit. Or you could just say what's up to you. That'd be awesome.

Mike DeHaan: [11:15] But appreciate everyone, and thanks so much for helping us grow.

Dan Austin: [11:19] To pivot back to the conversation Dylan kicked us off with, I would also add like, when you look at these things, the headlines, and all these sorts of like, macroeconomics, because they're real things, right? Like, they're really happening, and they will have some long run effects and short term effects to everybody at some level, but like, what are you going to do because of it? So if we go into recession, because now, like, the red recession lights are flashing, and and people love to see that, like, they're just the news has something to talk about in the in the economic world. So if we go into recession, what will you do? Like, ask yourself, what will you do? And if that is just not do anything, are you just gonna stop learning, stop investing, stop working, stop earning, stop growing, stop it's kind of pointless to listen to this, because if that's what it is, it's just a fear of you, and you're seeking that, because that's what people always wanna seek is like why they shouldn't invest in real estate. Right? Well, this isn't the best time. I'm gonna wait till rates come down. I'm gonna do this, you know, I'm gonna wait till it's a fire sale. I'm gonna buy all the houses. It's like, yeah, I'm sure we'd all love to do that, but that's just not realistic. So you have to stay active, you have to stay moving, otherwise, you're not gonna be growing.

Dylan Koch: [12:26] So an anecdote on that is like, you know, if I'm positioning for myself, you might not be buying the upper tier of your market anymore, because those are mostly affected by those industry changes the most. And here's a fun stat for for you in the crowd. I just learned this actually from another investor who runs a local Ria. There was just as many FHA home sales in 2009 than there was in 2008.

Dan Austin: [12:47] Well, which who buys who buys FHA or who uses FHA?

Dylan Koch: [12:50] First Step Homebuyers.

Dan Austin: [12:51] And who do we do flippers sell to? First Step Homebuyers.

Dylan Koch: [12:53] Mostly First Step Homebuyers. Yeah. So that is you can be that in your local market. You're still gonna like people are going to move regardless of the economic outcome. Just just like any product, make something that they will buy.

Mike DeHaan: [13:04] Yeah. I like what you said. They're dealing about, you know, in your local market. Right? Because my view on on this sort of stuff and what so for me personally, when there's, like, macro things I look at, I don't care not so much about, like, these large economic factors, things go up and down over, like, a short period. I look over, like, quarters or years, maybe a little bit more. But I mostly look at, like, social sentiment and, like, how people are feeling about things. You know? And so, like, Dylan and talked about the the show, is if you go back to say I don't know. There's a lot of countries that happened. You know, Germany is kind of the prime example. Right? You can have an extreme social shift that can make it so it doesn't fucking matter what you're doing because everyone loses. Right? And that has happened time and time again over history. It still continues to happen. You know, we just had this another big collapse in Venezuela. They went to a civil war. We've had this big thing as of two days ago in Burma, which was, you know, kind of a third world country anyway. But now, like, it's literally as bad where the government has said peace out, and now they're just killing everybody in the streets.

Mike DeHaan: [14:02] Like, that shit can happen in good countries too. You go to The UK. They currently have a bunch of social turmoil because there's a huge amount of people that are living under the poverty line. There was a social incident that happened. I'm not entirely sure, but I think, from what I've read, is that the basis was there was a killing of some children by an Islamic immigrant who was there illegally. Don't quote me on that. This is what I picked up off little pieces that I've read about it. And now people are protesting, there's like these massive protests all around The UK. Those are the things that you should be watching if they are relevant to your local market. If you are in Spokane, Washington, where we are, and these things are happening in New York City, you're probably fine. Just like

Dan Austin: [14:40] Especially if it's real estate information. It's so high, bro.

Mike DeHaan: [14:43] If it's real estate. Yeah. And and so that's kinda what I'm going to is on a macro level, I look at the social impacts to try and get an idea about how people are gonna make emotional decisions because they're the ones that I'm ultimately trying to sell to at the end of it. K? But then when I'm looking at my own day to day decisions, all I care about is what's going on locally because in real estate, that's honestly what matters. Like, that's where I make my money is here. And what happens on, like, a larger level doesn't really affect me that much. And if you're a local real estate company and you're not worth hundreds of millions of dollars, you're not, like, doing these huge acquisitions with these, like, $2,030.50, $100,000,000 assets, you probably don't need to worry quite as much either.

Dylan Koch: [15:22] Totally. And, like, you'll see the headlines, like, real estate prices declined by point 4% across The US, but who gives a shit if your local market's up

Mike DeHaan: [15:30] 2%. Totally. And that that's that's the that's the aggregate of the five sample markets that they picked

Dan Austin: [15:35] Yeah. To

Mike DeHaan: [15:36] run that survey.

Dan Austin: [15:37] Some person that is not educated nearly as much as you in real estate is going to come up with that. They're just looking for whatever they want the data to tell because that's what's gonna get the most clicks today.

Mike DeHaan: [15:46] Totally. The problem with like all the sort of studies they do is if you look at, like, how they actually gather in the the information, a lot of it's just so nonsense. Trashful.

Dan Austin: [15:53] It's trash.

Mike DeHaan: [15:54] Right? Like like, I see this a lot right now since an election year. You'll see these things where they say like, oh, well, whatever poll just looked in, Trump is winning in Oregon. Right? And you yeah. And then and then, like, being very close to Oregon, I'm like, I have that I fucking can't believe that that's true. Right? It's like they're in the bluest state forever. Yeah. And then you read about how they do it. It's like, oh, what they did is they cold called people only on landlines on Eastern Oregon. Yeah. In Eastern Oregon on Tuesdays between twelve and 2PM. So who answers the phone? The old people at home. Of course, they're gonna be Republicans. That's what they do. They're old. People not in Portland. Exactly. Like, no. No. But it skews it, and it creates this false fucking narrative that's technically true based off the information they gathered, but the information they gathered is not inclusive of the whole situation.

Dylan Koch: [16:39] Yeah. Even going back to the BLS data that we started this conversation with, it's legit like a survey. They don't even count people who might be driving for Uber or freelancing or do stuff on Fiverr. They don't report any of that stuff either. No. So it's garbage in, garbage out. It's stress. Much can you actually

Dan Austin: [16:54] take from us?

Mike DeHaan: [16:54] And that's the thing too is there's this huge rise of the hustle culture. Right? And, you know, for all people that are looking for jobs, there's also a ton of people that have kind of figured shit out. Yeah. Right? You know, I think it's Gary Vee that's that's very said this said this kind of famously. He's like, yeah, you know, the Gen Z doesn't want to come work for you for $60,000 a year. They figure out how to make $6,000 a year at home on TikTok. Yeah. Like, why would they wanna do that? Have somebody in our scale community whose daughter is making multi 6 figures on TikTok. Yeah. She got flown to Paris to go hang out with some makeup influencer.

Dan Austin: [17:26] Pretty legit.

Mike DeHaan: [17:27] Because she's like a big deal. And she like, what what how how old is she? Like, 20 damn? He was he was telling

Dan Austin: [17:32] me She's like a little older than that, like, one or 22.

Mike DeHaan: [17:35] Yeah. Like, that's crazy. Yeah. You know? And that happens everywhere. My my wife doesn't have a job, but she is an artist. Right? Has her little her her market and stuff. She sells she sells her art. Now she started to pick up speed with that. She's making almost as much as she was making at her previous job.

Dan Austin: [17:50] It's pretty legit.

Mike DeHaan: [17:51] K? But if you if you were to talk to her, she's unemployed.

Dan Austin: [17:54] Right. Loser. Right.

Dylan Koch: [17:55] Yeah. Right. So she doesn't show up in a in a statistic. Right?

Dan Austin: [17:58] Yeah. Exactly. Yeah. Exactly.

Dylan Koch: [17:59] And how many of there yeah. How many of them are there? Right? No one knows.

Dan Austin: [18:02] She is not productive in the workforce, as they would call it by the government, but she's out there hustling, making real money. Yeah. You know? So Yeah.

Dylan Koch: [18:11] It's funny that with the government jobs things, and this this might show my political bias just a little bit, but there's a good schematic out there, and it's basically like government hires worker a, and all it is is taking like a perfectly good road, being the shit out of it, breaking it up, and hiring government worker b, just replacing the same roads. There's actually no need for that in the first place.

Dan Austin: [18:30] So there is definitely a lot of that.

Dylan Koch: [18:31] So what is what is the productivity of these hires anyway? Like, there's another equation to

Dan Austin: [18:36] Absolutely, dude. And we all know government workers. That's one thing everybody can agree on is like, nobody can trust the government. Nobody wants like a government worker to do a good job. It's like everybody's like DMV. Go to the DMV and try to get your driver's license. It's a pain

Mike DeHaan: [18:48] in the ass. Nobody likes it.

Dan Austin: [18:49] Yeah. Although, I will say Spokane's has improved a lot.

Mike DeHaan: [18:52] Has it?

Dan Austin: [18:53] Shout out to Spokane DMV.

Dylan Koch: [18:55] Did you see my story the other day of I got a CMHA, which is like our section eight around here, of a of a failed inspection attempt from January 2022. I got the letter on July 18. Beautiful.

Dan Austin: [19:06] Yeah. Perfect.

Dylan Koch: [19:07] Yeah.

Mike DeHaan: [19:07] I mean, like, the the the epitome of that has been if anyone's ever had to do anything with IRS.

Dan Austin: [19:12] Oh, boy.

Mike DeHaan: [19:13] You, like, change something on, like, the platform, and then a year and a half later, you get a letter just confirming that they accepted your change. They did. And I'm like, well, I fucking reported on my taxes this year, so I hope that you did.

Dan Austin: [19:27] They're notorious for, like, a two year lag as well. Like, just so it's so bad. It's like, how do you operate this way? But, you know, it is. It's the government.

Mike DeHaan: [19:35] Yeah. Anyways, so I guess, like, from what you should focus on, obviously, is understanding, you know, when when you see all this stuff, you see, like, the scary headlines or you see people on Facebook or whatever that are talking about, like, the big crash and, you know, this is Biden's economy. This is Trump's economy. This is fucking whatever they think. You need to focus on what you can see yourself and what you can actually control. And what you can see and understand is typically gonna be your own local market, especially a real estate investor. And what you can control is your own skill set, your own allocation of resources, the own choices that you choose to make with your money. Right? And if you focus on, like, building your skill set and learning to allocate your resources correctly, you will win regardless of the economy. Right? You can go to like the worst economy in the world. Like, let's say it's not like war torn, but like somewhere where their money doesn't go very far. There are rich people there that figured it out.

Dan Austin: [20:27] Yep.

Mike DeHaan: [20:27] Right? Even even if they're like rich in their village, they are relatively rich. Okay? And that's because they have the skill set and they learned how to like make connections to all that. And so those are the things that you need to do. Keep hustling. Like, don't don't

Dan Austin: [20:39] Keep getting after it.

Mike DeHaan: [20:40] Yeah, exactly. Don't don't like stop your business just because Japan is down 12%. Like, don't

Dylan Koch: [20:46] Like,

Mike DeHaan: [20:47] who does that affect? And Yeah. You know, your local market in The US? Nobody.

Dylan Koch: [20:51] If we're looking at like the tail risk for us as real estate investors as a whole, is probably is okay, we do go into a recession or depression. What happens then? Your tenants maybe lose their job, and people buy houses less frequently for your flips, right? So what can you conservatively run your air v's have plenty of reserves, maybe wholesale a little bit more take less market risk. But also, you're gonna have less competition during all of Exactly. So if you

Dan Austin: [21:14] said many people leave.

Dylan Koch: [21:14] Some sense of business responsibility, you should be able to kill it.

Mike DeHaan: [21:18] Yeah. And here's the thing is if you are bullish on The United States as a whole, just keep America going, because you will continue to grow over the long term. I mean, the example that we have this for Dan and I is COVID. Like, we started our business together in late twenty nineteen. I remember when COVID happened, we'd started, like, you know, trying to work deals and all stuff. And there was this little Zoom call that like the the big player in town put together for all the other operators. And we're kind of talking about how we were approaching the market. And their basic sentiment was like, well, we're gonna not do anything.

Dan Austin: [21:49] We're done.

Mike DeHaan: [21:50] And Dan and I were like, we're gonna like lean into it harder. We And were able to take over the market as things came out. And ultimately, it's because we're bullish on The US. Right? And if you're not into The US, you think The US is going down, then leave. Go find somewhere to do business and invest your money.

Dan Austin: [22:06] I'm sure there's some other opportunities somewhere else. Right? Yeah. You know what I mean? Like,

Mike DeHaan: [22:09] you'll figure out. Yeah. And if it gets so bad that like the entire US collapses or like every other country does too, who cares? We're all screwed anyway. So don't worry about it.

Dan Austin: [22:18] That's my whole theory is like, if it gets that bad, we're all screwed. There's nothing you could do except for stockpile cigarettes, alcohol, bullets. There's all things worth value. Your stupid houses aren't gonna matter. Your bank account's not gonna matter. The

Dylan Koch: [22:31] worst sentiment was probably, I mean, I was on high school here, 2009, 2010, Right? Like, about the people who bought anything during that time. We're all doing okay for themselves.

Mike DeHaan: [22:41] Yeah. Right now, every time those people like go on a podcast and mouse, everyone goes, well, the fucking guy was born in 2010. So I don't even care what he has to say. He was making the hard decision when everyone else was like, no, I'm out.

Dan Austin: [22:53] Yes. I will say this because I wasn't in high school in 2009. I was getting out of the military like 2010, and I remember the sentiment for people was like, you're an idiot, dude. You're so screwed. Gonna You're get out of the military where you get a guaranteed paycheck. And I

Mike DeHaan: [23:06] was like, yeah, I think I'm

Dan Austin: [23:07] gonna gamble, you know, and I went to college, you know what I mean? And like, that's gamble in itself. But like, between 2,010 and 2018, there was literally no, like, people were buying houses, but there was no, like, good sentiment of, like, oh, man, it's such a good market right now. It's doing so well. Like, there's ups and downs that whole time. Like, it was just like it was super rocky, like, really rocky. And I remember buying my first house in 2016, like, my first rental property, and I was like, damn, dude, I don't know if this is a good idea. Like, this might not work out. And I was like super scared, and like, I just did it, and then it worked out pretty

Dylan Koch: [23:38] good. Dan, that's a good point. And I, because I dive deep in this stuff from like a, just like an intellectual curiosity thing sometimes. So when I first started doing this, you could imagine how like much I was reading and stuff. But you'd see the headlines in 2017, 2018, like real estate headed for a mark market bubble. Right? How wrong was that? So these are gonna show up

Dan Austin: [23:55] So bad.

Dylan Koch: [23:55] So many over like, many times over and over and over again.

Mike DeHaan: [23:58] Yeah. It's all because it's all about clicks. Right? Media is, you know, all about ad generation, you know, and and getting paid that way. And here's the other thing too is, if you are an off market operator, like we are, and you are doing direct to seller marketing to distressed people, you're kind of betting against the economic cycles anyway. Because here's the thing. If a lot of people are in financial distress, that kinda means that our inventory goes on sale. Yeah. It is. Right? Like, honestly, we we have seen a huge increase in people that have, like, pre foreclosures, people that are you know, have no money to their name to be able to, you know, do basic renovations, things like that. We have several innovations that we're doing right now

Dan Austin: [24:38] Mhmm.

Mike DeHaan: [24:38] That the people are walking away with, like, good money, and we literally, all we are doing is coming in and taking over their mortgage to carry the mortgage during the transition period while they move into their new house. They don't have to pay two times. Yeah. Right? They don't wanna have to pay their existing mortgage and their new mortgage. Right? And they're willing to pay us $20,000 to do that. Right? And so those situations become more and more common as the economy gets a little bit weird. And so if you have your funnel built out and you know how to operate in an off market environment, you can actually get some really, really good deals right now.

Dan Austin: [25:11] Totally, dude. And, like, in those economic situations where tenants don't pay, kinda like during COVID, landlords get scared, and there's a lot for the last four years, there's been a lot of new really shitty landlords created. And the first thing they're gonna do is if their tenants stop paying is they're gonna offload that thing, and they're gonna offload it at a fire sale. And that those are the great opportunities where you can make some super good moves and continue to grow. And then ten years later, you look back and like, damn, I'm glad I was operating while everybody else is crying recession.

Mike DeHaan: [25:40] Mhmm. The thing is with that is like if there's a specific pain point you can identify is gonna be a recurring thing, lean into that and learn to, I would say, manage and monetize that. So for Dan and I during COVID, that was the tenant situation being in a blue state in Washington where you couldn't evict anybody. And we may hand over fist money buying houses from these landlords that were well-to-do knew how to deal with real estate kind of knew the process, but they were like, I do not know when I'm going to get paid again, I have a tenant that's not paying. Dan and I would literally buy the house, we would go knock on the door. And we'd say so we're the new owners. So give me $2,000 while you leave and they go fuck yeah, and they would leave. And we would just sell the house. It was great. We made so much money doing that. Right. And we had several several properties that we still own, where we would go and we confront tenants like, hey, you're not paying. And they're like, yeah, the landlord just never asked, but I'll pay you since you're the new guy. And we just put them at market rent, and they started paying them. They're still there four years later.

Dylan Koch: [26:38] Isn't it amazing? Those landlords that are like, how did you become a landlord in the place Unreal. When you can't have a conversation with the tenant? Unreal.

Dan Austin: [26:44] Seriously. Honestly, you know how we like discovered that as a awesome way to make money? Is we just because we're kind of stupid. We just started figuring problems out as we went. We're like, this looks like a solution we could solve, like, let's figure it out. And we took some risk, because like, you know, and we hear this in the scale community a lot is, like, people bringing up, like, buying houses with tenants in it. And, now I'm like, yeah, like, who cares? Like, what's the situation? And and you know what questions to ask, you just go at it. But at the time, we're like, gosh, dang, is this risky? Probably, like, this is how we're going to solve this person's problem, and that's what we did. And like you said, hand over fist money came. That was a great opportunity. We didn't orchestrate it though. We didn't plan it. We didn't strategize it. We were just in the trenches.

Dylan Koch: [27:23] I mean, like any entrepreneur, you just took the opportunities that presented themselves and figured it out.

Dan Austin: [27:26] Exactly. Exactly.

Dylan Koch: [27:27] That's half of this business.

Dan Austin: [27:28] And we

Mike DeHaan: [27:29] were the only ones that were willing to do that. We did so many like random JV deals and stuff too, because they'd be like, hey, I need to find a buyer, but there's no tenant like, if we get a tenant out, we split the fee with us. And they're like, yeah, sure. So we would just go and we had our guy on the grounds young 22 year old kid, we just made him like go do our dirty work.

Dan Austin: [27:47] Man,

Mike DeHaan: [27:47] knocking on doors, getting people out of these properties, you know, and he's not like we were like kicking the doors and anything weird. Like literally, we would just have him sign a cash or keys agreement, we would show up. As soon as they were out of the property, we would give them their money in a little envelope, we would say cool, see you later, then we would immediately change all the locks, or up all the windows, in a shitty area. It was fine. We did that over and over and over again.

Dylan Koch: [28:09] There's a lot of people who become accidental landlords, like, in my area. And so they're, like, older now. They're on fixed income. They have, like, two or three rental properties, but they haven't kept up with them. They don't have the money for, the CapEx stuff. So if something like this does happen, the same candidate for some kind of sale like that. They'd be like, get it off my books now.

Mike DeHaan: [28:25] Exactly. Yeah. And they need to, you know, collect anything that they can so that they're not carrying a liability and they're getting some cash back in their pocket. Yep. I think that's probably a pretty good all inclusive wrap up of that. So, yeah, by the time this comes out next week, I mean, this will be coming out. We're recording this

Dan Austin: [28:41] on the sixth, and this will

Mike DeHaan: [28:42] be coming out on the fourteenth. So who knows? It could be completely different by then. Maybe it'll collapse. Maybe we'll be at all time highs. That's how bullshit the whole thing is, honestly, because it could really go either way.

Dylan Koch: [28:52] So today, the Japan stock market, it was down 12% on Monday. It was a limit up today.

Mike DeHaan: [28:58] This is why I think it's so dumb because the other thing is the rise of, like, the quants, you know, and, like, the day trading, and like the people using bots to do all this stuff. It makes it artificial like nonsense, honestly.

Dan Austin: [29:12] Yeah, it's all trash out there, and like, you're like, well, who is who's really in control here? It's not the individual investor, right? So it's like, you can't control it, who cares?

Mike DeHaan: [29:19] Totally.

Dylan Koch: [29:20] Right. This is why I picked real estate. We have control like

Dan Austin: [29:22] Exactly.

Dylan Koch: [29:23] The four zero one k, you just put money in it and hope it goes up over time, which historically, yes, That it could probably still work. But like, you have more control doing what we do.

Mike DeHaan: [29:31] Exactly. Yeah. And she can force equity and all sorts of stuff. But I don't know. If you're a stock guy, I don't do your thing. But if you're really worried about the economy, or like the stock market, honestly, real estate is probably not for you because you need to learn to think differently outside the norm a little bit. Cool. Alright. Well, Dylan, that was a good topic. Appreciate that. We'll wrap it up there, rather than rambling on for longer than necessary. So thanks for listening, everybody. We appreciate you all. Seriously, you should go and share this with your friends. It helps out a lot. Also follow us on Instagram. I'm at Mike underscore invest. Dan is at investor man. Dan. Dylan is at was it Dylan underscore Dylan air deals? Yeah,

Dylan Koch: [30:10] Well, it's not Yeah, Mike is right

Mike DeHaan: [30:12] Yeah. Don't listen to Dan. It's at at Dylan underscore does underscore deals and

Dan Austin: [30:17] With a y.

Mike DeHaan: [30:18] Yeah. Let us know what think of the show. Appreciate it. Thanks, everybody, and we'll talk to you next week.

Dylan Koch: [30:21] See y'all. See you.