Real Estate Year in Review: What Worked and Didn’t Work in 2024

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

Dylan Koch: [0:38] Going into next year, I am actually terrified to take on more flips because of them, like, market situation.

Mike DeHaan: [0:45] What is going on, guys? Welcome to today's episode of the collecting keys real estate investing podcast. Today, it is the last day of the year. If you're listening to this, we recorded it a little bit early, but, this is our December 31 annual wrap up show. If this is your first time to collecting keys, welcome. This is the show by real estate operators, for real estate operators, so you can hear about what other people in the same industry are doing around the country, so you can make more money learning from other people's mistakes and successes. And, you know, we can all just kinda, like, compete against the real enemy here, which is those damn sellers

Dan Austin: [1:24] who won't sell us their homes.

Mike DeHaan: [1:26] So right on, guys. Well, welcome to the show. On this episode today, we're gonna be doing a little annual wrap up. And not necessarily for the show, but kind of our businesses in general, because that's really why most people are here. And so we're gonna be diving into some of our major KPIs, some of the big wins that we had, some of the challenges that we faced, and what our goals are with our business going into 2025 with so many things with the economy potentially changing or getting interesting with new presidential administration stuff going on in the wars. Should things like that matter? I don't know.

Dan Austin: [1:59] We'll talk about that a little bit today.

Mike DeHaan: [2:01] But first time here, my name is Mike DeHaan with my cohost, Dan Austin and Dylan Cook. Hello. And we are super stoked to dive into this today. So let's talk about some general KPIs first and the main things that typically matter, right, aside from I mean, there's, like, revenue and all sorts of stuff, which is cool, but those are lagging indicators. And what I like to hear more about is leading indicators. So cost per lead, cost per deal, best marketing channel. What are you seeing over there in Cincinnati doing for those things?

Dylan Koch: [2:34] Yeah. So cost per deal specifically, because that's probably what I I follow most, is actually pretty low for me this year, especially compared to last year. So in 2023, it's just about 3,500. I was actually down a little bit this year, and my cost per deal is at right here, $2,400. Then it's kind of further broken down into, like, a cost per deal for SMS, like and that really only counts for, like, the first half of the year because it kinda died off. Was around $2,700. Cold calling is $2,600, and then my judge mail is by far the best at, like, $19.50.

Mike DeHaan: [3:09] Which is crazy.

Dan Austin: [3:10] That's pretty good. That's really cheap.

Mike DeHaan: [3:12] Like, why do you think because most people were talking direct mail, and this is us included, are, like, mid 3 thousands. You think that's just like your market? Is it do you have, like, a strategy? You think it's because you're, a one person operator, so there's nothing falling through the cracks?

Dylan Koch: [3:27] Definitely. Kind of all the above, really. Yeah. And it's gotten to the point where I mostly just mail list stacks. I guess not really the high equity people anymore, so there's already probably a more inherent level of motivation there. Sure. And I guess since I've been doing this so long, the easier it gets as you go on is, let's anyone who's from Cincinnati, if I get a deal in Madisonville, I know two or three guys that I can just text automatically and be like, hey, you know, go check out this property for me, and they can give me their best number. And I can almost reverse wholesale at that point, and then make my spread based on where I need to be. Yep. Versus maybe the more traditional method of lock it up, blast it out, see what you can do. So I I would contribute to those two things. It's like, I think I know most of the major buyers in my market in their general respective areas. And I definitely am probably better at most people at follow-up. Like, I just I will hound people. And then probably to the point where I'm annoying for most people. And I think I'm first to come to mind for a lot of sellers that, hey, I didn't wanna sell now, but I wanna sell six months ago, you know, or whatever it may be.

Mike DeHaan: [4:25] Yep. Which makes sense. I think also too, well, something that's understated with direct mail, and this is why we're a big proponent of it, is there is a, like, compound interest that builds with direct mail when you're mailing the same people over and over again. We've mapped this before. And, typically, if you start mailing a new list, it takes until about month four for your cost per lead to get to its lowest point. So it's always the highest in the first month. Second month is a little bit lower. Third month, we tend to see a big jump. And then fourth month, it tends to get to, like, what it's the true cost per lead is for that area that you're marketing to. And so you do that for long enough, and it just keeps your average a

Dylan Koch: [4:59] little bit lower. Right? And, actually, I'm I'm glad you brought that up, Mike, because one of the caveats to that number is, you know, if I close the deal, but I mailed it in 2022, I'm not necessarily tracking that.

Mike DeHaan: [5:09] Right? Exactly. Right? And you're carrying it through, but it's still showing in your system as a direct mail lead.

Dylan Koch: [5:15] Yes. Correct. And so I discount on when it closes and probably for the most recent, you know, ad spend that we did. Right? So that could skew the numbers down a little bit too.

Mike DeHaan: [5:24] Exactly. And you'll get people that don't even call you for a long time. Like, we closed a deal this year. It's a few months ago. Was almost in Asia. In New Mexico. Right? We hadn't sent anything down to New Mexico for over eighteen months. And we just got a random call from this person that, like, found, honestly, at that point, a piece of litter that was sitting in, you know, their mom's kitchen that died, called us and was like, hey. Do you wanna buy this house? Sure. We pieced it together. Made a $17,000 fee. Right? Yeah. But, like, they hadn't received anything from us since 2022 at that point, like, so long.

Dan Austin: [6:00] It was a long time ago.

Mike DeHaan: [6:01] Yeah. But those things do start to skew your KPIs a little bit.

Dan Austin: [6:04] Let me ask you this, Dylan. Looking at your numbers now as you look backwards towards what you did this year, are you gonna change any of your marketing methods going forward into 2025 just based on your cost per deal for each of your channels?

Dylan Koch: [6:17] So I could. I'd probably keep it the same. I mean, my cost per deal, and I would actually expect this to go up with more volume. Uh-huh. But being being the one man show and being that next year, I you know, I've said publicly on the podcast, if I wanna do 7 figures top line, I'm gonna have to bring on probably an acquisitions person.

Dan Austin: [6:33] Mhmm.

Dylan Koch: [6:33] But I already have a shit ton of leads in the CRM, and I would rather go more deep in Cincinnati than go to a different market. So I might just incorporate more mail, you know, instead of list stacking, you also do the high equity, you know, people that could get you some deals. Okay. And I'll also probably try other channels, you know, pay per lead or because I don't do any of that right now. My three methods right now are just basically cold calling, direct mail, and it was SMS, but that's not even a thing anymore.

Dan Austin: [6:58] It is not. It's hard. It's not.

Mike DeHaan: [7:00] I know it's pretty much impossible.

Dylan Koch: [7:02] To answer your question, I guess more inbound stuff versus more out less less outbound.

Dan Austin: [7:06] Yeah. It's kinda tough because you look at these numbers, and and somebody that's got, like, a PhD in anything is gonna say, well, 1,900 is cheaper than 2,700. You should just put more money there. That's not necessarily directly how it correlates because you made mention too, like, if you spend more on mail, you're gonna it's probably gonna go up cost per lead, because you're gonna stretch out to less motivated people to get more pieces of mail out there. Mhmm. And then there's a little bit more inefficiencies as you get more and more leads coming in, things start falling through the cracks. Your your cost per lead, cost per deal will inevitably go up. But I think it's just looking at your numbers, the spreads are almost a thousand bucks apart, where mail definitely is producing super well for you, which is awesome.

Dylan Koch: [7:45] Yeah. And, you know, I don't think that'll go away. And I think the biggest thing if I'm know, now that I have two years of of full data. Right? We have 2023 and 2024. I will do this basically three more deals this year, and then the revenue is about a 14% year over year increase. But that is attributed to more of an exit strategy thing. Like, I did 11 flips in 2024, but I only did three in 2023. So that's that revenue difference in those deals is what was the biggest differentiator there.

Mike DeHaan: [8:13] Nice. Yeah. Makes sense. Cool. So I guess comparison with ours And so we had a big national operation for vast majority of the year, and then we started to scale it down about months ago. And so for the sake of, I would say, keeping it relatable for people that are listening to this, we're gonna focus on just our local market KPIs. Just go back to not quite the full year, but back to March. And so for us, locally, we had a total cost per deal of about $3,400. Cost per lead, $221. And the average profit per deal, almost all wholesale, was just over $20. So not quite as efficient as you, Dylan, but not too bad overall. And direct mail was our core through and through just like it has been forever. It's the most predictable for us. I mean, in September alone, we signed 10 off of just direct mail here locally.

Dylan Koch: [9:12] Mhmm. Yeah. See, that's nuts to me.

Mike DeHaan: [9:14] And that's like with running everything else. And the crazy thing is too, that was off of only a $12,500 spent locally up to that point. Well, I guess they can not buy for that month.

Dylan Koch: [9:25] Yeah. My wholesale revenue per deal is about 14. Right? Yeah. So you guys are kind of the market difference, so, like, our median price points is probably what attributes to that.

Mike DeHaan: [9:32] What's your median high price point in your market?

Dylan Koch: [9:34] It's probably like $2.50 or 300.

Mike DeHaan: [9:36] Oh, shit. Yeah. So, like, our average, I think, is, like, $3.80 or something. Like, like, that's like

Dan Austin: [9:42] the mean. Yeah. So we're mid threes to 4.

Dylan Koch: [9:45] Yeah. Well, the other thing

Dan Austin: [9:46] to think about, so what what did you say our cost per deal was, Mike?

Mike DeHaan: [9:49] $3,740.07 to be exact. Yeah.

Dan Austin: [9:53] What I was gonna think about is, like, yeah, if our cost per deal, say, is a thousand dollars more than, you know, as you take like a seven or eight x that, that kinda gets us from 15 to $22.23. That's true. Because that's typically our return on ad spend is like a seven or eight x. So that would also make sense.

Mike DeHaan: [10:09] Yeah. For sure.

Dylan Koch: [10:10] Yeah. And I think the return on ad spend is obviously if, know, you're another marketer out here to to track, that's probably one of the biggest KPIs you should track in on top of cost per deal and revenue per deal. But I mean, ours is because of that efficiency, ours is 850% or eight and a

Dan Austin: [10:26] half x. Yeah. Which is solid. I think that's where you really wanna be is like a is like a single operator or like a small like two or three man company. You need to have some multiple above one because you have overhead. Yeah. And you do need money in the bank if you wanna start doing flips to increase your revenue. You need to be able to have that cost to carry the marketing. And so you gotta have something six x would I would go to say would be on the lower end of where you'd wanna be. You're probably being not as efficient as you could be, and then as you get better because like when you start out, that's this is the thing about the KPIs. They don't mean shit to you when you first start. Like even your first year, it's really hard unless you're benchmarking against somebody else that's experienced. But your return to ad spend sucks because if it takes you like, what it was, eight months for us when I had get a deal or seven months for us to get our first deal? No. It like five. Five months of marketing, your return to spend, that's really terrible. And then it but it should belly out somewhere and and get to an average probably after your first year. It's just hard to tell.

Mike DeHaan: [11:20] It is so hard. And on that same note too about, like, just the inefficiency out when you're starting, also different of local versus if you're trying to do things virtually too. Right? Like, one of the reasons that we wound down our kind of big national team started going local was because just the a massive amount of, like, I would say, like, waste and inefficiency that happens when you have things spread out super, super wide and you have a big team. And sure, you can be making more top line. But ultimately, Dan and I came to find was top line of the company was looking pretty cool. We're like million. But the bottom line, we were making, like, nothing. So we're like, why are we even doing this compared to, like, the most profitable year that Dan and I ever had was when it was just us and two local guys on the team, and we were just, say, pumping money heavily into the local market. Uh-huh.

Dan Austin: [12:13] Because then

Mike DeHaan: [12:13] our profit margin were, like, 80% at that point. Right? Yep. With this big national company, like, we were pulling 25 ish percent profit margins. We had a huge amount of waste that was going on. We had HR. We had salaries. We had all these other things. Missed opportunities because we weren't there to compete with the local competition. And at that point, our cost per deal was pushing up over 4,500, and our deal size would be, like, 15.

Dylan Koch: [12:37] That's right.

Mike DeHaan: [12:37] And so it's like just getting smaller with expenses getting bigger. This is kind of is a hard place to be. And so something else to think about is, like, where you can be more efficient with all that.

Dan Austin: [12:47] The the challenge becomes with just this business in general is the how it scales. Like, what efficiencies do you get with scale? Because you can only get to so big as like a wholesale operation, or as a flip operation, or as a wholesale flipping operation that also buys rental properties. Like, you get so many inefficiencies that where you're like, oh, I'm making 80% profit margins, which is sick. Like, that's sweet. But you're like, I want more. I wanna make more. And then with more, you have to have more overhead, which drops you to 60 to 50 to 40. And then by the time you're down to, like, 20%, you're like, holy shit. This is a lot of work. Yeah. For 20% profit margin, you end up finding that you sometimes, not all the time, but make similar amounts of money, but you're working a little bit more because now you're managing all the staff, and you're trying to make them as good as you were.

Mike DeHaan: [13:31] Yeah. Which is just impossible. Yeah.

Dylan Koch: [13:33] And if you're seven or eight x on your on your return on ad spend, but your net is like 20% less, I mean, there's you're losing a lot in the delta between those two things.

Mike DeHaan: [13:41] A lot.

Dylan Koch: [13:42] If I'm looking at my business too, from a volume perspective, we did around 35 deals. But the wholesale revenue of that was accounted for like, so let me put it this way. Out of the all of the volume, wholesale deals were around 56% of that, but they only accounted for 40% of the revenue. Whereas flips are only a third of the volume, but accounted for 40% of the actual revenue. But going into next year, I am actually terrified to take on more flips because of the, like, market situation. So like, to Dan's point earlier, mathematically, I would say, do more flips. Just do more flips. Figure out a way to do that. But I just being an entrepreneur and a business owner that's like, I guess, kind of in tune with the market, I would almost say that I would go against the grain, go against the math of that in this situation.

Dan Austin: [14:27] You gotta trust your gut. Yeah.

Mike DeHaan: [14:28] Yeah. Totally. Makes sense. Awesome. Alright. Next question to do a little review. What is something that you learned or realized about your business that you didn't know going into this past year? So what's, like, your big kinda lesson that you learned being a business owner this year?

Dylan Koch: [14:44] Oh, man. So it's I'll say this. Even after I've been doing this for two years and I've been proven it's works, there are still times where I'm like, I can't believe this is actually can reliably send out mail and then like predict revenue on a consistent basis. And there now hasn't been a single month in over twenty five months where I haven't done at least one deal. That's pretty great. And so like, it kinda gives me the confidence where I'm like, okay. I actually am probably good at what I at this, and I can continue to do and provide for my family. But I don't know, man. There's still just times where I'm like, I can't believe this is an actual business, and you can make money doing this.

Dan Austin: [15:22] Yeah. It is. It's kind of like a shock still. Yeah. You're like, holy shit. I'm making money on my own.

Dylan Koch: [15:27] I can't believe someone just called me and they wanna sell my house at 40% of what it's worth it's gonna be worth.

Mike DeHaan: [15:31] Dude, I still think that sometimes with some of these that come in.

Dan Austin: [15:34] That doesn't go away. No. It really doesn't. Yeah. Yeah.

Mike DeHaan: [15:37] I hope you guys are enjoying this episode. We are seriously trying to grow this podcast so that the voice of what it really takes to grow a real estate business becomes kind of the norm versus the guru get rich quick BS that everyone is fed on a daily basis. With so many podcasts out there, it is hard for us to get discovered on our own. So a quick ask. Please share this episode on your social media accounts, be that a real story, whatever. And if you tag me at Mike underscore Invest, then I will give you a follow, and I will also send you a DM so that we can have a little chat about your business and any ways I could potentially help you grow. So again, please share it on your socials. Tag me at Mike underscore 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. But appreciate everyone, and thanks so much for helping us grow.

Dan Austin: [16:29] I would say this is interesting because it's not like a new lesson, but it is definitely a lesson for me that as I was looking at this question, I was thinking like, what is new? Because you and I have done so many different things in this business and worked at all different levels of it, and we've kinda seen a lot. But really what it was was I think gaining clarity as we stripped things down and went back to the basics, and really how simple this business is. Mhmm. Like when you first start and you get into it, it's kinda complicated because you don't know your bookends. You got all these systems, all these things, all these sellers, all these buyers. You're trying to like make things work at a deal at this point, just piece deals together so that you can always do a deal, and it doesn't feel like when you're starting out that that next deal is actually out there, and it is.

Mike DeHaan: [17:08] Mhmm. But

Dan Austin: [17:09] for us getting back to the basics, like in our local operation, granted, we do have some staff with our with the Collecting Keys brand and stuff that helps support us. But we don't really have any employees in our business that we need to have right now. And the business cycle of this is so simple. It's marketing and doing really freaking good at what you're doing when you're talking to sellers, and then being very proactive with your buyers to find buyers before you even have deals so that you can be ready to reverse wholesale, which Dylan mentioned earlier when you know your buyers really well. Like, right before the podcast, got a call from one of our acquisitions folks on the team saying, hey. I got this deal. What do you think? I'm like, well, we could try to pre sell it. Going through that, like, who on my Rolodex is going to want that deal?

Dylan Koch: [17:53] Mhmm.

Dan Austin: [17:53] Those are the simple things. And really, when you get back to the basics, it's that simple. You don't need to overcomplicate shit. You don't need to over systematize it. You don't need to over SOP it. You just need standard frameworks.

Mike DeHaan: [18:03] So Yeah. It's funny. Mine's almost along the same lines, but I would say the big thing that I learned is that sometimes the correct answer is to undelegate and to be willing to go in and get your hands dirty again. Right? Which I feel like as a business owner, it almost, like, damages your pride a little bit. Right? When you, like, have this team built out and you have all these roles and you have your org chart and you have all these different things. But what I noticed, and this is something in in hindsight, I I kinda realized while I was in Asia, was that I didn't really need to be involved in the business, which was fine, like the real estate business anyway.

Dan Austin: [18:45] But it also was a big

Mike DeHaan: [18:46] reason why I weren't making very much money. Right? And then the crazy thing was when I came back and literally, like, on the first day back, I fired everybody. It was a really fun day back at work after vacation. Like, I had a bunch of calls, and I let pretty much everyone know that they're being let go. I think overall, it was, what, 12 people over the course of, like, two days. And I realized how little they were actually doing, which was weird. Because they always felt like they were busy and how, like, they had all these roles for things that didn't actually need to be there. And realistically, just kind of between the small team that we've kept and Dan and myself, we can do all those roles without needing to work, like, as much as we did years ago when we were filling those roles because we're more experienced, systems are better, we understand kind of like priorities a little bit more. And so that's like a big challenge I would have for people is if you've grown like this big systematized process or you have this big team and it's just kinda not working, sometimes it's best just to nuke the thing and be willing to dive into your own business again and not be afraid to get to work.

Mike DeHaan: [19:54] And you'd be surprised at how much easier it is than you think it's gonna be because you have this memory of doing that years ago, but your experience does compound with that.

Dylan Koch: [20:02] Like, ego is the enemy. That's the way you guys summarize that. So much, dude. Right?

Mike DeHaan: [20:07] And honestly, like, that's a big challenge I've had with collecting keys and, you know, our scale community and things like that is I spent so much time over the last couple years, like, trying to create content, do the Instagram thing. I was doing, like, YouTube and all sorts of stuff. I never really, like, liked it, but I felt like it was necessary to grow, like, the scale community. And then when I got back, I was

Dan Austin: [20:28] like or I was gone.

Mike DeHaan: [20:29] I was like, I kinda just don't care about any of that. So we stopped it. And the crazy thing is is I've had more engagement and interest in scale and, you know, people wanting to, like, know kinda what we do without making this, like, bullshit. Like, that's doing the content creator thing, which I really think is just, like, such a nonsensical business. Like, the more that I thought about this that it's what people do when they don't have any skills. Right? Or when they're, like, so rich that they have nothing else to do anymore. Right? But everyone else that's like a professional content creator and that's core of business, like, that's because you're kind of a fucking loser. Like, honestly, like, you understand the lessons that you've been taught by people and you pair them, but you don't really have like a lot of meat to back it.

Dylan Koch: [21:14] Yeah. Or the my favorite part of this is the the coach jumpers. They'll do scale. They'll do the, you know, all the other masterminds that are out there. And they know all the right things to say, but after under experience, they don't they don't actually do anything.

Dan Austin: [21:27] Yeah. Yeah. This is yeah. I found out I hated this probably about six, eight months before Mike did. Like, I was like, Mike will define the moment probably because I had told our guy that that doesn't work for us. He was like, I fucking hate this. And I was like, I gotta take a break. And so Mike obviously put more heart and effort and had did a better job than me during that period of time. But it's one of those things with like, it's so when you get into that content creation to try to like drive a brand and you start learning about it, start seeing how every single person on the Internet is trying to do the same thing.

Mike DeHaan: [21:58] And they're all liars.

Dan Austin: [21:59] It's all the same shit. And they're all liars. They're all trying to follow the same shtick. They're all trying to follow the next content thing. And the thing that I've found with content creators, the Internet of social media and YouTube and all that stuff is that there are people out there that have really great novel ideas for being a creator of something, of content. Really is what it is. It's entertainment. Mhmm. And those people stand out because they have really great it's just a unique novel idea that sticks out on the Internet. Mhmm. That's awesome. Or they're a super hot chick that just works out in yoga pants.

Dylan Koch: [22:33] Yeah. So let's get to the real reason, Dan. You're just not attractive enough.

Dan Austin: [22:37] I am 100% not attractive enough.

Mike DeHaan: [22:39] Absolutely. I mean, like like, you're joking, but that's like a real thing. Right?

Dylan Koch: [22:43] Like Yeah.

Mike DeHaan: [22:44] People can't lie and say that's not man or woman. Right? It is if you are a prominent picture. That's why even, like, Ryan Pineda had, like, orange hair and shit for a while. Right? He was like, that was his way of standing out.

Dylan Koch: [22:54] Real quick to what I I guess I another one I'd add to like lessons learned is don't underestimate human capital. And what I mean by that is your NOAA guys, especially if you're flipping, your drywall guy, your plumber, an insurance agent, property man. Like, if you just have a Rolodex of people you can rely on for every aspect of this business, because the hardest part of real estate sometimes is relying on other people, then that is like unquantifiable.

Mike DeHaan: [23:19] Mhmm. Absolutely. It's

Dan Austin: [23:21] so important because that's what makes this that's what makes this business easy and frictionless. You know what

Mike DeHaan: [23:27] I mean?

Dan Austin: [23:27] When you have and everybody that is listening that has had that contractor, for example, where you don't have to feel like it's just hard every time you talk to them or every they you have to do so much just to support them versus the guy who just shows up and is like, yeah, man. I did all this stuff for you. Does that make sense? You're like, wow. That was so much easier. Yes. Same thing with people in your network. When you have a really good buyer and you could throw something over the fence and be like, hey. I think I can get this to you for $2.50. Are you in? And they're like, yeah. I'll do this. And you know when they say that that they're gonna buy it. Like, that is the buyers you wanna connect with.

Dylan Koch: [24:01] Or a title company that actually talks to sellers. Right.

Mike DeHaan: [24:04] No shit.

Dan Austin: [24:05] Yeah, that makes the phone calls for you, that connects people. Yeah, after we worked with all these national title companies, and I'm working on a lot of the TC Dispo stuff right now, to Spokane with our title gal that we actually started with, and how much work they do compared to some of these other title companies, you're like, oh my god, this is so easy, I can literally just send you an email, and you can infer things because it's common sense, and then you also take action without me telling you, oh my god.

Dylan Koch: [24:29] Yep. There be days where it's like twenty four hours before it's disclosed, they're like, hey, how's things look? I'm like, oh, did you schedule the seller to come in? I'm like, no. It's your job. Like, why would I have

Dan Austin: [24:38] to do Why would I do that?

Mike DeHaan: [24:39] I know. We would get that all the time. Literally, they'd be asking, when's your seller coming to sign them? I don't know. I haven't talked to them in two weeks. Like, what

Dan Austin: [24:46] the fuck, man? Covet those people. Buy your entitled people coffee, flowers, whatever their brand is. I would ask this question. What do you guys think if you're starting out, you're doing little deals here and there, how much percentage of your time should be spent on building that team, like finding new people, even though you maybe you're doing a flip right now, you've got a title company, you've got all the pieces in place, but it's not perfect yet? 2030%?

Dylan Koch: [25:08] I don't know. I it depends on your personal situation and if you actually have like capital, like, set aside where if you like need that or not. But I would get better at sales and assigning and buyers first, probably above all else.

Dan Austin: [25:20] Yeah. Absolutely. Before you would worry about your team, your people, rest.

Dylan Koch: [25:24] Yeah. I mean, it's just kinda like walking before you run. And then once you have those people in place

Dan Austin: [25:28] So let me ask you this though, like, you kinda have to know those people. Right?

Dylan Koch: [25:32] Yeah. But you learn them as you go. It's like Yeah.

Dan Austin: [25:34] And that's what I mean is like, what would you do, like, with that? Would you go to meetups? What percentage of time would you do? Would you call people ahead of time to kinda connect with them? Because like, hey, I heard you were a buyer. I'm gonna have some deals coming, or would you literally just market, get someone on contract, try to figure it out?

Dylan Koch: [25:48] The latter.

Dan Austin: [25:49] Okay. Yeah.

Mike DeHaan: [25:50] It's

Dan Austin: [25:50] fair. I mean, that's how we did it. Yeah.

Mike DeHaan: [25:52] Yeah. So, I mean, I think it's the way to do it because it feels harder and it's scarier. And when you're under contract and you're under the gun, it forces you to figure things out rather than like, I'm trying to prepare.

Dan Austin: [26:03] Yeah. There's that value and not the guy that shows up and is like, I would love to take you to coffee and pick your brain on what deals you like. I like them all as long as they're the right price.

Dylan Koch: [26:13] Yeah. Yeah. Right. I get that all the time too. I know. And it's like, what what's your buyback? I'm just send me everything. I'll tell you if it's deal or not. Like

Mike DeHaan: [26:20] Yeah. Yeah. And then then they proceed to send you the worst they've ever seen. You're like, no. That's not it. And then you either offend them and never hear from them again, or they're like, okay. I'll get better next time.

Dan Austin: [26:30] Yeah.

Mike DeHaan: [26:30] Alright. Next one. What was your favorite deal of the year, Dylan? This can be a good lesson that you learned. This can be a big win. This can be one that was just, like, interesting for some reason.

Dylan Koch: [26:41] Yeah. And the favorite deal is probably it was actually kind of recent. It was a foreclosure lead, but the gentleman had had passed away. But his he was still they did like a DIY divorce. Okay? And so even though they were technically divorced, the wife wasn't didn't have rights to the property. The daughter did. The daughter who wasn't with the ex wife, not trying to get too convoluted. But basically, we had a whole bunch of probate and title issues, ended up getting it to the rightful owner, which was the daughter, and who was like pregnant, expecting twins. She's like 22 years old, and she was able to walk away like 40 k. And then we had turned around and we're able to flip it in like three months, we made like 90 k.

Mike DeHaan: [27:20] Nice.

Dylan Koch: [27:20] And so it was just like a literally like a win for everybody. Took a lot of work on the front end, but this ended up working out best for everybody.

Mike DeHaan: [27:28] Perfect. That's a great one. What a deal.

Dan Austin: [27:30] Yeah. That is a good deal.

Dylan Koch: [27:31] It's the bet it was the most revenue I've ever had on one deal.

Mike DeHaan: [27:33] Yeah. That's awesome. What about yours, Dan?

Dan Austin: [27:36] Mine is not a single deal. Actually, I was looking at our list of deals that we've done here locally, and what I think my favorite thing that that we did this year from a deal standpoint was all of the, like, JV type stuff we did. Mhmm. Like, for me, there's actually some awesome monetary wins where we won more than once on a deal. But, like, for the JV deals that just came into our system, where we were able to work with a local competitor to make a deal work because, you know, we were both working a deal, decided to collaborate on it, and work together on it as opposed against us, or just people that call us and say, hey. I've got this deal. Can you help me dispose this? And it's a big core part of our business that we're focused on going into 2025 is how can we do more of those deals where people need our support because we have a lot of experience in our market, or we run into other people on deals and we can make something work that would take nothing and create something. Because that also drives your cost per deal down, which is what we ultimately wanna do, and they're essentially free deals usually. Mhmm.

Mike DeHaan: [28:36] Absolutely. Yeah. Those are great. And those are also why it's so important to have a good reputation and not be a dirtbag, because otherwise, those opportunities won't even come to you.

Dan Austin: [28:44] Exactly. And let people know that you're you're out there.

Mike DeHaan: [28:47] Right? As we came

Dan Austin: [28:48] back into Spokane, there's a lot of buzz. People were like, oh, Mike and Dan are back. Oh, my you know, what's gonna happen here? And people are calling and picking up the phone, hitting me up on social media, and that's when things just happen. Like, deals Mhmm. They just pop. And I know, like, it's kinda funny because I got a this is a good example of why I bring this up. I got a DM from a guy that was like, hey, I heard you guys are back in town. Like, yeah, we're back in town. Man, we should have coffee one day. Yeah, we should definitely have coffee one day. Cool. And then we got a phone call from a meetup I did this year. A guy referred me to somebody, some lady that needed to sell her house fast. He's like, oh, Dan Austin the guy to do that. Right? Because I spoke at their meetup. She calls. That same day, we go out there, figured out, get it under contract. I DM'd the dude that had DM'd I'm like, hey, I got a deal if you want it right now. Really? Sweet. Went out there, freaking loved it. He's like, I just did one two blocks away. This is the exact same house. I'll do it again right now. Boom. I think we made, like, $10 on that thing. Easy. You know, just from two people knowing I was in business here in town.

Dan Austin: [29:46] I didn't have to spend any money on marketing. I didn't have to like beat down anybody's door. It was just like connect, connect, connect, and then boom. Done.

Mike DeHaan: [29:53] Yeah. That's awesome. Cool. And so the one that stands out to me, and this one's kind of an interesting one. So we have this new lending business that we've had for a little hard money lending business. We're growing into like this co lending model where people can basically, like, invest with us and, like, buy parts and notes, which is pretty cool. What that's allowed us to do has been to expand, like, our lending capabilities kinda more than we have in the past. And we did this one deal. It was a small mobile home park that we assigned. And I don't remember the exact numbers, but I'll just use, like, basically easy math. So we assigned it for, like, $300, and we got a $30,000 assignment fee. But what we did is we actually provided the hard money loan for the buyers. And so we basically provided them a loan, right, at our purchase price, and then we whatever their price was, we have them pay without a down payment, they were at $2.70. We collected our $30,000 fee. Right? And so, basically, they're paying interest on their full loan amount, but we recovered $30,000 of the principal on the assignment fee at close. Right? So we're collecting interest at a higher rate than principal it has out. And I think the total amount of interest that that is, like, what, 3% or 4% more. So it really maximizes the return for the lending company, while also making it easier to get a deal done on the wholesale side with a deal that would have been kinda tricky for them to get lending on because it's a little mobile home park.

Mike DeHaan: [31:11] But also because we underwrote the deal to begin with, if they do screw it up and I gotta take it back, I'm not upset about that because I already liked it. Liked in the first place when contracted it. So as you kinda grow and you get more capital and you understand real estate a little bit more, there's so many ways you can make more money off of one deal, and that's something that's been really interesting to me as we're going into this next year.

Dan Austin: [31:31] I knew you'd pick that one.

Mike DeHaan: [31:32] I mean, just like it just gets me excited.

Dan Austin: [31:34] Yeah. No. It's it's one of those things like, well, one of the stuff things that we've always tried to figure out, like, or we're always trying to figure out is like, how can you drive revenue into your business without having to spend money? Like, how can you get larger, you know, sums of money on the bottom end without having to add in, you know, cost of goods or marketing or something like that? And the lending piece is really fascinating. The thing Mike and I have found out about lending over the years is you run out of money super fast. So fast. I mean, it doesn't matter because like, somebody finds out you're doing loans, you do another loan, you do another loan. You could spend a million dollars in a week on a few deals. And now people are knocking on your door and like, dude, I wish I had more money for you. And so you go out and you raise some money, you bring it in, and then the problem is you deploy that money.

Dylan Koch: [32:13] Mhmm.

Dan Austin: [32:14] So with the new model that we're trying to use, which Mike mentioned is co lending, where we can be a co lender with multiple investors on the same deal. Everybody's in first position, kinda like a almost like a group, I would say. You could, you know, buy $20,000 of a note, $50,000 of a note, and and then you still get the same interest rate as if you had the whole note. Mhmm. But now we're able to bring on other people as investors to be able to help us, you know, originate these private notes for all these investors. And then if we can do it for all the deals we're wholesaling locally that we know are good deals, because we're not ship birds. Like, some people out there love to wholesale deals to people that they're gonna fail on, and you only sell them a deal once. But if we underwrite good deals, we sell them good deals, then we can loan on good deals and have good risk, you know, risk aversion on it.

Dylan Koch: [32:57] I need you guys to raise about $250,000 by in two weeks.

Mike DeHaan: [33:01] I know. I'm trying. I'm trying. We're trying. Yeah. But by the time this episode comes out, you'll need it. So it won't be too late. Awesome. I I know we're coming up on time. You gotta go do daddy duty duty Dylan. So last question to round out today's show. Biggest thing you're going to change going into 2025?

Dylan Koch: [33:19] I'm gonna hire somebody.

Mike DeHaan: [33:20] You know, I I can't believe you've been like this long without doing it. That's like shows a lot honestly about your skill set.

Dylan Koch: [33:26] I have my assistant. I have my assistant, and that has helped a ton. She does like transaction coordination, property management, like all that kind of stuff. So that's helped. But I need to hire a salesperson, especially now that I have a three month old at home, man. I'm just being I'm I don't sleep. I'd run on caffeine. I know that's not healthy. So

Dan Austin: [33:42] Try drugs like Adderall and stuff like that, or that's pretty good.

Dylan Koch: [33:45] Yeah. Thug them

Mike DeHaan: [33:46] to the

Dylan Koch: [33:46] next pharmacist. That's a good idea.

Dan Austin: [33:48] You know people.

Dylan Koch: [33:50] That's the biggest thing. I wanna hire somebody. Hire an acquisitions person specifically.

Dan Austin: [33:54] That's gonna be your change, is hiring an acquisition person. I feel like I remember earlier this year, that was kind of a thing that that was like a goal of yours. You and you did hire somebody, but they quit or you fired them the first day?

Dylan Koch: [34:04] They showed up to the sales sales training on day one, but they didn't show up at all.

Dan Austin: [34:07] They didn't show up

Dylan Koch: [34:08] at all.

Dan Austin: [34:08] They fucking ghosted it. Yeah.

Dylan Koch: [34:10] Yeah. Mike texted me. He's like, you guys supposed to be in here. I'm like, oh, that's fucking great.

Dan Austin: [34:14] Yeah. That's yeah. You're like, that's a good way to start off.

Dylan Koch: [34:17] Yeah. That's funny.

Mike DeHaan: [34:19] But what about you, Dan?

Dan Austin: [34:20] What am I gonna do different going into next year? I'm going on the theme of simplifying, and I am going to try to do more with less. We've been kinda running and gunning, so like how can I allocate my time better? I don't know that I'm gonna hire anybody. I don't know that I have any desire or need to hire people right now. I've just kind of gotten in my head that when a business gets to a certain size, you need to hire people, and it's it's kinda like the mechanics of it. It's just gonna happen when it happens. So I'm not worried about hiring people. You know, a lot of people Dylan, you're in this situation where it's like, hey, I wanna do more. I need to get off this hamster wheel. I gotta hire somebody. For me right now, I don't feel like that hamster wheel exists, but coming off of a busy I mean, I don't know. We are freaking tangle busy, like, just entangled in a lot of things. 2022, 2023, 2024, it's been wild. And so I am going to do more with less and try to allocate my time more appropriately. And I got a big calendar that I'm trying to figure out, like, the big chunks of time and where they need to go and, like, family time versus business time and all that sort of stuff. So that's kinda my that's what I wanna do differently.

Mike DeHaan: [35:22] There you go. Perfect. Right on. And then on the big picture company side, I think for our brand, I guess for our company, I'm gonna be focusing a lot more on the actual brand piece locally and really trying to expand and grow that. I think that now versus previous years, the brand matters a lot more with, like, a real estate company than it did a few years ago, where everyone was kinda just, like, throwing stuff out there. No one really stood out. Right? And so, you know, you it was kinda just like who had the best sales team or whatever. But now I think that having a strong brand that is recognizable that sellers can easily find reviews for, track record for, looks professional, you know, has a good reputation. I think that matters a ton now, and that's something that, like, people that we know that have done really well have really focused on. So that's gonna be a huge focus on us for next year. Is it gonna be less, like, just targeted marketing and more like how can we build this umbrella that everyone that is a potential motivated seller should be able to find out about us super, super easily without us needing to do targeted marketing. Right? And so we can, like, just build that, I guess, that brand piece here locally. So that'll be a new thing for us.

Mike DeHaan: [36:32] I already have all the pieces sort of lined up to start doing that, and I'm excited to sort of see how that come together. But I think it'll pay compound interest pretty quickly.

Dylan Koch: [36:40] I mean, that's just, you know, like you said, the more you go, they know what you do. Mhmm. There's gonna be free leads that come in. Exactly. Free as in like, you know, you set it up once and then it kinda just pays on itself.

Dan Austin: [36:51] Yep. I strongly believe you can go out there and be a professional brand, but show up as the guy next door.

Mike DeHaan: [36:58] I think so too.

Dan Austin: [36:59] You know what mean? Yeah. Could be a dichotomy where you're loosey goosey, shady wholesaler going in knocking on people's doors saying, would love to buy your house. Thanks for calling me. And this over the top, you know, we buy ugly houses franchise.

Dylan Koch: [37:12] Mhmm.

Dan Austin: [37:12] I think that's the two kind of dichotomies where you may be worried that some people will choose the other one or the other. But I still think you can have that really good local nice brand, and then when you show up, you're still just the guy next door that's flipping houses.

Dylan Koch: [37:26] Yep. You know how many people are you know, if I take an inbound call, which I still do, and they're like, my name is on the letter and I say, hey. This is Dylan on the phone. Like, that is all it cuts a lot of people off surprise by surprise.

Dan Austin: [37:38] Really?

Dylan Koch: [37:38] Because they expect it to be somebody else. Yeah. I mean, right? Like

Mike DeHaan: [37:41] I wouldn't expect it to be you. I mean, that's weird as fuck. Why don't you have a call center?

Dan Austin: [37:45] At least

Mike DeHaan: [37:45] what's wrong with you? Yeah.

Dylan Koch: [37:47] The truth is the call center sucks.

Mike DeHaan: [37:49] That's why your cost per deal is so low, dude. Like, honestly, yeah, you have to be on all the time, but you're you're making up that money right there. You're dropping to

Dan Austin: [37:57] zero balls now. Yeah. You're good looking. That's why. Thanks. You should try your social media.

Mike DeHaan: [38:02] Thanks, buddy.

Dylan Koch: [38:03] Maybe they could see me through the phone.

Mike DeHaan: [38:05] If you were a hot chick, your cost per deal would be half of what it currently is. Just think about that.

Dylan Koch: [38:10] Oh, good. I think the surgery is just only a couple grand. So

Dan Austin: [38:14] It's cheap if you

Dylan Koch: [38:15] do it yourself. Yeah. Never mind.

Dan Austin: [38:17] Let's get out of here.

Mike DeHaan: [38:18] Awesome. Alright, guys. Well, thanks for listening, everybody. That's our overview of the year for you. So you guys have a happy New Year. And going into next year, start to see a couple different changes with the show. We're gonna be leaning a lot more into, I would say, kinda like the stuff that we're doing week to week and just getting a little bit more focused on, I would say, like, not necessarily educational details, but what, like, like, actionable details on what's actually working for us and everything else. So, yeah, expect a couple changes here. They'll be good. So if you have anyone that is interested in growing their real estate businesses or just operators and just looking for some good guys to listen to who are actually playing the game, share the show. It really helps us a ton the more that you tell people about it. And, you guys have a great New Year's, and we'll talk to you guys next week. Alright. See you.

Dan Austin: [39:03] See you. See you all.