Selling Real Estate Deals Quickly in a Slow Market

Mike DeHaan: [0:00] Real quick before we jump into the show, we created the collecting keys podcast to be a real estate investing podcast that is created by real estate operators for real estate operators. And we want operators everywhere to know what it really takes these days to be successful in this business rather than all the fluff that all the other content creators and podcasters out there make. And so one of the challenges with this is that it's challenging to grow because most operators are too busy out there working. Right? And they aren't always learning or actively seeking new learning material. And so if you could please share this show with any fellow operators you know. You know, you can text it to them. You can post it on your socials. You can leave us a good review that you then share somewhere. That would be amazing. But really, whatever, it really helps us continue to get excited to create content, and it will also help you because everyone that you expose us to will get better as a real estate operator and close more deals. So if you could do that for us, it would really need a ton. And, otherwise, we appreciate you guys, and let's get into this episode. I feel like the days of the easy lipstick, we kinda just, like, make it look shiny and throw on the market. That's a dangerous game to be playing right now.

Mike DeHaan: [1:14] What is going on, guys? Welcome to today's episode of the collecting keys real estate investing podcast. This is the show by real estate operators for real estate operators. And if this is your first time here, I am Mike DeHaan here with my normal cohosts, Dan Austin and Dylan Cook. And today, we actually have a special guest for the first time on these panel style shows we've been running, Brett Halsey. So for people who don't know who you are, Brett, give us a quick overview about why they should give a shit you are here today.

Bret Halsey: [1:45] I guess I started a few years ago coming out of school. First and foremost, I play professional soccer in MLS. So that's my main w two income. But, yeah, I started only a few years ago, and, obviously, I've been playing soccer the whole time. That's, you know, my main source of income. But it's been talked over and over about getting started and sort of building up a side hustle. But, really, some people might think, oh, he plays professional sport. He's making a ton of money. He could just easily invest, but that's not the case. You know? There maybe has been, I guess, one year so far that I've made over 100 k with with soccer, so it's not, you know, I'm not making millions like, you know, an NFL player or something like that. They can just you know, I can just sit here and just say, I've just hired a management company, something like that. I really tried to build from the ground up. I started with a single family that I lived in one room, rented out the other, so I've had to be creative. But over the past few years, and especially the last year, have scaled up to own 11 buildings, nine four units, and two single families out in Utah with those nine four units here in Cincinnati.

Bret Halsey: [2:45] So I think it's mainly just a testament to, you know, being determined and passionate about something. But, yeah, I mean, yes, testament to someone anyone can really take this on. You don't need to be making a shit ton of money or, you know, you kinda just gotta be passionate about it, determined, and everything else we talk about. There we go.

Dylan Koch: [3:03] Yeah. I think to to allude to Brett's thing too is, you know, we met at a local investment, like, meetup one time, and then he actually went, like, came to one of my four units. And then he, like, he asked some questions. And then next thing I know, like, the dude's on a power dialer making calls, like, four hours a day and just talking to sellers. And it just comes down to straight hustle.

Dan Austin: [3:21] Hell, yeah. So

Mike DeHaan: [3:22] Yeah. I mean, just like becoming a professional athlete too. There's a lot

Dan Austin: [3:26] of hustle that goes into that.

Mike DeHaan: [3:27] I'm sure there's a lot of crossover. And you we're talking before you add on, but you're also doing some wholesaling, doing some little bit of transactional stuff. You wholesaled a large apartment complex and made 6 figures on that. So you're grinding out, man. So super excited to have you on today.

Bret Halsey: [3:41] Yeah. Thank you, guys.

Mike DeHaan: [3:41] Right on. So Dylan, what do we got in the news today?

Dylan Koch: [3:45] Biggest thing, I think, of following the trend that we've been talking about for a while is like, this discrepancy between Fed funds rates and where mortgage rates are at. And there's actually like a mortgage application index from the Mortgage Bankers Association. Basically, it's saying since the pandemic peak of like 2020, late twenty twenty, we're down 63% from that peak. And the last time that we're at these current levels of mortgage applications was 1995. So literally thirty years ago.

Dan Austin: [4:13] That's that's when you were born, dude.

Dylan Koch: [4:15] I was two years old. Yeah. But I think the biggest thing is, like, you're wholesaling, you know, maybe be a little bit more conservative on your ARVs because things are gonna be sitting a little bit longer, days on market's going up. If you're flipping, kind of the same thing, less risk if you're wholesaling. And in my own personal business per se, I'm just more likely to wholesale than to fix and flip right now, especially if that rehab is four or five, six months long.

Mike DeHaan: [4:39] Yeah. I mean, I always feel like these conversations are tough. So I feel like they try to make it whenever these things come out, they always try to make it like a bear indicator for real estate. Ultimately, the core of people just can't afford anything. Right? You can be in any industry right now, and you're gonna have less consumer activity than you've had in the past.

Dan Austin: [4:58] I think it just depends on what part of the consumer stack you're in. Who's your consumer? Right?

Dylan Koch: [5:02] Yeah. Locally speaking, even from like the MLS numbers here Yeah. FHA buyers, I mean, they're still around. And there's actually, the amount of good grants that are coming out, this is a funny aside. We're selling a property, and it was a first time home buyer. They had this grant where they bring, like, nothing down to the closing table because they get, this 3% grant back. Buyer got a raise on January 1, even though we're halfway through due diligence, and no longer applies or, like, is guaranteed that grant because of their rage their raise.

Dan Austin: [5:27] Oh my god. That sucks. What a pain in

Dylan Koch: [5:30] the ass. So now we have to go whole FHA and redo it and this whole thing. This shit like that that pops up on the regular in this business. So

Dan Austin: [5:37] Yeah. It's interesting looking at your graph though, because like 2010 to 2016 were pretty flat As far as mortgage applications that, you know, spiking up and down in that time period

Dylan Koch: [5:48] Yes.

Dan Austin: [5:48] And we're even lower than that. I would say that was like a boring time to be in real estate, but that's when millionaires were made. Right? Because they were buying and selling and doing what they do. They just maybe weren't doing it as easily. I just talked to a guy before we got on here that listed a property here and had 22 showings in a day and seven offers.

Mike DeHaan: [6:07] Isn't that crazy?

Dan Austin: [6:08] That's not normal. Right? And it was a well priced property, but you can if you do these things right, you can still have pretty good activity.

Dylan Koch: [6:16] Would that claim seasonality, any of that? Now that the holidays are over, people are starting to pick back up on some of this stuff? Because it's been I feel like there's no middle ground. It's either sitting for forever, or it's gone in forty eight hours.

Mike DeHaan: [6:27] Nah, bro. He's a realtor. He's not claiming seasonality. He's claiming that he's the fuck ass.

Dan Austin: [6:31] He's the reason why.

Mike DeHaan: [6:32] Brett, what are you seeing on, like, the rental side? Because you have a lot of rentals. Right? That's like your main gig. Are you starting to see any issues with, like, filling units or things like that over the last, like, six months?

Bret Halsey: [6:44] Yeah. I mean, I I wouldn't necessarily say that I've seen issues per se, but, I mean, to be honest, you know, at this point last year, had six units. All of them were occupied. I was actually living in one of them. It was a FHA four unit that I bought in September 2023. But this past year is really when I just kinda hit the ground running, bought eight more units. So I'm really kind of only now at a point where I can sort of track and see some of this.

Mike DeHaan: [7:05] You say eight more four units, so that's 24? No. Wait. Twenty Thirty 2. 32. So you're at 38.

Dan Austin: [7:12] 38.

Mike DeHaan: [7:13] 30. Okay. So you haven't taken your licks yet, bro. Get ready.

Dan Austin: [7:16] Yeah. That's the thing. I've I've heard it.

Bret Halsey: [7:19] I'm just like, oh, shit. Well, hopefully, you know but trying to figure things out. Like, right now, I think, we just turned a unit to try to place someone there. I don't know if it's partially because of, you know, the season of January or whatever, but, you know, kinda like Dan, you were saying about, you know, operating just kinda doing what they're doing. I mean, I'm still just going on ahead, turning units and trying to do it the right way, list things right, and see how that goes.

Mike DeHaan: [7:43] Do you find that you're able to rent stuff at, like, your projected rents when you bought? Because what we've started to see and where I'm alluding to with this, I had a personal rental, and then Dan and I have a joint owned rental, which are coming vacant. And both of us have gotten basically rental estimates from our property managers that are now quite a bit less than what they were last year.

Dan Austin: [8:04] Maybe 10%? Yeah. 10% at least. Sounds like one. Right? Which is a lot year over year.

Mike DeHaan: [8:09] Yeah. It's a ton. And so I guess on your end, are you when you were underwriting these deals last year, all these four units, do you think real estate you're gonna be able to rent them for what you were hoping for when you bought them?

Bret Halsey: [8:20] Yeah. Something still to be figured out. You know, I did a lot of groundwork that I did last year was basically acquiring, you know, as many good deals as I could with the assumptions that I could get, you know, in place rents of, you know, whatever I was projecting. So I think a lot of that came down to owning stuff in the certain areas that I was investing in, like

Dylan Koch: [8:38] Sure.

Bret Halsey: [8:38] Some deals that I just bought. One of them was, you know, a street over from another property that I own was very similar and just rehabbing it to that standard and trying to trying to do it that way.

Dylan Koch: [8:49] So Are you self managing?

Bret Halsey: [8:51] Currently, yeah. I'm I'm trying to get a new team over to Buildium.

Dylan Koch: [8:54] Yeah. And so, like, when you are leasing these to rent, is it Facebook Marketplace, Craigslist, Zillow? What were you kind of using for those?

Bret Halsey: [9:01] I've been using Zillow mainly, but I think it's interesting because I've sort of hired a couple leasing agents. I just do that aspect of the business. Know, sometimes people ask me, like, if something goes wrong, you know, how can I tend to it if I'm over playing a game in Canada or if I'm Honduras? We'll be in Honduras in in about a month. But, yeah, I mean, for that, I think it I've just figured out ways to sort of bring in people to sort of help with the things I don't necessarily want to do or can't do. So bringing in a leasing agent for some aspects, you know, for this leasing component of it, I've been trying to kind of leverage people that are a little bit more experienced on this side of it, because I've mainly just been acquiring it and just working on the turns. So I have a leasing agent just help me out on a few of these.

Dylan Koch: [9:41] To get to Mike's point, I own a six unit that is in the same neighborhood, only a couple of streets from one of Brett's four units. And even though his is more rehab than mine, I guess more inside's nicer, the new LEDs, paints, you know, countertops and stuff. But his rent is almost as much as mine, and I have two more units. Gross.

Mike DeHaan: [10:00] Interesting.

Dylan Koch: [10:01] Yeah. Right. So I just think that you need more than ever to do this, have those nicer end like quality apartments. Or if there's middle of the track, you're not gonna get what you think you're gonna get.

Dan Austin: [10:10] Yeah. Especially if you're rehabbing now, there's no point in not taking it the extra mile. Like, sucks when you have like a unit that you've rehabbed maybe a couple years ago and it doesn't need it, but you're like, This is kinda gross compared to what the new people coming in. The guy who just bought a four unit is doing. Right? Because you have to eat, and you need to go the extra mile to get that thing leased. If anything, it reduces vacancy, which is, in my opinion, more valuable than any rate increase you can do.

Dylan Koch: [10:33] Especially when you're on hard money for that fixed unit.

Dan Austin: [10:36] Yeah. Totally. Or or if

Mike DeHaan: [10:37] a vacant property, you're not on hard money, right, you're still paying. Yeah. Yeah. You know, I think to bring that full circle, right, like the so this mortgage rate application you're seeing at an all time low, which is indicative of the ability to sell real estate liquidity of it. I think that is directly tied to the fact that we are seeing reductions in rent just overall. You know? And I think it's gonna be driven mostly by affordability, but also supply and demand. People are going to choose to go to those nicer properties whenever they can. If your property kinda sucks, it's probably not gonna sell. It's not gonna lease up.

Dan Austin: [11:07] Mhmm.

Mike DeHaan: [11:07] And that's just something really important to take in mind if if you were going to be actually acquiring properties, whether it is to flip or whether it is to, you know, hold for the long term. It's like, I feel like the days of the easy lipstick, we kinda just like make it look shiny and throw on the market. That's a dangerous game to be playing right now. Right? The days that are probably over.

Dylan Koch: [11:27] Totally agree. And then like if you're there's some saying in the real estate circles, like, look at your comps, see what your your comps sold for in three to four months ago. But that might not necessarily apply if you're doing the the those kind of things that you just alluded to.

Dan Austin: [11:40] Totally.

Mike DeHaan: [11:40] I think what's almost more important, you gotta look at what the active on market is that's been sitting. Yes. Make sure your shit doesn't look like that. Right? Like, that's the example of what not to do for you to to go out there. And then the example I have, that's why I have a rental property that I have owned for five years, six years that I just listed on market and went under contract in three days, full price offer, easy. But what I did, there was two other houses that were the same as Speck Home Filioso were literally the same. Both had been sitting on market for over a hundred days. And I looked at those listings, and they both had kind of, like, beaten up countertops, older flooring. Walls are kinda scuffed. They didn't look that good. They'd obviously been rentals. So I went in. I spent $5, all new flooring, all new paint. Face was shiny, man. And the second one on market the other ones are still sitting. I've I'm now painting. I'm and I'm for $20,000 more than they were asking, and it cost me $5 to get there.

Dylan Koch: [12:34] I think appearance, you know, plays a much bigger factor than it might have tradition like, you know, in the past six to twelve months. We just listed a duplex in Price Hill for 219,000, and the gross rent's, like, 2,400. Like, it actually makes sense on paper, but it's not pretty on the inside. Like and it's sitting. I haven't had many showings, it's actually surprising me. So I either need to make a decision to lower the price or to actually go in, you know, remove a tenant, and then now it qualifies for someone to owner occupy it.

Mike DeHaan: [12:59] Yep. Are you your own agent, Dylan?

Dylan Koch: [13:01] Sometimes I am. Sometimes I'm

Dan Austin: [13:02] not. Sure.

Dylan Koch: [13:03] Yeah.

Mike DeHaan: [13:03] Because I do think that right now, also when it's competitive, is when a good agent does earn their money. So that also definitely helped me. Right? So I worked with an agent team here that we know really well. And, like, she filmed, like, a whole video where she's walking through. It was, like, TikTok styles. There's, like, cuts, and she's, like, doing that, like, style where, like, they're just walking straight the whole time, but it cuts through the different things.

Dan Austin: [13:24] You know?

Bret Halsey: [13:24] Have you seen that?

Dylan Koch: [13:24] Yeah. Mhmm.

Mike DeHaan: [13:25] And so it looked good. And they had they have 25,000 followers on Instagram. And the buyer that I got was actually looking at properties in the other end of town, but followed these people and engaged with them because they liked this house. And even though it's literally a thirty minute drive from where these buyers were looking, they chose it because they saw it on there. But they never would have seen it on Zillow because they weren't looking in that neighborhood.

Dylan Koch: [13:49] No. I think you're right. And I like this during the days in the MLS is is Yep.

Dan Austin: [13:53] That stuff. Welcome to the buyer's market, everybody.

Mike DeHaan: [13:55] You know?

Dylan Koch: [13:56] And that's what I do for my own property. So, like, I the ones that I need to actually have some oomph into, I actually refer to other agents.

Dan Austin: [14:01] I I'll say, that's what

Mike DeHaan: [14:02] you do. You're TikTok answers for your property.

Dylan Koch: [14:03] I'm not

Dan Austin: [14:04] doing that. Would love to see buddy.

Dylan Koch: [14:05] Yeah. I'm not doing that. Yeah. It's not gonna happen.

Mike DeHaan: [14:08] Right on. Yeah. So who knows? I feel like every week our news is kind of like, well, how fucked is it this week? But that is the way real estate is right now. I don't think we have anything else, like, general big picture to go into with it. If you can give me about thirty six seconds, I just wanna share our scale community with you. So scale stands for scaling cash flow assets, leverage, and equity. It is our exclusive community for real estate operators looking to take this game seriously. In the community, you can hang out with myself, Dan, Dylan, and other operators around the country who are all working to be the best in their market. We recently did a survey, and every single member said that the community had directly contributed to major growth they experienced in the last twelve months. On top of that, you get all of our processes around marketing, sales, building a CRM, and you even get preferred relationships with Lowe's and different financing slash lenders so that you can get your deals 100% paid for without a headache. So if that sounds like something you're interested in, go to collectingkeys.com/scale. Let's see if you're a good fit.

Dylan Koch: [15:05] Well, I'll try to be a little bit more optimistic next week.

Dan Austin: [15:07] So It would be interesting to stack all these metrics. Right? Because, like, there's a lot of things you could do to make one metric make it look like it's super bleak. And we've talked about different ones each week. I'd be interested, Dylan, to see how they all stack up to each other. Yeah. Yeah. That's good point. Are they all really this bad? All the metrics we looked at?

Dylan Koch: [15:25] And like, not to beat a dead horse, but it's so local. Right? Like, my mortgage index is gonna be different than Cincinnati. Is in Spokane that is in the middle of The United States. It just depends. Yeah.

Dan Austin: [15:36] I heard they need more housing in California. Oh, Jesus. Bird off. Bird off. Is what I've heard.

Mike DeHaan: [15:43] Goddamn. Okay. Well, moving on from that. What's going on in our businesses right now? I know Dan and I have had a busy, busy week. I think we've signed around including the one yesterday. I was at six in the last seven days. All off market. You've been busy on the dispo end. You thought you were gonna have the easy part of the business. You've been working like a freaking dog.

Dan Austin: [16:03] Yeah. We've had a lot of weird stuff too. It's never like the easy slam dunk stuff. If it is, it's the shit we're buying usually. So it's been good though. Yeah. Trying to wholesale a few different random things out there, and really focusing on back to the point on the retail side. It's the same thing with the off market side. How can we show houses better and get better marketing out there for our buyers to see? Because they all like to choose a different virtual or whatever digital medium to see your deal. Uh-huh. You can't just post it in a Facebook group anymore.

Mike DeHaan: [16:31] Yeah. That's actually something that we were strategizing this morning is so we have a private Facebook group that we've started for investors. We have our email list. We have a text blast that we send out, and then we post it on our own social medias, Instagram, things like that. And what we've decided we're gonna try starting today is we have, like, a post, like, a stylized post, and we're gonna make sure that it's exactly the same across all the platforms. So people are seeing the same thing, and they're recognizing it as the same opportunity instead of having, like, email, but, like, just a picture of the house. And then on Facebook, it's just like a text post saying, hey. Sell me this house. Or it's in, like, the Facebook group. It's like a stylized one from Canva that has branding and things like that and really trying to make sure it's all the same. And my theory, just based off what I know about marketing, is that we'll increase engagement and we'll increase conversion because the general rule of marketing is people need to see something seven times where they engage with it. And so if I can make that seven times be across all the different mediums, we should theoretically get more engagement. So it'll be interesting to see how it pans out.

Dylan Koch: [17:35] Do you worry at all about, like, buyer fatigue of of how much like, oh, this looks like a deal. Someone else is gonna overpay for it. I'm not even gonna bother. For example, there's stuff on investor lift that comes in. I'm like, this is or it's not even a deal on the surface. I'm not saying you guys do that. But Yep. There's just sometimes it comes through based on who sends it. I'm like, not even gonna take waste my time.

Dan Austin: [17:54] Always. Yeah. That's a real thing. But I will say this, that's the terrible attitude to have, the wrong approach. Because even another deal I saw come out from one of our competitors recently, maybe four months ago, I just happened to glance at it. I was like, we've wholesaled a deal on that road. Like, damn, that's actually a good deal. Mhmm. Like, it it was a good deal. I would always say anything that they would say, that was not gonna be a good deal. But like, there's been enough times too where people are like, yeah, man. I was just looking at the MLS, and I saw this deal, and next thing you know, I made $100. You know?

Mike DeHaan: [18:24] Yeah. I'll say, Dylan, I think the best way to combat that is by having more engagement with your community than just sending out deals. Mhmm. Right? Like, having this nifty podcast that a lot of our buyers listen to you apparently. That's one of the most common pieces of feedback that Dan's been getting from buyers when he's the one that actually calls, and and they're like, oh, shit. I listen to the show all the time with people we've never met before. Right? Or just like us in this local Spokane community, a lot of people know who we are. And something that's was really funny was I posted my I posted a deal on my personal Facebook yesterday, two days ago, and the number of comments on it that were like, hey. I like to see you all the time. Why don't I get your emails in my, like, in my inbox? Right?

Dylan Koch: [19:04] Yeah. Yeah. Yeah.

Mike DeHaan: [19:05] Why don't I get them? And I'm like, well, send me your info.

Dan Austin: [19:07] Yeah.

Mike DeHaan: [19:07] Maybe I would add you then. Right? And so it just organically starts to build it out because you have that credibility. But because they see us active in real estate outside of like, here's a deal. Here's a deal. Here's a deal. Here's a deal. So they kinda take you a little bit more seriously at that point. Yeah. I will say

Dan Austin: [19:21] to add to that too, to make it a little more tactical on the engagement pieces, you cannot send out a deal no matter what you're doing. You can't push it out and think that that's how you're gonna sell the deal because you could post it in Facebook, email it, do all that stuff, text blast it. I still call people, text people directly, and work Yes. With But hey, did you see that deal? Hey, did you know, it's that outreach? And I probably have like, I would say on my roster right now, just in the last like ten days, probably eight to 10 buyers that are like, I want a deal right now. Need a deal right now. They're gonna buy the one deal I sent out, I don't know. But like those are the people that are like actively pursuing me. So it's like, okay, I'm gonna text you right now. Hey, I'm about to blast this out. What do

Bret Halsey: [20:01] you think?

Dylan Koch: [20:02] Mhmm. And then first one, if any Spokane buyers want cheaper real estate in Cincinnati, my you can follow me on Instagram. But the There you go. The second thing is, so I have it like, it comes down to the credibility as you as the wholesaler too, because I have a package of three properties right now that the seller is very adamant, like, get one time through this. I'm not doing multiple showings. I'm not doing all this stuff. Right? And so what I did on my first showing is I hired the appraiser that like 90% of the hard money people guys used to come with me. And so he did the appraisers on the place, and now I'd send it to I think I'm gonna be able to sell it side you know, quote unquote, side unseen, and they could sell you as the hard money guy. And they're willing to buy from me like that because they've bought deals from me before.

Dan Austin: [20:44] That's smart.

Mike DeHaan: [20:45] That is really smart. Yeah. That's I'd say, like, a next level up from bringing out buyers because that's the person that's ultimately gonna be the referee for the whole deal.

Dan Austin: [20:53] Answer the questions you're gonna get. You're basically is what you're doing. You already know.

Mike DeHaan: [20:56] Awesome. Very cool.

Dylan Koch: [20:57] Brett, How's the are you still running through any acquisitions right now? Like, what's it look like for you? Are you still pounding the phones or what's the what's it look like?

Bret Halsey: [21:04] Yeah. So essentially for me, you know, obviously I've been focusing a lot on those four unit buildings. So I'm trying to contact and get in touch with as many people as I can, kinda like yourself, as well as just being creative about getting in touch with the owners directly, whether that's, mail campaigns, which I just, I really wasn't too active. I should have been a lot more active in those because I've actually I probably sent out only less than a thousand mailers and I've gotten two deals.

Dan Austin: [21:29] Damn.

Bret Halsey: [21:29] This was from before. I was doing them sort of like custom, like I was pulling off of Word and then signing them and then doing the, mailing address on the back. So it was really time, like, intensive. And this was before I bought my first one and that's how I bought my first one. But it just wasn't, you know, easily scalable. But I'm I'm working this year. I wanna get a much better, I guess, sort of plan and system and process, you know, of sending out these these mailers and, you know, just trying to be a lot more open to receiving, you know, deals from whoever it is. So I was doing a lot of cold calling last year, which I think I might start up again soon, but I feel like I've kind of crafted this little niche of, you know, buying these these four units, trying to, you know, figure out exactly what I can get them and what would make sense and then tying back to, like, initially, like, what what I can rent them for because I'm actively doing it on the stuff that I have.

Mike DeHaan: [22:18] Yeah. On that note, what does the acquisition of these look like? Because, I mean, you're buying at a pretty rough interest rate period of time. Right? Like, you getting loans on these? Are these like seller finance? Are you getting hard money and you're able to refinance your money out? Like, what's the story, I guess, of each one?

Bret Halsey: [22:34] Yeah. So it depends. I mean, on some of them where the two most recent ones that I bought, they had leases in place, which was kind of annoying until, like, October of this year. So what I did is I got, two DSR loans that are, I think, it's seven and a half percent, which makes it a little bit easier to carry those costs. And actually for the down payments, I just sort of raised, that money from a teammate of mine. It was like, hey, I have x amount of dollars, you know, I want to place it somewhere. And I was like, these are the deals I'm working on, you know, essentially you can send me this money. We'll do a promissory note and, I'll pay you your interest rate. So kind of getting creative, whether it's something that I'll be able to turn quickly and I can use higher interest rate debt or something that might need to, you know, I might have to wait a little bit longer and I wanna be able to not have to take those as big as hits on my cash flow size that I talked

Dylan Koch: [23:21] to. Sure. Those five like, the arms, like a five one arm, are they fixed?

Bret Halsey: [23:26] These are fixed with no prepay.

Dylan Koch: [23:28] Okay.

Bret Halsey: [23:29] Somebody had to negotiate. You know? Something that they sent initially, and I was like, wait a minute. If my plan here is a refi, you know, in a year, you

Dylan Koch: [23:35] Right. Exactly.

Mike DeHaan: [23:37] You got DSCR loans with no prepayment? Yes. Really?

Dylan Koch: [23:40] Good for you.

Mike DeHaan: [23:40] That's pretty solid. Yeah.

Bret Halsey: [23:41] That's That

Dan Austin: [23:42] is super solid. That's smart.

Bret Halsey: [23:43] That's forward thinking. Just tell you

Mike DeHaan: [23:44] what, we were locking in these, like, low interest rate DSCR loans years ago. And now that we wanna sell some of these properties, those prepayment penalties suck ass.

Bret Halsey: [23:52] Yeah. I was looking at it. I was like, damn, this is not gonna make sense if, you know, I'm having to pay five points at the end of year one. I mean, I told my broker, you know, exactly what my plan was, and he still presented me this. And I was like, wait a minute here. So just about to sign. Was like, hang on.

Dylan Koch: [24:05] That's because you get some of those fees, bro.

Mike DeHaan: [24:07] Yeah. No shit. Yeah. It's bonus. Loan brokers are such a fucking racket, man. I was talking to who am talking to the other day?

Dan Austin: [24:15] Mister loan broker yourself over here.

Mike DeHaan: [24:17] Well, no, dude. Because we we we fund our own loans, though.

Dan Austin: [24:20] Yeah. I know. I'm just kidding.

Mike DeHaan: [24:21] Even when I worked at the hard money company, they were still, like, in house loans. But the way the brokers work I was talking to my neighbor. I asked who it was. Went to the Gonzaga game last week, and we were driving back, and he was telling me I was asking about how he bought his houses up here. And he's like, yeah. He's like, know, because it was when interest rates were, like, starting to peak, and they were able to, like, lock it in and all this stuff. And he's like, yeah. But my broker really did us a solid because he was like, well, if we structure it this way, you'll have to put less money down. Your interest rate will be higher, but then you'll have money to do, like, landscaping and stuff. So you really saved us a bunch. And I was like, no. He didn't, bro. That's like loan sales one zero one. He got a bigger commission for that.

Dan Austin: [24:58] Oh, yeah, dude. Oh, yeah.

Mike DeHaan: [24:59] You're paying more on interest. And sure, you got $9 put in a fence, which is helpful for sure, but understand that that was fully a sales tactic we just did.

Dan Austin: [25:08] It was a mutually beneficial agreement. Yeah.

Dylan Koch: [25:10] Totally. But

Mike DeHaan: [25:11] that's awesome, though, Brett. So these these four units, I just wanna dive in that a little bit more because that is it's interesting that you got so many of, like, sounds like similar kind of properties. Are those all I guess, are they all similar properties? Are they all over town or, like, the same dental area? Do you have your buy box pre locked in, are you, like, kind of an opportunist just with the seller?

Bret Halsey: [25:30] I would say I'm an opportunist. I have them across a few different neighborhoods of Cincinnati from, you know, some nicer areas. They command higher rents to shittier areas. But, you know, mainly, it was just being creative about finding them. Like, I think my best deal that I did last year outside of the big assignment on that 45 unit was three, four units that I bought is one package. They're on one parcel. And I saw them on Zillow and they're being auctioned and they were listed for like $420, which is like 30 a or 35 a door. I was like, this is just a screaming deal. I mean, don't know much about, you know, this is in East Price Hill, Cincinnati. A lot of investors will tell you to stay away from here. But I went over there myself, saw a tenant outside who was mowing the lawn and I was like, hey, $50, show me around the place. And he had been living there for fifteen years, showed me his unit, showed me the common areas, got me in touch with the actual, there was a manager in place. It was an interesting situation because the owner was getting foreclosed on from, I guess, a lawsuit from a tenant. They had claimed that, like, the ceiling had fallen down on their head. And this is like an out of state owner.

Bret Halsey: [26:35] They didn't know about this lawsuit that was going on until it was too late. I got a million dollar judgment. It was pretty insane, but it kind of took, you know, just being ready, and willing to buy something. I mean, it it had to have been a really good discount for me to even consider it. But now, you know, I'm able to rent those units at, you know, $8.50, $9.50 even with section eight, which is, you know, over two plus 2% plus, you know, price to rent ratio. So some some good numbers, but all different types answer your question, like, whether it's So

Mike DeHaan: [27:05] you bought those at that, like, $4.50 price?

Bret Halsey: [27:07] It didn't get bid

Mike DeHaan: [27:07] up at auction?

Bret Halsey: [27:08] It got bid up slightly to around, I think it was, like, $4.75.

Dan Austin: [27:12] Still got them.

Mike DeHaan: [27:13] But people just didn't like the area or what? And they probably

Dylan Koch: [27:15] didn't see the inside like Brett did.

Bret Halsey: [27:17] Yeah. Yeah. From from the outside, I was like, man, like, if I didn't have that insider information like, I got in touch with a property management company. I told them, like, what was going on, and they were willing for some reason to supply me like the rent rolls, stuff like that. But like if I didn't have that information, very well, it could have become something that was like a great unknown across 12 different units, you know, three different boilers, water heaters, roofs, all that stuff. So it was mainly just trying to eliminate all of the, those unknowns and do as much due diligence as possible, which like usually isn't very easy to do with like an auction property, especially like a multifamily property. But, yeah, just kind of being creative about that stuff.

Dylan Koch: [27:54] I will say Cincinnati is like four unit heaven, though. We have a ton of, like, the same brick boxes all around in different parts of town too, but there's a ton of them in our in our market. That is what happens when you're

Mike DeHaan: [28:05] a market that had segregation for, like, a better part of a century.

Dylan Koch: [28:08] Shut

Dan Austin: [28:08] the fuck up.

Mike DeHaan: [28:09] It's true. We didn't have that out here. That's why we all have single family homes.

Dylan Koch: [28:13] Yeah. This is true. It's funny because I'm thinking, like, most of them are built in, like, the nineteen twenties to nineteen forties. Exactly.

Mike DeHaan: [28:19] Say, Dylan. Yeah. Yeah.

Dan Austin: [28:20] You guys have a terrible history. Your city's built on racism.

Dylan Koch: [28:24] You know what? You can stay away. You know? You get to stay away.

Dan Austin: [28:28] Hey. I'm not trying to get out there, dude. I like where

Mike DeHaan: [28:30] we're at.

Dylan Koch: [28:30] Numbers still make sense here.

Mike DeHaan: [28:31] Awesome. Alright. What lessons do you guys have from this week? Whether that's in rentals, transaction business, Brett, she learned a cool soccer trick.

Dan Austin: [28:41] I don't know.

Bret Halsey: [28:42] Today was our first day of practice, actually, coming back for three seasons. So

Dan Austin: [28:45] Oh, really? Hey.

Bret Halsey: [28:46] I'm probably still out of shape.

Mike DeHaan: [28:48] Yeah. Oh, yeah. For sure.

Dan Austin: [28:50] I bet.

Bret Halsey: [28:50] So that

Dan Austin: [28:51] goes away quick.

Mike DeHaan: [28:52] You got any good ones, Dan?

Dan Austin: [28:53] I don't have any lessons learned as far as, like, my learning lesson. I mean, I got, you know, dick kicked a bunch this this week on rental properties as you know. Oh, yeah. It's nonstop. It just sucks. Like, I was telling Mike, like, we were texting back and forth and, like, dude, every time our rental bank account gets like, damn, dude, like, this is why we own rentals, boom, boiling.

Dylan Koch: [29:14] Yeah, something happens. Yeah.

Dan Austin: [29:16] $7,500 out the door. But I think the theme of that, just going along with having Brett on here too, is like, there's different phases of like property ownership. And Brett, I would go to as far to say from kind of what I'm hearing is you're in like that growth phase, so you need to take more risk on these things, right? You need to be acquiring and building, and knowing you might not get cash flow because you're acquiring a building, and during that acquiring a building phase, you shouldn't expect to have cash flow because you're doing just that, acquiring a building, and there's unknowns with that. Mike and I went through an acquiring and building phase pretty rapidly for a while, and now we're just trying to trim things as where we can, and finding those low performing properties that are just sinking everything else. And it's hard to let go of those too, because the market doesn't seem like it's a great time to sell rental properties in our market. It's tough, so you have to figure out how you're going to position those and sell those sell those off so that you can recapture some of your equity, pay some of your freaking prepayment penalties on your DCR loans, and still be happy with it. Because at the end of the day, we're looking at it as all just paper equity. It doesn't mean anything until it's in your pocket. And so trying to recognize that is a lesson I would would pass that on to other people.

Mike DeHaan: [30:25] Yeah. I think that's a good one.

Dan Austin: [30:27] But I had a

Mike DeHaan: [30:28] good one earlier, I guess end of last week. I'll say earlier this weekend, end of last week, about when you're the owner of a company, you shouldn't be above doing stuff that's outside of, like, your lane, if it makes sense to you, no matter how big kind you like your team gets or how and out your processes are. So the example I have with this, we had a deal that we now have under contract that one of our sales reps was closing. She's overseas. She's in The Philippines. She's very talented at what she does, but we sometimes get into these more complex conversations, and it gets a little ahead of her. Our sales team was off for the evening. They were basically out hanging with their kids, whatever. And I see an email come in with a bunch of questions from the lead. Jesse's out. Right? So it was only me, and I was basically left with, what do I do? This is a deal on the line. Do I let it sift the next guys, or do I just call the seller right away and get in get involved? And so as the owner, I don't talk to sellers very often. I haven't done that in years. Picked up the phone, called the seller, had, like, a thirty minute conversation. We bonded on a bunch of stuff. We used to work in the same Boeing facility. Was able to explain how it started financing work, signed the contract, like, five minutes after we had.

Mike DeHaan: [31:37] Right? But that's something that people can tend to be like, well, that's not my job. I don't do that role. I don't watch the CRM because I'm it's the evening, whatever. That deal, very realistically, we could make, like, 60 or $80,000 on. And if I had I that we could have missed that if I had not been willing to take a thirty minute conversation at 7PM on a random Thursday.

Dan Austin: [31:56] Yeah. Lesson don't let your org chart dictate a sixty or eighty thousand dollar deal. Absolutely. And also pay your salesperson a commission even though you have to jump in and help.

Mike DeHaan: [32:05] Yeah. Of of course. Yeah. Yeah. That is a weird question we get sometimes. Like, well, if I close it, do I still need to to pay them?

Dylan Koch: [32:12] Who shit. Just pay them. Yeah. No. I mean, I think there's a theme here. It's just like, you know, hustle a lot and then, you know, don't give up. I think my lesson for the past week is unless they tell you to go f yourselves or they say don't contact me again, don't mark them dead because we just locked up a deal that's been in the CRM for seven hundred and one days. Hell, yeah.

Mike DeHaan: [32:32] That's a good one. Yeah. Yeah. Yeah. We we might have a record coming up. That one on that you and Cody walked last week, I think it's, like, eleven hundred days.

Dan Austin: [32:40] Yeah. I know.

Mike DeHaan: [32:41] It's been there a long time. So but you're right. You know, that's one that for some reason has resurfaced multiple times. I don't know why. Right? You never wanna give up unless it's, like, just such a clear cut. Answer.

Dylan Koch: [32:53] Yeah. Because, I mean, sellers' lives change, and you just gotta be top of mind when they do actually decide to make that decision to sell.

Mike DeHaan: [32:59] Yeah. Absolutely. It's a

Dan Austin: [33:00] great point.

Mike DeHaan: [33:01] How about you, Brett? Any good ones?

Bret Halsey: [33:02] Yeah. I guess for me, like you're kinda, know, you saying I'm sort of in the acquisition phase, but it's all about systems. So I'm having stuff pop up now that I didn't before when I wasn't at, you know, 38 units. It's, you know, a pipe burst

Dan Austin: [33:14] where I,

Bret Halsey: [33:14] you know, someone's broken into one of the apartments in one of the not so good areas. So systems for like, you know, I guess rental management, acquisitions as well. Because I think, you know, Mike, on what you're saying, that acquisition process, I think it provides some safety in the sense of like, if you're able to obviously right now, I'm not as sort of like a stabilized cash flow point. So money is going out for turns, for vacancy, whatever it is. But still being able to acquire even while I'm still like working to stabilize gives me some freedom because if I can find a deal that's got $5,100 in equity, I could sell it and then tap into some of that equity and use it for some of the stuff that I'm doing right now to just enhance the current portfolio. That's kind of I've mainly what I'm working got, you know, lot I've got to do, but yeah, that's my main focus right now is just developing those systems for the management and acquisitions.

Dan Austin: [34:04] How are I

Dylan Koch: [34:04] think I'm gonna touch on Brett's point, just pulling that thread a little bit more. I think people underestimate the ability to trade up assets when you already own. Like you start with the duplex or the single family or the four unit, is I was able to buy, you know, our eight unit and 13 unit just because I had those properties where I could sell and tap into the equity for something that had a better, like, you know, cash on cash. But I would never have done that if I didn't have those properties because I didn't have, several $100,000 just sitting in the bank account.

Dan Austin: [34:31] Exactly. Or even you have cross collateralize it, give it a line of credit against a decent Exactly. Know, anything, you have so many more options because you have that equity sitting there, because you didn't stop and say, okay, I bought, now I need to stabilize. It's like, well if you do that, you're missing all those opportunities that are going to continue to allow you to build. It's like you can't you can't really stop. You just have to You have to be tactical and smart as you're acquiring and buying, but you don't wanna stop. Yeah. I think that's a good point, Dan.

Mike DeHaan: [34:56] I think where most people tend to get in trouble is when they do stop and they're not replenishing that liquidity. Right?

Dylan Koch: [35:01] Mhmm.

Mike DeHaan: [35:01] Or they or they don't, like, accumulate that at the start because they don't buy good enough deals. And then you get into a situation like Brett, it's like, sure. You scaled up a ton. But now you're, like, on the brink of disaster constantly because you have no way of ever recovering any of that equity and turning it into, you know, the thing that actually pays the bills cash. Right? Because equity is not worth shit. You can't use it.

Dan Austin: [35:23] It's on paper, baby. Yeah. Yeah. I wanna add another thing too because I I love the situation here, Brett, because you're a young guy, and you get to a point in life where you recognize you've put yourself in a position that you have to figure it out. So you own these units, 38 units, I think we all added up, do the math. And I'm guessing that you've never worked full time as a plumber, full time as a drywaller, full time as a flooring guy, right? You're a soccer player for the you know, that's your day job, you're doing that, like that's where your focus is at. I've recently run-in these situations where people are like, well, what do I do? I'm like, figure it out, like given that context. Well, how did you do it? I'm like, when you're the only person that gives a fuck about your shit, you figure it out quickly, you figure out that how to handle a burst pipe, you figure out like right now, you know, we've got this property under contract that we're buying, I've never had to test a well at a freaking house, there's no power, nothing there. I don't know, I don't even know where to start to get a well record. Yeah, right. But guess what? Nobody else is gonna care as much as me, I just have to figure it out.

Dan Austin: [36:23] And I think not being willing to just figure shit out and put yourself in a position where the only thing you can do is quit or figure it out, I think that a lot of people don't do that, and that's what separates, you know, yourself, Brett, from all the other people that are your age doing the same shit.

Mike DeHaan: [36:38] It is pretty wild, honestly, like how few people do that. I mean, even it's funny. So we we run our our scale community. A lot of you guys know this. And how often people, like, want us to, like, give them very specific answers to stuff. So I'm like, I don't know. I was like, I'll go figure it out for you right now because it would probably be helpful to know that. But just so you know, I'm gonna be bullshitting my answer because I've never done that before.

Dan Austin: [36:59] I've done it though. Yeah. Exactly. But you have all the confidence you could.

Bret Halsey: [37:03] Mhmm.

Mike DeHaan: [37:04] Yeah. Like, people I mean, right now, we have an opening question in there. Somebody asking about what Postgres people are sending. I was like, I'll send you the one that we just sent. I designed it on Canva in ten minutes. Hopefully, it works. I guess we'll find out.

Dylan Koch: [37:17] Yeah. Yeah. And I use like the standard ones on most male Yeah. Websites anyway. So

Dan Austin: [37:21] Yeah. Yeah. There's the other element of that. Don't overcomplicate.

Bret Halsey: [37:24] That was my dilemma for a while just making that making that jump. I mean, I I could, you know, very comfortably run the numbers, but it's just, you know, I guess, in the lead to soccer. You know, if you're playing FIFA, that's not gonna really teach you how to how to play. You know, you kinda just gotta

Dan Austin: [37:36] Just kinda gotta do.

Bret Halsey: [37:37] Jump right in. And something that actually stopped me from sending those mailers for a while was, like, I had success with the first batch, but, like, really didn't know what it what it was. And it was kind

Mike DeHaan: [37:45] of just

Bret Halsey: [37:45] the thought of, like, having to start this whole campaign and tracking all that stuff that was making me procrastinate. But at the end of the day, was like, man, just send in wire and really

Mike DeHaan: [37:55] If you got two deals off your first thousand mailers, I can tell you exactly what it was. It's called luck. And that's what you

Dan Austin: [38:01] Yeah. Yeah. Yeah.

Dylan Koch: [38:03] So People very much underestimate how many mailers it actually takes to do a deal. So Totally.

Mike DeHaan: [38:08] So for context for you, Brett, our average is about $3,500 worth of mail for every deal. So that's about 4,000 pieces per deal. So the fact that you pulled two off of a thousand is hitting way above your weight class for sure.

Dan Austin: [38:20] Sick, dude. That's the best kind of luck you want.

Bret Halsey: [38:23] Yeah. That was great. It was great because I was just starting, and I was like, man, this thing works pretty well.

Dylan Koch: [38:28] This is easy. Yeah. It's

Dan Austin: [38:29] a drug. You're

Dylan Koch: [38:30] like, woah.

Mike DeHaan: [38:31] I was like, I don't know what people are

Bret Halsey: [38:32] talking about, man. Like, just write a couple letters

Mike DeHaan: [38:34] and stuff. It's good you were grinding though before that because you still have developed that work ethic. The worst thing that can happen is you have the newbie that's kinda lazy, that has that same luck because they never learn to work. Yeah. Right? Because now their expectation is like, well, I had two deals off the thousand that I spent. I'm gonna expect that every single time, and they don't have, like, the the stick to itiveness

Bret Halsey: [38:55] Yeah.

Mike DeHaan: [38:56] Right, to to actually grind stuff out.

Dylan Koch: [38:58] Mike, can I share a story that I think you and I shared a while ago? Yeah. It was a previous group that we were kind of all in, and some guy had posted in the Slack channel, like, you know, gonna send out my first round of mail, asking similar questions. And then like, I don't know, four months it went by, and someone had followed up like, hey, how'd the mailing go? And I was like, oh, I didn't I didn't know which credit card points did you pull from, so I didn't send the mail out. And it was like, that is the antithesis of who you want

Dan Austin: [39:23] to be. My gosh.

Dylan Koch: [39:24] Right? It's like, it's action first, and then figure out the logistics.

Dan Austin: [39:27] So Yeah.

Mike DeHaan: [39:28] That's the worst. Yeah. I mean, that's a lot

Bret Halsey: [39:30] of people, though, man. Yeah.

Mike DeHaan: [39:31] So awesome, guys. Well, we'll watch out to wrap down here. Brett, thanks for coming on, man. Any socials you wanna plug? Anywhere people can follow you along, find you, I guess, besides ESPN eight, the Ocho, or whatever MLS appears.

Bret Halsey: [39:43] Yeah. For sure. It's red holy seventeen underscore seventeen on Instagram. I also have a my business per se is Touchline Investments, which is kind of, you know, another league of soccer, the Touchline. But yeah.

Dan Austin: [39:56] Love it. That's a good name.

Mike DeHaan: [39:57] I like that actually. That has a good, like, ring

Bret Halsey: [40:00] to it. A lot of people tell me they don't even, like, realize it's for soccer. They're just like, it's a cool name. I'm like, yeah. I mean, I guess. But

Mike DeHaan: [40:07] For some reason, it makes me think of, like, military. I don't know why. Touchline? Touchline. Touchline. Yeah.

Dan Austin: [40:14] Yeah. Lot of people don't know what he is.

Dylan Koch: [40:15] Dan's former military. He's like, I

Dan Austin: [40:17] don't pay FIFA, so I don't know soccer.

Mike DeHaan: [40:19] Yeah. Yeah. Dan Dan hates all sports except for wrestling because he likes to hug men.

Dylan Koch: [40:23] Yeah. And the and they're singlets.

Mike DeHaan: [40:25] Yeah. Exactly. So awesome. Well, Brad, thanks so much for on the show, Everyone, thanks for listening, and we'll see you guys next week.

Dan Austin: [40:31] See you. See you.

Mike DeHaan: [40:34] Thanks for listening, everyone. If you want more from us, you can shoot us a follow on Instagram. I am at Mike underscore Invest. Dan is at Investor Man. Dan and Dylan is at Dylan underscore Does underscore Deals. Choose to follow and send us a DM to let us know what you think of the show.