Should You Take Your Real Estate Business National or Stay Local?

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

Dan Austin: [0:37] a good fit. In this business, every five to seven years is when you're gonna make a shit ton of money. That's how you're gonna become rich.

Mike DeHaan: [0:44] What's going on, guys? Welcome to today's episode of the collecting keys real estate investing podcast. This is the show where you should make massive income, not just passive income with your real estate investing business. And we are down to two hosts today with me, Mike DeHaan, and my original cohost here, Dan Austin.

Dan Austin: [1:03] The real cohost.

Mike DeHaan: [1:03] The real cohost. Yeah. Not not the, stepparent, Dylan, that's come in for the throuple.

Dan Austin: [1:09] Whatever Dylan is, his step step brother, sister, stepsister? Stepsister.

Mike DeHaan: [1:15] But we are prerecording this show because I head to Southeast Asia here next week, and we wanted to get a little backlog. So I'm gonna be out of town for a little bit. And so Dan and I wanted to get on and record this episode where we are talking primarily around some changes that we are making with our real estate business because it's something that we've been talking about, I guess, like, loosely on different shows, and it's a it's a big topic within our scale community. But we wanted to dive kind of into some of the details about why we are downscaling our real estate wholesaling business and kinda just, like, changing our model and our team a little bit to make try and make things a little bit more, I don't know, I would say, like, efficient because there's just so so many challenge come in come in with this business as you grow. And so I guess, like, to give you the long story of it first, over the past several years, we built out a national brand, and we had, at one point, a very large team. We had, what, like, six sales guys, I think, at peak. Like, they're actual closers plus a whole lead management team plus a transaction team plus a manager that ran all of it. And we had these partners all around the country, which I think max were at, what, in sixteen, fifteen different markets at the same time?

Dan Austin: [2:28] It was like, yeah, 15 or 16 markets for sure. Yep.

Mike DeHaan: [2:31] Yeah. And we scaled up, and we were doing a lot of deals and a you know, doing pretty dang well with that. But there was always complexities with it, and, you know, we would have deals going sideways. It would be hard to handle due diligence, keeping up with the laws in different places, maintaining buyer relationships and everything. And we ran that for two years and did fine.

Dan Austin: [2:53] We had some really good years, and we had some okay years. And on average, it was a good it was good business. It was profitable every month of the year, basically.

Mike DeHaan: [3:02] Yeah. Exactly. And but then earlier this year, we joined up with Cody, you guys have heard on this show, and his sister. And we started like a little local operation, which kinda just felt like getting the band back together. Because they were super active here years ago in Spokane, then we were as well. And we wanted to start up a little local business. And all of a sudden, we just started printing money that felt significantly more profitable because it was on paper and seemed to take a lot less headache, a lot less time, you know, running a team, dealing with HR and management and everything else. And we kinda left big picture. And over the course of two quarters, we almost doubled the amount of take home that Dan and I were getting from that endeavor as we were from our national business. Yep. And, ultimately, it came down to and a lot of this was fueled by my my couple visits I've done to acquisition.com to hang out with Alex Remosi's team. Why are we trying to sort of force some of these things that are seem to be really challenging to grow and aren't making us that much money for the stress that they're causing? And so going into 2025, our big goal is just to go all in on the local business. And one of the things that was so interesting, and Dan, I know you have some of the numbers on this, is just, like, looking at our difference in, like, actual KPIs and how much they differ. So, like like, what was our difference in, like, cost per per deal across the two things?

Mike DeHaan: [4:32] And, like, the actual profitability and stuff is just insane for the volume that we're doing.

Dan Austin: [4:37] Yeah. We have nationally a cost per deal of 4,800, which is pretty high, I would say. It's pretty high. It's not high high, but it's high average.

Mike DeHaan: [4:48] Yeah. Like, you know, it's a lot of the larger operators you've had in the show have been in like that middle to upper four So thousand it seems to be about standard.

Dan Austin: [4:56] I don't get scared at 4,500, 5,000. If I would get scared at $67.08, you're kinda like, okay. Something's wrong. Mhmm. But, yeah, 4,800. So definitely decent, I guess. It could be worse. And then I think our average profit per deal was I don't even know what it is, actually. What is our average profit per deal on this one?

Mike DeHaan: [5:16] Well, it's for Nationwide. So we had different kind of JV splits that we had run.

Dan Austin: [5:19] Oh, that's right. Yeah.

Mike DeHaan: [5:20] Right? And so it's about 15,000 on average. So like a three x return plus commissions and everything for the sales team, plus the closer, plus the TC. And so we would have Yeah.

Dan Austin: [5:30] I would say there's like somewhat inefficiencies in the structure of going national. There's a great thing about it, and that is there's a lot more deals to be had. Mhmm. So there's a lot more at bats. There's a lot more opportunity for, like, the big swings, the big wins, the big haul runs, because you're in multiple markets trying to grab, like, the low hanging fruit. But as we grew, our cost per deal like, our marketing metrics is great. Like, that's fine and Danny. But the the piece that doesn't get captured is the overhead cost in running a larger enterprise business, where you have a marketing an actual, like, marketing for your business, not just marketing for deals. Marketing for your business, you have all the staff and back end team costs, because now you can't just have a VA doing some of your your easier work that's on the back end of your business just to catch you up. You have to have, like, we still use VA type employees, but high skilled VAs doing very specific jobs, like data analyst jobs, lead management jobs, transaction coordinator jobs, and all those sorts of jobs that once you're at that scale, you can almost do the same amount of deals, but the complexity of doing it with 20 different title companies and all these different styles of buyers and these different rules and laws, it becomes somewhat complex just to track it all.

Mike DeHaan: [6:39] Yeah. Just tracking, it's complex. And then because those all those inefficiencies, you have a higher drop rate. You know? So our drop rate last year was really bad. It was like a 40% almost. This year, it's been doing better. We should be, like, around our 30% drop rate, which we've sort of considered our standard. But comparing all these things to Spokane so, like, I guess our return on ad spend with all that technically at top line revenue was with just over three x, three and a half x, let's say. Yep. Yeah. Three x share. Plus we had the bloat and everything else, but we're doing a high volume. So we're making, you know, decent profit on our total profitability. But I figure it was about 25% overall when we looked at our books last year. I don't know where at this year.

Dan Austin: [7:19] I think at the heyday probably in our in our biggest when we were because the other thing too is with when you have a larger team, the scale your scale of efficiency actually helps. The more clients you have, the more profit you have, more profit percentage you have to whereas we are as we wind things down or as we don't bring on new markets and close markets, our profitability kinda shrinks down to, oh, maybe 15% right now.

Mike DeHaan: [7:42] Exactly. And then this is one of the things I I really spent a lot of time discussing with acquisition.com's team was they, like, went through the different business sort of setups that we have. And the Spokane one was just so much more profitable.

Dan Austin: [7:55] Yeah. Yeah.

Mike DeHaan: [7:56] And, yeah, we are working in the business a little bit more. I guess it doesn't feel that way. It feels less stressful. What's our cost per deal and stuff at in Spokane?

Dan Austin: [8:04] Spokane, we are at a cost per deal of $2,500. We have a 7.5 x on ad spend for gross revenue to actual profit, which is 22 k per deal right now. So much healthier margins on that. And to add to that, the overhead in our business is like zero.

Mike DeHaan: [8:23] It's pretty much nothing. We have like a VA. We have one of our chief staff in there and then some systems. And the I think the thing that's so different is because we have four owners in the company who are all very, very experienced. Right? Like, there isn't the like, I need to kinda crack the whip and keep people on track because we're all equally aligned.

Dan Austin: [8:49] Yeah. And we can all do each other's job at some degrees. Everybody's better at something than than the other person. But, like, if, you know, you're going to Southeast Asia, if you can't do your job, I could do your job. Cody could do your job. Alec, you know what mean? We all have the ability and understanding of the business because we are experienced. And we're all aligned incentive wise, like, to make money and as much as we can.

Mike DeHaan: [9:11] It's almost like a little co op almost because we've all you know, even though you and me are kind of on the back end and they're on the front end sales, we've all closed deals at this point. We've all dispoed deals. We've all been involved in different parts of, the organizational back end, whether it's the finances, the little tracker sheet I have pulled up right now. Even though Cody's the sales guy, he's the one that built it. Right. Or the one that made sure the data was correct. Yes. Right. And it's just like it just is all aligned that And it's been an interesting, I would say, experiment, right, about, like, what profitability actually looks like like and feels like within a company and the fact that most of the time more is not better. Right? Because, like, I don't really care if you have a company that's making $10,000,000 a year, but you're not making any money. Yeah. It doesn't mean anything.

Dan Austin: [10:01] You know? Still working. Right? Like, if you like, there's the the vision is is that you build a business big enough to to be able to put an operator or somebody involved that can run the day to day, and you can go fuck off. That's just really not the case because, like, you gotta have quite a bit of EBITDA to be able to do that. Right? So if you're if you're making $10,000,000 a year, you need like a million dollars in EBITDA before you can really get to that, having that person where you're still just you're not in the day to day decision, but you're kind of at the macro level decision making, and we've kind of known that. So if you step back and you're like, well, I can't leave my business on autopilot until I'm a certain size, then why don't you just go back in it and work in the business a little bit? You still work on it, but work in the business and make the same amount of money. Probably working slightly less.

Mike DeHaan: [10:45] Honestly, yeah. It it definitely feels that way now, especially because we kinda know what we have to do and all the systems are built. But and it's funny with wholesale businesses too, like wholesaling flipping businesses, because I think that they all have this natural ceiling. Because I've I've seen similar patterns with so many different people that I've talked to recently. I had a call with Cam Cathcart, who's Got it. You know, we he we had him on the show. He's Brandon Turner's cohost for his show, and he has his virtual business that he does. I talked to several other big name operators who I won't necessarily name because I they don't know that I'm recording this, but Cam does, so I'm gonna keep naming him. And they've all sort of seen these same patterns as they scaled to that, like, $15.20 plus deal per month range is all of a sudden you're doing more and more deals. You're taking on more downward risk, especially if you're racking up credit card or line of credit debt you're putting on marketing. You're getting hard money loans to flip properties. You're doing all these things. And now you have a team that is slightly bloated because you have redundancy in it in case somebody leaves. You're not, like, left out to dry. And the profit margins get smaller and smaller, and you get, like like you said, kinda before the show, Dan, you get to that, like, standard small business profit percentage of 25%.

Mike DeHaan: [12:02] But the problem is is because we're an economy dependent business, we have downward risk associated with that. Right? Like, it's very different from, like, if you're selling widgets where you have, like, kind of fixed costs and, you know, yeah, you gotta buy your inventory and you gotta sell But, like, our inventory actually goes down in value with the economy. It's not easily liquidated. It's not liquid at all. Right? You can't wholesale it with some real estate, but it's not like wholesaling a bunch of widgets for raw materials. Yeah. Or you're like, just like take these from me. Right? Or I need to I'm gonna run a sale at 50% off to, like, sell all my bullshit. Like, you can't do that when your entire inventory is tied to debt or they're tied to, you know, things that there's isn't a buyer for because of the economy.

Dan Austin: [12:45] Yeah. The risk the risk of property ownership is much higher than you opening up a brick and mortar store where you sell cupcakes. Right. Great great business model. I love cupcakes. I'll go into those fancy cupcake stores and spend $10 all day on a cupcake. But if they aren't good cupcakes or the economy is bad, I need to pinch pennies. I'm not gonna do that. And, well, you just have flour and rent. Right? Where us, we have to buy these big giant assets, generally get large amounts of high risk debt, high interest debt. And it's you just said, it's not a liquid thing that you can sell or close-up and walk away from. And so when you have those normal margins, say say you're at scale and you're making a 20% margin, you're happy with your business, but then things turn, all of a sudden, that big giant risk of this box that you own, the shitbox, because you if you're buying it off market at a discount, it's distressed properties by a shitbox, like, that is going down so fast that your fifteen, twenty, whatever percent margins aren't enough to capture and save your it's like not a safety net for you. So you really have to think about that as you scale up, and you keep shrinking your margins because you have to have overhead. If you wanna scale a flipping business, for example, this is the one that's really common.

Dan Austin: [13:53] The flippers that go up and down, you need to be able to scale up and scale down and understand how you flow with the market because that's how you take advantage of the boom times and you don't bust. But like what happens is, say for example, you're just a single dude. You say you got a job, and you wanna flip four houses a year and make $30 each time, $120. You could literally do that in your spare time. Make a $120 extra as long as you can find the deal and get the deal. That's a great side hustle that takes you almost no time. But you say, I wanna go from four to eight, and then from eight to twelve, now you gotta you start getting into the spots where you need probably need a project manager, probably need a transaction coordinator. You need you know what I mean? You gotta start paying for more different things that you might not have paid for. You might have to start paying for property staging and all these different things that you didn't have, and your margins start going down and your overheads start going up. And now you're kind of in that vicious cycle of, like, more isn't more. More is actually less for you until you get to this, like, mythical scaled level. And if you don't ever reach that, more actually is less. And for 99% of people that I've seen scale these large flipping business or wholesale operations where they have these large offices, they actually more is actually never more. I think that's the philosophical question like you and I have been playing around with the last, you know, four or five months.

Mike DeHaan: [15:03] I hope you guys are enjoying this episode. We are seriously trying to grow this podcast so that the voice of what it really takes to grow a real estate business becomes kind of the norm versus the guru get rich quick b s that everyone is fed on a daily basis. With so many podcasts out there, it is hard for us to get discovered on our own. So a quick ask. Please share this episode on your social media accounts. Be that a real story, whatever. And if you tag me at Mike underscore Invest, then I will give you a follow, and I will also send you a DM so that we can have a little chat about your business and any ways I could potentially help you grow. So again, please share it on your socials. Tag me at Mike underscore invests, that's with an s at the end, and I'll follow you, and we can have a little DM and convo about your business. And maybe I can help you grow a little bit, or you could just say what's up too. That'd be awesome. But appreciate everyone, and thanks so much for helping us grow. Well, I think that that whole scalability issue. Right? That that's also the like you said, that's the opportunity here because you can be a one person show that flips, you know, 10 houses a year and makes a couple $100 pretty easily because he's outsourced.

Mike DeHaan: [16:09] But then going beyond that's nearly impossible. And I think that's why you see a ton of people that get into coaching or they start like, you know, like we had Simply Leads. Right? You start like these other businesses is because you recognize the scalability problem with the real estate business because there's such a slow transaction time Mhmm. On the you know, when you get paid. There's all these challenges and the downward risk that you face. And as you learn about business, these other things feel easier. Yeah. Right? Which I would say they're fundamentally not. I think that growing a coaching business fast past couple million dollars is probably just as hard as growing a real estate business past couple million dollars. So But, again, it goes down to the difference that you're not taking on debt. You're not taking on risk Yeah. I know. In order to do that. Right? And if the economy goes sideways, sure, your revenue might go down, but you're not gonna be going into debt that you can no longer cash check for.

Dan Austin: [16:58] Totally.

Mike DeHaan: [16:59] Right? Unless you make a bunch of bad decisions with your, you know, marketing spend or whatever you do.

Dan Austin: [17:03] And I think simply that you brought that up as a great example of where we call it a cash flow business, because there's zero infrastructure around running a cold calling business. We were already using it. We bought the company. And ultimately, the only investment we would have to make and do is marketing to grow the business. The system's not I mean, you you add add staff as you grow. That's a great cash flow business. The margins do the same thing as anything else, and you really gotta be committed. What we found, we actually decided to sell the company, which we are, it's, you know, under contract to sell, is that, like, you really have to want to grow it and be into that, and like take the time to actually focus on that. And if you're not gonna do that, then you're just it's an injustice to all the staff and stuff. And that's why we decided to sell and and kind of narrow things down to where we know our highest time, I guess, our highest value for our time.

Mike DeHaan: [17:51] Yeah. Highest time value. Yeah. It's it's just in the local business. You know? And then, like, with the scale community and stuff, the funny thing is is we started the scale community for the wrong reason compared to most people. Whereas like most people, they start it because they're like, hell yeah, this is how much money I'm going to make on having recurring revenue from people. Like when we started it, I mean, was because we started this show mostly for fun and we ran it for six months. And then we had GoBundance people that, if you remember, where they reached out and they were like, hey, would you like do a little call to show us what you do? And we had like 30 people show up.

Dan Austin: [18:27] Yep.

Mike DeHaan: [18:27] And after that, they were like, hey, you guys should like start like a coaching thing. So you can, like you could get paid for this. And we did. Yep. And it was mostly because we had fun in helping people, and so we've slowly grown it. And now we have this really awesome group of people that we do deals with together. Right? Like, is a very much mutually beneficial thing. Our churn is almost zero because everyone wants to be there, they're not getting hard sold into it. Right. But those other businesses, they kind of just come calling after a while when you're doing this real estate business. And then the problem is is once you kind of understand that, one leads to the next, it becomes like a slippery slope so, so fast. Does. You know? And and the funny thing is is there's been quite a few other operators that we've had on this show over the past couple years. Like, really good people that I know were very successful that have reached the same conclusions that are now starting coaching programs or doing these other businesses or different things. And I'm like, we're all just on the same freaking treadmill. Yep. Right? And then, like, looking at people that have been around the business for a long time, like Aaron and Mooseghi down in Austin, I remember talking to him about this when I was down there, like, I don't know, six, eight six, seven months ago, whenever that was.

Mike DeHaan: [19:35] And he said this, and I didn't really think about it at the time. But the whole business model for him because he's a very, very high volume, high quality flipper down there. And he was saying that, like, the whole point of getting good at it is to be able to survive for, like, the twenty twenty ones where he made, like, $50,000,000, wherever it was. And the rest of the time, yeah, he makes, like, a million dollars a year, you know, million plus, couple million, whatever it is, does well for himself. But he's not, like, crushing it, and he's just waiting for those big opportunities. And I think when you're in an asset driven business like real estate, that's honestly the play. You know? It's not like you're selling you know, you created Yeti, and you just, like, keep growing your sales, and you keep making new products, and you can have linear growth because people are gonna always wanna buy fucking water bottles and ice chests or whatever. You know? It's not gonna go away. But when it comes to real estate, like, you will have those natural cycles, and it's unavoidable. Unavoidable. Absolutely. You know? And so I think it's important. Like, if I look at, like, our business, I think the the best way to go about a wholesaling flipping company is to get really good at it so that you can make a lot of money without it, like, being some insane call on your time. And then collect those revenue and invest it into other businesses that are, like, in tangent or, like, or into, you know, your portfolio or things like that and use that to escalate your asset growth. Right? Or, like but I guess for me, a lot of it's gonna be pushing it into, like, a hard money company that we have.

Dan Austin: [21:04] Mhmm.

Mike DeHaan: [21:04] You know, we have bought a lot of properties over the years, which have allowed us to do pretty well in just like our general wealth generation. Right? But if you're just trying to do it as, a full cash flow play, there's probably a lot of better businesses that you can do that'll have, like, a lot more clear growth.

Dan Austin: [21:20] Yeah.

Mike DeHaan: [21:21] They'll take longer to make, like, your first buck. Right? Because, like, you know, if you go and you start a a plumbing company, you start selling widgets, it'll take you a little bit to be able to make real money off of that. But you will actually be able to get past the ceiling because there's, like, a much clear lead generation and sales model, and you can run traditional marketing systems and funnels and stuff like that. And it's not like you're gonna be as tied to, like, this larger economic picture quite as badly.

Dan Austin: [21:49] Yeah. Yeah. If you wanted to go start another business actually, somebody just asked me about this. I was like, yeah. You could pro give it about ten years. That would that plan would probably work out. Start a HVAC business, build it up till you can sell it, about ten years. Give yourself ten years, and you'll probably be able to sell it to if you do it with intention, sell it to a private equity company and have a multi 7 figure, $5.08 figure exit. If you're good enough to grow a business that big, and if the timing works out for all that stuff. The cool thing about this, you said getting good at this business, getting good is important. And I think getting good at managing your business and your cash flow in the wholesale business is very important, because I can see it on a lot of people's faces in the scale community. You know, when they're trying to make decisions, they're making it from a a place of fear, because they don't feel like they have the consistent lead flow to do the deals that they wanna do to reach the income they want. So, you know, in that case, they won't think more is better. I think the thing for us in our venture here locally is there's just not really it's like we know we spend the marketing. It'll come back around.

Dan Austin: [22:50] And

Mike DeHaan: [22:51] There's confidence. Right? At, like, such a high level.

Dan Austin: [22:53] Confidence. And it's just when does it come around is not always known. And I would add that, you know, understanding how to manage your cash in the business. And what happens is people are fearful that they're not gonna get another deal, so they take what could be a $30,000 wholesale wholesale fee, and then on a good day, to make a $60,000 flip out of it. But it's a four or five month deal or deal, and they stop. They don't really stop and think about how that actually affects the rest of the cash flow in their business, and it does. It distracts you. Lot of people we've done it before in the past. This is how I can I can speak from a position of, like, experience because we've done it, and that is distracting from the main core of your business, which is finding good off market deals? That's all we're doing. The flipping is a is another result. The the disposition and wholesaling of those good deals is the main focus of actual cash in this business. Because otherwise, you can sink yourself really quickly. You can't get good. And so if I had to articulate that in a short version is like, get really freaking good at managing the cash in your business and understanding that, and don't manage it from a place of fear.

Dan Austin: [23:58] And because you could you'll make bad decisions. We've all done it.

Mike DeHaan: [24:00] Totally. Yeah. And one of the things other that's also funny too is looking back at, like, this little shift is there's always this view with business of you need to, like, delegate everything. You need to, like, work on your business, not in your business. And we're kind of voluntarily going the other way. Right? I'm saying we were gonna work in the business a little bit more. Yeah. And we're gonna make more money. And the funny thing about that is that, like, I'm looking at our current setup with our local business, and I definitely don't feel busier now than when we were really trying to grow, like, the larger team. Mhmm. We're making more money. But also too, if you actually look at what we're doing, it's the same stuff as we were doing when we were trying to, like, build things out in, like, 2020 and 2021. It just feels less busy because our tolerance for, like, workload has changed.

Dan Austin: [24:53] Right.

Mike DeHaan: [24:53] Right? It's, like, adapted. Like, it's like going to the gym when you first start lifting weights. You get really sore if you go, you know, twice or three times a week. Now you can go every single day. You're not gonna get that sore just because your workload adaptation, your your tolerance for that has changed a lot. Totally. More efficient. We have, like, a higher knowledge base. And so I think that that's, like, something that makes sense to do probably every once in a while is to kind of do a big step back and look at, do you actually need to be adding on the redundancy and the staff and

Dan Austin: [25:23] the

Mike DeHaan: [25:24] system stuff? Like, you think, no. Are you just being lazy? Yeah. Because also too, the one of the things that was funny was when I was working, quote, unquote, on the business all the time and the team was kinda doing the day to day, what I would find myself doing because I needed to be trying to find more partners, trying to grow scale, trying to do all these different things is, you know, I apologize to everybody who's been watching my cringey ass reels I've done over the past couple years. Right? Like, all these different kinds of content and stuff that you're just, like, kinda reaching for, trying to come up with, like, topics and hooks and all this bullshit just so that you get more eyes on your business.

Dan Austin: [25:54] Yep.

Mike DeHaan: [25:55] Whereas, like, now one of the things that's very fascinating is on, like, the content side and different things that we do, like, for the show. It's much easier to have things to talk about, which actually creates value because it's not like a theoretical thing that you're trying to, like, dictate or teach somebody, but you're we actually are, you know, documenting, I guess, instead of just like Documenting the journey, baby. Yeah. Creating content. Yeah. And the audience has grown. The show's grown a ton since we've made this transition over the past couple months. The outreach that we get, like, the engagement is so much higher. And it's really made me realize how many, quote, unquote, experts out there are completely full of shit, and you can tell just, like, if the fact that all if all their content that they create is trying to, like, only teach you how to do things Right. I can guarantee you that they're not still doing it because, you know, either their business is fully, quote, unquote, delegated. They're grasping at more money that they need you to pay them.

Dan Austin: [26:54] You mean if they, like, change, like, products and things all the time and pitch the newest, latest, greatest thing? Exactly. Yeah. Is that the kind of thing you're talking about? Grasping?

Mike DeHaan: [27:03] Exactly. Like that. I don't know if the Friday folks I recorded about that will be out yet or not, but when this one comes out

Dan Austin: [27:08] Oh, you have one? You have one? Did you record one?

Mike DeHaan: [27:11] I I did record one.

Dan Austin: [27:12] So Oh, you're so sassy.

Mike DeHaan: [27:14] I just I just can't get over it, dude. It's just I had this Instagram beef with the highs about how they're freaking grifters, and they got as far as to, like, conference call me, which was hilarious.

Dan Austin: [27:26] You know what I want? Because I I haven't met them in person. I have no ill will personally against them. I don't know them to say that, but I do have some opinions on how they run their business.

Mike DeHaan: [27:37] All the stuff that they talk about with their business, like, doesn't quite make sense. And the fact they're always have like a new platform, a new marketing thing, a new whatever that is now their super They're top just grifting for money. Right?

Dan Austin: [27:47] Totally. And the funny thing is is and and we can digress off this, but like, I mean, we've been observing you for years and all this stuff that has been pitched like, well, that's garbage. That's garbage. That's garbage. Like, that's we just know because we've been in the game long enough. We've tried enough things that you know, like, people and we've talked to people personally in our networks that have used some of that stuff, and it's just like, yeah. I told you not to do it because it's garbage, but you some people have to learn the hard way. And when somebody's pitching things and then they're going off and talking crap about the same thing they're pitching, then you probably definitely shouldn't follow what

Mike DeHaan: [28:17] But they're everyone has a hobby. If you think about, like, whatever your big hobby is and you meet someone that's kind of like a casual on that hobby and they, like, try to talk to you about it and you just know that they're, like, have no idea what the fuck they're talking about, That's how we feel with every new, like, real estate

Dan Austin: [28:34] Yeah.

Mike DeHaan: [28:35] Like, scheme or, like, marketing thing or secret and stuff people have or just like, dude, like, I know that you really think you're into the NFL, but I know every player and every team, and you're trying to bullshit me about something right now. That's what we feel with every all the real estate Honestly,

Dan Austin: [28:49] because a lot of the stuff we've tried, but then also it's easy to spot a gimmick when you see a gimmick. You know what I mean? So it is kind of funny how a lot of people are funneling naturally towards what we've been doing this last, I don't know, since 2019, and we haven't changed the direct mail pieces and all that sort of stuff. It's kinda funny how that all works out. But

Mike DeHaan: [29:07] And it just keeps coming full circle too. Like like, everything just goes round and round and round and round. And, like, like, a lot of the the gurus and stuff that are big right now, those same people existed in 2019. There were just different names and different offices.

Dan Austin: [29:20] Exactly. Exactly. Different brands.

Mike DeHaan: [29:22] Yeah. But they had the creative finance guy. They had the ones that were, like, the top wholesalers that had all the marketing secrets. Right? They had all the different groups. They had the sales coaches. All those people were big back then, and they're no longer around. And the same thing will happen over the next three years because all those people, their businesses at its core fail, and they're only Internet personalities, and that only lasts for so long, especially when you start bullshitting the entire population.

Dan Austin: [29:47] Should we make a prediction that Pace Morby won't be around in twelve months?

Mike DeHaan: [29:51] I think that that's absolutely true. I mean, I've I've heard to the grapevine from some very reliable people that there's a class action lawsuit against sub two

Dan Austin: [29:59] Oh, no.

Mike DeHaan: [30:00] Wonder why. As well as the the title companies that are allowing all these transactions to go through.

Dan Austin: [30:06] Knowingly doing things that are a little bit, you know, scrupulous.

Mike DeHaan: [30:10] That are knowingly doing things that are basically fraud. Now and it's not like everything. You can kinda get away with doing some janky stuff until you start doing it a

Dan Austin: [30:18] lot. Yeah.

Mike DeHaan: [30:19] Right. Like, honestly

Dan Austin: [30:20] putting it on Instagram.

Mike DeHaan: [30:21] Exactly. And then all of a sudden, you have your brand tied to thousands and thousands of these sub two transactions, because the problem is too, you also have all these people that are wholesaling them to unapproved buyers who are then failing. And you have these sellers that are like, woah. Woah. Woah. What do you mean I'm getting foreclosed on? This Really? This guy told me that I was good because he had this track record, and he's like, gonna make sure that I'm taken care of. No.

Dan Austin: [30:43] Could you imagine being in court with all the evidence stacked against that guy? Just because it's all on YouTube, it's all on Instagram, and like, even if he was being like if he was like kind of embellishing how much of the stuff he's doing, it's still he's he's the one that said it, and he put it on the Internet. So it's just like, well, did you not say that?

Mike DeHaan: [30:59] Yeah. And I don't know how all that stuff's structured, like if they can go after Pace directly, but they can definitely go after the community, like the company. They can definitely go after the title companies that he owns that is putting together these deals. Oh, yeah. Right? And so I guess the what I've heard again from some very reliable people, I would I would 100% believe are cut in on this, is that if he's been doing content recently about how he's thinking about retiring, and he's gonna, like, get out of the game and stuff. And a lot of people are saying that that is that is him setting up to be able to just kinda like disappear if he needs to, if things get really janky.

Dan Austin: [31:35] Yeah. Exactly. People won't be like, what happened to my boy, Pace?

Mike DeHaan: [31:38] Yeah. Exactly. Oh, I'm retiring. Retiring. I'm just hanging out with my kids on my ranch in Montana, which I'm about to fire sale because I'm getting sued to hell. Thought he was

Dan Austin: [31:47] gonna just go hide there. He got a sub too, though, for a dollar. Fuck. Yeah, man. So, yeah. Anyways

Mike DeHaan: [31:52] I don't know. But but again, all those guys will be gone, and the ones who'll around will be the ones who actually learn how to build a sustainable business. So

Dan Austin: [31:58] Absolutely. It's about being in the game long term so you can find those big upswings. Because you know every five to seven years is when you're gonna make make a shit ton of money. That's how you're gonna become rich in this business. So I feel like we've been going through this cycle now, because we did. We kinda started, and you and I both started real estate at a time where it was like, meh. Like, it's cool. Like, it's getting like a lot of steam, bigger pockets, and all that stuff. There's a lot of steam around cash flow and buy and hold. And then 2020 hit and freaking it was just a launching pad, and now we've kinda just been this, meh, it's okay. There's money to be made. If you if you're experienced, you know what you're doing, you can kinda hold tight. And then I have every belief that in the next year, two years, three years, at some point in time, I don't know when there's gonna be another huge upswing in real estate, and we're gonna have to take advantage of that opportunity.

Mike DeHaan: [32:43] Yeah. Totally. And we'll be in a place to do it because Mhmm. We've continued to refine and adapt the business, you know, and and we are setting ourselves up to be able to operate in different market conditions. You know? Exactly. Again, it's to get that consistent high income that we're able to get plus the opportunity to cheap assets, which is where money can be made at a high rate. And then, you know, on a personal finance level, being smart to invest that money Right. Put it towards things that will continue to grow. Like, that's how you get wealthy. Absolutely. Right? I think there's so many people that think that becoming rich has to be from, like, these really high capital events, selling the private equity, or, you know, having a business like, you know, Alex Hermosy bit Alex Hermosy's gym launch business, they're making, like, $10,000,000 a month or whatever. That's such an insane unicorn of a situation that shooting for that just doesn't make sense. Right? And especially when it comes to a business like wholesaling and flipping real estate, it's just not really possible, don't think.

Dan Austin: [33:40] That's very challenging. I think you could grow a decent decently solid operation, especially if you're a single operator. It's not unheard of for you to make a few $100,000 a year, not not even struggling to do that. Right? Like, that's very doable.

Mike DeHaan: [33:54] Mhmm. Or even a million dollars a year. Right? Like, that's not out of Plus if you're buying property, you get all the tax benefits, you know, which are pretty significant, like, honestly. But it's interesting. And also too, just one last thing to finish on, is if you get to a point where you're looking at your business, you're like, I don't know why things kind of feel like they suck right now. And you've, like, built up this whole system and you have all these team members, it's okay to just, like, do a big analysis of it and figure out that you don't need as many systems as you thought. You don't need the people. Take a step back. Accept that you will have to work more in the business again. That doesn't make you a failed entrepreneur at all. Right? Because you're what's gonna happen is you're gonna go back into the driver's seat that used to be in any way. You're gonna do it better than you remember doing it. You're going to make more money than you're probably currently making. And more confidence. And, honestly, you you probably will enjoy it a little bit more again just because you won't feel like you're having to babysit or kinda just like beat your head against the wall.

Dan Austin: [34:57] Yeah. Well, you also have gotten good at it too, observing your team members do things and looking and learning how to do things. And so when you when you lean back into it, you just have a larger view of the the big picture, which is so helpful. And it does, I think, really does feed into confidence, right, which I do believe feeds into success.

Mike DeHaan: [35:13] Absolutely. Yeah. And on our end too, I think it's pretty fun, honestly, to be going into the scale community every day and being in the trenches again with people because it gives you just, like, some more more relatable stuff to dive into. More more edge. Yeah. Awesome. Alright. We'll wrap up there. Well, guys, hopefully, that was interesting for you. Let us know what you think. Go ahead and shoot us a comment on Instagram. I'm Mike underscore invest, Dan's at investor man. Dan, I wish there was a better way to, like, communicate with podcasts. I don't know. It sucks. We have YouTube stuff, but social media is better. But, yeah, besides that, we appreciate you guys listening. Talk to you guys next week.

Dan Austin: [35:50] See y'all.