Systems For Success

Mike DeHaan: [0:00] Hey, guys, before the show, I wanted to take a second to talk to you about our instant investor program. The instant investor program is our group coaching program. And it is an eight week program with the goal being to have you talking to motivated sellers within the first two weeks. Believe it or not, you don't have to be the person that's out there overpaying for investment properties and competing with everybody else on the MLS. You also don't have to be one of those investors that flushes 1000s of dollars down the toilet on ineffective marketing methods. To talk to motivated sellers on regular basis, all you need is an effective marketing system. And we will give you the system that we have been using for the last two years, as well as a weekly call, where you can sit in with us and other investors and just be a part of a group discussion while everyone works to optimize and grow their businesses. At the end of the day, our goal is to create a like minded community of people who not only are trying to grow as real estate investors, but as people and as business owners, so they can go and take the knowledge they learn from us and use that to change their lives just like Dan and I have been able to do. So the question I have for you is, do you really want to keep sort of standing by and waiting for these opportunities to land in your lap? Or do you want to get started right now?

Mike DeHaan: [1:15] And if you're ready to jump in and start changing your life for the better, go to instantinvestorprogram.com and book a call with me, and we can hop on a call and see if the program's right for you.

Speaker 2: [1:26] Welcome to the collecting keys real estate investing podcast with your host, Mike DeHaan and Dan Austin. From wins, losses, horror stories, and tactics for optimizing your business, Mike and Dan take a real uncensored deep dive into the ins and outs of running a full time real estate investment and wholesaling business.

Mike DeHaan: [1:49] What's going on, everybody? Welcome to episode 24 of the Collecting Keys Real Estate Investing Podcast. I'm back from Costa Rica. I was traveling last week, so Dan was holding down the ship. You're fresh off the boat, man. Fresh off the boat. Don't know if that's like a derogatory thing to say. No. Are you like I

Dan Austin: [2:09] don't know. Is that I don't yeah. I guess I never

Mike DeHaan: [2:12] thought about it that way. Watch eggs out of milk. Because I know I guess if you say that about a person that came in, but there was also like a ABC show or like a network show that was about like a Filipino family that I

Dan Austin: [2:22] think Like a Tyler Perry show. Yeah. Yeah.

Mike DeHaan: [2:28] Yeah. But, yeah, we're down there for a week with my wife traveling around. We were in the rainforest area, made a bunch of hikes and all sorts of random stuff there. And it's, it's crazy how like full of life that area is.

Dan Austin: [2:44] That was

Mike DeHaan: [2:44] one thing that I definitely noticed compared to other places I've been like Hawaii was a, it's not humid like Hawaii, which I was really surprised by since the rainforest. And also there's so many freaking animals.

Dan Austin: [2:54] Like animals, like creatures or both?

Mike DeHaan: [2:57] Like animals, like creatures or both?

Dan Austin: [2:59] Like lizards and like snakes. Like, what are you talking about? Reptiles? What are we talking about?

Mike DeHaan: [3:03] Talking that. I'm talking monkeys. I'm talking like mammals, birds, like cool birds, though, like toucans and parrots and all

Dan Austin: [3:11] sorts hear them on their zoom calls, man. They're all over the place. That was pretty cool. I like that.

Mike DeHaan: [3:15] Yeah. One of the places we stayed, we're woken up by howler monkeys at 5AM every single morning. The second there's like a tiny hint of sun. They all just start going off, marking their territory for the day. And then sitting back on our our little back deck of our little Airbnb cabin, as soon as the sun would, like, start to go down, like, the bugs just started raving. Oh. Like, it was so unbelievably loud. Like, to the point that we were, I don't know, probably four or 500 yards from the the trees, like, edge of the trees. And we like had to speak to each other louder than before because the bugs were so freaking loud.

Dan Austin: [3:56] It's like a white noise machine like my daughter.

Mike DeHaan: [4:01] Was it was crazy. It's so consistent there. The temperature down of the houses have, like, any form of insulation or heat or air conditioning or anything. It's almost like you're always outside because when you walk into the house exact same as it is outside. And then because the under the house of any insulation, you can hear everything outside of the house super clear. One of the places we stayed in La Fortuna, so one that was right along that rainforest, all night did, like animals and shit, like walking on the roof, like, on the roof? Yeah. Like, the the roof of our thing, like, on the walls. If there were, like, lizards going, you could, like, hear them, like, scurry. And and the first night, we were like, what the hell are they? Like, mice in here? And they weren't because there was nowhere from the bee. And then afterwards, we figured out that there was like lizards and stuff that were like just crawling. You could hear their like little pitter patter feet go. Oh, great.

Dan Austin: [4:50] You know? Or or Your wife loved that. I know she likes lizards. My wife wouldn't have been super keen on that.

Mike DeHaan: [4:56] Oh, she loves it. Yeah. She loves all the animals. And then one of the nights, there was something obviously big that was on our roof. It wasn't like a little thing. I don't know if it was like a little mammal marsupial or what, like going around and then it was like pulling stuff around on the deck. Like we could hear it. Like, and we're like, you know, it's like it's like camping, but with, you know, there's nothing really With WiFi. Of, like, dangerous animal with WiFi. Yeah. Yeah. But but it's funny that you're in, a house, you know, but it just felt so wild compared to the place I've

Dan Austin: [5:28] been. That sounds amazing, actually. Like, just different, right? Unique. I've definitely never been to Central America. It is crazy. Not same part of area, but like you talk about rainforest. This is such a weird tangent. Sorry to any of our listeners. But the deforestation of like the rainforest down in like South America, and like they're uncovering like these civilizations that were like super modernized civilizations, like places in the world that just nobody ever knew existed, because the rainforest was so thick and dense, but now they're deforesting it and, you know, creating all sorts of other issues, but it's pretty amazing.

Mike DeHaan: [6:00] Yeah. Yeah, it really is. You know, it's, it's like a different level that you don't really see around here. Think because we just have such a presence everywhere. I mean, you kind of, you kind of get it a little bit if you go up to like Idaho, you know, those sort of areas, this, I think the difference was just how full of life this area seemed. I mean, because you can go, you can go march around wherever in Idaho and the forest feels pretty empty unless you really look like you'll see birds and stuff, but this, you know, all the hikes and everything, there was just constant animals everywhere.

Dan Austin: [6:32] Yeah, dude. Cause America will shoot your ass. If you bird flying around, you're gonna get slapped with a bullet. Yeah, right. We have guns, bro. Yeah. Yeah. To have a more

Mike DeHaan: [6:45] of a respect towards nature vibe down there. So that was the other thing too. That was really interesting was super clean. But, you know, again, I had to like, no reason for it went there. We're just like, let's go to Costa Rica. People go there and we literally just flew down with no real plan, but super clean country. Like they are very religious about their recycling, you know, about like minimizing waste, like doing all this sort of stuff. And I thought that was pretty cool. Right? I guess I, especially as I know some of those countries under that a little bit rough around the edges, their people have so many issues that they really don't care about what's going on. They're trying to not die. But Costa Rica benefits enough from tourism. I think that doesn't have the same problems.

Dan Austin: [7:23] Right. Yeah. Well, sounds like a good trip either way. Do you have any, epiphanies as you typically do when you travel?

Mike DeHaan: [7:31] Yeah. So I mean, of the biggest I sort of had, you know, because you stayed here and you were managing the ship. But it's funny, you quickly realize how much my fingers are kind of in all sorts of stuff. Because, you know, several times, you know, our guys will listen to this too, but they were like, reach out to me. I'm like, go freaking ask Dan or ask each other. Like, you know, I got, like, you guys know what you're supposed to do. You know, the answers to these questions. And even a lot of time, would be like, I don't know. What do you think? You know, just like, oh, and I realized that there's some work I have to do that we have to do to sort of systemize stuff a little bit better and help limit that. And then in terms of, like, bigger picture epiphanies, I mean, we've been dealing with this marketing situation, and I had a few thoughts with that about sort of maybe one of our recent issues have been particularly with how our most recent ones have flopped. Like, we've had a couple marketing campaigns now, you know, just went out and just didn't hit how we expected. And I had a couple of epiphanies about why that might have been some of it's from feedback based off of people that did respond, and some of it is from something that my wife said, which I thought was kind interesting where she was like, you know, saying we've had this less response than we had this one person reach out and was like, hey, I've received these different offers from me that are super wildly different, like what gives? And Madison's like, it's like, oh, you probably turned into spam. Like, you know, she's like, we get ads here that when they first came to look at them and now we don't even open them because he recognized what they are.

Mike DeHaan: [9:06] We're just like, oh, I don't even wanna engage with that anymore. And I was like, that's probably some truth to that. Right? So I'm gonna work on a a slightly reduced down marketing structure that we'll kinda go over in house this week. That was a a pretty big epiphany business wise. And then something else that especially last few trips I've done, you know, I went to Egypt in October. I went out of Costa Rica, which are, you know, Egypt like a third world country. But Costa Rica isn't, but it's still just like a simpler country. I always come back after trips like that. I'm like, I went to Costco today and I was like walking around and I always just look at things a little bit different. And I'm like, none of these people should bitch about anything in their lives.

Dan Austin: [9:48] It's so much easier than people like to think. Yeah.

Mike DeHaan: [9:51] Yeah. Even down there, it's a it's a decently established country, but the local people that aren't in the big cities, they're living in these little makeshift shacks. Like, they're living super simple lives. They do not have a lot. And the people that we met that were local, owned, like, little restaurants and stuff like that, they were the nicest, happiest people.

Dan Austin: [10:11] Right.

Mike DeHaan: [10:11] You know, and that and it was the same thing in Egypt. Egypt on like a different level because it was so poor. In Costa Rica, there was definitely some more stability you felt amongst the people. But I know I always come back and I'm just like, one point my wife, we're going around and she's like, I always feel like me go places like this, that The United States is just doing it wrong. Because if they like, sure, we have abundance, but it's like, you know, the people in general, it's just like, I don't know, man. Yeah. It it gives you perspective. And I also think that's why it's super important for people to travel places like that because it makes you reflect on that. And not enough people do it.

Dan Austin: [10:47] Definitely gives you an opportunity to see what you're taking for granted every day and and things that maybe that you live in your life that you can maybe get rid of.

Mike DeHaan: [10:57] Totally, you

Dan Austin: [10:57] know, like that you don't need or that you don't need that stress in your life because it's really not something that you're worried about when you get that unique perspective. Absolutely. Yeah.

Mike DeHaan: [11:04] It teaches you to be happy with the little things that you have. The things that you generally take for granted. It's like, maybe you probably shouldn't do that because probably it's a lot better than what most people have access to.

Dan Austin: [11:17] I mean, I'm still buying a plat mode, so it doesn't matter.

Mike DeHaan: [11:20] Your man ship while I was gone.

Dan Austin: [11:21] Yeah.

Mike DeHaan: [11:22] How'd it go? Any fun stories? I know, sure. A little bit slow.

Dan Austin: [11:26] Honestly, nothing crazy. Just kind of dealing with some of those sellers that hang around that we're touching bases with, you know, and you're just, they're just kind of annoying type sellers that you're trying to stay in touch with. But they're like, I still want a million dollars from a house. And you're like, well, you know, you come down a little bit, you know, that sort

Mike DeHaan: [11:43] of We don't have too many like that. So we get when we get sellers that want like a million bucks or their offers that range, we usually just let them go.

Dan Austin: [11:50] Yeah, but the ones where it is like close to like, where we want to be, but you know, they're still being stupid about it. And you know, you're close enough to close the deal, they just are being illogical about it, right? So just kind of staying in touch, because I totally think that it's important to stay in touch with those sellers, because eventually they will sell because they haven't sold yet. It's the you know, the kind of sellers like, well, I have another offer in hand for this much. It's like, well, take it, that's actually a really good deal for you. But then you call them three months later, they haven't taken it. And so just that follow-up is obviously important. But that's kind of like we had a handful of those this week.

Mike DeHaan: [12:23] Yeah. And I think that's one of the reasons it's so important to pre screen leads, though, as well, because that's always a fine line with those people. If you haven't prescreen them, right, because you'll give them too much attention and only too much of your time for no reason.

Dan Austin: [12:36] Yep.

Mike DeHaan: [12:36] It's an easy trap to fall into. We fell into that a lot when we first started. I mean, how many people did we did we spend insane amounts of time with? Yep. Because we I mean, a way we didn't really know what their house was worth that we wanted to offer. But also too, because we're like, well, they called us. They must actually wanna have a conversation.

Dan Austin: [12:52] Right. Or a logical conversation. And too, when you're first starting out, it's not even a it's like, you don't even have the backlog of leads to be following up with. So every lead coming in is you have the time to follow-up with them, right? Because they're the only leads in your system. But then minute you get, you know, 100 leads within your system of follow ups plus another several 100 of just like dead leads that might come out of the blue and text you back or something like that. So you actually have a lot less time as you go. And so you really have to prescreen. But you're right. Don't waste your time on some of these people that just are being illogical. Yeah, that's the biggest advice I can give to people because I think you're right. That's what we did when we were first starting out was like, everything's a deal. We'll just negotiate it to the price we want.

Mike DeHaan: [13:36] Yeah, you think you're going to convince people to sell for 50% of what they're asking for, which generally is not gonna taste. I mean, it does happen, but it's not the norm. But I mean, at the end of the day, this is this is what we told everyone in our instant investor program as well is that there's there's four leads. There's four kind of calls you're gonna get. Right? There's, yes, I wanna sell my house. That's the best one. It's the rarest. That's one that you always look for. Right? That's that's why we keep pulling the marketing slot machine every single month is because, you know, we probably get, like, one of those a month and those are always super valuable. So we have the yes, I wanna sell. We have the yes, I wanna sell, but for too much money. Right? Which are also not terribly as long as it's, like, kinda close. Like, if their offers outrageous things, basically, you know, we have the why are you calling me? Like, how did you get my information? We have those pretty regularly as well. And those can actually come from some deals because generally, they're kind of inquiring about who you are, that if you can build if you build some trust, you can get opportunity there. And then there's the no, which can basically consist of take me off your mailing list, f u, go kill yourself, you know, I would never sell to you or just uplite, not interested.

Mike DeHaan: [14:44] Right? A bunch of different iterations of that. But besides that, I mean, there's really not that many other ways people can reach out to you. The yes and the no are kind of the easiest ones to determine, but those middle two, that's where the nos kind of make up the most of the calls you get in, but those middle ones make up the second group. And that's where the salesmanship comes in and being able to navigate those and put in the times for those is the difference between the companies that make a couple $100,000 a year, do a few deals or the ones that make millions of dollars a year and close dozens or hundreds of deals.

Dan Austin: [15:18] Absolutely. And to your point, yeah, that's that's why we throw out thousands of dollars in marketing because we're looking for those. Yes, leads knowing that stacks of those mailers are just going to go nowhere with people, you know, eventually. And what we do find is like, I don't know what's our like, highest, like 18 times we mailed somebody, they finally called us.

Mike DeHaan: [15:37] I mean, that's what it was a while back. I mean, I think one of of the recent ones you have is even higher. The duplex that we bought in January, they first came into our system in the summer of twenty twenty.

Dan Austin: [15:48] Wow. Yeah. So it's consistency there because they eventually might turn into a yes, if they haven't even called you yet.

Mike DeHaan: [15:54] Yeah. That's also why it's so important to have that sales process as well, you know, not just be throwing things to the wind and and keeping things organized in a CRM. The one we use are simply, it's a really easy way to visually keep track of all of it. I know we've met people. I mean, even in our program, have people that have been doing this for a little while and they still share everything in like a spreadsheet. And it's like, bro, no no wonder you close to a few deals. You don't know what the hell is happening.

Dan Austin: [16:21] I don't know how you could do a follow-up system without like a task management system that's like pointing you, hey, call this person today.

Mike DeHaan: [16:29] Yeah. I don't know. People try to figure it out, but having those systems in place for, managing that and then also how regularly you're gonna follow-up and what those conversations are gonna look like, That's all important stuff that we need to be making sure you're keeping track of. Right? It needs to be structured because same time, if you're just calling people and you're not exactly moving things forward, eventually what's gonna happen is it's not gonna sell you. They're gonna get friend zoned by these people or you're gonna start to piss them off, you know, and that that happens all the time where I mean, we we've talked to several sellers that they know exactly who we are when we call and they're actually thrilled that we called them, but they are not gonna sell the house and you are now friends with them. And, you know, especially for the older people, it happens all the time.

Dan Austin: [17:13] Yeah. Friend zone, man.

Mike DeHaan: [17:15] Or alternatively, happens is you have sort of business oriented people or, you know, the people that don't really like to be pestered. And if you don't have a process for what following up them looks like, they're gonna get pissed off. They're not gonna work with you anyway.

Dan Austin: [17:28] Yeah, keep at it, keep sending mail, and more leads come in. Like, that's all I think about, right? When we talk about all these sorts of things, and saving your time. It's that abundance mindset again, like, don't think every lead is the only lead you're going get like, somehow magically, we get more leads every week.

Mike DeHaan: [17:47] And for context, a good response rate for us on a marketing batch is usually, like, one to one and a half percent on the high end. Mhmm. So that means if we're sending 5,000 of them, we should hopefully get about 50 to 75 calls. And that's calls. That's not even necessarily opportunities. You know, the calls that come in 60 to 70% of those are gonna be knows. They're gonna be the bottom of the sort of total pull. Right? But at the same time, those are still you should still consider those success because by them saying no, if you're managing your data correctly and you're going back and you're removing them from your list, it should be saving you money next month.

Dan Austin: [18:24] Well, yeah, think about it. If you mail somebody 20 times in a period of times, whatever, and you have a thousand no's, how much money is that?

Mike DeHaan: [18:32] That's a thousand dollars probably. Yeah. Maybe even more. Not even including the hours that you have to deal with managing all those. If you're not clearing them out, just like responding to the inquiries and that sort of stuff, especially if you're managing in a freaking spreadsheet and you have no idea if someone's actually called you before or not.

Dan Austin: [18:50] That's incredible. I cannot imagine. We never started that way. We went right in with the CRM. I'm glad we did because knowing you and me, we would have struggled with trying to manage in this spreadsheet. Like we could figure this out. We could do it. We would have wasted so much of our time.

Mike DeHaan: [19:03] Yeah. So I mean, so yeah, we jumped right in with that. So but instead we cut corners and all the other important stuff, you know, like, like how to set aside money for taxes, how to keep our business compliant with the state and

Dan Austin: [19:15] the government.

Mike DeHaan: [19:16] And now that's just a giant disaster for us, but that's fine. I mean, well, for you, I don't know what's really happening with it. It's your nightmare that you're trying to

Dan Austin: [19:23] I don't know. I'm waiting for somebody to call me.

Mike DeHaan: [19:26] Yeah, yeah. Right. Well, to be fair, guess one of reasons it's so bad is because we were that was stuff that we recognize as not a revenue generating activity, which also I would say is probably to our benefit that we did this if you look at the big picture because that stuff is easy enough to figure out down the line and we were able to start pursuing revenue super early. Whereas I feel like I I might see this in our investor group even though I try to push people towards revenue generating activities early, people are still getting fixated on like, well, what should my logo look like? What's your company website? It doesn't freaking matter. Yeah. It doesn't matter.

Dan Austin: [20:06] Should I show this to my lawyer? It's like, what? You have a lawyer? I know. We barely have an accountant. Like, we just finally got an accountant.

Mike DeHaan: [20:13] Yeah, totally. And that's the thing is we share, we shared our PSA with people and several people ask me is like, oh, should I go over this with my lawyer, you know, in my state or whatever? And I was yeah, probably. But at the same time, just start talking to leads and start Yeah. Getting those opportunities figured out. And then if there's something weird with your purchase and sale, here's what's gonna happen. You're not gonna get in trouble. Your title and escrow agent or your closing agent, whatever is going to get your contract, they're going to be like, what the hell is this? This doesn't work here. And you're going to go back to the seller and be like, oops, sorry, this contract isn't going to work this transaction. Can you sign this other one instead? And if they're a good seller, it's going to be fine. For some reason, people seem to think that if you don't have everything 100% dialed in from day one, that you're gonna, like, completely get yourself in major trouble down the line. And here's the thing when it comes to all that sort of stuff. The only time you're gonna get in trouble is if you're negligent or malicious.

Dan Austin: [21:08] Totally. Right?

Mike DeHaan: [21:09] Exactly. If you're just like ignorant and you go into it like there's especially in real estate, the process is so freaking long and there's so many people that touch everything, it will get caught or fixed. And even if in the first transaction, it doesn't need somehow slip through, you just made some money, then the second one, someone's gonna come and be like, hey, we shouldn't have done that last time. On this next one, let's use this contract instead. It's like,

Dan Austin: [21:33] And you're going through a title and escrow company. So like, they screwed up. That's our liability. Not yours.

Mike DeHaan: [21:38] Yeah, right. Exactly. Title insurance, know, everyone says what the hell is title insurance? It's a win for that's exactly what it's for. So, you know, when they do something silly, like accidentally send the seller the entire proceeds instead of paying off their mortgage.

Dan Austin: [21:53] Oh, man. I forgot

Mike DeHaan: [21:54] about that. Was hilarious. The title company. Well, didn't they call us

Dan Austin: [22:01] to ask us to try to get it back? Yes. We should have said no, have fun.

Mike DeHaan: [22:05] I know. Well, especially here you want you want you want to dive into that story?

Dan Austin: [22:10] Oh, man. No, no. It is like, not really. Yeah.

Mike DeHaan: [22:13] Go ahead. So basically, had this seller who was absolutely a flight risk. Yeah. Like, was just

Dan Austin: [22:19] Yeah. A Just

Mike DeHaan: [22:21] a basket case of a human being. And she was making a good sum of money from selling this house, but obviously still had a mortgage on it. So anyway, she calls us, we funded the transaction, we wholesale this deal. We have our money that came in, and all of a sudden, the seller calls us. She's like, hey, I just received, you know, $260,000 in my account. She's like, I'm pretty sure that it's supposed to be less than that. What do I do? And we were like, okay. I don't know. So then we call the closing agent and they're like, oh, yeah. That's that's not good. That shouldn't have happened. We should have paid off her loan. Like, can you have her bring in a check? And I was like, no. You call her. Yeah. You figure it out. It's not my job at this point, especially because this lady was such a freaking nightmare to track down.

Dan Austin: [23:06] Yeah. She was.

Mike DeHaan: [23:07] I'm not gonna spend hours every single day trying to do that for your mess up. Yeah. But, you know, at the end of the day, that that is why they have title insurance, because for the thousand transactions they do, that doesn't happen. They're making their money.

Dan Austin: [23:21] That's why they have lenders title insurance too. Right?

Mike DeHaan: [23:23] Yeah, exactly. Right. And then they would be paying it out of pocket. Either way, somebody in that department will be getting fired. I can guarantee that.

Dan Austin: [23:30] One thing I've been wanting to chat about too is, like, I don't know if you know you were gone gallivanting, but we're at war. The world is at war at this point in time with Ukraine. Economic war. Right? Oh. Oh. What do you think

Mike DeHaan: [23:43] of like, like, we're at war too, bro. Got we got weird sellers going on. We got one lady right now who has, like, as a household, they probably make they make over 6 figures and they are not paying us rent.

Dan Austin: [23:57] Oh, yeah. That's yeah. That that is gonna be war. I I can't wait for that to play out. That's gonna be a battle story in itself.

Mike DeHaan: [24:03] I snipped those texts today and I sent them to, like, we have this stupid mediation center now. Oh, yeah. In the state, which exists purely because they're like, landlords are like too afraid to talk to the peasants that are their tenants because that's how a lot of people view their tenants, which we don't view them that way. But so they're like, we what we do is we set up a neutral meeting to do it. And I basically sniffed the text where she's like, if you treat us this way, it's like, you know, you want us to protect your investment and all this sort of bullshit. Yeah. So I sent that over to the mediation center. It's like, just so you know, this is what's happening. She's not gonna pay rent. So that's gonna

Dan Austin: [24:36] be fun. I'm actually excited for that to all play. I mean, not excited, but excited.

Mike DeHaan: [24:40] I kinda hope that they do something really bad so that we can legitimately see somebody, especially because they have stuff to go after.

Dan Austin: [24:48] Yeah. That's true. They're not like a normal seller.

Mike DeHaan: [24:50] Yeah. And and if they wanna be that way, like, would take so much pride and joy.

Dan Austin: [24:55] Oh, despite in there. Oh, dude. I I

Mike DeHaan: [24:58] just hate the bullshit.

Dan Austin: [24:59] I hate it. She's she's a criminal anyways, the way I look at So she deserves a little bit of punishment. We're treating her really well. Honestly, she's just

Mike DeHaan: [25:07] Yeah,

Dan Austin: [25:07] being her thinking that she's smarter and can get away with things where it's like, no, let's just all be humans here. We're treating you as a human. But she turned into a tenant really quickly after being a homeowner. It's kind of funny how that transition happened so quickly.

Mike DeHaan: [25:22] That's the story is we bought the house. They were literally inactive foreclosure. We bailed them out. They walked away with over $100,000 in profit instead of losing everything. And we were like, hey, cool, we'll give you sixty days to move out. You know, we want you to pay rent and have hard money cost. They understood that. Paid one month at the start and then they just stopped and they're like, screw you. We're not paying anything anymore for no real reason other than the fact that she does not like Judd for some reason.

Dan Austin: [25:49] It's not the first employee we've had that piss somebody off. I mean, just happens. I don't know why.

Mike DeHaan: [25:54] She wants to speak to the manager. She wants to. I want your manager. Yeah. Anyway, it's back to you.

Dan Austin: [26:01] You want talk world politics. There's so much chatter. Maybe this is like, we could commit a big portion of an episode of this, but just your thoughts, like, where that changes the outlook from, know, where we were at in January, what we see, like, right now is obviously this inflation, every time about inflation, gas, all this crap, how does this affect the housing market? How does this affect the supply chain? They're talking about like food shortages, right? All this stuff, because I think, I don't know, Russia and Ukraine make up 15% of the world's calories or some shit like that. How do you see that playing out as far as, like, American economy within the housing market? Are you worried?

Mike DeHaan: [26:39] I'm not worried at all about that. Like, in its current state, I mean, if it escalates to something bigger, I don't think necessarily housing would take a big risk. I think people would kind of just probably stop buying and selling. So it would slow down, but we're expecting it to happen anyway. I don't think it would necessarily affect values because there's still a lot of people who have the desire to own a home. And I think that the people that own homes would just be a lot less likely to move, which is kind of where they're already at anyway. So, I mean, I don't know, like, I don't really see any crash in the housing market just because supply and demand. What I do see is things just rounding off. I could see a rapid stall in appreciation where basically what happens, this is sort of my thought, is appreciation goes so low that the 30 or 40% appreciation where we've had slows to like 1% a year.

Dan Austin: [27:34] Yeah. Which is typical actually.

Mike DeHaan: [27:37] Then what ultimately happens is after a decade or something of that net, all of a sudden, real states appreciate exactly how it was supposed to. Right? Yeah. So that's kind of what I expect, but I'm not, say, an economy expert.

Dan Austin: [27:51] Yeah. I'm not an economy expert either, but I do play one on TV. So

Mike DeHaan: [27:57] On YouTube.

Dan Austin: [27:58] Yeah. I I do get curious about the interest rates and how that will affect what we're doing, because we're raising interest rates. And I think that scares a lot of people. I mean, I have all these listings, because I, know, I'm a full time broker now, right? I'm in the game, I hear from the streets. But so many people are like, I have to buy a house because my rate lock comes up and rates are increasing after my rate lock expires. Like, I'll take your money. But that's just not a good way to go about it. But people get so concerned about rates going up and like what that actually means and how that actually trickles down. And when when they're talking about the Fed raising the rates, yes, that has a correlation to your mortgage rate, but it's not like a direct correlation, right? I think that they're going to increase like we've talked about that at the beginning of this year. But as an investor, should that really affect you?

Mike DeHaan: [28:46] If you're buying your properties, right, it shouldn't matter. If you're one of those chumps that's out there buying things on the market at retail price plus, it absolutely will affect you. But if you're, you know, you have a marketing system like we do, or like we teach in our program, right? You know, you and you're buying things at huge discounts, it doesn't really matter because you make your money when you buy. Yep, your cash flow might go down. But if you just made $100,000 in equity on the deal, and you're going to be pulling out a huge amount of cash and refinance it, who cares if only cash for a couple $100 a month?

Dan Austin: [29:15] They've spurred a thought in my mind to if, you know, so raising interest rates affects buyers confidence as well, right? So if you're a full time flipper, and you're kind of skating on thin margins or skating on appreciation, you may want to think about switching over to some buy and hold assets because you don't have to worry about that exit price as much. I've recently this not where I started out as an investor, but recently flipped towards cash flow is great. And we have lots of cash flowing properties. But that's actually not the end all be all, it's the asset itself and what the power of that asset can bring you in the future. And if you're investing on a one year timeline anyways, like that's short term investing. And I don't think you should be doing a whole lot of short term investing kind of in a market like we're in right now. Because I just think there's too many unknowns, like personally, right? Like, I'm not going to go and start day trading right now. Like, that'd be terrible. I don't know shit about it. And it's probably just not a great time for me to do that. Right? There's still day traders out there, but they're probably shit in their pants. Right? It's probably hard to make money. So I just think if you look at it from the standpoint of owning an asset over that timeline, even if appreciation tightens up to one to 3% a year, which is kind of a typical average over the history of real estate, owning that asset is so much more powerful than that paycheck at the end of it. And so if you're holding a lot of properties that you're in flipping, you might be time to like, start clearing some of those off, but then also look at buy and hold, even if it cash flows breakeven after everything, right, maybe you're only making $102,100 bucks a month after all your set asides and everything. That's okay. Because in five years, you don't, you're not going to give a shit because that $200 cash flow in five years is going be $800 And you're going to have $100,000 you're going to pull out of that damn house when you refinance it, which is like, literally exactly what I did.

Dan Austin: [30:58] Just, on a couple of my properties, refinanced it pulled out over $200,000 And I'm still cash flowing on them not as heavy as I was, but I'm like, I know where my rent is going to be at two years, I'm going to be almost back to where I was on cash flow. And now I have all this money to go reinvest else place, redeploy that capital. And that's kind of the mindset I'm in, and this market is not trying to hold cash, but I am trying to lock in some debt and redistribute that cash.

Mike DeHaan: [31:25] Yeah. Yeah. And I mean, a lot of people hear that too. They'll say, well, you guys are in a position, you can say that. And you're like, yeah, we are. Because we took all the risks, and we did all this stuff a number of years ago. But that like, just because we're there now doesn't mean that somebody else can't be there in the next couple of years.

Dan Austin: [31:41] I mean, I could do it again, right now we bought two properties this year, give me three years, we're going to be there. It's just that short term investing mindset. And that overnight paycheck just doesn't really exist. Like that's exception. Yeah, you and I have had some big wins here and there. But it's like, that is not what we invest for those are just like, Oh, that was kind of cool.

Mike DeHaan: [32:00] Well, Tang, it's not even really an investment at that point, right? It's a business. That's very different. When you have an investment, you're taking that money and you are parking it somewhere. You need to be doing on a longer term horizon. The biggest thing you can do to escalate that is make a large portion of return when you buy the property.

Dan Austin: [32:19] Buy Right. It at a discount.

Mike DeHaan: [32:20] Yeah, you know, I don't I don't know what Tesla or whatever is out right now. Let's just say it's at a thousand dollars hypothetical. I literally have no idea. Bought zero stocks. Let's say it tested a thousand bucks and someone says, hey, I will give you 10 shares of Tesla stock right now that you could sell for a thousand dollars. Right? I read some, I will sell them to you for $600. Would you buy those? Yeah. Yeah. Everyone would.

Dan Austin: [32:41] Absolutely. Yeah.

Mike DeHaan: [32:43] And a house works exactly the same way. Yes. If you have something that you can, you know, buy for that discounted price, second that you buy it, you can sell for retail price, but you're buying a discounted price second that you buy it. That is getting a return on your money. Even though it's on paper, even though you can't use that to immediately go and buy Tesla, you know, you can turn that into debt. You can use to buy a Tesla, really cheap debt that's paid by a rental, right? You know, or you can sell it at that point if you want to and then go and use that to, you know, get cash. We have to pay tax, all that sort of stuff. But that is like the biggest sort of thing that I think a lot of people discount. And I agree that if things do get weird on the exit and there are less buyers, that's going to be a big shift that a lot of people will benefit to start like considering an option for themselves.

Dan Austin: [33:29] Absolutely. I agree.

Mike DeHaan: [33:31] Yeah. Thanks for listening. You can follow me at micro underscore investment in Instagram. You can follow Dan at investor man Dan. Go check out our instant investor program. It is a twelve week course that gives you the exact outline on how to build a business exactly like ours goes to the marketing system, sales systems, everything that we kind of touched on this, as well as being in a community with other white minded investors. We've had some pretty good Zoom calls in the past couple weeks. The first group's getting ready to do all their marketing. I'm pretty pumped to sort of see how that all goes. Just go to instantinvestorprogram.com, and you can book a call with me on there, see if you're a good fit. And besides that, alright, Dan. It's the moment of truth.

Dan Austin: [34:10] You got your send off. I actually thought about it today, but I didn't really I don't know. I did put some time and effort into this one. So you guys can beat me up. But this is investor man Dan, aka Dan Austin signing off. Get out there. Collect some keys. Collect some fees until next week.

Mike DeHaan: [34:25] Oops, collect some keys, collect some fees. I don't know. Hopefully not too many fees. Some people aren't paying rent on time.

Dan Austin: [34:31] Yeah, right.

Mike DeHaan: [34:32] So alright. Get closer. You got something at least.

Dan Austin: [34:35] I added fees and keys together. They rhyme. There you go. I like that one though. I think it's gonna stick.

Mike DeHaan: [34:41] You're a wordsmith. You gotta tell. Alright. Thanks, everybody.

Dan Austin: [34:45] Alright. See y'all.

Speaker 2: [34:47] Thanks for listening. Please leave us a review on iTunes or wherever you get your podcasts and check us out at collectingkeyspodcast.com for tips and guides on starting your own real estate investment and wholesaling business.