The Insanely Simple Steps To Early Financial Freedom with Brad Dumas

Speaker 1: [0:02] 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: [0:25] What's going on, guys? On this episode of the collecting keys real estate investing podcast, we have Brad Dumas, who is a small time real estate investor out of Cleveland, Ohio.

Dan Austin: [0:37] I don't accept that term. I think he's killing it.

Mike DeHaan: [0:39] I mean, is killing it. It was a funny thing. Winston says, when you say you're small time, but you own 24 doors, you know, in the storage unit and some short term rentals and all sorts of stuff. I mean, that's doing pretty dang well. Like, small time Alright. You know, small time, I consider to be like the one or two doors kind of investor.

Dan Austin: [0:54] Right.

Mike DeHaan: [0:54] But he has a really just sort of consistent and valid strategy about how he has grown his portfolio over the last five years, you know, with turning his primary residences into rentals and then just consistently buying properties over the years while also balancing that with building a stock portfolio and, you know, remaining more liquid so that, as he said, he's more lendable as he looks at different opportunities. And I feel like it's a great sort of story and viewpoint for many of our listeners because, like, the reality, this is what most of you want. I understand not everyone wants to try and be Mike and Dan who's out here going through crack houses and doing all this weird stuff. Doing the wild shit. Exactly. Yeah. He's living just a great consistent life, building a portfolio, and doing some big things. So

Dan Austin: [1:36] He's just a good clean Midwestern boy. He's got a w two. By the way, he is a Notre Dame football player. Go falcons. Look it up. You'll know what I mean. I'm not wrong. Please fact check me on that. And, anyhow, but like, he's just consistent. He has a w two job. He's not trying to blow anything out of the water. He's like, hey, if I just buy properties every year, by the time I'm 40, I'll be w two optional. So I think that's a really cool part of the story. And that's how I kinda got into real estate. I was like, hey, man. I just buy one a year. I'll be doing great. Mhmm. And then I decided I wanted to go, you know, crazy with it.

Mike DeHaan: [2:07] Yeah. Exactly. So, anyways, hope you guys enjoy this show with Brad Dumas. If you do or even if you don't, go ahead and leave us a five star review wherever you listen to your podcast. And if you do wanna learn how to find off market properties and, you know, if you wanna be a small time investor like Brad, but just get better deals or you wanna go big, go and check out the instantinvestorprogram.com and see if you'd be a good fit to work with us. We have a bunch of new things coming out on there. So go and check it out. Anyways, guys, thanks so much, and enjoy the show. Brad Dumas from Cleveland, Ohio, ex Notre Dame football player, respects LeBron, but isn't a fan. You know? I don't know. I feel like with Cleveland, it's always super mixed when it comes to that, but it's also like the one thing that everyone associates with Cleveland. So I'm sorry. Immediately LeBron. LeBron James. LeBron.

Brad Dumas: [2:53] Are you

Dan Austin: [2:54] a jersey are you a jersey burner, or you a lover?

Mike DeHaan: [2:56] Yeah. Right. So, you know, but I I will say, I've heard he's been good for tourism at least.

Brad Dumas: [3:02] Well, look, he got us a ring.

Mike DeHaan: [3:03] Right? Yeah. Right? Yeah. Yeah. That's true.

Dan Austin: [3:05] He did. That is true. Oh, and who else do you guys have to claim to fame as Johnny Manziel? What a what a superstar there.

Brad Dumas: [3:11] What a stud. Right? Canadian Football League.

Mike DeHaan: [3:14] He's killing it now. I remember when he was the biggest thing ever back when we were in college. The Johnny football man.

Dan Austin: [3:20] He was huge. I but you know what? He where our claim to fame over here is

Mike DeHaan: [3:24] Ryan Leaf.

Dan Austin: [3:25] Yeah. Who like, you can also claim him. Yeah. And he turned into a great guy as a drug addict and ex NFL player. Yeah. What a great

Mike DeHaan: [3:33] guy. Yeah. He went to my high school, and then, yeah, he got what do you get? Popped most recently for stealing steroids from AIDS patients. So yeah, that's how you know that's how you know you've yeah. Yeah. Number two in the NFL draft to stealing drugs from AIDS patients Yeah. Man. Rough times. Anyway, Brad. Sorry. Yeah. Thanks for hopping on. As you described yourself as you're getting around, you said you are, you think, one of the laziest investors out there, but you've still done pretty well for yourself. You know, you've accumulated 24 doors, makes some short term and long term rentals, and you're taking a hybrid approach to investing and creating wealth and passive income, basically using real estate as well as securities and different kinds of stock investments in a way that is, I guess, like, comfortable with the sort of lifestyle that you wanna live, but also still taking active steps towards getting where you wanna be. Or you see you said that you can potentially retire by the age of 40. So I'd love to hear about kinda your background and sort of how you got onto this mindset and how exactly you are continuing to grow and scale without having to work too hard.

Brad Dumas: [4:40] Yeah. Yeah. And Mike and Dan, thanks for having me on the on the podcast.

Dan Austin: [4:44] Yeah. Sure thing.

Brad Dumas: [4:45] Yeah. So got into real estate about five years ago or so, started really small. My first deal ever in Cleveland, Ohio, a $26,000 condo that I was moving into myself as soon as I kind of got into my professional workforce. And like a lot of investors, the easiest path to buy the next deal was just to move into the next deal and then rent out the previous home. So I did that, you know three or four times and then moving every year got really annoying. So I started looking at different means to invest and I started buying small duplexes, four plexes, five plexes, so on and so forth. And now it's just kind of a steady growth rate where I'm looking to buy three or four deals a year and not necessarily retire by 40 but be optional w w two by 40.

Mike DeHaan: [5:38] Yeah, that's great. Mean, that's great. So you started with, not so like the house hacking method, but like the house trading method. Right? Where you buy your first

Brad Dumas: [5:46] That's right.

Mike DeHaan: [5:46] Primary and you can get it with like a better loan because you're moving into it. It's gonna be lower down payment and, you better interest rate. And then you just basically trade up to did you like go to like nicer and nicer property or were you just like buying the same kind of property in a different neighborhood or even maybe, I don't believe do it like next door because they're just trying to do the whole concept.

Brad Dumas: [6:05] Almost next door and all of them were right around like 50 to $70,000 and, you know, we got them in a time where, you know, all those properties doubled, you know, in the last couple of years with our big run up and just held on to them. And like you said, good debt, low money down, was able to find quality tenants and a lot of them still remain in those doors today, and I still pretty much own everything I've I've ever bought.

Dan Austin: [6:30] Nice. So did did you have when you're getting into this, like a specific buying criteria where you're like, well, if I'm not willing to live there, I'm not gonna own it. Or is it like, hey, as long as it's cheap, I'm gonna move into it?

Brad Dumas: [6:41] So my underwriting is the reason why I call myself lazy. I think everyone knows the 1% rule. My criteria was one and a quarter. If I met the one and a quarter, so 1.25 rule, I'd buy it. I I didn't really spend a ton of time looking through, you know, the the CapEx, which I would do now. But as long as I could paint it, put some new flooring in, spruce it up a little bit, and it could be a home for somebody, I bought it.

Mike DeHaan: [7:07] Nice. That's awesome. So have you have you now done this with I assume you have five years. How many of the homes that you own have you lived in?

Brad Dumas: [7:13] Gosh. Good question. Five of them.

Mike DeHaan: [7:16] Five of them. Oh, five.

Dan Austin: [7:17] Every every Yeah. There you go. It's dedication.

Mike DeHaan: [7:21] Yeah. That's cool, though. Mean, that's a super smart strategy. So when you were doing that I mean, even with that that price point of home, though, they were all in that same sort of $50.70. Can you get, like normal mortgages on that? Because I know a lot of lenders, they won't do mortgages below say like $50. So are you buying these things cash?

Brad Dumas: [7:38] You know, my hardest loan I ever did was my first one that was $27,000 And I put $4 down and they had this, this regional bank had a LMI product that as long as the median income in this community was X, they would do the financing for it. So got in my first deal with like $4, $4 down, you know, that there was a small condo, it's a rental today, it's paid for, but it's worth, you know, 80 now. So it's one of those things where good cheap, money, no money out of pocket debt in the beginning and just did that for a couple of years. Then I, you know, my next big purchase was a $61,000 single family home that I put $7 down on and continue doing that year over year.

Mike DeHaan: [8:26] Yeah.

Brad Dumas: [8:26] So it's very manageable.

Dan Austin: [8:28] You said the first one's paid off now. Was that part of just the cash flow paid for? It was cash flowing so well, or do you have a strategy of paying them off?

Brad Dumas: [8:34] That one cash flowed well. So, you know, so you bought it I bought it for 27. I get $8.50 a month for it. Same tenant for the last Man. Five years.

Dan Austin: [8:43] Yeah. Well 2.5 rule.

Mike DeHaan: [8:45] Yeah. Right. What what was your payment even on that? Like, $73? Like, that's outrageous.

Brad Dumas: [8:49] Yeah. My mortgage was, like, a $121, and I had an HOA fee that covered my CapEx, my water, my sewer security for, like, 200. So I had an all in payment of, you know, $3.50.

Mike DeHaan: [9:02] Yeah. Nice. Man, are are properties still like that in Cleveland that are in, like, good areas?

Brad Dumas: [9:07] No. Not in good areas. No. Not in

Mike DeHaan: [9:08] good areas. Okay.

Brad Dumas: [9:09] You can buy in depressed areas for probably under 50 still in some some pockets. But this market, I've never bought a house for appreciation. I've only bought it for cash flow and appreciation has just been the icing on the cake lately.

Dan Austin: [9:22] Yeah. Mhmm. Yeah. I've heard that a lot with Midwest investors. Like, if you've been doing it in a while, you never plan on appreciation, but the last four or five years have actually been pretty good for Midwestern investors.

Brad Dumas: [9:31] Very true. Yeah. Yeah. And look, I I don't have anything to compare it to prior to five, six years ago because that's when I that's when I started, but I got in at a decent time, I guess.

Mike DeHaan: [9:42] Yeah. Absolutely. Yeah. But before it got too crazy, yeah. I know we have one of our friends, Drew Wiard. He's also in in GoBundance. And we were met up with him at a meetup last year, and I was talking to him. He invested in Bisole in, like, Central Indiana. And he was like, dude, this is like I know we're in a bubble now because Central Indiana is appreciating aggressively. Yeah. He's like, he's been buying it for, like, ten years, and nothing has appreciated ever. But now he has houses that were worth, like, 50% more than they were a couple years earlier. Now that that's that's cool, though. So you made the the transition out of basically buying primary residences and turn those into rentals, and you started buying stuff just, like, strictly as rentals. I guess how did you come around to doing that? Was that mainly just because you were like sick of moving and wanting to scale? And like sort of how did that change your investment criteria if you're no longer looking to live there?

Brad Dumas: [10:34] Yeah. Good great question. So I certainly got sick of moving, but, I just got married this year, and my wife then then girlfriend and fiance was also sick of moving. So we wanted to have a a primary residence that was, you know, nice that we grow into. We wanna start a family here soon. And packing up and getting in a moving truck didn't seem appealing every every twelve months. You know?

Mike DeHaan: [10:58] Yeah. No kidding. Yeah. So then as you were starting to look for properties, was the same style of properties. Did you start looking for multi families?

Brad Dumas: [11:06] Eventually got bigger. Yeah. So duplexes became a trend maybe in the 2018, 2019 timeframe where we were able to look a little more strategically like highly dense pockets and neighborhoods, places that had kind of the trendy service industry themes going on. So that's kind of our West Suburb neighborhoods in Cleveland here near the water, a lot of attractions. Right? So started buying duplexes and that changed our financing strategy. So, you know, maybe more 25% down type of loans. And instead of doing, you know, one or two a year, we're probably doing two or three year at that time. My w two income allowed me to kind of fight off bigger projects and self managed probably, you know, a dozen units or so until I hired a manager.

Mike DeHaan: [11:56] Perfect. Yeah. So you finance properties, you said you worked mostly with realtors. Did you have, like, a key realtor that would be bringing you off market stuff, or were you, like, spending your evenings, like, cruising Zillow, cruising the MLS, talking to people? But what was your total acquisition strategy to start finding these places?

Brad Dumas: [12:13] Yeah. It was definitely it's definitely the latter. So I would kind of peruse the the realtor.coms, the Zillows, and just, again, one and a quarter rule, see if it made sense, see if there was a price point that I could afford at the time, sent over five or six properties to my realtor and said, hey, can we do this do these six Saturday morning. I'm ready to make an offer and we would you know, we'd go view the properties and start firing offers.

Mike DeHaan: [12:38] Nice. That's awesome.

Dan Austin: [12:40] Right on. Just the traditional way just beating the pavement and picking up units. Love it.

Mike DeHaan: [12:44] Yeah. So how is your acquisitions fair this past year as the market started to get, you know, a little bit crazy, like 2021 hot? I guess when I say this past year, we're almost setting at 2022 now things have slowed down. But during 2021 when things were super hot, were you still able to buy things for that same level of like casualness, I guess?

Brad Dumas: [13:03] Short answer is no. But 2021 was a was an interesting year where I took a pivot to the short term rental space. So I put my first short term rental, and this just kind of tells you my personality. My goal in 2021 was to buy a short term rental and I had a short term rental under contract in January 2. So one of those like, hey, let's just make this happen type of thing. And it was because there was a great alignment. You know, I had an existing property manager that was willing to stay on. I was absorbing a decent amount of bookings for the 2021 season and it just felt plug and play where it wasn't going to feel heavy to me to do. So we did that first thing in 2021, bought an off market townhouse kind of near the airport, which I think we bought right. Good equity kind of going into the deal. I think that might have been it for the acquisitions in 2021. Okay. Now 2022 was a very heavy year in terms of acquisitions where we bought 35% of the existing portfolio that we own today this year. Oh, wow.

Dan Austin: [14:05] Nice. Really turned it up.

Mike DeHaan: [14:07] Okay. Okay. No. That's huge. So I guess what was your secret to that then? Like, I mean, obviously, the market was still super hot for the beginning of the year. Was this like now you were just patient and as people started to realize that they weren't gonna get as much for their properties anymore that you were starting to capitalize on that? Do you just have a bunch of money saved?

Brad Dumas: [14:26] Combination of both of those. So it was it was a combination of, again, the active income putting me in a position to to buy. I actually raised a little bit of money from from family. And I find this as a funny phrase, but I was making disrespectful offers to a lot of potential Respectable people. Yeah. Yeah. So, you know, we we were able to put a few under contract that, again, even with the run up and maybe the change in the interest rate environment today are gonna be kind of long term quality holds in the multifamily space. So we bought a 16 unit apartment building with with a storage garage on premise. We got the other short term rental under contract closing this month, which we got a $100,000 under asking price, which I thought was awesome.

Dan Austin: [15:10] Wow. That's great.

Mike DeHaan: [15:11] Yeah.

Brad Dumas: [15:13] Yeah. And a small fourplex earlier in the year. So it was a good year in terms of unit count and cash flow.

Mike DeHaan: [15:21] Yeah. See, now that's awesome. I mean, disrespectful offers. I mean, I don't know. We're wholesalers. That's what we do all day. It's just the

Dan Austin: [15:27] Can't get what you don't

Brad Dumas: [15:28] ask for.

Dan Austin: [15:29] Yeah. That's what I always say.

Mike DeHaan: [15:30] Yeah. You know? And sometimes that's what you gotta do. I mean, even the house that that Dan lives in right now, Dan lives in this really nice, like, giant house.

Dan Austin: [15:38] Low key. It's low key.

Brad Dumas: [15:39] It's not low key.

Mike DeHaan: [15:40] It's this giant, ridiculous house in, the best part of town that you get it. What did get it for, like, a $100,000 under asking, Dan?

Dan Austin: [15:46] That was a 150 under their original ask. Yeah.

Mike DeHaan: [15:48] Yeah. Which you bought, like, what, 2019?

Dan Austin: [15:52] Oh, it was 2020. You're

Mike DeHaan: [15:53] in March.

Dan Austin: [15:53] Yeah. March 2020.

Mike DeHaan: [15:54] And you got it just because it had been sitting for, like, a little bit. And because we've been we've been starting this business yesterday, we're used to making low offers, you just shot your shot. And they were like, well, we, like, need a guaranteed sale because we're leaving the country. So sure. And they just accepted it. And then they were so grateful to have the house sold that they got you, like, gift baskets and, like, got your kids toys and stuff. Wow.

Dan Austin: [16:16] They did. They left all of their furniture all

Brad Dumas: [16:19] of their furniture. Really nice.

Mike DeHaan: [16:21] Yeah. Yeah. I still have it in

Dan Austin: [16:23] my house. Wow. Love that. Yeah. The well, the the context, is I was doing that that year. Like, I'll just shoot a lowball offer. I got one that people were so mad they refused to respond. And I was like, hey. Your house isn't worth what you want anyways. So, like, why not shoot shoot my shot? And then, yeah, sometimes they land, sometimes they don't.

Brad Dumas: [16:40] Yeah. Well, you guys both know in this business, it's like, one deal like that makes a big difference. So you just Yeah. Fire from the hip and try to knock down a deal or two. And if you pick up $50,100 grand in a deal, it's it's a it's a great win.

Mike DeHaan: [16:54] Yeah. I mean and that can literally change the whole trajectory of your investing. Right? And that's what you know, so we have we have a mastermind instant investor program where we have a lot of people that come in and they wanna find off market properties. And it's always super challenging when you're starting out marketing and those sort of things because it does take capital. You know, it takes time. Mhmm. And you're kind of in this grinding phase and, you know, whenever you start investing. And really, you kinda just need to keep grinding and keep shooting shots until you get that first big win, and that can literally change everything.

Dan Austin: [17:24] Right. It's like you've gotta be at bat. You gotta hit the base hits before you can start hitting home runs. And base hits keep your business running or keep you alive. And same thing with, like, just even just buying your properties and adding them to your portfolio. Like, you know, they're not all home runs. But, man, when you do get that home run, it's like, hell yeah. All those, like, $200 a door cash flow units are great, and now I've got, you know, extra couple $100 in equity in this property plus $700 a month of cash flow. It's just like that home run. Exactly. You gotta play to win. Yep.

Brad Dumas: [17:51] Combination of offense and defense. You're you're absolutely right. Yep.

Mike DeHaan: [17:54] Yeah. And it's it's like that with everything in life too. You know, even going into, like, sports and stuff like that. Like, there will be, like, I'm trying think of, like, random athlete. I mean, Jeremy Lin. Do you guys remember him? Yeah. He had, like, three good games when we were in college, and but he's still, a talking point for he was right. I think he played for, like, the rockets, and he had, like, three games. Like, oh, he's this Asian guy from Harvard. He's good at basketball. And then he was no longer good after that. But he still, like, makes good money because he sells tickets, and he's like a personality now. You know? Because he just went decided that he was gonna start shooting one game, and it worked out for him.

Brad Dumas: [18:25] My analogy to that is is Odell Beckham. One catch. I mean, his entire career. He's a one. Yeah.

Mike DeHaan: [18:33] Exactly. Yeah.

Dan Austin: [18:34] There you go.

Brad Dumas: [18:35] In a New York stadium where he had, you know, 60,000 fans on primetime television.

Mike DeHaan: [18:40] Yeah.

Brad Dumas: [18:40] That's the guy. Right. Yeah.

Mike DeHaan: [18:41] Absolutely. Exactly. No. That that's cool, though. So I guess as you're you're looking at growing your portfolio, you're also taking a hybrid approach since you are a wealth manager. So you're putting money in securities. How exactly do you balance that? Because I think that's something I mean, I know I personally am not good at that. I tend to put all my money into real estate, but I do recognize the value of putting money into, you know, other assets like stocks and those sort of things. So I guess how do you balance that and make those sort of decisions, know how much to put into real estate versus that? Like, what would you give advice for other people on that?

Brad Dumas: [19:14] Yeah. So here's here's my advice, and it came with I've been in this business for almost ten years. And the one thing I noticed overwhelmingly obvious on a lot of my wealthiest clients' balance sheets is they had real estate, they had a big piece of real estate, but they also had marketable securities and liquidity. And it made it really, really easy for banks, lenders to lend them money because they weren't overleveraged. And so one of my goals has always been to, continue maintaining liquidity and and not be the typical, you know, real estate guy with, you know, 98% of his net worth in debt structured assets. And so

Dan Austin: [19:54] I yeah, on paper. Yep.

Brad Dumas: [19:56] Yep. Yep. You know, part of that is me is me maybe playing small and maybe playing a little safer than I need to. But at the same time, I think, you know, I'm easy to lend to. I show them my W-two. I show them my cash reserves. I show them my, you know, my marketable and that typically gets a lot of folks maybe comfortable with a hairy deal.

Dan Austin: [20:19] And

Brad Dumas: [20:20] so if if something, you know, didn't feel right to the lender, I had some contingencies that got them comfortable.

Dan Austin: [20:27] Yeah. Right. And so you're saying is liquidity on your balance sheet when you are going to your lender matters. Mhmm. Absolutely. It makes you more lend more lendable. And of course, they love w two income. That's also a huge win, when you're getting financing because that's that's key. A lot of folks kind of overlook that on what does your actual balance sheet look like because it's actually, you know, it's not that hard if you can get unlimited leverage to grow your net worth, like you said, through leverage on your balance sheet, but that doesn't actually always correlate to cash flow or liquid cash flow. Like if one bad thing happens Mhmm. And you all of a sudden can't cover it. And they wanna know the bank wants to know, like, what else can we take from you really easily? Marketable securities? Cash.

Brad Dumas: [21:11] Yep.

Mike DeHaan: [21:12] Yeah.

Brad Dumas: [21:12] Yeah. And it's not it's not even the bank being a 100% comfortable with it too. It's it's me being comfortable with it. Mhmm. You know, I have all the all my spreadsheets. Right? And my portfolio says it makes this much money every month, but somehow that much money doesn't hit my bank account every month because stuff just happens. Right? And, you know, I did two roofs this year, two furnaces this year, you know, driveway. And it's really easy for a lot of your cash flow to be absorbed in these projects. And so when your cash flow is absorbed from your CapEx and you plan for that, right? And you do all that, but it's nice to know that you have kind of some some cushion aside.

Dan Austin: [21:50] Yeah. Yeah. And I always like to preach like pro form a is not reality. And it's all good if you've had a stabilized portfolio for several years and your CapEx set asides are filling up your reserves to where it doesn't even hit your cash flow anymore. But as you're growing and always adding units, it's really hard to keep that cash reserve built up because especially if you're stabilizing units at the same time, like, you buy it and you need and you're burying it, you need to pay for that renovation, and and you sometimes don't get to bury it all out, and there's all sorts of things. And so, again, pro form a is not reality. So it's a it's a tough challenge as you're growing your portfolio.

Mike DeHaan: [22:27] Yeah. Yeah. It really is. And and I I think there's a lot to be said there too. So, like, mean, even talking about, like, liquidity and being more lendable, I mean, the hardest house that was I guess, the the transaction that was difficult for me over the past year was for me to buy my new primary. Even though we had literally when when we bought it, like, I think just that to that point of the year, we bought, like, 30 houses. You know? And I had a portfolio at that point of, like, 30 something units. And the lenders were just like, well, you know, your debt to income is this. I didn't have a w two. You know, I didn't have a huge amount of cash that wasn't tied directly to my business. We had several properties that were, like, under rehab but still had mortgages. And getting this house, I actually had the first lender, like, a week before closing back out and be like, yeah. Sorry. Your debt to income isn't sufficient, so we can't close. And I was like, that's ridiculous. You know? We actually had to extend the closing thirty days. Fortunately, it was a new build, and they the builder was willing to work with us for that because we gave him some concessions and start an entire new lending process with somebody that kinda, like, understood real estate investors a little bit better. And it was outrageous.

Brad Dumas: [23:32] And that's a big thing. Yeah. You gotta have a loan officer that understands, like, schedule e and k ones and Mhmm. You know, how depreciation works. That's that's a huge point you just made there.

Dan Austin: [23:42] Yeah. So much because I yeah. And I have depreciation especially, and that's just a good that's a token of knowledge right there is making sure your loan officer is adding back because that's actually what you're supposed to do, and sometimes they don't. They do not add back the depreciation, and so it looks like you're poor. Looks like you're making no money, which is a great thing from a tax perspective.

Mike DeHaan: [24:00] Right? Right. Especially when you're working with, like, the front person on your loan, right, where they don't know. Like, they're the person that's, like, just a client relations. They're, like, probably making $45,000 a year to just, like, answer the phone and push paperwork. And the real decision maker, you know, which they keep that degree of separation for a reason, So there's no, like, you know, bias that is established or any sort of, like, relationship with the borrower. Right? You should do that to keep them neutral. But if the information doesn't get relayed correctly to the decision maker, it's gonna screw up your whole deal. And, like, you can't rely on the person that you're actually talking to going through that loan process to know those specific details, especially in times like last year where there was, like I mean, loan officers and mortgage companies were, like, real estate, you know, realtors. Like, everyone was, like, quitting their job to go and, like, sell loans. Mhmm. You know? Because that was an easy way to start making money during the boom, and now they're all gone.

Dan Austin: [24:52] So Yeah.

Brad Dumas: [24:53] Funny how that works.

Mike DeHaan: [24:55] Yeah. Exactly. So that's that's awesome. So I guess as you're, you know, continuing to go forward here, what are your plans and strategies in to keep on growing?

Brad Dumas: [25:06] Yeah. The the biggest goal is to be fully integrated with management companies by the end of probably next year for all my properties. And that's something that I totally missed the boat on. I'll be honest, guys. Like, I should have did that from day one. Just, be more strategic and more high level into decision making as opposed to trying to be in the weeds and cut costs in areas where it didn't make sense. And, you know, I I found the right partners. So I have, you know, I have kind of two pockets in my portfolio in two different counties here, and, I've hired managers in both. And it's just freed up, allowed me to grow my active income, allowed me to be more strategic and maybe spend more time networking with with realtors, with brokers, with wholesalers, with, you you name it and work kind of on the business, not in the business, you know, and that's that's been a big fix for me.

Mike DeHaan: [25:59] Yeah. Yeah. Great.

Dan Austin: [26:00] Yeah. That's awesome.

Mike DeHaan: [26:01] You can figure out that secret. That's huge, especially the managers. That's been our biggest struggle with our our portfolio. We have what? 48 units, two and two of us. And we've brought we have a couple different property managers just because a couple different geographic areas. And, man, it is so difficult. Like, as as recently as I I had a couple of properties in mind that I couldn't rent out. Well, I guess, the property manager couldn't rent them out for, like, two months. And I was like, what is going on here? So I went and, like, went to the house on a Saturday, took a bunch of photos, put them up on Zillow myself, and had them rented and paid literally by Monday. And I was like, okay.

Dan Austin: [26:34] Yeah. This is unacceptable. Bad. It's not bad. It shouldn't be that hard. Do you have, Brad, any, like, tips when you're looking and vetting out your property managers?

Brad Dumas: [26:43] So definitely finding somebody that's, like, pro scaling. Right?

Dan Austin: [26:47] So Mhmm.

Brad Dumas: [26:48] I'd rather have somebody be investor minded than like charge one percentage point less, you know, like, I I just want my philosophy is never, you know, step over dollars, pick up pennies. And there's a lot of people in this industry that try to find the guy who charges 6% as opposed to 10%. And they charge $150 every time they go answer a service call. They don't pick up their phone on Wednesday at 03:00. Like, communication's huge, right? So I just wanna know what's going on with the properties, what their strategy is, send me a monthly report and then let me be on with my life.

Mike DeHaan: [27:25] You know,

Brad Dumas: [27:25] I think I found that in both my markets.

Mike DeHaan: [27:28] Nice.

Dan Austin: [27:29] Yeah. That's great. Yeah. And if you you made a good point, like, looking for the cheapest property manager, you know, real estate investors kind of personas to known to be cheap people, and cheap is never ever the right way to go with your property manager, with your contractors, anything that just doesn't ever work out. I'm trying to

Brad Dumas: [27:45] be cheap and it never with your realtor.

Dan Austin: [27:47] Yeah. Exactly. Nothing works out when you go cheap.

Mike DeHaan: [27:50] Yeah. Yeah. My that was one of my favorite things about last year was all these people that didn't understand that, you know, sure they could go and list, like, a 1% realtor because it would, you know, save the max amount. It's like but then you, look and you're like, did they, like, take these photos with a baked potato? Like, have they did they actually know what a house looks like? Because it would just be so bad. They'd be like, no one wants to buy my house even in this market. It's like, well, it kinda messed up.

Dan Austin: [28:13] Yeah. On that that being said though, you also have to work for your money. So there's people jumping into the game as loan officers and real estate agents, and they didn't have to work for it. They just had endless leads. And now you have to work for it. And those ones that worked their butt off for the and and were charging full commissions on whatever they're they were selling are the ones that are gonna continue to operate.

Mike DeHaan: [28:32] Yeah. Exactly.

Brad Dumas: [28:34] The market always disciplines, you know, the folks that are unprepared to do the work. So it's

Dan Austin: [28:39] That's so great.

Brad Dumas: [28:40] We're gonna come into this market in the next six months where all those realtors and mortgage officers that were ignoring investors because we're a pain in the ass, you know, they're they're gonna be calling us now. Yeah. It's gonna be a market shift.

Dan Austin: [28:52] Yeah. When the, you know, we had a I had a guy actually asked me something recently. He texted me, said something about, you know, how's business or whatever. And I was like, oh, man, I still have hungry buyers out there. He's like, really? What do you mean that you have hungry buyers? And I said, well, you know, flippers still gotta flip. If you're a flipper, you're flip. And if you're an investor, you're gonna buy things. You it just has has to be a good deal just like any other time in the market. If it makes sense for you yesterday, it might make sense for you today just at different pricing. And so there's still hungry people out there, and those are the ones that are gonna consistently buy and help those agents and loan officer you just talked about.

Brad Dumas: [29:25] Yep. 100%.

Mike DeHaan: [29:27] Exactly. And with real estate, the people that are wealthiest and have the largest portfolios, I think the number one thing they're gonna universal have in common is they just never stop buying, you know, up market, down market, whatever. They just kept going. Sure. Things get weird for a little bit. Sure. They have to adjust their buying criteria. But it's a long game. You know, it's consistency over time. And sure, you can every now and then, can have, like, a crazy market that allows you to get a little bit lucky and, you know, maybe make some some money quick. But really, if you want to be true wealth, you know, you wanna be like the guy that's 80 years old that's worth a $100,000,000, you know, because of all your real estate, like, that's gonna take a long time to build. This is require a lot of consistency.

Dan Austin: [30:06] You gotta you just have to adjust your just have to adjust your criteria. I was at 4AM this morning feeding my son and, got down this weird rabbit hole. And, I was looking at Fred graphs on my cell phone while I'm holding the bottle and all that. And the you know, they say you should have 30% of your income go towards housing like that. If you go above 30%, you start getting into where you're cash strapped or you're financially unstable. And so I was like, well, if that's the case, well, then if you look at the average household income or the median household income of, like, $71,000 across the entire nation, that's right in the middle, 50% below that, and 50% people make above that. You look at that, they can generally afford max of $1,725 a month. And so if you just look at principal and interest between last year's rates and today's rates, that's a $400,000 house down to a $260,000 house, not including taxes or insurance.

Mike DeHaan: [30:57] Yeah. That's crazy.

Dan Austin: [30:58] So now you're buy that's your buying criteria now. Mhmm. If it was a $400,000 house last year, go buy go buy it for 260.

Mike DeHaan: [31:03] Yeah. Yep. Sorry. That's the truth. Yeah. Right. So yeah. No. That's awesome. Right on, Brad. Well, as we sort of start to get to the end here, we'd love to go into our our guest questions that we always ask. So first off, the crowd favorite question. What is your craziest real estate investing story?

Brad Dumas: [31:22] My first ever rental, my small condo I rented to my first tenant. Ten months later, I was given my first, suit. So she tried suing me for not returning a whole, security deposit. So, you know, and it was some, I mean, I ended up settling it within ten days or whatever, but it's just, this is what every rental is going to be as, you know, my head starts spinning. Like, do I really want to do this? You know, you start getting worried because I don't you know, I didn't have any real money then. And so that that was the wild one.

Mike DeHaan: [31:55] Yeah. So so she sued you for not giving all the deposit back. So you didn't give her back, like, $75, and she

Brad Dumas: [32:02] Yeah. It the the suit was over, like, literally $500.

Dan Austin: [32:06] Oh my god. It probably cost almost that just to file it with the county or whatever.

Brad Dumas: [32:10] Yeah. I think she had a family member that was an attorney. I don't know. But Oh my god. Yeah.

Dan Austin: [32:15] Yeah. I'm gonna get you.

Mike DeHaan: [32:16] With tenant laws in Ohio, are those things typically I guess, is it favorable towards tenants there or more towards landlords?

Brad Dumas: [32:24] You know, the one thing I'll say that is really good is we don't have rent control here.

Dan Austin: [32:28] Which

Brad Dumas: [32:29] I think is a good good pro. But I mean, we have a lot of, I guess, section eight or subsidized housing here that is is very tenant friendly. But it's in a market where it has a price point. We have a lot of investors. So, I mean, I I'd say it's pretty fifty fifty across the board.

Mike DeHaan: [32:46] Gotcha. Okay. Gotcha. Yeah. Because because Washington where we are is very pro tenant, which, I mean, if you go through the process and you go by the books, really isn't that bad to be completely honest. We've had to evict a couple people. I mean, it's

Dan Austin: [32:57] terrible when you compare it to places like Texas.

Mike DeHaan: [32:59] Yeah. Texas where you just like, you know, you you can you can send in like your your drywaller who's freaking stacked to go and throw them out, but, you know, you can't can't do that. Her that way. Yeah. Yeah. But, like, you know, here, what the one of the problems is they have, like, a tenants union that is, you know, part of the the whole government organization. Right? And they will actually so, like, that situation, if they wanted to take a landlord to court and they had to cause to do that, like, they will actually have it paid for. And then the landlord will have to yeah. By the state, and the landlord will actually have to come out of pocket for their side of it. So, like, people have incentive just to pursue everything that they can. The only plus side is that the the Washington tenant union website and rules and regulations are so freaking confusing that they make this hard for people to figure They

Dan Austin: [33:52] don't know if you're in the right or wrong as a landlord. I've gone there trying to find answers for myself, and I'm like, god. I I should know this.

Mike DeHaan: [33:57] Well, it's hard for landlords, but it's also hard for tenants. So I Totally. At least that's the equal playing field is you have to be highly committed, you know, and even the most dirtbag of person, like, they'll eventually just be like, I don't know, man. This seems like a waste of time for $500. Exactly. Well,

Brad Dumas: [34:13] I'm sure as as the unit count increases, I'll probably spend more money and time into screening. But you know, unless you're a total, you know, piece of shit, most people can have a good job, pay their rent, move on, you know, and it'd be okay

Dan Austin: [34:28] for It's not that hard to find them. It really isn't. I don't know how so many landlords find all the shitty tenants, but I've never had a problem finding a good tenant.

Mike DeHaan: [34:35] It's because they have shitty properties, so it attracts them and they don't verify. I mean, like, the only the only bad tenants we've had are ones that we inherited with properties that we bought.

Dan Austin: [34:43] Yep. Yep. Yep. 100%.

Mike DeHaan: [34:44] Cool. Alright. So next question. What is one piece of advice you would give either for a new investor looking to get started or a small investor looking to take their investment to the next level?

Brad Dumas: [34:54] For the one getting started, just do do one deal. Just do it just doesn't have to be, you know, the great white buffalo deal. Just do a deal. Just just do one and get under your belt. Learn the systems, learn for that first year, what it feels like owning real estate. And then consistently try to talk with people that are like that next base ahead of you, that next step ahead of you. Because the reality is a lot of real estate people like talking about real estate and they're okay to share their information. It's not a zero sum game. Everyone can win. Everyone can own, and let's talk to mentors.

Mike DeHaan: [35:32] There you go. Perfect. I love it.

Brad Dumas: [35:34] I like it.

Mike DeHaan: [35:34] Super sound pieces of advice. And last question, where can people find you and follow along if they feel so inclined, or, where can people contact you if you want anyone to do that?

Brad Dumas: [35:45] Yeah. Instagram is probably easiest. It's BradBradDumas@BradDumas. And then email at Bradley Dumas, bradleydumas@iCloud.com.

Mike DeHaan: [35:57] Perfect. Awesome. Well, thanks so much guys for listening, and thanks so much, Brad, for coming on the show.

Brad Dumas: [36:02] Thanks for having

Mike DeHaan: [36:03] me. If you guys enjoyed this podcast, please go and leave us a five star review wherever you listen to your podcast and share it with someone who also might be starting to grow portfolio, or could relate to Brad. And, feel free to reach out to Brad too. He is doing things in, I think, very, I would say, way and structured way that, you know, sure he might be might be he said as he said in his own words, a little bit lazy. He's going, like, a little bit slow. But I also guarantee that he's definitely not gonna get bit like some of us that are going balls to the wall.

Dan Austin: [36:34] Yep. It's not fancy. Yep. Just doing what you're supposed to, one foot in front of the other. Right? Consistency does help.

Mike DeHaan: [36:40] Exactly. All about that consistency. So awesome. So thanks so much for listening, guys, and we'll talk to you guys next week.

Brad Dumas: [36:45] Yeah. Thanks, guys.

Mike DeHaan: [36:46] Thanks for listening, everybody. Please leave us a five star review wherever you listen to your podcast. For the people that go and leave us a five star review up until we have 50 reviews, if you take a screenshot and you send it to me on Instagram at Mike underscore Invest, I will send you a free collecting keys podcast T shirt. They're rad shirts, they're triplan. They're super nice. So definitely do that, and I would love to send you a shirt. Aside from that, if you wanna start getting off market leads and buying discounted properties just like Dan and I do every single month, go to collectingkeyspodcast.com/free, and you can get our free five step guide to start generating off market leads, and you can get started right away. It's not a crazy difficult process. You just kinda need a system, and then you would be off to the races. Aside from that, guys, thanks so much for listening, and talk to you guys next week.

Speaker 1: [37:32] 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.