The Only Deals Worth Doing Right Now

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

Dylan Koch: [1:04] Every classic off market operator is like, I'm drowning in almost, like, leads and stuff where I don't wanna spend more money because I didn't know we'd if we'd get to them.

Mike DeHaan: [1:13] What is going on, guys? Welcome to today's episode of the collecting keys real estate investing podcast. I am back today. You have been entertained by Dan and Dylan for the last two weeks. I was out. I was gonna look for a good word for

Dan Austin: [1:30] I don't know if they were entertained, but we recorded podcasts.

Mike DeHaan: [1:34] You know what? The two episodes you guys did actually pretty well.

Dan Austin: [1:36] So

Dylan Koch: [1:37] I thought so too.

Dan Austin: [1:38] Mike's, like, monitoring. Monitoring. Mike's, like, his egos hit a little bit.

Mike DeHaan: [1:41] Yeah. Like, I might be the problem. But I spent the past couple weeks in Europe with my wife. Yeah. Took a little trip over there. I went to a wedding in The UK, which is pretty good, and then to spend an extra week kind of visiting some friends that we've made in other parts of the world that happen to live over there. So it's a good time. Cool. But good to be back. And, Dan, thanks for playing quadruple dad in our polyamorous business relationship, which everyone everyone took off at the same time.

Dan Austin: [2:08] Never heard of it. Polyamorous. Yes. That is it is a polyamorous business situation.

Mike DeHaan: [2:13] You know, it does have the drama that I would expect a polyamorous relationship to have sometimes. There's a lot of, like, bitching. And then for some reason, when the other two partners are having a spat, it reflects on you as well. And it doesn't

Dan Austin: [2:23] make any sense. It all hurts you.

Mike DeHaan: [2:24] It does. It does. All in all, it was a good couple weeks, though, business wise. We're keeping busy. The lending business has been insane. I literally just pulled up our pipeline, and we have so many freaking loans that we're closing right now. We're at least trying to figure out how to close. And, yeah, it's been really, really strong there. And then back at homebuyer stuff, I mean, we've been getting some pretty strong lead flow. Dan, you've been out walking houses. You got a couple contracts locked up on your own without any of the sales team in town. Just you and the VA just getting it done. Us, me and a Filipino, I think

Dan Austin: [2:55] we could I was actually looking at our kickoff this morning because usually there's more people on our kickoff. Right? But everybody's out of town, whatever. And it was me, you, and our two VAs, Filipinos. Mhmm. Pretty sure we could run a pretty robust business with a couple Filipinos and us.

Mike DeHaan: [3:10] Oh, yeah. Well, especially because we have good ones. Working part time.

Dan Austin: [3:13] Yeah. Well, we have really good ones. And, you know, we've had dozens before that that weren't good, but we're like in a sweet spot. But also just like, you know, you don't need a whole lot, I guess, was like the recognition. If you get the right folks trained up and the right people doing the things you like, you could do it part time.

Mike DeHaan: [3:29] And you get them to follow a process. I mean, I think the issue with having two more partners is because they came in with their own habits, they don't follow, like, our general process, which when they're gone, everything just performs our general process. Process. Right?

Dan Austin: [3:42] It just reverts back to how we do it.

Mike DeHaan: [3:44] It does. Because the staff that we have is ours, and they basically joined in. And so when they're here, they don't follow that. They kind of do their own thing, which I guess works for them, but you realize how inefficient that is. It's tough with staff

Dan Austin: [3:57] because staff needs and wants a process.

Mike DeHaan: [4:00] They do.

Dan Austin: [4:00] Generally speaking, not everybody. It's it's easier with staff.

Mike DeHaan: [4:03] It's tough to get multiple owners that wanna be owners.

Dan Austin: [4:06] Yeah. Exactly. Everybody wants to play daddy.

Dylan Koch: [4:08] Yeah. Well, there's you guys on that end of the spectrum with what? Four owners and a handful of staff members. There's me or there's one owner. And Mike was just gone for two weeks in Europe and could really, like, do his own thing while Dan had done the fort. Or I went out to Portland, Oregon this past week, and I came home, and it's a shit storm. And I've been playing Yeah. Like working fourteen hour days the past four days just to catch up. So And to be

Mike DeHaan: [4:30] fair, I hopped on more than half of our calls while I was gone. But, you know, you do always have to be somewhat engaged. I do think that when you're a small business, it's a myth that you can, like, just, like, step away, right, and, like, do nothing. Like, that's something that people use to sell you a course or a group or whatever. Right?

Dylan Koch: [4:48] If you're a one man show, you can do that, I think. Because like you could just step away from your own lead flow. You're like, I don't do close a deal this month because no one else is relying on you. But when you have people who rely on you, that's a little different.

Mike DeHaan: [4:58] It is. You know? You know? And if you can not be down with, like, not making money, I think if you're a real entrepreneur, the thought of stepping away and just, losing all the opportunity is really brutal.

Dylan Koch: [5:07] Totally. Right?

Mike DeHaan: [5:08] So but yeah. I mean, it's you know, there's always there's always balances with it. But, yeah, held down the the fort really quick, and, you know, there's lots of, like, older stuff that got spun up too. I don't know you saw this right before we got on this call, Dan. But Jesse locked up a deal that's, like, 2.5 years old from Minnesota. I saw that, and

Dan Austin: [5:26] then I just she she Slacked me, and she's like, you know that house we were looking at, on government way today? She's like, well, the guy said it'll take 200. Do you wanna go look at it? I'm like, fuck.

Mike DeHaan: [5:34] Oh, is that where you went, like, this morning? No.

Dan Austin: [5:37] I no. That's not the one I was looking at just this afternoon, but I was just like, goddamn it. Like, okay. Like, she's that goes back to just having I so guess for the audience too to hear the the process we've been following recently, which we've done similar in the past, but recently, it's like leads come in. Our lead manager takes them in. She takes the crap, gets rid of us. She understands what's good, what's bad. And then she's looking at it. She's she'll send it to me like, what do you think? I'll give her a quick range offer. She gives that range like, hey, my boss said, you know, we'd probably be in this ballpark. What do you think is do you think you would be somewhere in there? Oh, you will? Okay. Cool. I'm gonna schedule an appointment, then she just books on my Calendly to go look at a house. Mhmm. And so that's how we've been running it for at least just for me for the last couple weeks just because I'm busy and it's hard to just do all of that stuff all at once. But it's been nice.

Mike DeHaan: [6:23] Maybe we're gonna miss stuff, but

Dan Austin: [6:25] I don't really I haven't seen anything slip through the cracks because you're really setting the expectation. It's not like we're giving them a like a super tight range. It's like if the if the house ARVs, you know, 300, you know, it's like, hey, based on condition, we'll probably be at like $1.75 to $2.10. Would you be interested in that? You know, realistically, almost all the time we're at $1.75, but it at least opens a door.

Dylan Koch: [6:46] The important thing is getting the foot in the door.

Dan Austin: [6:48] Yeah. Right. But if you're at a point where they're like, no, I want $2.90 for my $300,000 house. I need $60 worth of work. Going on an appointment, in my opinion, is not necessarily gonna change that. They need to change their mind on their house first, you know, to open up that conversation.

Dylan Koch: [7:05] I agree with that. One of my leading questions, and this my LM doesn't really ask this for the acquisitions guy does, is, you know, what what do you want for the property? What your price expectation property? I try to get them to say a number first typically.

Dan Austin: [7:17] Oh, absolutely. If you can,

Mike DeHaan: [7:18] for sure. Yeah. You can. But if they don't, then you just give them a Yes. Right? If they're like, say, do you wanna offer me? What a lot of

Dan Austin: [7:24] these folks are giving us, like, I want $2.60. And then, like, we have one exactly like this. This guy that I was just talking about in the CRM, he came in. He's like, I want $250,000 for this house. And then Jesse's like, it sounds like he's ill and dying. Mhmm. Like, he doesn't sound good. So I'm like, well, he's motivated. And he's like, I don't want anything to do with this house. Liz is out of state, all that stuff. But he came in with a hard, I want $2.50. And she, I think, said we'd be at $1.80 to 200. And he's like, okay.

Mike DeHaan: [7:48] That sounds good.

Dan Austin: [7:49] And someone that's wanting to come off of their price that quickly, you know there's something that you you just automatically know, okay, we can have a conversation. They're at least willing to listen.

Dylan Koch: [7:56] Well, there's so many BS people too that they probably talk to. They think you're another fly by night. They say two fifty and they never hear from you again. But if you can say, hey. We like, we're still interested, but this is the range we'll be at. They're like, oh, shit. These people are serious. So, yeah, I'll hear you out.

Mike DeHaan: [8:10] Yeah. And the thing that's so powerful about running your process this way is it allows you to be a lot more efficient with your time, spending a lot less time walking out, and, you know, walking properties aren't worth it. Because like what most people will do is so they'll say it's $2.50. You know the house could be worth $2.85 fixed up, $2,300 fixed up, whatever. So it's a discount. So they go, okay. Well, let me come and look at it. And you already know that $2.50 doesn't work, but you're gonna go and get in front of them and do this all this bullshit. So you're gonna let them down anyway. You might as well do it before you go waste time and walk the property. Right? Because if they're not gonna agree in less than $2.50 already, don't even waste your time. Right? And so by setting an expectation before you go and look at it, it allows you to not have to be driving around on stupid appointments, spending an hour talking to the seller, you know, just to not get a deal anyway. And it also if you want, once you get good at this, you can launch new markets. Right? You can have, like, a lot more flexibility with, like, where your team's located and everything else. This is what we've been we always go to preach and scale with folks that are in some of these, like, rural areas especially that are like, well, that market's an hour away. Like, I can't be driving out there all the time. It's like, well, then don't unless it really makes sense.

Mike DeHaan: [9:22] Honestly, it's that fucking simple. You know? And if you're like, well, I don't even know if I can do that that range that I said because I haven't seen it yet. I like, have them send you photos. You If they can't send you photos, then send somebody else out there and pay them $200. Like, you know, he'll figure it out. But there's always this weird thing. I think it's because real estate guys, I don't know, they tend to be kind of tangible by nature. They always wanna walk the house and, like, get in front of people and feel it and, like, get the layout. Like, I I hear that all the time from newer people. Like, I just like to, like, kinda get the feeling of the house. I'm like, why? Doesn't matter at all.

Dan Austin: [9:57] Yeah. Yeah. Dylan Dylan can speak to this fact. You do enough, like, renovations or going in enough houses, you're like, I don't give a shit. Make get white inside, and then gray carpet, and we'll sell it. You're like Yeah. You know you know, like, the newbie the new people always come in, like, I just wanna know that's got really good flow and this, that, and the others. You're like, I don't care. I just I just wanna do what it takes to get the number that I put on the spreadsheet.

Mike DeHaan: [10:15] It's even worse with newbies. I don't what the fuck they're looking at anyway.

Dylan Koch: [10:19] Right? Right.

Mike DeHaan: [10:20] Yeah. They've never done a project. And so, like, they're gonna walk around and be like, oh, yeah. You know what? Like, that's always super fun.

Dylan Koch: [10:25] That electrical looks good. But yeah.

Mike DeHaan: [10:28] When you're doing dispo and a bunch of newbies walk in, they kinda like walk in, she's like, oh, okay. Yeah. You know, that looks pretty good.

Dylan Koch: [10:34] Oh, when I first started, I didn't know I mean, I'm not a handyman by any means, but, like, I didn't know the difference between plaster and drywall. I could see electric panel. I'll be like, that's electric. Like There's an outlet over there. Idea what

Dan Austin: [10:45] I was

Dylan Koch: [10:46] looking at. So Yeah. Yeah.

Dan Austin: [10:47] That's great. So it's like, look at you now, Dylan.

Dylan Koch: [10:49] Yeah. You learn a lot by just fucking doing it.

Dan Austin: [10:52] So Yeah. Totally.

Mike DeHaan: [10:53] But the thing is with your Dylan, so you were in Oregon for like a weekend. You have an AM and a VA and an assistant. So why the fuck did it fall so far behind?

Dylan Koch: [11:04] Yeah. So I mean, I think most of it is related to the fact that we have seven rehabs going at one time right now. And I'm GC ing most of those rehabs.

Mike DeHaan: [11:10] Yeah. So you're a project manager.

Dylan Koch: [11:11] Yeah.

Mike DeHaan: [11:12] Okay. So you're missing a seat, like, needs to be filled

Dan Austin: [11:15] in that.

Dylan Koch: [11:15] Yeah. But Dan and I actually talked about this a little bit while you're gone. I don't want to be I don't want to do this many rehabs at one time. I just kind of took them because the opportunity presented themselves.

Dan Austin: [11:23] Mhmm.

Dylan Koch: [11:23] Right? And I didn't want to turn away deals, revenue, properties. And so I'm just kind of sucking it up and getting through this.

Mike DeHaan: [11:29] Yeah. Okay. Well, that makes sense. You're in a specific one off challenging situation and then chose to go to Portland for some reason.

Dylan Koch: [11:38] I was there for a wedding. Thank you. Okay.

Mike DeHaan: [11:40] Oh, that's right. I think we talked about this wedding.

Dan Austin: [11:42] He did offer to come visit me. He's like, how far is up from Spokane? I was like, too far.

Mike DeHaan: [11:46] It's pretty far. It's too far. It's like an hour flight.

Dylan Koch: [11:50] Yeah. I didn't know. Was like, this was I was like, they're on the West Coast. This we should be close.

Dan Austin: [11:54] Yeah. Everything is very spread out on the West Coast. So, we're we're far away.

Dylan Koch: [11:57] Yeah. But one of the things, I guess, while we're talking about, like, team sizes and, like, what it takes to run, I don't know, a business that does four or five plus deals a month. I had this old, basically, like, breakeven analysis of my business. This is everything from, like, alright, Simply, PropStream, all the tech platforms, being registered with the Better Business Bureau, my PO Box, even some economic subscriptions. Do you think what that is every month, like, the overhead cost is?

Mike DeHaan: [12:25] For, all that?

Dylan Koch: [12:26] Yeah. For basically to run the entire business without any direct mail spend.

Mike DeHaan: [12:30] Oh, I mean, like, so with those staff. 10 easy, if not more. No. I have less.

Dylan Koch: [12:37] No. So this includes my salary. If you could take that out, it'd be a lot different.

Mike DeHaan: [12:40] Oh. So he pays himself $25 a month. So we're talking 35. No.

Dylan Koch: [12:44] I don't. I pay myself $6,500 a month.

Dan Austin: [12:48] Dylan, Dabadi from Cincinnati is one of the richest dudes I know, so you pay yourself well.

Mike DeHaan: [12:53] It's getting up there.

Dylan Koch: [12:54] Alright. So we're gonna just gonna move on past that. But anyway, but total is about $13 a month.

Dan Austin: [12:58] Oh, that's what you pay to run your business, not including direct mail? Okay.

Dylan Koch: [13:02] So that's without direct mail spend, and that's paying me $66,250 a month, my AM, $2,000 a month. And then my my point being is it's about $13 a month, and then call that 18 to 20 with direct mail spend. But 90% of that is just staff.

Mike DeHaan: [13:18] Me Yeah.

Dylan Koch: [13:18] My AM, my assistant, my VA, acquisitions guy.

Dan Austin: [13:22] Which actually speaks to honestly how how low overhead this business truly is outside of marketing. Because typically, your labor is gonna be like 60% of your expenses, maybe 50. Where here, it's a lot higher in this business towards that because there's just not a ton. You don't need a ton. You don't have to have an office space. You don't have to have a bunch of other crap to run the business. You need a few systems. Right? Then your marketing, which is an incremental spend is well, that's really coming out of your gross proceeds anyway, so it's not considered an expense. Right? Right.

Mike DeHaan: [13:52] Yeah.

Dan Austin: [13:53] So it's heavy in that in labor and marketing.

Dylan Koch: [13:55] Mhmm. But I just sent out another $7,500 mail piece. So, like, I guess my point being is like, for the audience, if you're doing one to two deals a month, and you're wondering why can't I can't do like three or four or five, it's maybe you're not spending enough money.

Dan Austin: [14:08] Yeah. That's a 100% usually. If you figured out how to start doing one or two deals a month consistently, like, that's your consistent number. Like, I can do one. I can do two. Some months, I do none. Some months, I do three. Like, can do five to six deals by just spending more money.

Mike DeHaan: [14:24] Absolutely. Even just you. Right? Maybe, like, one team member. Mhmm. Even just you. You know, the you bring on a lead manager when you get to the phase of you have, like, so much backlog that you can't keep up with it anymore.

Dan Austin: [14:37] Right. 100%. But

Mike DeHaan: [14:39] You think that's threshold five or six? I mean, that makes sense. Right? For like Yeah. If you think about if you have a singular AM, like a good AM, if they're having to go on-site, I would say like eight to 10 a month. Right? Like, realistically.

Dylan Koch: [14:54] I would love to get I mean, we're doing five to six a month now, and that's about my team. Me, a VA or me, an LM, an AM, my assistant.

Mike DeHaan: [15:02] You're probably not spending enough money, honestly, for more leads. Yeah.

Dylan Koch: [15:05] I might not be. But I've fitted to the point too where every classic off market operator is like, I'm drowning in almost, like, leads and stuff where I don't want to spend more money because I didn't know we'd if we'd get to them. I mean, I sucked it up and did it anyway, but, it's the same shit.

Dan Austin: [15:18] Well, and, like, with you, Dylan, too, because you like, you even talked about that earlier in the podcast, like, you're you're pretty heavy on flips right now.

Dylan Koch: [15:22] Tied up a lot of money.

Dan Austin: [15:23] So you're tying up money and you're tying up time with those because there's project managers associated with that. So then then it leads you to believe, which this is the next step for a lot of people is like, well, do I hire a project manager? Because then I could do what I do best? Maybe. Or if you just do less flips? Maybe. But like we found even in our CRM, you know, looking at our stuff, like we've made a good chunk of our income this year by doing flipping or innovations or wholetails. Like, where Mike and I are usually heavy wholesale.

Mike DeHaan: [15:48] Yeah. Also, too, with what you're saying there, John, so you're drowning in leads. As you increase marketing spend, the efficiency of your marketing drops. Right?

Dylan Koch: [15:59] I think that's what kills me, like mentally.

Mike DeHaan: [16:01] Yeah. Well, I mean, that that's kind of part of the game though. Right? Is, you know, you will get more leads that come in, less of them will be qualified because you're starting to get into less qualified lists. Right? You're starting to hit, like, people in more rural areas, less out of, the target areas. You know, unless you're in, a massive market. But even then, eventually, you'll start to have loss that occurs just because your marketing list is less motivated. Right?

Dylan Koch: [16:27] Right. So return on ad spend goes down.

Mike DeHaan: [16:29] Yeah. Your return on ad spend might stay the same. Your cost per deal will go up even if your cost per lead stays the same. Right? Because you'll still get the same where people that call you tell you to fuck off. Right? There will be just like less motivated people that call you when you're starting to get into exclusively just the absentee owner list. But so I think that that's kind of the issue. And and like what we're talking about at the beginning of the show where you get used to creating these ranges to prequalify stuff a little bit earlier, that becomes more important because there's now as more leads come in that are less motivated, there's more opportunity to waste time. And what a lot of people do is they're inclined to bring on more staff, which adds on more fixed overhead, which affects your business. So it's one of those things you kinda need to break it to fix to be able to fix it and figure it out. I mean, drowning in leads, I think if you get to that phase, the next step is to figure out how many of those leads are actually quality. And what does that actual cost per deal look like? And if you're comfortable with that cost per deal, just push it until you're not anymore.

Dylan Koch: [17:24] I think that's all valuable feedback too. And I if I'm just sitting here, like, my mind's always racing. It's like, Okay, I got this to do next, this to do next, this to do next. And it's never, I should go back and see if my leads are qualified.

Dan Austin: [17:36] You've always got stuff to do.

Dylan Koch: [17:37] Right. So it's just like making it a priority when I, you know, it's important, but it doesn't seem like the most important thing to do at the time.

Mike DeHaan: [17:44] But I mean, that's and that's the hamster wheel, right, of entrepreneurship and why it never seems to stop because you have to make that time. That's a big reason that like Alex and Mosey's stuff is talking about how until you're to a certain point, you kinda just have to work fourteen hours a day.

Dan Austin: [17:57] So suck it up.

Mike DeHaan: [17:58] You spend ten hours operating the business, you spend four hours doing all the shit to make your business operate better. You You can't really afford to do both at the same time.

Dylan Koch: [18:06] It's taken the two steps or one step back to take two steps forward, entire concept.

Mike DeHaan: [18:11] Yeah.

Dylan Koch: [18:12] But you just I mean, he stole your guys' slogan the other day. Do you see that?

Dan Austin: [18:16] I'm super annoyed by that. He must be a listener. I mean, how else would he get that tagline?

Mike DeHaan: [18:22] Yeah. I mean, we stole it from Brandon Turner, but which I found out after the fact when we said that on the show, like, years ago. And then one of our our scale members sent me a YouTube video from Brandon Turner that was literally titled massive income before passive income. Not the audit. You didn't have

Dylan Koch: [18:37] to you didn't have to disclose that, Mike. Now the world

Mike DeHaan: [18:39] does.

Dan Austin: [18:39] Yeah. But but you know what? Here's the thing. There's nobody knows Brandon Turner as the massive income guy. They know him as the passive income guy.

Dylan Koch: [18:44] Exactly. About the real estate guy, the bigger pockets guy.

Mike DeHaan: [18:47] The guy with the beard. And to be fair, Brandon doesn't know shit about making massive income unless it's like being an influencer.

Dan Austin: [18:53] He's used that to his been

Mike DeHaan: [18:55] You know, he's he's not out there grinding, walking crack houses doing what we do. It's a little different. He, like, he he put in his time. He paid the piper with the thousands and thousands and thousands of hours building bigger pockets. And so he makes money that way now. You know? It's like it's different than the grindy massive income that we're kinda talking about. Because, like, realistically, the people that we're pitching to with that, they cannot do what Brandon Turner did. Very, very few people can do what he did no matter how hard they try.

Dan Austin: [19:21] I mean, we can't do what he did.

Mike DeHaan: [19:23] He couldn't now? For sure. If you look at how much more that's actually a really interesting, like, conversation if you think about it is with how much more real estate content is out there, Brandon Turner, if you were to start even, like, three or four years ago, would not be successful.

Dylan Koch: [19:39] Oh, I don't know about not being successful. He would not be successful at the scale that he is now.

Mike DeHaan: [19:44] Correct. I think he's gonna be very skilled person. Think he's a very smart guy. He would not be who he is, like, with the level of following he has in the audience.

Dylan Koch: [19:52] I feel that way a lot about a lot of real estate investors. I know even locally who have 50 to 100 units. And I talked to him, I'm like, you're dumb. But like, they just bought at the right time.

Dan Austin: [20:02] Yeah. For sure. Yeah. That's a lot of people.

Dylan Koch: [20:05] And if you'd be like, Oh yeah, I purposely bought, you know, when I knew prices were you know, I knew printing trillions of dollars was going happen. I knew inflation was going to be low. Like, none of them knew this. They just invested in their backyard at a time that made sense.

Dan Austin: [20:17] Yeah. They just made shit work.

Mike DeHaan: [20:19] Same if you look at all the influencers. So many influencers that are big, it's because they've been doing it for a long time, and they're very charismatic, and they just happen to have like a niche that became popular. This comes up pretty often in GoBundance. People are like, well, what's the next big thing going to be? I'm like, well, by the time you have an inkling of what that is, it's going to be too late. Right? Realistically, you need to kind of already be doing the thing and just hope that it gets popular.

Dylan Koch: [20:43] Yeah. And everyone's jumping on AI stuff. I just I can't get behind it until Yeah. Someone else does it.

Mike DeHaan: [20:49] Yeah. I mean, AI is like the kind of obvious one. Right? I'm talking about like niche within the real estate space. You know? Like, if you'd asked me five years ago if fucking boutique hotels were gonna be the popular thing, I would have thought you were stupid. I'm like, why? Does it make any sense? But sure enough, there was people that were niche into that five years ago that did very, very well. And now their business must not be going that great because they're the boutique hotel gurus. Right? Like, that's what that's kind of the pivot.

Dylan Koch: [21:16] Yeah. Biggest one in hindsight to me is obviously the Airbnb. I know we've harped out on the show. Absolutely. The people who do like the arbitrage shit, like I don't see that at all anymore in any my social medias. And that was big for a while.

Dan Austin: [21:28] Yeah. It was terrible. And that was, I think, probably at some point in time when the BiggerPockets listenership turned over when they hired that dude that was like, I'm all in on Airbnb, and that's all I do. And then combined that with David Green, I was like, oof. I don't think that's a good show.

Mike DeHaan: [21:45] Yeah. But, you know, it's like everything else. It just starts to get over I would say oversaturated. But when everyone starts talking about something is probably the time that it's too late for it. You know? Like right now, buying a small business. Literally, I had a guy respond to a little marketing email that I sent out for our lending company. And he his response was it's funny. You might listen to this guy. Send a link to the show, so I'll be kind. I I was kind in the email. I said he said, do you guys are you familiar with the Morby method?

Dylan Koch: [22:13] Oh, no. Oh, god.

Mike DeHaan: [22:15] And will you find a deal that has this structure? And I responded back to him, and I was like, no. And nobody else will either. And just so you know, I pretty much speak out against everything that pays more. He does. Sub two in itself isn't the problem. It's mostly about how he teaches it, and he makes it sound way less complex than it is. And it talks about how you can do it with no cash and all those other things. And I was like, I would highly recommend that you don't do that. He responded back and he's like, okay, well, I'm a veteran, and I'm trying to I don't have a lot of money. I'm trying try to get into this. And I was like, where I've seen veterans have the most success is by using the 0% down VA loan to start house hacking to just kind of get that initial

Dan Austin: [22:54] Send it to our boy, Dave Pare. He'll teach him.

Mike DeHaan: [22:56] Investment going at similar to Dave Pare, whatever. And then his founder just went back to me. He's like, well, I'm looking at buying I said, I think I'm gonna pivot and look at buying small businesses. Do that kind of financing? And I was like, no.

Dan Austin: [23:07] Sorry, dude.

Mike DeHaan: [23:08] I was like, over three emails, he completely changed his tone. He's like, you know what? I'm not gonna do real estate more. I'm gonna be a small business guy. I'm like, fucking Christ.

Dylan Koch: [23:16] Those are ones that they just need to figure it out on by themselves. And they will eventually. I know.

Mike DeHaan: [23:21] So, yeah, it's well, again, that's that's a perfect example, though, is now everyone's getting into that. It's too late. Like, there's so many different ways that people have like, dumb money has pursued things. That just don't make sense.

Dylan Koch: [23:32] For me, it's just like on you just got to get to the point where you basically like fuck what everybody else is doing and figure out what works for you and what your goals are with long term investing with whether it's to make massive income, is it to build a rental portfolio, is it to grow your net worth? Because real estate can do all of those things. It just depends on what vehicle you choose to do it with.

Dan Austin: [23:52] 100%.

Dylan Koch: [23:53] Right? Wholesaling and flipping is the massive. Buy some more rentals, not even for the cash flow to live off of, but, you know, if you can basically burr into a place that's worth, call it $400, and let's say you're all in it for 10 to 20. Okay. Well, you just bought a $100,000 worth of equity for 10 to $20. You had 80 k spread. Do that a couple of times a year, and you're going be in a much better financial situation five to ten years from now.

Mike DeHaan: [24:16] Totally. Hey. So you've heard us mention our scale community before, and I don't have a lot of time, so here are the quick highlights. In scale, you get all of our processes and systems that we use to do about a 150 deals every single year. You also get a community of investors that are verified crushing it in their markets. Otherwise, they wouldn't even be members. And that way, you don't have to waste time with nonstarters like you find in other groups. You also get preferred relationships with marketing companies and even lenders that will give you 100% financing. If you just heard all that and said, nah. I don't really need it. That's not gonna help me. I don't know what to tell you. You're lying to yourself because all those things are guaranteed to help you explode your business and buy more deals next year. So go to collectingkeys.com/scale, and let's see if you qualify. And one of the sort of like themes with that that you see preached a lot with, I would say, more experienced influencers around business. You know, Hermoji says this a lot. I've heard other people say this too. It's like sticking with the same thing and like being patient. Right? And everyone's like, why are you in a rush?

Mike DeHaan: [25:16] Like, why are trying to do this? And that's a very easy thing to say, like, when you're already rich. Right? Because you don't have to be in a rush. Fucking you can do whatever you want. You could stop working tomorrow and be good for the rest of your life. Those people that generally say that. But even though I'm not quite in that position, right, like I definitely still need to make money. Now having been self employed for seven years, I can very confidently say that I understand that and I fully agree with that. Right? As if you are able to look at things without needing to be rushed, it's so much easier to make actually smart decisions. Right? And to get be okay with things going a little bit sideways or want to try and get better, like, 1% every day instead of feeling like you need to be doing things a 100 x, like, this year, right, which isn't realistic.

Dan Austin: [26:03] Yeah. It's tough because it always those same conversations always go hand in hand with, like, what is it? You can't hit a tar you can't hit a you miss a shot every shot you don't make.

Mike DeHaan: [26:12] Where the fuck?

Dylan Koch: [26:12] I'm having a stroke. You really fucking butchered that. Are

Mike DeHaan: [26:17] you having a stroke?

Dan Austin: [26:18] I'm having a stroke. Oh my god. Can you say that again? The Repeat. Let's rewind this. So the same people in the same conversations are like, you gotta set big goals because even if you miss a big goal, you still hit lower than the target.

Dylan Koch: [26:32] What the

Mike DeHaan: [26:32] fuck? I wanted to throw

Dan Austin: [26:33] a target in there. You know what I mean? But but like everybody's always in the entrepreneur world, like talking about setting big goals, lofty goals. Right? And they're always like, oh, you can do, you know, more in, you know, five years or a year than you can

Dylan Koch: [26:44] in ten years. You can do more than a decade than you can, like, do in one year, especially like the Bill Gates quote.

Mike DeHaan: [26:53] Yeah. Or people will say it that you overestimate what you can do in one year and you underestimate what you can do in ten.

Dan Austin: [26:58] That's what I was trying to say the whole fucking time. So but, like, when you're when you're in that one year window, feels kind of rushed because you have this big goal that you also kind of need to set. And so you're like rushing towards that big goal. And you had you had no fucking chance of ever hitting that goal because you overestimated what you could do. It's hard. Right?

Mike DeHaan: [27:16] And people It's hard. Underestimate how hard it is. That's been one of my my big pieces of guidance I give for, like, younger people who wanna be in entrepreneurship is people always ask like, oh, you know what? Something that you know or, like, a piece of advice. I will always say that things will take significantly longer and be significantly harder than you're expecting them to be.

Dan Austin: [27:34] That's exactly it. That's the best way to put it.

Dylan Koch: [27:36] Especially in the beginning and especially for a new one who wants to buy let's say you're young 20 and you wanna buy rentals and you you're trying to burr a deal, but you don't have any money, you need almost a 100% burr deal, which means you get a deeper discount. Because if I get that same deal and I'm okay with leaving 10 to 20 k in the deal, I can pay more for it. You're competing against those people all day long. So it's tougher in the beginning than it is in any time during this process.

Dan Austin: [28:02] You have to take more risk in the beginning too. That's just the unfortunate truth.

Mike DeHaan: [28:05] Yeah. For sure. You know? And that's such a valid point, I would say, now more than ever. Because over the last, you know, five years, those of us that have been playing the game for a while, which that population has really gotten big, if you look at, like, five, six years ago, we are willing to do that. We still have businesses. We are playing the long game now. And the newbies that come in and try to do it, like, half assed or part time, they're always gonna lose unless they get lucky. Right? So you either gotta be willing to just grind until you get lucky, or you gotta be willing to, you know, figure it out and, you know, really, really expect to take a lot longer than it would have even a couple years ago.

Dylan Koch: [28:39] And keep doing it once it gets boring. Been the thing lately. This isn't exciting really anymore. Yeah. You know, you just gotta keep doing it.

Mike DeHaan: [28:47] Yeah, not at all. Know? And people will ask all the time because they're like in scale and different things we do. I'll tell people exactly how we run our business, even people locally here. I'll literally tell them all of like our marketing campaigns, everything. And people that I would say are, like, quasi successful, they're always like, why would you give away all of your secrets? I was like, because I know that if they do the same thing, we will be better and we will beat them. You know? And I don't care. And if they do happen to beat me on a deal, then here's the great thing is because I help them figure that out. There's a very strong chance they're gonna come to us and say like, hey. I don't know what the next phase is. Do you wanna help us with this? And I will say yes. And then we will make money on that regardless.

Dylan Koch: [29:23] And you tell it to a 100 people, only one of them is actually gonna do everything you do They

Mike DeHaan: [29:27] don't do anything. You know? Yeah. So, you know, small business. It's kinda just the way it is. And as the economy and stuff's gotten weird, it's been fascinating to kind of see how that's all sort of starting to shake out too. Because, you know, there's starting to be fewer and fewer small businesses every day. But also, I don't know, I would say like the general job market and things like that, like people are getting more and more fed up with just everything else. And affordability is becoming more and more of an issue. So who knows what the next little bit is gonna look like.

Dylan Koch: [29:57] Dan, we were right. Last week, you asked if the Fed was going to what they're going to do that day. And we both said they were gonna not do anything pretty much. And that was that was right.

Dan Austin: [30:07] That's what they did. Well, I am known to be able to forecast the future. So if you guys ever want anything

Dylan Koch: [30:12] Can't speak.

Dan Austin: [30:14] I definitely can't speak. It's because I'm just so good at forecast the future. It just messes up my mouth.

Mike DeHaan: [30:19] It's your autism, Dan. It's okay.

Dylan Koch: [30:21] I have some of those tisms. You you do.

Mike DeHaan: [30:23] You have one too many tisms.

Dan Austin: [30:24] I was checking the market to be like, But you know what? The stock market keeps going up for some reason.

Dylan Koch: [30:31] So it closed at all time highs today,

Dan Austin: [30:33] which is Nobody knows why. It's like you can't sell a freaking house. Things are uncertain. Just things are weird. And you're like, but guess what? Baby boomers four zero one k went up. Yeah.

Mike DeHaan: [30:44] I mean, any transferring of assets. Right? Like you have people that are having capital events, people that are selling houses, putting different things. Where are they gonna put it? You put it somewhere.

Dan Austin: [30:53] Yeah. I think right now it's just kind of swings back. Right? Let's go people are investing in the stock market a lot more recently because they're like, oh, it's an opportunity. This will

Dylan Koch: [31:01] be a topic for another day. But there's a there's a hedge fund manager out there. His name is Mike Green with Simplify Asset Management. And he basically has this theory that passive income flows, so basically like the baby boomers and their four zero one k's and how there's no theory, rhyme, reason. They just pick the highest market cap stocks because that's what their four zero one k and their vehicle is designed to do. That all of the appreciation really for the past ten years has just come from these passive income, nondiscretionary income flows. That's why the the bag seven keeps getting wider and wider from the rest of the 493 stocks and

Dan Austin: [31:36] S and

Dylan Koch: [31:36] P 500.

Dan Austin: [31:37] You think that that's why their value is going up? Yeah. It's interesting because they are like 99% of the stock market growth is the the magnificent seven. Like, almost all of like that stock growth has been for the

Dylan Koch: [31:48] Well, it's a feedback loop. The bigger it gets, the more of the allocation that it gets.

Dan Austin: [31:51] Right. Exactly.

Mike DeHaan: [31:53] See, and this is why the whole system's so fucking dumb. Because based it's literally based on nothing. And over the past number of years, when trading stocks like that has become so much simpler, it's like lost all actual value. Right? Like honestly.

Dan Austin: [32:08] Yeah. You got a bunch of people out there just dumping money and stuff.

Dylan Koch: [32:11] The Warren Buffet style investing, value investing, doing discount cash flow models, finding the intrinsic value, there's like a handful of people do that in the world. And they've gotten crushed the past ten years from people who all they do is like, hey. This went up yesterday, so it might go up today. Like, that's basically the the thought process.

Mike DeHaan: [32:27] Swing trade it, especially when you can go on like Robinhood and trade like for free. Right? And like you go and you sign up and they just like give you margin to like trade on. Right? So you have all these kids that are just like throwing money and like whatever is moving for the day, and they'll hold on to for two days and they'll sell it, you know, and doing wild shit.

Dylan Koch: [32:43] Well, it's bad. There was a there was like a 20 year old kid who basically was trying to trade leveraged options on Robinhood. And his account show like, even though he only had like $5, showed a negative $50,000 balance. That's not how it works. That's just what the UI showed him, but because that's where his contracts are, he killed himself.

Dan Austin: [33:02] Oh, shit.

Dylan Koch: [33:03] And then, like, the contract would have expired worthless. Would have lost, like, his $5, but he didn't know that.

Dan Austin: [33:08] Like, he thought he was, like, out 50 k?

Dylan Koch: [33:10] He thought he was out $50.

Dan Austin: [33:11] Interesting. Oh my god.

Dylan Koch: [33:13] So I think that that happened almost a year or so ago, but you guys jogged my memory. I don't don't know if that turned into, like, a lawsuit or or not. But my point being is, like, educate yourself before you play with these leveraged products.

Mike DeHaan: [33:23] Yeah. I don't know. That's it's a weird thing. I do think that that will be the challenge that society faces in the next ten to twenty years will be the wealth gap because of that.

Dan Austin: [33:36] Just about how rich rich guys like us get.

Mike DeHaan: [33:38] Yeah. I mean, honestly. Right? Because even like what you were saying before, Dylan, where it's like somebody comes in and if you need a full BER to be able to keep buying, but you're in a position where you don't need that, that exists across everything. Right?

Dan Austin: [33:48] The people that have the the assets are able to do different things. Yeah. Invest differently. And then to your point about the mag seven, then they get bigger as as it's just feedback loop right back to itself. You get bigger, invest more and get bigger, invest more and get bigger, and it just goes on.

Mike DeHaan: [34:03] Yeah. You know, there's really no way to get out of that without some luck or like a large capital event of some kind.

Dan Austin: [34:08] Luxury or wealth tax. Get a wealth tax.

Dylan Koch: [34:12] Yeah. You hit a meme stock that goes off 20 x. No. Let's not talk about that. But there is one thing we should bring up that the Fed announced yesterday, and it's basically called loosening the SLR restrictions, which is the supplementary leverage ratio. The easiest and cleanest way I can explain this, like if you are a JPMorgan, one of the big banks in the world, and you have 50,000,000,000 of assets on balance sheet, you are required to hold, let's call it $10,000,000,000 in collateral against what you're lending out. So and they have to hold those in safe things. So call that treasuries, bonds, mortgage backed securities. Well, they're changing the leverage ratios, where instead of holding 10,000,000,000, you only need to hold 5,000,000,000. And that 5,000,000,000 that is now freed up, you can use for whatever you desire as the bank, with the hopes that they use it for more lending purposes, free up some credit, the consumer can go out and spend more. So this is not the first time this happened. This happened after 2008 and the bank crisis and COVID. And when Silicon Valley Bank all went up, they kind of did this too, they eventually bring it back. But the whole point is loosening monetary conditions, hopefully, increase spending.

Dan Austin: [35:20] So will will this make debt any cheaper? Because now there's more availability in debt that banks can provide. Will they be willing to drop their rates? Because that's-

Dylan Koch: [35:31] I guess I would go back to the demand response to that. So I I guess I would assume so, but it depends on the appetite for this new Right. Quote unquote collateral or debt that can be issued.

Dan Austin: [35:42] Yeah. That would be the question. Because if it's issued at the same price, it feels like no. Maybe though, maybe banks will say yes to a few more borrowers, I guess. Maybe banks naturally loosen up other things like credit score or background requirements.

Dylan Koch: [35:56] This is more in line with congress, big banks. It's not really like URI having deposits at one of these banks because that's gonna be so such a small percentage of the overall balance. So this is more like when the congress issues its debt, and that debt needs to go somewhere, and the banks basically trade amongst each other.

Dan Austin: [36:15] Okay. So then there's they can buy more debt from the government?

Dylan Koch: [36:20] Yeah.

Dan Austin: [36:20] So then the government can have a place to to get money from. And maybe then in turn rates go lower.

Dylan Koch: [36:27] The whole reason for doing this, and they'll Like they got It actually voted five to two, which I don't know why there's seven votes. I thought there's more than that. But there's five people for, two people against. And they were basically saying like, we need to loosen monetary conditions, but they want to do that without directly doing that with Fed's funds rate.

Dan Austin: [36:43] Right. Yeah.

Dylan Koch: [36:43] And then this is their way of doing it.

Dan Austin: [36:45] Yeah. And that makes sense. I do recall this being adjusted as you said that I do recall with this being adjusted during COVID and after the SPV thing. Like I remember them talking about this specific things. I guess I don't functionally know how it works. I don't really care. Like, it doesn't matter, I should say rather. So essentially doing this could make it a more easier environment for guys like us to get money. It's kind of what the intention is, ideally.

Dylan Koch: [37:10] That's how I would interpret it. Yeah.

Dan Austin: [37:11] That could be a good thing, especially on the investor side of things. If you're able to go to banks, if you're a Fannie Freddie borrower, you know, I don't know that this will affect, you know, your local banks with their doing commercial loans at all. Because those seem to always be up to the discretion of the local bank. But for your Fannie Freddie stuff

Dylan Koch: [37:29] Well, if you mean, if you're a bank, you have a certain amount of deposits, which therefore gives you basically how much you can lend depending on how much deposits you have. They're just saying, hey, you have the same number of deposits, but you can just lend more as a percentage of the deposits out.

Mike DeHaan: [37:41] Right. Of that. Right.

Dylan Koch: [37:42] So I don't have a crystal ball of what this will do, but I think it does show that, hey, the Fed is trying to do something without touching the federal funds rate.

Mike DeHaan: [37:52] Well, I bet it does nothing.

Dylan Koch: [37:53] Time will tell. Yeah. Time will tell.

Dan Austin: [37:56] So in 2026, June, one year from now, will it be better? What's it? The real estate market, the economy.

Dylan Koch: [38:07] Everything. Will the world be better a year from now?

Dan Austin: [38:09] Will we be better? What do you say? You said it won't change. I'm just asking you, like, what do you think in a year from now? What will be different? Because this is gonna be one change of many probably.

Mike DeHaan: [38:19] Yeah. The one thing I can guarantee is if things are better, Trump will say it was his influence. If things are worse, it's because of Biden. That's what he will say.

Dan Austin: [38:29] That's what

Mike DeHaan: [38:29] the general consensus will be.

Dan Austin: [38:30] I'm trying to think of something funny to say, but I don't have anything funny because this is too serious of a topic now.

Mike DeHaan: [38:35] Nah. It's fucking clowns world out there right

Dylan Koch: [38:37] now, bro.

Mike DeHaan: [38:38] That's just that's just happening. But, I mean, I would say to me, is funny is that Instagram reel that you sent me this morning, and it was that that clip from uncle Rico Napoleon Dynamite throwing a fucking sandwich at at Napoleon Dynamite. And it basically says, like, you know, he's The US and this is Iran.

Dylan Koch: [38:53] And he's like, what the fuck are you doing?

Mike DeHaan: [38:55] I'm like, yeah. Exactly.

Dan Austin: [38:56] He's like, check this out. It's like Israel, The US, uncle Rico's The US, and they're sitting there on the he's like, check this out. It's The US obviously throwing the sandwich at or the football at freaking Napoleon Dynamite. And Napoleon Dynamite's already why'd

Dylan Koch: [39:10] you do that? Yeah. What are you doing? That was funny.

Dan Austin: [39:14] Yeah. That is true. It's interesting though, because I do think there's going be quite a bit of changes because obviously the economy is it's like moving. It's theoretically okay. It's not broken that we can see on the surface of everything. Right? It's working, but people are like, god. I just don't feel more rich. Like, nobody's feeling more rich right now. You know what I mean? And so that is problematic.

Mike DeHaan: [39:36] Unless you're

Dylan Koch: [39:36] a boomer that is at all time highs in their four zero one k today.

Dan Austin: [39:39] Sure. Yeah. Exactly. But, like, within the groups that the crowds that we kinda like talk. Right? People are doing fine. The other rich guys that we talk

Mike DeHaan: [39:46] to in our extremely small bubble of one and two percenters. Correct.

Dan Austin: [39:49] Sure. Buddy, local real estate investors. Right? I was just on the phone with a guy on the way in here, and he's like, how's it going? He's like, oh, it's good. It's good. But it's just like, everything's hard. Right? That's kind of the conversation you have. Like the people that are truly doing things, they're doing them, but the sentiment is that it's harder. You could probably look back and be like, nah dude, 2025 was similar to '43. I mean, maybe, I don't know. When you're in it though, the sentiment just feels like it's hard and grindy. And so I bring that up just thinking like this is probably one of the several changes. We will probably end up seeing some rate cuts at some point at the end of the year. And so is that going to drastically change the market for the better and where people it's gonna bring people's sentiment up and therefore people it doesn't necessarily make this economy stronger. People just get more willy nilly with the cash they have in their savings account and their credit cards. That's when people feel good is when they're like racking up debt or spending money.

Dylan Koch: [40:39] Yep. And the opposite side of that is when you start turning the other direction, and they're like, oh fuck, I gotta figure some things out. And then they all, like, basically clamped out at the same time. That's when the problem comes.

Dan Austin: [40:49] That's when the problem happens. And then you're like, why the fuck won't my bank give me a loan? It's because they're clamping down because they're scared.

Mike DeHaan: [40:55] The consumer debt issue is still gonna exist, right, which is a very, very big problem. It's not gonna go away anytime soon. You know? And that's gonna go anytime soon. And here is something that happened a couple days ago, which I would say is such a bearish indicator for consumer debt. So we use Stripe to process our subscription payments for scale. Right? I got an email from them with great news. They're so excited about this. You can now use Klarna. Oh my gosh.

Dylan Koch: [41:20] This is already bad.

Mike DeHaan: [41:22] Yeah. So Klarna, which is one of those, like, buy now pay later systems, which has a huge amount of debt that's been, you know, defaulting with people.

Dylan Koch: [41:30] This is the one that'd be like, hey. You wanna finance your Chipotle burrito? You can do that.

Mike DeHaan: [41:33] Yeah. Exactly. Seriously? Yeah. So you've never heard of Klarna?

Dan Austin: [41:36] I've never heard of the name Klarna, but I've heard of, like, people, like, financing shit that they shouldn't.

Mike DeHaan: [41:41] So Klarna's a big one. So you can now so Stripe now allows Klarna to be used for your monthly subscriptions. So I don't understand how this works. So basically, you have something that you pay monthly that you can now use a buy now, pay later system. That's weird.

Dylan Koch: [41:59] That's just so dumb.

Mike DeHaan: [42:01] So you have your fucking July payment for something like Scale. And then what happens when it comes up again next month? You use Klarna again? It's a recurring thing.

Dylan Koch: [42:12] Filing on

Mike DeHaan: [42:12] itself. If it was like a one time thing, it's a stretch, but I guess you can do that. But they and it now allows it to be used for subscriptions. And I'm like, what the fuck? So there's just money coming from nowhere that they're never going to pay because why would they?

Dan Austin: [42:25] There must be some model in that that makes sense because those are the type of people that are like that they're going to lose money. Right?

Dylan Koch: [42:31] Yeah. Well, they've already lost like hundreds of millions in that.

Dan Austin: [42:34] Klarna has. Yes. Correct. Okay. Yeah. Yeah. Yeah. And that's what I mean. It's that there must be something that they think that they're getting out of this because it's like the the cash your paycheck places where they charge you like 18% to cash your paycheck at 07:00 on a Friday.

Mike DeHaan: [42:48] It is the modern version of that, Dan. I think that's a great example, honestly.

Dan Austin: [42:52] Like payday payday loans and stuff like that. And it's like, but the people that do that never can get out of that cycle. So, like, how are

Mike DeHaan: [42:58] they gonna pay you back?

Dylan Koch: [42:59] If you ever go, like, mobile deposit, like, let's call it a thousand dollar check. It's like, you can get this today if you pay $75 fee. I'm like, why the fuck would you do that? Or I can get it tomorrow for free. Like, but there's people out there that have to do that, I guess.

Mike DeHaan: [43:11] Well, so there's you know, it's like Stripe has offered us that forever. Like, they will have a ten day processing time for the money, but it'll be like but if you want it today, we'll give it to you, and it'll charge you, like, 12%.

Dan Austin: [43:21] Yeah.

Dylan Koch: [43:21] It's insane. Yeah. Insane.

Dan Austin: [43:23] Payday payday loans, baby.

Dylan Koch: [43:24] One of the things, real quick, I know we're near the end of time, and I don't know if you touched on this on a previous podcast or not.

Mike DeHaan: [43:29] I hope we're not near the end of time.

Dan Austin: [43:31] God, I hope not.

Dylan Koch: [43:32] Is the fact that these student loans are are now having to be paid. Mhmm. And but they weren't reflective. Like, if they weren't being paid, they weren't reflected in credit scores. Mhmm. And now that they are coming due, I think a lot of credit scores are going to drop pretty significantly.

Dan Austin: [43:47] Because their debt will their debt will increase their debt load.

Dylan Koch: [43:50] Yeah. Their debt will increase. Their utilization will go will go up, all this kind of stuff. And so some of this was theorized that a lot of them probably know this. And so they're trying to get some of these loans and stuff now where their credit looks good before it kind of catches back up. So that could have front run some of the numbers, economic numbers saying, Hey, we're actually okay. Consumers doing all right, before their credit goes in the tank. Made sense to me.

Dan Austin: [44:14] Yeah. So what's going to happen though when they start paying these back?

Dylan Koch: [44:18] Well, they won't be able to. And that's problem. They'll be in default. And you can't really get rid of student loan debt.

Dan Austin: [44:23] Okay. Let me I want to pull the thread on this because I would like to make sure I'm educated on this. So the student loans during COVID, you didn't have to pay them. I've never had a student loan, so I don't know this. But like, you have to take student loans. You don't pay on them till you graduate or something.

Dylan Koch: [44:36] So you didn't incur like interest during that time.

Dan Austin: [44:39] Right. Until you graduate. But once you graduate college, you're out of the education system, you have to start paying them. But then during COVID,

Mike DeHaan: [44:44] they're like, ah, you're good. You don't have

Dan Austin: [44:45] to pay them. And then did they keep accruing interest that period of time and now people are even further back? Or is it just like stop a period of time?

Dylan Koch: [44:53] If you had government backed loans, then they did not. But if you had like a private institution, then they would.

Dan Austin: [44:58] They did. They could not get the payment from you if you chose to not pay.

Dylan Koch: [45:02] Correct. And they couldn't penalize you for that either.

Dan Austin: [45:04] Okay. So a lot of people probably for some reason, good or bad, decided not to pay them, and now they're having to pay them again.

Dylan Koch: [45:10] Right. And this was like, you know, almost four years ago. So their lifestyle got used to not paying them. They maybe they had lifestyle creep, maybe they buy a new car.

Dan Austin: [45:17] They were like, Biden said he's relieving student loans.

Dylan Koch: [45:20] Correct. Yeah. They're like, hey. I'm And he never did. I'm not gonna have to pay this ever. It's kind of their thought process. And now the chicken's coming home to roost.

Mike DeHaan: [45:27] That's a whole other problem. Like, how many decisions people make off of, like, bullshit that, like, politicians say. Yeah. 100%. But they don't understand the process of it becoming a law. You know? So Biden says that, and they go, oh, I guess I'm not going to worry about those anymore in my future financial planning. It's like, actually, you do. You know? Or like you see other shit, like, with a lot of the Trump stuff that Trump's coming in and promised. I've seen this happen repeatedly. We're like, there's no longer gonna be taxes on tips. Yeah. And it's like, he just tweeted that. And people are like, sweet. I no longer need to set aside tax money on tips.

Dan Austin: [45:58] I'm not I'm not putting money yet. They weren't anyways, let's

Dylan Koch: [46:02] be honest. There's a whole process for that to become a law.

Dan Austin: [46:05] It's gotta go through congress first. And there's two houses in congress.

Dylan Koch: [46:08] And then you see the the memes that are like, oh, haircut for a dollar, buy one of 49% $49 tip. Yeah.

Mike DeHaan: [46:15] I know.

Dan Austin: [46:16] Yeah. Exactly. That shit. Yeah. No. You're absolutely right though, Mike. People are people but I think I think part of it is people want it to be true so bad that they kind of will ignore it. It's kinda like don't know if you've ever talked to somebody in like financial stress, they're like, I don't even wanna look at my bank account. I'm like, but you should. Like, that's actually an important thing to do to see how much money you have because it might actually go negative. It like because you want it and it's it's like human instinct to like avoid the problem. So when people want something enough, they kinda like, I think it's gonna work. So I'm just gonna not do this, and it's not my fault when I fail.

Dylan Koch: [46:45] No better indicator than that than the leads that are in pre foreclosure.

Mike DeHaan: [46:49] Totally. 100 Exactly.

Dylan Koch: [46:51] Because they stick their head this way, and you're like, you'd think they'd be the most motivated, but no. They, like, don't do anything until it's too late.

Mike DeHaan: [46:58] Yep. Yeah. But well, I will say that if you are one of these people that has these student loans coming due and you're about to get wrecked or you've been using Klarna or you stopped putting your tip, you know, tax money aside and you have a property you need to sell so that you can get bailed out, you should go to backyardhomebuyers.com, and we'd be happy to see if we take a look at your place.

Dan Austin: [47:19] Dylan does deals. He answers his phone 247. Exactly. So

Mike DeHaan: [47:25] alright, guys. We'll wrap up there. Thanks for listening, everybody. You guys have a great week, and we'll talk you guys next time. I'm trying

Dylan Koch: [47:32] to I'm trying to find a way to fit in Dylan's other nickname, but I just couldn't agree myself to say it. Pleasure. It's here.

Dan Austin: [47:39] The the No.

Dylan Koch: [47:40] Don't do it. It's okay. The

Dan Austin: [47:42] the real estate genie with the big weenie. Oh, man. That's a

Mike DeHaan: [47:46] terrible place to end, Dan, so I'll leave that with you. Thanks for listening, everyone. If you want more from us, you can shoot us a follow on Instagram. I am at Mike underscore Invest. Dan is at investor man. Dan and Dylan is at Dylan underscore does underscore deals. Choose a follow and send us a DM to let us know what you think of the show.