Tips To Not Waste Thousands On Marketing

Mike DeHaan: [0:00] Hey, guys. Mike DeHaan here. And before the show, I just wanted to take a moment to talk about our most recent partner, Ballpoint Marketing. Direct mail is a common way for people to start marketing for off market deals. But standing out from all the other investors out there is never easy. That's where Ballpoint Marketing comes in. Ballpoint marketing allows you to send actual pen written letters to your marketing list. They legit have warehouses full of robots using ballpoint pens to write your letters. This comes along with all the smudges and pressure points of a handwritten letter, which gives the same effect as if you had written them yourself at your kitchen table. If you go to ballpointmarketing.com, you can use our code m d five, and you will get 5% off your next order. 5% might not sound like a lot, but when you're sending thousand dollars of letters like you need to be doing to get deals, that will add up very quickly. For example, if you're sending $5,000 of mailers next month, that's gonna be $250 in savings. Anyways, go to ballpoint marketing dot com and use our code m d five. That's m like Mike, d like Dahan, and the number five for 5% off your next order. Thanks, and enjoy the show.

Speaker 2: [1:01] Welcome to the collecting keys real estate investing podcast with your host, Mike DeHaan and Dan Austin. From wins, losses, horror stories, and tactics for optimizing your business, Mike and Dan take a real uncensored deep dive into the ins and outs of running a full time real estate investment and wholesaling business.

Mike DeHaan: [1:29] What's going on, guys? Welcome to episode 14 of the Collecting Keys Real Estate Investing Podcast. If you're watching this on YouTube, I'm in a different background right now in my wife's office. I got a new desk and she loves putting stuff like that together. So she's up in my office right now.

Dan Austin: [1:48] What's up?

Mike DeHaan: [1:48] My new desk. Wow. Yeah. What do you wow, what's wrong with that? So my alternative was I ordered it from Home Depot, and they had an option to pay someone to come set it up for me. It was like $150. And I was like, I'm absolutely gonna do that. I'm not gonna spend a whole afternoon building this stupid thing because I hate that. And she was like, I'll just do it for you. You can pay me $150 And I was like, well, that makes more sense.

Dan Austin: [2:13] I'm very baffled on two things. One, obviously your wife putting together, which I know you well enough. I'm not surprised. Yeah. Two, bought a desk at Home Depot. Would you buy like a toolbox and that's gonna be your desk? What are going for here?

Mike DeHaan: [2:26] It's actually pretty nice desk. So I mean, was online. I was looking at different ones and it's basically like a corner desk so I can have a little bit better setup to film this stuff and to start filming all the new videos we're gonna be filming this year. Because the setup I had before just wasn't super functional. I had a lot of clutter. The lighting was always weird. There's just kind of nonstop. It just wasn't good for the space. I rearranged my entire office. I got a new desk coming. It's a little bit of a different functionality, but it'll be good. And I like it from Home Depot because was looking at other ones and it's ridiculous. You look at some of this stuff, it'll be like a piece of wood and some legs. It's like $2,500 Yeah.

Dan Austin: [3:14] Yeah. Yeah. It's stupid. It's ridiculous. The good thing is is like I trust your wife to put it together better than the Home Depot install. You're winning today. Yeah. Yeah. Multiple fronts.

Mike DeHaan: [3:26] Yeah. No shit. Yeah. And it also to you with the Home Depot person probably been waiting like weeks

Dan Austin: [3:30] for them. Oh, yeah.

Mike DeHaan: [3:31] But yeah, of course. So, anyways, I'm in her dark office right now. Mind you, turn on the light here in a minute as the sunlight's quickly fading. But, yeah, we had a good start. I guess it's first official week of 2022 with our staff working. I had a big sigh of relief on Thursday, Friday as our our first set of marketing finally started hitting. When we had to go out before New Year's and just with the delays in the post office and stuff, it took a little while. It took about a couple of days longer than normal to start getting on people's doorstep for us.

Dan Austin: [4:08] So I'm actually like, this is sad, I'm actually slightly surprised it hit. You know, like just the fact of how we've had with the postal service this whole year has been kind of like up and down or like weird stuff. Know what I mean? Yeah. So, I'm glad it hit in a in a time, a relatively timely manner.

Mike DeHaan: [4:25] For sure. So we ordered it on Friday. Traditionally in the past it would start hitting on Monday or Tuesday which is what is ideal because at the start of the work week the guys can start getting after it. Instead it didn't hit until Thursday but I did have half of a day where I was like I really hope that it's actually gonna we're gonna get some calls. We didn't just pay goose egg. Yeah. Because we have done that before especially when you're playing around with data. I mean we had I spent a lot of time over the Christmas period optimizing our data to market a little bit better. And, know, I've screwed up stuff in the past and we've sent like 5,000 mailers and all the data was wrong. So we got no calls.

Dan Austin: [5:07] Yeah. Or the one time like you put the return address as the wrong zip code.

Mike DeHaan: [5:12] Yeah. Send

Dan Austin: [5:13] it to us. We're like, where are where's the return address? And like, I think that was one of the batches that maybe we're worried about it hitting. We're like, dude, did it hit? And that that was like, I think the first batch that we sent that wasn't priority or that we tried

Mike DeHaan: [5:24] out doing not priority or

Dan Austin: [5:25] stuff like that. Remember? You remember that? And it was like, why is it not hitting? And then I'm like, we have no RTS. You're like, where did it go?

Mike DeHaan: [5:31] Yeah. Right. I know. And that was the other thing we learned too is the nuances of the post service. If you don't pay for first class mail, you don't actually get it back, which I didn't know either.

Dan Austin: [5:40] Well, did. The only reason why we didn't get it back though was because the zip code was wrong.

Mike DeHaan: [5:45] And so

Dan Austin: [5:45] it took it a while to find the right zip code. And so it was like a month later, then and all of a sudden we got up all at once and like everyone said wrong zip code, wrong zip code.

Mike DeHaan: [5:54] Oh, yeah.

Dan Austin: [5:55] Maybe I don't know.

Mike DeHaan: [5:57] Yeah. I don't know. Semantics. It's kind of the challenges of having to rely on third parties for everything. But but, yeah, overall though, had a good response first two days. I mean, four days, even over the weekend, we've had quite a few leads come in. You know, the guys are off, I've been trying to follow-up with people. But it's always fascinating to me that somebody calls in, you call them back ten minutes later and they don't answer their phone and they never get back to you.

Dan Austin: [6:20] I

Mike DeHaan: [6:20] know. That's so frustrating. They just throw their phone and run away. I don't understand. Change their mind immediately. Why did

Dan Austin: [6:28] I do that? Oh my god.

Mike DeHaan: [6:29] Yeah, exactly right. But yeah, mean, first group to hit was I think about 4,000 mailers and we got, I think over the past few days maybe 30 something leads that we'll be navigating through. We got our first deal for the year on Friday. Earlier in the week, we had a couple other ones from the end of the year that we should be getting. We literally had a lady text him late at night and was like, hey, is your offer still staying? I'd like to go. I was sitting on my couch immediately saw it and texted back and was like, yeah, sure sent over the contract. She never freaking opened the contract.

Dan Austin: [7:07] I was

Mike DeHaan: [7:07] like, I may even text her to confirm.

Dan Austin: [7:12] She's like, nope. Gotcha.

Mike DeHaan: [7:13] Yeah, exactly. Right. I'm like, I know. Exactly. And that was like a ten minute delay on that was like right on it quick. Yeah. I don't know. It's just it's always challenging.

Dan Austin: [7:23] Well, it goes it's weird too, because like, I feel like the end of the year is always, like, kinda cramped. Like, even just, like, this last year in December, like, we closed on our eight unit on, like, what, the twenty ninth? Yeah. Thirtieth. And then we we just had, like, a bunch of different closings happening. I'm trying to go through them all in my head. The last week and a bunch of leads and all that stuff you're trying to it's like this whole year is like compressing into the, like, the end of the year, the holidays and stuff. And then all of a sudden you have this weird, like, gap where it feels like nothing's going on. And then you start reworking those old leads. They start coming out of the graveyard or wherever the hell they went. And then all of a sudden your new leads are hitting too, your new batch mailers from January start hitting, then all of sudden it's busy and you're off to the races again.

Mike DeHaan: [8:04] Yeah, exactly. I mean, that's kind of just the way it works the cycles. That's one of the things we're working on this year is spreading, like figuring out how to time stuff a little bit better. So it's less ebbs and flows and just more consistent, you know, not only for doing business, I think it keeps morale higher with the team as well. If it's kind of just like consistent work, because it's always I think slightly crushing when you're slammed, you feel like you're getting a lot of deals and then all of sudden next week it's like dead. It's like what happened? Right. You know? Yeah. At the same time, it's in that we getting lazy things are dead and then all of a sudden it ramps up really high again. Now we're inefficient because everyone got lazy the week before. So it seems like a fine balance figuring out how we're gonna keep it consistent. And there's a few different ways we're doing it like you know spread it like batching our mail a little bit more, hitting like people with different kinds of mail to get different response rates and because everything sort of stands out to people a little bit more than others. So

Dan Austin: [9:04] yeah. Yeah there's no like direct it's hard. Over the holidays, I even tried pulling some data, like, doing, like, linear aggressions, which is super nerdy. You know, just trying to find, like, okay. So how do we connect? And, like, for us, specifically, like, our leads to contracts, I think it was or something like that, like

Mike DeHaan: [9:22] Mhmm.

Dan Austin: [9:22] There's like a 20% super nerdy r squared value, which basically means it's like shit. Like, there's no correlation. And so it's really hard to correlate because also if the contracts take, say, thirty, forty days to get signed for when the lead comes in, like, you almost have to shift all your data when you're trying to analyze it by a month to see, like, how it correlates. So it's really hard to correlate. And then on top of that, if you're trying to correlate it, like, driving consistency or business. Right? Because that's what we're trying to do right now is like, how do we, like, not have super high months and super low months? Like, how do we at least, like, just have this baseline? Because then, like, if you could start out where your baseline is like, I'm doing a contract a month, just fundamental, then your goal should be two, four, six, eight, ten, twelve. Right? And so it's but you gotta have that baseline to where you don't drop super low. And so you're always trying to raise that valley. But to do that, you'd love to have data, but it's just super hard to dig through that data.

Mike DeHaan: [10:16] Yeah. And a big part of that was our tracking too because we didn't necessarily know what we were, you know, what we need to track at the start. And now this year we have a better idea so it should be better going forward. But the previous couple of years we would try to measure by different campaigns or different types of mail and all that sort of stuff. And instead what we're going to be doing going forward is just like measuring an exact campaign just one time with that phone number then basically retiring that phone number and moving on to the next one. And then retiring that phone and bring on to the next one as opposed to having the same phone number for different campaigns carrying across months. Right. Because then you're like, well, I don't really know how effective that campaign was because I mailed with that same phone number four or five different times.

Dan Austin: [10:59] Right. Yeah. Yeah. Anything you can eliminate any room for air on that makes so much sense.

Mike DeHaan: [11:04] Exactly. Figuring out your KPIs like that will be, it's kind of key to be more efficient, especially when you're spending all this money. We have kind of our first coaching person. We're looking to do some coaching here shortly for some from some newer investors. And I'm working with somebody right now. It's kind of like a beta test. And that's one of the things I'm working with him on at the very start is like, you have limited resources. You're just starting out. You haven't made any money yet. Let's make sure we're tracking this correctly. So we're getting the most out of your money, you know, because if somebody starts out that way, they can avoid what we did and having to waste hundreds of thousands of dollars on marketing because we weren't we didn't know what was working and what wasn't.

Dan Austin: [11:48] Yeah. And there's mean, honestly, there's really very few people. I mean, throw the term KPI around a lot, there's very few people actually teaching how to do it. And it's because I think most people don't know how to do because it is complex. Like, I was telling you, I'm trying to pull linear aggressions on it, which is super nerdy and probably not necessary. But just trying to dig in and build those KPIs and monitor things because you would love to be able to say, hey, if we spend this much money, we should see this many leads, and so on and so forth as it goes down the chain. So then you can levelize your business and then you can use the be the most efficient with your employees' times as possible.

Mike DeHaan: [12:21] Yeah. Exactly. I mean, yeah. And I think that's it. That that adds up to being, tens of thousands of dollars if not more every single year they get saved. Not only just in marketing but also like you said in the guys times, right? And then like what you're paying them for. If they can be more efficient, not only in terms of just like how they spend their time, but also how they prioritize stuff as well. Because that's kind of one of the biggest things that it's easy to fall into the trap of is you're having lots of stuff come in, you're not really sure what's effective. So now they're spending their energy on things that are less unlike leads that are less important, right? Or on tasks that are less important or trying to navigate your BS. And this is a very energy intensive business, you know? So when people start wasting their energy on the crappy leads, you don't know that they're not good. It's gonna make their effort towards the good leads be reduced.

Dan Austin: [13:17] Yeah. Yeah. I mean, it's sales. And one of the hardest, you know, niches of sales, which is off market real estate. And so some people will waste your stinking time. And it's frustrating. And it's like they never intend to sell or they are unrealistic. But you know, your act manager, whoever spends so much time on them, and then like, they're like, God, I gotta call this person back. And I know it's gonna be a pain in the butt. And they suck their they suck their energy. So if you can put good qualified leads in front of your hack manager every time they're picking up the phone, like, that's ideal. Right? Because then they can keep their energy levels up. They're thinking about it in terms of two of, like, I gotta close this deal because I gotta put food on the table. Right? They're trying to sell they earn their living. This is how we earn our living. And so having that energy, what do we call it? The Mickey Mouse or Disneyland voice like The Disneyland voice. Allowing them to have that all the time, which is hard, is important to, like, being successful long term.

Mike DeHaan: [14:13] Yeah. Emma, what do what do mean by Disneyland voice? I wanna hear your impression.

Dan Austin: [14:17] I don't even have one. Don't don't put me on the spot. But, you know, Disneyland voice is like the kid that's excited when they find out they're gonna go to Disneyland. Right? Or when they're at Disneyland, everything's so excited and you're higher pitched, you're motivated, you're excited. Everything you're saying is exciting, and you're motivating that person that they wanna talk to you.

Mike DeHaan: [14:33] Exactly. How I was thinking about it, it's like you're you're calling somebody to tell them they want a trip to Disneyland, even though you're calling them to tell them that you're gonna be offering 50% of value for their house. So you can be like, you know, hey, mister seller, thanks so much for taking my call. I'm really excited for this offer we put together for you. We spent the afternoon looking over the numbers, the photos, think there's a lot of great things going on here. We're gonna be able to offer you $160,000 cash for this house closing three weeks from today. How does that sound?

Dan Austin: [15:03] Yeah, that's hard do. Like for some people, it's more natural. Like, you know, for you guys like you and me, it wasn't as natural to learn that in our sales pitches, but you can do it. You just have to practice it and understand the value of that.

Mike DeHaan: [15:15] Yeah, exactly. I've come to find something that's been reflecting on the past year and a bit. I've really noticed is learning a lot from just observing even our acquisitions managers and like our other people that have worked for us. If you sort of study what they do and what works and what doesn't, you can learn a surprising amount for without actually having to get the licks yourself. Sometimes it's almost better because as like the armchair quarterback in the back office, just sort of analyzing sort of hearing what works and what doesn't. I feel like it's almost easier to recognize those patterns because you only hear the critical conversations and not all the ones in between. So like, you know, with with our people, we we review kind of the the calls that end up yielding objections from the sellers or when they're making offers because those are kind of the critical conversations. A lot of the middle ones, we don't really review. And it's amazing. There's so many different kinds of sellers and situations but so many of the conversations are like kind of the same. There's different components, different objections that come up all the time. And there's definitely an art to it and that's where the sales side I think comes in. You sort of learn to recognize these patterns and learn how to navigate them in your favor as opposed to just sort of submitting to them. There's still always curveballs obviously but it's just like how if you ever go into a car dealership to buy a new car, every single person has obviously been to the same car salesman school. They have like a push stick that they give you.

Mike DeHaan: [17:00] They're like, the first two offers are always the worst. You're always supposed to wait for the third one. They do the shit where they like write the number on the piece of paper and slide it towards you. Right, it's all the same. Yeah. And the same thing applies for our business as well. But yeah, yeah, yeah. So

Dan Austin: [17:18] it does. It's and it's really critical as we review these calls, because I mean, that's where you're gonna improve yourself or your salespeople. That's how you improve your team. Yeah. And, like, I I don't know of any other technique. Like, you can't just read a book or or send somebody to that to, like, that type of training, and then all of a sudden overnight, they're good. Like, you've gotta be critical of yourself and critical of these calls. And, like, one big thing I learned too through the process is, like, you gotta truly listen to who you're talking to. And then you can react so much better in the moment when you're actually listening to them. Some it's really easy to start talking and then keep talking. Yeah. Right? Because you're kind of giving them news that, know, in this this business, they're typically in a bad situation. And in the market we've been seeing, they're used to this, like, my house is worth this much. And you're like, it might be to somebody, but not to me. And you're trying to explain that to them, but also trying to solve a problem for them, whatever that problem may be. If you're not listening correctly, you're not able to pivot to the problem that's most effective for that sales pitch.

Mike DeHaan: [18:21] Yep. Yeah. You're completely right. You know, and and and back to what you said about the training going to reading books, stuff like that. You're completely right, can't just sort of read it, go to those seminars and be good or like you know be better even. But I think you have to be pretty intentional about picking parts that you learned from those books or those sales trainings and putting them into practice even though it seems unnatural. Something that we're working with our guy this year, he never split the difference. He has this whole practice where when you put your final offer in, make it extremely specific. So instead of being, know, 175,000, we do 174,980, you know, and basically psychologically, what that's supposed to do is make it sound like you've really calculated this. And they're like, dang, you really did your homework. There is no more room at that point. Especially when you're doing these high ticket purchases where 175 to 177 might not be that much of a difference in that way. But now if you're like have it dialed down, they're gonna, you know, potentially think that you've you've done that much more homework on it. But

Dan Austin: [19:33] Yep. And that's a great example. Like, I'm I guess I'm not advocating to not go to the training because I think it's any type of negotiating training you can get involved in is gonna be super helpful. But how you deliver it is where you need to listen to your calls and and you need to kind of analyze how you deliver it and how it landed. Like, is there a different way to say it? Is there a better way to say it? Is there a different timing of when you throw in that offer or when you're actually going back and forth with the sale? Like, there's all sorts of different things so that you have, like, this quiver quiver of arrows, and you know when to pull the right one out at the right time.

Mike DeHaan: [20:03] Yeah. Exactly. But you know, and there's no perfect solution. I mean, there's always gonna be challenging situations that you can't really overcome. I mean, like one of the ones that, like that you can't even really control, like external factors that lead to objections. So that's something that we dealt with a lot this past week. We had a huge amount of snow this week in Spokane. And it's silly, right, because a lot of our mail started hitting when the snow was falling and people that obviously have obvious motivations we can see on paper, they call us and they're like, I am never selling this house. Don't you ever call me again. And we're like, what happened is you woke up and you're like, sell my house, but there's snow outside. I can't do that. Like, like, I know, calm down. The snow will be gone in two days. Yes. You want to sell your house?

Dan Austin: [20:53] Oh, yeah. Yeah, we get a lot of that too. Just, know, whatever's going on in the in the current world events or weather definitely plays a huge role of it. We're in the Northwest. It snows a lot here in the wintertime, and it's crappy. It's cold out. And I mean, yeah, I don't wanna get out and do anything. Like, I'm not gonna be moving right now, but I'm also on pre foreclosure.

Mike DeHaan: [21:11] Yeah. Exactly. Right? I know a lot of people that are

Dan Austin: [21:13] willing to flirt with that a

Mike DeHaan: [21:14] little bit more, you know, when the weather's bad, or like the elections coming up, or during the summer, find like around holidays, people want to do list stuff, you know, fourth of July, no one wants to sell their house then because they want to go to the lake. It's like, well, should stop your bankruptcy before you go and

Dan Austin: [21:31] rent a boat. Seriously.

Mike DeHaan: [21:34] So yeah, it's pretty constant. It's always frustrating too, because here the weather is just such a diverse thing. Like talking to friends that we have down in Texas or some of these southern areas, they just don't even have that. It kind of just never stops.

Dan Austin: [21:53] You

Mike DeHaan: [21:53] know, it's very consistent. And, you know, I think that when we start to go virtual, we were doing some virtual stuff down in, Knoxville for a little while. We paused that just to sort of optimize our systems a little bit locally. I think when we go virtual, definitely gotta pay support that's only sunny all the time. We cannot deal with that, I guess, anymore.

Dan Austin: [22:15] Yeah. But Yeah. Climates. That's what I'm looking forward to.

Mike DeHaan: [22:19] Yeah. Exactly. So Especially when

Dan Austin: [22:22] we do another virtual flip, if we can do it somewhere super conducive to the beach, that'd be great.

Mike DeHaan: [22:27] Yeah. Why make it not virtual anymore? We'll go down there to do it on-site. Exactly. Right. Yeah. Yeah. So cool. I mean, I guess the the weather doesn't affect our flips up here too much, though. You're cruising through our current one.

Dan Austin: [22:41] Yeah. Definitely doesn't slow us down. Obviously, it's internal, you know, inside work. And now one's, yeah, it's moving well. We got drywall up. So I think we're I don't know. What are we? Like, two if you don't count the demo because the demo was, a week of, you know, the junk guys coming in and taking in, and they had to go you know, it took them a few days to get all cleaned up. There's so much stuff in there. And then our contractor had to go back in there and clean it because it was just covered in feces. Right? Literally. That week. And then so, yeah, I think we're about, like, two and a half weeks into it from start to finish so far. And we got, all the drywall up and it's cruising. So we're gonna be on schedule on time, get this thing out. Hopefully, listed in February would be sweet.

Mike DeHaan: [23:22] Which would pretty awesome. So I mean it was a decent sized project. We're gonna put together a video up on our YouTube to show this but we bought this hoarder house. We had to cash for keys to tenants that were in there. We had to junk out the house, had an unfinished basement so we basically added a bathroom down there which involved cutting into the concrete and doing all this stuff. We framed in all the rooms, dry walls up down there now, we've run trash electrical throughout various parts down there, fresh plumbing. It's basically turning it from a two bed, one bath to a four bed, two bath and we bought it for $150 what are we gonna be into it? I think like $60 something.

Dan Austin: [24:03] Yeah. Yep.

Mike DeHaan: [24:04] Yeah. And then after

Dan Austin: [24:06] yeah. The demo and the junk out cost us a few thousand more than we had hoped. Then we're typical because this was so bad. Yeah. But other than that, yeah, it's, you know, about yeah. Low sixties.

Mike DeHaan: [24:16] Low sixties. Yeah. So I mean, we'll be into it, you know, $2,102.15. And then after it's done, I mean, we should be able to sell it for low 3 hundreds. So we got good good spread on it for sure.

Dan Austin: [24:29] Yeah. My analysis right now is sitting around 70 would be our net proceeds on it. And so, you know, that's kind of conservative, but we I'm sure we could exceed that.

Mike DeHaan: [24:38] So Yeah. For sure. I mean, and the kind of the nice thing about our setup now too is, you know, we debated on if we want to keep it as a rental. It's like kind of difficult with the cash flow perspective, but like we talked about, we might do is just list it as like a rental for a week or two and just see if we have any bites at kind of like a primo rate. And if we do, we might as well rent it for like a year at least and then sell it then so we avoid the short term capital gains tax if nothing else.

Dan Austin: [25:07] Exactly. Yeah, that's a great strategy. And we're of course in the business of collecting keys. So that's another solid cash flowing property for us. Yep. Then why not?

Mike DeHaan: [25:17] Yeah. Exactly. We don't need the revenue. So that means, actually, we can do a cash out refi on that. Yep. And be able to pull out pretty much all of our money.

Dan Austin: [25:24] Oh, yeah. So we'll definitely be able to pull all of our money out on this one, I But Yeah. Then you look at kind of the ROI of that versus in the cash flow, that sort of stuff. So that'll, I guess, all all depend.

Mike DeHaan: [25:35] Yeah. Yeah. I mean, we should really find every don't know why I think about this until right now. Look at what like, we do a cash out refi versus the flip with short term capital gains, what the actual net comes to after that. Because I mean, there must be a number where if we're gonna flip it and make x amount, it makes more sense to not do that Right. I

Dan Austin: [25:59] we're probably because short term capital gains is your tax rate, whatever that is. Right? So probably for where you and I are sitting in like the well, depending on if the taxes change in the future, but 24 or 32% bracket. So Yeah. It kinda sucks.

Mike DeHaan: [26:16] Yeah. Right. Yeah. Right. Exactly. You know what I mean? But yeah. So cool. So we got that one wrapping up. We got another duplex closing on this next week that we'll have to be navigating. There's not really any work there. We're just gonna have to deal with the people living there for a short period of time. And then got a wholesale one this week. And then got another one that I'm expecting to get that I think will be our next flip potentially. Oh. But Which one's that? Hilliard area.

Dan Austin: [26:45] Oh, okay. Yeah. That'd be good. So I mean, it's Hilliard,

Mike DeHaan: [26:48] but Yeah. House is house is decent, though. And it has I mean, it has finishable basement, which is our bread and butter. Pretty much everything we can finish the basement. I just wanna buy it.

Dan Austin: [26:58] Yeah. Seriously. I know because the just extra square feet. It's worked out pleasantly for us recently. So I think the question is always, like, does that what is the what, what is the second bathroom get you in that neighborhood? Exactly. Well,

Mike DeHaan: [27:14] And that well, that one has a it already has a janky second bathroom. So I need to add it. Basically, it's got to make it not shitty.

Dan Austin: [27:20] It just saves so much time and effort in the plumbing and electrical piece of it already there. Because the framing, all that drywall stuff, I mean, you can build that. I mean, it's cheap. Right? It doesn't putting up drywall and and framing walls is so fast and easy, but it's that extra little bit of time that takes about a week Mhmm. To get it all dialed in before you start closing it back up. But that'd be cool. Yeah. Yeah. We close on that one property, that we'll do a little bit of work on. Which one is that? The duplex. The duplex. Yeah.

Mike DeHaan: [27:50] Yeah. Yeah. We have like a tiny bit, but they kind of already have done it. Mean, those people just got themselves into a situation because they fricking bought this house with a hard money loan to be an investment several years ago. And then they illegally moved into the property. Yeah, they've been in this house and hard money loan for like three years.

Dan Austin: [28:08] I thought I wonder where they got the more hard money because they're usually like due in 12 or something like that. Are they?

Mike DeHaan: [28:14] Yeah. So it's 12% interest is what they're paying.

Dan Austin: [28:16] No. I I thought that most I mean, the hard money loans we get are usually due in twelve months. Oh, yeah. If they're paying extra interest, you know, usually it's like, oh, if you don't pay it off in 12, then it goes like 20% interest.

Mike DeHaan: [28:27] Yeah. Well, the thing with hard money lenders, though, is you can always ask for an extension. And, and this particular hard money lender, I'm not gonna blast their name on here, but is known for their very skeptical tactics. Kind of bet on suckers and people are going to fail so they can steal their house. I mean, we had a deal that we were unable to close this past fall because the seller got all weird and stopped participating in the transaction. But he had the same lender, which basically a wealthy individual. And the guy was not smart. He was just one of those very self destructive people and they gave him this hard money loan on his personal residence. He'd already actually bought it and then they refinanced his loan form, the hard money loan and then took his house from him when he was not able to perform on this 12% note. So I'm guessing with these people, they kind of went through the same motion. They're like, oh, you're probably going to screw this up. So we'll just give you this loan and we'll wait for you to fail So we can take your house for 40¢ on the dollar.

Dan Austin: [29:33] Instead, we swooped in and got there just in time.

Mike DeHaan: [29:36] Yeah, exactly. You know, well, that's I mean, that they they've actually fixed up. They're planning to keep it as a long term rental, but they can't qualify for conventional financing. And so now they need to get out of it because the person has basically said, I'm not going to renew your loan anymore. So they must be itching for a project or something. So instead we got to close before the end of the month to make sure that we can get out of it. But there's even like shady stuff that comes up though with that. Because like our our escrow agent was saying they don't respond when she tries to get payoffs. Know? Like like like they like intentionally try to drag it out. So it just screws them over.

Dan Austin: [30:14] That's where you should have, like, some ability to just, like, okay. This time when you're getting by and then they'll you know, then maybe they'll call when they're, that's not enough.

Mike DeHaan: [30:22] Yeah. Right? No kidding. I know. There's there's some shady stuff that goes on, Especially in the private financing world, if you're one of those people that's getting started and you meet somebody who offers you some kind of financing and it sounds too good to be true, it probably is. They're probably trying to rip you off like these people.

Dan Austin: [30:45] Seriously, it's unfortunate honestly.

Mike DeHaan: [30:50] The world of money is super weird like that. A lot of those hard money lenders, like that's a huge part of their business model is sucker loans, where, you know, they build into their margins, these loans that they know will fail and they will foreclose on, and they will be able to flip themselves and make way more money than on the loan.

Dan Austin: [31:09] Yep. So Well, that one closes and I just looked at my calendar three days. Right?

Mike DeHaan: [31:14] Yeah. Wednesday. Wednesday.

Dan Austin: [31:15] So hopefully, we get the payoffs for them.

Mike DeHaan: [31:17] Yeah. But talking to our closer last week, she said it might be bumped to Friday, but either way, it'll be this week. So

Dan Austin: [31:23] Okay.

Mike DeHaan: [31:24] But we so gotta come up with some money to pay for it.

Dan Austin: [31:27] Yeah. Jeez. Okay.

Mike DeHaan: [31:30] So cool. Alright. Well, that's pretty good time there. What do think, Dan? Any good lessons? Anything you're taking towards the new year that you're excited to apply here?

Dan Austin: [31:43] Just doing more deals and continue continuously optimizing both ends of our business. Right? Whether it's the property management piece, the property stabilization piece, And then on the acquisition side, just getting more and more opportunities, getting more at bats for ourselves on the rental side, and then more at bats, for the wholesale side too. Like, if we can give our employees more at bats, then we we know we can do it. And so continuous optimizing our systems as we bring in more leads. So that's what I'm excited for. Yeah. Twenty twenty two is gonna be great for us in the sense of, like, we've been doing this a while now. And we've kinda put some key things in place where I think we're gonna be able to kinda just keep moving.

Mike DeHaan: [32:23] Yep, exactly. And I think one of the biggest changes for us this year versus past years is just with the relationships we've built over the last couple years, particularly in the finance sector. We've now have access to some very cheap money, we just got approved for a decent line of credit that will give us a lot of buying power. We have one of the lenders we were using call us to say they're going to start giving us a special rate because they knew we were using another lender as well. And they pretty much want us to only use them. So we're going be getting hard money from an institution at seven percent and one point right now, which is pretty unheard of. That plus the line of credit for down payments, plus just us having more liquidity right now in general is going to be a game changer. We're going be able to take down a lot more projects if we want to squeeze more juice out of them rather than having to wholesale everything all the time. But I think that that opportunity is kind of earned from just doing deals, being good to your word and just staying on top of things. Right? So I think

Dan Austin: [33:25] Yeah. It's kind of tough. Like, financing a lot of times for new investors are the biggest challenge. And the way you get that is you do deals and you do good a good job and, and like, bust your butt. And when the lender calls you, you answer your phone. And so they mean, because they're doing sales too, right? They want clients that are easy to work with. But they also you got to have a track record and show what you can do. Otherwise, you're going to be buying getting more expensive lending, we went through it. But then the more sources of lending you can pull in, to so you can pull your levers. Like, we've got private money locally or hard money locally, hard money nationally, private money locally, line of credit, like, you build all these levers so that you can pull them when you need to.

Mike DeHaan: [34:02] Yep. Yep. Exactly. And that's, you know, that's a whole other conversation we can see for another episode because the finance business is huge.

Dan Austin: [34:08] So yep.

Mike DeHaan: [34:09] Cool. Alright. Well, you can follow us on Instagram. I am at Michael underscore Invest. Dan is at investor man Dan. You should go check out some of his recent stories about the flip that we're doing. It's pretty crazy how far it's come along. You can follow the podcast at collecting keys podcast on Instagram. And if you go to collectingkeyspodcast.com, you can get our ebook, which is five steps to start generating off market leads. I can let you know that if you go, you get that ebook, and you start that process, you should be able to start getting leads within like ten days realistically when you start. It's all pretty cut and dry. So, yeah, go check it out. And anything any last words, Dan?

Dan Austin: [34:52] No. Go get them leads after you read that ebook. They're there for you. They're they're ready for you.

Mike DeHaan: [34:56] Exactly. Cool. Alright. Thanks, guys. Talk to you next week.

Dan Austin: [35:00] Yep. See you all next week.

Speaker 2: [35:03] 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.