Top Tip to WIN in a Competitive Market

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.

Dan Austin: [1:26] Alright. Now I'm good.

Mike DeHaan: [1:28] Now we're good?

Dan Austin: [1:29] Let do it.

Mike DeHaan: [1:29] Yeah. Alright. Wanna avoid another situation where we have to do it a second time. What's up, everybody? Welcome to episode 15, the Collective Keys Real Estate Investing Podcast. Here with Mike DeHaan. It's me. And my business partner, Dan Austin. That's me. There you go. How things going, Dan? Been been a interesting start to 2022. It's currently the second week, January 15 is what we're recording right now.

Dan Austin: [1:58] Yeah. That's good. I wanna describe it as interesting. I'd describe it as manifested. Manifested.

Mike DeHaan: [2:04] Look at you with the the $2 words.

Dan Austin: [2:06] Right. I don't know. I feel

Mike DeHaan: [2:08] That's not that hard of a word. Never mind. I take that back.

Dan Austin: [2:10] Yeah. That's a buck 50.

Mike DeHaan: [2:11] Not a buck 50.

Dan Austin: [2:13] That's a buck 50. It's big for me. Yeah. No. I feel like everything we did in 2021 is like working out. And I mean, it's definitely we've had some interesting leads and stuff like that, but getting contracts as planned and projects are progressing. Like, we're we're in the groove, I feel like.

Mike DeHaan: [2:26] Yeah. Yeah. We're definitely not struggling. I mean, it's a good carryover from, you know, Christmas. A lot of the we we kinda heavily loaded our marketing going through Christmas, which resulted in no real opportunities during Christmas. Right. But, you know, there's some stuff that started to heat up since then because, I mean, I think a lot of people just pause during the holiday period and then as the New Year turns over, they start to get ready to go. But yeah. So this is maybe not interesting for you. We've had some interesting stuff on the acquisition side. You know, we got another deal that we'll we'll touch on here in a little bit. We got our second contract of the year, which came around super, super quickly. We're gonna be trying to wholesale that one. And then we just had a lot of, like, weird conversations with, like, older leads. Oh, yeah. Know? As things are, like, coming around, like, you know, it's funny because, one day, they'll be, like, super warm and wanting to chat with us. And then the next day, it'll snow, you know, like an inch. And they'll be like, I am never selling my house ever. Mhmm. You need to leave me alone. And then it'll be 40 degrees and then they're nice again. And it just makes it super I don't know. Like the guys have been chasing spirits, it seems like.

Dan Austin: [3:42] Well, they're not dead yet. They're just old.

Mike DeHaan: [3:44] Yeah. And they're all addicted to getting these deals. They're like chasing the high of the next one all the time.

Dan Austin: [3:50] Yeah.

Mike DeHaan: [3:51] And I mean, as as happens with this business because that that is kind of the weird thing about this business is you never know when they're gonna come together. It is like addicting, honestly. And when things start to get moving, I don't know, I personally get like high a little bit. I'm like, oh, you know, we gotta like lock it down. We gotta chase it. I mean, even over the one we got over Christmas, you know, we were just hanging out and the lady just texted me out of the blue like, Hey, still interested in the deal. And it was literally like, my blood pressure rise.

Dan Austin: [4:22] I was like, Oh,

Mike DeHaan: [4:24] to We go on it. And all of sudden I was like with friends and stuff and I was like, it was actually kind of bad because, you know, I'm completely tuning out my wife and my friends and everything trying to get this thing closed via text And you can see how people, they're like, if they're so reliant on that to make a living. I mean, the benefit for us, like, if a deal goes sideways, that sucks, but, you know, I'm saving up the food on the table. Right. And that's if you were like the kind of people that you didn't have that. You can see why there's like, like, oh, I'm addicted to my work and I can't, you know, I neglect my family. Like, it makes sense how that could happen.

Dan Austin: [5:00] Totally. Yeah. If you're if you're like a wholesaler and you maybe do one deal a month and, like, that's your

Mike DeHaan: [5:05] Yeah.

Dan Austin: [5:05] That's your big money for the next month to carry forward. Holy cow.

Mike DeHaan: [5:08] Yeah. You're right. Well, I mean, that's how you end up with the shady dudes who, like, you know, do things like kidnap our sellers at closing and are, you know, getting involved in in people's deals and trying to interject with sellers and start doing all the shady tactics that people do. But, you know, the fortunate thing is we're in a place that we don't have to do that. But if you're a one man show and you need that fee to be coming in, it could get messy really, really quick.

Dan Austin: [5:36] Oh, yeah. Yeah. I would be

Mike DeHaan: [5:38] I I don't know if

Dan Austin: [5:39] I deal with that kind of stress very well. Some people do though. Some people can deal with it. Just not me.

Mike DeHaan: [5:42] We were there not that long ago.

Dan Austin: [5:44] That's true. But we still had other income. We both had some portfolios and stuff like that coming in. But I think it just speaks to, you know, some people are cut out for some people maybe aren't. Yeah. And you got to build the business a way that that, you know, suits you, I guess, you know.

Mike DeHaan: [5:59] Yeah. That is true. But, know, it's it's just been it's been interesting just watching the guys deal with all that sort of stuff. Because that's also the thing too is everyone comes into the new year kind of with like church camp syndrome, right? Because we have like our little goal setting meeting right at the beginning of the year and everyone sort of came out that and was like, ready to go. You know, and they're like, they have like, everyone has like all these lofty goals And, you know, we've gone through this before. So we kind of set them like, hey, let's be realistic about this. Like, you know, don't be counting your chickens for their hatch. Yeah. Like, let's make sure that we actually have action steps to reach these and not get disappointed if we're not getting a weekly deal. Right? You know, although that is a great expectation to have, you know, with Edgar Garcery going, let's go buy monthly instead because we all know that this stuff comes in batches as well. You know, it's not uncommon for us to not get anything signed for two weeks, but then get, like, three deals in two days. Mhmm. Yeah. Yeah.

Dan Austin: [6:54] Yeah. It's really easy for, like, to set a goal and, like, that is awesome. And you start doing the numbers and you start backing into what that means to everybody. But it's easy. Yeah. It's just easy to say that as far but the action steps in between, like, how are we gonna get there? Because this is where we got last year. If we're gonna go there, we have to do more on the action steps.

Mike DeHaan: [7:11] Yep. Exactly. But yeah. So we get that. And then we have our one that we got last week called Dispo. We're gonna be partnering up with local younger investor on it. It works out pretty well because, you know, he he did exactly what you wanna do if you wanna find a deal where he has checked in with me very regularly over the past, like, year and a half looking for an opportunity even though he didn't necessarily have the money and stuff to put it together. He's just been keeping me updated about what he's wanting to do, where he's at financially, you know, showing that he's hungry. So sure enough, this good deal comes around and it's like, oh, actually, you did, you know, just reach out to me and we have this one come through. Do you want this one? And he said, yeah, jumped on it. You know, they're a little inexperienced, they're new flippers. So basically, the arrangement is, you know, they're buying it from us. We're gonna help them with the down payment. We're gonna help them get a better loan than they'd be able to get his new flippers to save some transactional costs. And they're gonna pay for the rehab and they're gonna control it. And then we're gonna basically provide guidance on stuff that comes up. This is always especially, this is like a 100 year old house. There's always weird stuff that comes up that, you know, needs to be solved. Yeah.

Mike DeHaan: [8:22] It's gonna be really intimidating if you're new.

Dan Austin: [8:25] Yeah. And making sure they're solving the right problems, not the wrong problems. Right? Especially when you know it's a 100 year old house, you got to expect that there's going to be some of those weird issues. And so when you're kind of doing your budget, you know, you got to look at it like, well, if we have some of these weird issues, say it's 10% of our overall budget, like, do we need to go as high end? Do we need to go Chip and Joanne on this one? You know? Yeah. Maybe not. Yeah. Maybe not initially.

Mike DeHaan: [8:47] Exactly. Right. Well, and also usually on the price point of the house. I mean, this is in like a c class area, you know, so it's still gonna be on the lower end of the price point in Spokane. So it's like, well, what's the expectation for that price point? You definitely don't need to go chip and Joanna down there.

Dan Austin: [9:03] Yeah. Well, it's and it's just so easy for new flippers. I mean, we've kinda gone higher end on some stuff, but we have a strategy with that. But it's it's easier. Like you see a lot of folks on Instagram doing these flips, and it's just like amazing. Like, damn, that's nicer than my house. Right? And either there's a couple different things like sometimes they're in a high price point market. And so it looks super cool, but you to do that. Right? You have to have the $12,000 refrigerator installed. Or they're just like going crazy on it and not actually making as much money as they should be. Yeah. Because they're just trying to make it cool and cute.

Mike DeHaan: [9:35] Yeah. For sure. I I gotta say that we we need to have, a collective meeting as everyone that flips houses and decide on a different color scheme from the gray floor, the white cabinets, and the white countertops and the, you know, just stainless steel appliances. You can pick a a flipper house so far away. Like the second you pull it up on Zillow, like, oh, yeah, that was a flipped house because they have the exact same color scheme and they use the wide angle shot to try and hide that it's not a 600 square foot house. And

Dan Austin: [10:04] if they get a little bit creative, they have black hardware or gold hardware now. And so out of the standard nickel. But yeah, that's yeah, you're absolutely right about that. I was thinking about that the other day, actually, because I I was watching some of thatch Nguyen stuff. He I love his stuff. Right? And and some of the apartments and how he does it. He just kinda going over why he picks certain things. And he had some, like, pretty sweet cabinets that he was talking more, like, of more of a builder grade. Was like, oh, those are pretty cool, actually. Better than white shaker.

Mike DeHaan: [10:29] Yeah. Yeah. I know. Exactly. Everyone does the same thing. And I mean, we do it too. And the problem is cheap. Right? As cheap as you can do Well, it's easy. Good. You don't have to

Dan Austin: [10:38] think about it. Yeah. Exactly. But I I would imagine at some point, we're gonna have to step up and do something more unique, something cool.

Mike DeHaan: [10:45] Yeah. Exactly. You know, people should at least have, like, a trademark. Like, a lot of our rentals, we do, like, a bright accent on the outside or something to, you know, give it a little bit of character.

Dan Austin: [10:55] A little bit of pop. Yeah.

Mike DeHaan: [10:56] Yeah. Look exactly the same as every other house.

Dan Austin: [10:58] Yeah. I dread when white shaker and like monotone grays and stuff go out of style because I'll have to rethink everything. It took me a long time to build style. That style anyways. Yeah. But I'm sure in a few years that'll go away. So we'll have to figure out something.

Mike DeHaan: [11:11] Yeah. Right. But yeah. So we got that one coming. And I think it's point being with those people too. If you're a new flipper or a new wannabe investor, you're not trying to get started or how to find a deal, literally find people that are finding deals on a regular basis and pester them just enough so that they think about you, but they're not annoyed by you.

Dan Austin: [11:30] There you go. Exactly. Yeah. Yeah. The thing about these guys too, is like, know what they're getting into, they're pretty realistic about it. So it's not like they're asking a billion questions, but they're at, you know, they're asking the right questions. And if you can realize that some of it is just like, that's just up to you to overcome. Yeah. And and figure out, as opposed to just wanting to know every single detail. Because I've talked to some people where they want to know like, well, what should I do for cabinets? I'm like, just go to the cabinet store and get like some builder grade stuff. I don't know. I don't know your style. Like just do it.

Mike DeHaan: [12:02] Yeah. You know, it seems so obvious to us. Yeah. It's funny. I was even the joke and I was walking it with him yesterday. Because I was like, oh, you know, we're just gonna like, you know, what we need to do is open this up, know, you can remove this wall, probably have to put a beam in here. And I was like, you know, Dan can get you this GIF. And I'm like, I don't know. It should all be relatively pretty simple.

Dan Austin: [12:21] They're just like And they're like what? Yeah.

Mike DeHaan: [12:23] They're just like, I like how you keep saying it's simple. And I was like, honestly, it's not that hard.

Dan Austin: [12:27] Yeah.

Mike DeHaan: [12:27] We've done some weird stuff.

Dan Austin: [12:29] Yeah. Move a few walls, knock down a few things, you get used to it. Yeah. Exactly. The house will not, generally speaking, just fall over and disappear on you.

Mike DeHaan: [12:38] Yeah. Right. Generally, you hope. Yeah. Yeah. Exactly. But yeah. So that that one will be good. And then you had so the flips wrapping up, we should be what? Two weeks from that now?

Dan Austin: [12:52] It might be Yeah, just depends on some of the products like material issues and stuff like that coming in. Yeah, it's it's moving along. I was just I just talked to our guy yesterday and all of the basement is done. He's just got to paint it now, do do texture and paint. And that's like the big part, right? Because there's all this slow process of drywalling and wiring and plumbing that you never see. So he's past that. And so looking forward to probably by the end of next week, the basement will be all trimmed out and just ready for ready for our flooring, which we're just doing carpet and some LVP in the bathroom down there. So it'll go pretty pretty quickly. And and then upstairs is just putting things back together. Cabinets arrive next Wednesday. And so, it it's gonna go fast from here. Like, all the pretty stuff goes in now.

Mike DeHaan: [13:37] Nice. There we go. So I like it. So cool. Right on. Yeah. So one of the things I wanted to bring up this week, which I think is really pertinent as we've seen more and more competition coming into the market as well. I noticed, I mean, classic New Year, right? Everyone's like, I'm gonna be a real estate investor this year. So there's been tons of new people jumping in, starting to market, you know, and some people actually pulling some stuff together too. Like there are a lot of people I see on social media that are names that have been involved in the community for a while but haven't actually done anything yet or actually starting to take action, you know, new year, new them, see how long that lasts

Dan Austin: [14:15] as

Mike DeHaan: [14:15] they start flushing huge amounts of money down the toilet on their marketing. But one of the things that's kind of funny that I hear all the time on stuff is how competitive off market real estate is and how things like direct mail or cold calling or whatever are all saturated. And, you know, there are people that say, how are you supposed to compete, you know, with people like us? And, you know, or like, I like the larger groups that are already established. And first thing I'll say is, you're not. We're gonna have systems and stuff set up that are going to beat, you know, the onesie twosie sort of mailing people. But step two to that is it doesn't mean you can't establish your own systems. And that's going to be kind of like the key if you want to take this seriously and compete with the people that are already established. And one of the easiest ways, I think, to remain more competitive, and this is what the guys found out firsthand this past week, is being responsive and really jumping on when opportunities do come up and not procrastinating. You know? And this goes for when you have an established business and when you're starting out. Because we got a deal this past week, the the contract that we got, where I found out I found out after the fact that both of our main competitors in town had also received calls from these people. These people were it was just a sitter of a deal. Right? They literally texted us off of one of our mailers and said, hey.

Mike DeHaan: [15:43] Here's my address. I need to sell this property ASAP. That's all it said. And I was like, Oh, that's like the best thing Yeah, right? That's the one I want. Yeah. So we got that text in, you know, into our system. We have all of our guys have alerts set up so they are notified immediately when things come in. Kind of our standard we like to push is you want to be contacting a new lead within an hour of it coming in and of course this lead came in at like 06:00 at night or something. Yep. So it came in, James saw it, our sales guy jumped on it, was out there, you know, almost immediately meeting with these people. And Then we had an offer and we sat around within the next day. So the whole thing was like less than twenty four hours from a contact to a contact.

Dan Austin: [16:31] That's awesome. You get a handful of those a year and you got to take advantage of them.

Mike DeHaan: [16:35] Yeah, exactly. The point being, we got this and then talking to some of our competitors, we're all we're all friendly in town, chatting with them and they're like, yeah, we had that deal in our systems. Like, yeah, we hadn't called them yet. It's like, well, you missed out, man.

Dan Austin: [16:47] You missed out.

Mike DeHaan: [16:48] And I'm sure there was a lot of other people too that they had called because these people were desperate. The house is in a rough part of town, terrible condition, they inherited it, they need the money to go and do whatever the hell they're going to do. The And point being that if you're going to spend the money, have the systems in place to follow-up and to be jumping on things immediately. Like I said at the start too, if an opportunity comes up, you need to go now because they will be calling other people.

Dan Austin: [17:18] Yep.

Mike DeHaan: [17:19] You know?

Dan Austin: [17:19] Yeah. You're not the only one with that data. Right?

Mike DeHaan: [17:22] Yeah. Exactly. So You know? And there and there's people that are they mean it sort of depends on where you're at in your life, I guess. But there are people like, Oh, I was eating dinner. I was working out. I was doing whatever when that lead came in, so I missed it. I think it's David Green that says this on BiggerPockets with his realtor. He's like, Oh, I'm sorry. Is that a $25,000 sandwich that you're eating?

Dan Austin: [17:43] I love that too. That's so true. Yep.

Mike DeHaan: [17:46] No, it's not. It's like, and sure, it sucks. You got to drop your life to jump on this. But if you seriously want to do this business, especially when you're starting out and you're competing with people that have more resources, you have to do that. You have to put down that sandwich and get in the car and drive to the house and meet with these sellers immediately. Mhmm. You know?

Dan Austin: [18:05] Yep. I mean, there's no if, ands, or buts about it. I mean, like, if you're working in the real estate industry, like you don't work on a clock, right? I mean, you work on one of your customer, when your clients, your sellers, your buyers are working, are not working, right? Because that's when they're communicating with you. And if you can't, you're gonna miss quite a few opportunities out there, which is unfortunate. Yeah.

Mike DeHaan: [18:26] And the thing yeah. That's the thing that with real estate, you know, with this business, you do have the freedom to kinda have a very flexible schedule, but you have to be extremely reactive to stuff. You can go play golf on a Thursday, but tell you what, if you're finishing up that back nine and a seller calls you and says, I need to sell ASAP, you're telling your buddy, sorry, I'm going home. Like, I got to leave. I can't play the second nine with you and wait two hours because I'm going to miss out on this potentially 30,040 thousand $50,000 deal. Unless nine holes of golf is worth $40,000 to you. In which case

Dan Austin: [18:55] I guess it depends on how much you're betting with your buddies but how much you got on the line.

Mike DeHaan: [19:01] Honestly, you're in that situation, why the hell are you trying to wholesale houses?

Dan Austin: [19:06] Exactly. But Yeah.

Mike DeHaan: [19:08] You know? And that's yeah. It's a huge, huge, huge thing. I mean, even when I've been traveling overseas and stuff, like, I've been in Florida with my my friends, you know, playing spike ball on the beach and and I'll get like a call that I need to take this response like some sort of response to a lead or something and I'm like I'm sorry guys, we got to pause this for ten minutes so I can go do this. And they gave me a hard time and everyone's like I don't like when people do that. It's like well you know what? You're gonna like it when you're receiving a 5 figure check for that deal that you just closed while you're playing spike ball. Yeah.

Dan Austin: [19:42] It's worth it to me. I mean, where we're at with our business, you and I still both have to jump out to do things or take care of issues. Right? That's just how it is. And that's what it is being kind of a small business owner. But especially when you're starting out, you can't just automate everything. Like, you can't think of in the terms of like, oh, this is a nine to five job. I own a bakery or whatever. I don't know, like Mhmm. Where you can just have employees do everything. Like, you gotta be really responsive on top of it.

Mike DeHaan: [20:05] Yep. Exactly. And, you know, and if you don't have that flexibility, like yourself all the time, realistically, you gotta find a business partner. You gotta find an employee so you can you know, when you're not available, they're not available, you guys can trade off. You you and I do that on stuff all the time. Yep. You know, I do that with our sales team all the time. I mean, that one that we got over Christmas, they weren't responding. They were all on their Christmas break. I mean, in an ideal world as a business owner, I would have loved if they were like, don't worry, I got this. But of course, they're not going to do that. We just told them they could go on vacation.

Dan Austin: [20:36] Yeah. And like the expectation you shouldn't have is that they'll do it because we did just tell them like, two weeks off, don't even think about work. You got other stuff to worry about family and, you know, projects and stuff like that. And so it's like, you know, that's what you do. Yeah. Step in and crush it. And then you make fun of them when you got a deal when they were on vacation. Exactly.

Mike DeHaan: [20:51] Right. Yeah. And then then, you know, you don't give them their commissions and you slap it in their face. Yeah. Paying yourself their commission.

Dan Austin: [20:57] Exactly. Good

Mike DeHaan: [20:58] capitalist America. Right Yeah.

Dan Austin: [21:01] Yeah. And then you get a new employee on January 1. Yeah. Right. Yeah. Oh, man. So yeah.

Mike DeHaan: [21:08] Anyway, I think that that was a big sort of lesson learned today. And the thing that I that really did warm my heart though was the guys heard that we beat out the competitors and how freaking amped they were Yeah. About that. And I'm like, that makes me happy.

Dan Austin: [21:21] And it's proof of concept on action steps. Right? It's talking about stuff that we talk about know, when we're doing goal setting of, like, how do you get to that? And so those are back to those action steps. Like, that's one way speed to lead. Right?

Mike DeHaan: [21:32] So Yep. Exactly. So, yeah, it'll be it'll be an interesting one to try and move because it is a dumpy house. But I mean, are getting at a great price. I mean, it's the thing needs like $70 worth of work. But, you know, the upside in this area is like $2.50 ish, $2.60 ish.

Dan Austin: [21:53] So there's some meat

Mike DeHaan: [21:54] for There's some sure. We're down pretty well on our offer but I'm not going to share the exact number because we're trying to assign it right now. Alright, yeah. So it should be a good one. Anyway, that that was a big lesson learned. Think the exactly you said a proof of concept there. But yeah. What else you got, Dan? You have you've had a few people reach out. We've been having a lot of people reach out to us recently. We've actually started working with a couple people remotely in different markets who wanna basically build our business. You know, we've had a couple be like, hey. Do you guys offer coaching? And we haven't. But now that enough people have reached out, we're like, well, maybe we should. Right. Yeah. So if you have an interest, let us know. We're working on some different material and processes here about how to get you started in this business. And I think the one thing that we are touting, which is true, is if you sort of come with us and you start going through our processes, we can have you working leads within two weeks, going from nothing to talking to motivated sellers within two weeks. So and we're gonna throw you into the fire. You're gonna learn hard. It is gonna cost you a little bit of money to get this thing going. But, I mean, if you're serious and you wanna talk to sellers, we can get you there very, very quickly.

Dan Austin: [23:14] Which is maybe a little intimidating to people that are starting from zero to start talking to leads in two weeks. Like, well, what do I don't have a business yet. I don't even know the process. And I've talked to quite a few new people where they're even just asking questions about like, well, what do you do once you get under contract and all that sort of stuff. The reason why we think getting leads sooner is important because it takes a while to work these leads. And if you spend four or five, six months, like building your brand, building your business, you're just spending money. And you're not actually doing the core part of the business, which is talking to sellers.

Mike DeHaan: [23:45] Yeah. When you're exactly. And you're wasting time. Yeah. And we've we've been parts of groups where they're like, first thing you gotta do is you gotta build an LLC and you get a logo and you get a website and all sorts of It's like, yeah, that's great. And that's important. But people get so hung up on those non revenue producing tasks. And it's like, now you haven't actually done anything. You wasted a bunch of time when you should have been talking to sellers. And I guess what we're doing with the people that we're working with is actual direct coaching with them. So, like, you know, like the guys I'm working with, I'm on Zoom with them, you know, at least once a week sort of going through the processes, what they're working on, you know, walking through how to get the leads coming in, how to work the leads, how to do everything. And then, you know, how should they follow-up with these people, you know, when they do get a contract signed around, what steps are gonna be next and how to figure all that out. So, you know, it's kinda like, honestly, it's kinda like a mentorship, I guess, where we're gonna help them go along the way. And it's not just like, oh, throwing you completely into the fire and you're on your own. But

Dan Austin: [24:48] Yeah. Yeah. And it's like, again, it it could kinda be intimidating. And I was talking to I talked to a handful of newer investors that are reaching out. And like, when Mike and I say reach out, definitely do it. Like, we always say that, like, when I'm on other podcasts, or even on our podcast, we say it. But like, just hit us up in the DMs or whatever. And we will respond. Just like I have been this week to several different people and one of them was like a younger gal thinking about getting to wholesaling and, you know, I was, you know, trying to explain to her kind of the process and high level stuff and, you know, I think there could be still be some questions for newer people like why wholesaling, what's wholesaling? Because most people come in, they're like, I wanna buy units or I wanna flip houses or I wanna do both. Well, realistically, if you're younger, you're newer, maybe you don't have your capital built up, like buying a house to flip is like super hard because you got to be able to buy a house and if you don't even own a house yourself, you might not even qualify or be able to from a financial standpoint to buy a flip property. Like it's not, it's just not that cut and dry, you need more money. And I think about it this way, like, in terms of, like, why wholesaling for a lot of people, like, even if you make a $100,000 a year job, right, that's that's a decent income, that's probably double the national average of household income. It's still really hard to build capital up to go and put 20% down on a rental property, or go and put 20% down on a flip and then fund the rehab. And you know, if you just back into it, it's like, okay, a $100,000, maybe your effective tax is like 15%.

Dan Austin: [26:15] So now you're playing with $8,585,000 dollars after you've paid taxes and then you've got some sort of living expenses whether that's rent or or maybe you do own a house like a mortgage that if you're all in is like 15,000 or 1,500 a month, you're at what is that 18,000. You start backing it down and maybe you have a car payment of like $400 a month. You start backing it down to where maybe you can save a thousand dollars a month, which is great. That's $12,000 a year. If you're gonna buy a $200,000 property, that's two years of saving without any whoopsies or issues. And so you start thinking about it in terms of that, if you want to take action now, saving for two years to maybe get an opportunity to flip a house and you're just dedicated to saving and you're looking at deals, but you can't do anything with them. You're really you're really hindering yourself. And so why wholesaling is because you can start that you do need some money to start like you've got to pay for marketing, you got to pay for some things that start up. But what Mike and I are saying is in, you know, two, two weeks all the way up to like three months, like you're going to be collecting fees, because you're going to be talking to deals, and or to leads,

Mike DeHaan: [27:18] and then you're going to

Dan Austin: [27:18] be getting deals. And if you can close a deal in one month, that's $15,000 that covers what you were saving in a whole year, you can start seeing how quickly you can scale with wholesaling where you never even have to take title of a property. But you can now build up your coffers. And if you wanna traditionally go out and buy a house with 20% down and flip it or use it as rental, now you have the cash or now you're in front of good leads, good deals for yourself to take down.

Mike DeHaan: [27:42] Yeah. Exactly. Yeah. I think that I don't remember what personal finance book I read, but they talked about kinda what you're saying there. There's, like, kind of the the three sort of forms of income for building wealth. Like, kinda like the the process they had is, you need your consistent income that you live off of, which is, your w two job, you know, for most people. Right? Then you need some form of massive income producing activity, whether that's, like, you know, people have said that that's that that basically isn't gonna go towards your living expenses, whether that's flipping a house, wholesaling a house, you know, having some sort of side business, you know, even even doing things like driving for Uber, which aren't necessarily massive, the point is all extra money is going towards your investment pot. And then you take the surplus money from that and from your W2 job that you live off of and you combine those to invest to build wealth. Right? But then the whole premise of what they're looking at is you can't really control your w two income. You can control what you save from that, but that's limited after an extent. Right? You can control what your massive income producing task is, you know, so the whole thing is you survive your w two, and you focus your time on whatever that massive income producing task is. And then especially once you're starting, you take all that extra income, and that's what you invest, right?

Mike DeHaan: [29:07] As opposed to saying I only have the singular form of income that I'm gonna try and scrape together and save and have all my kids lift off of ramen and live in a cardboard box from Lowe's in the corner so that we can save money on housing. That's sort of like the broke mindset, right, instead of seizing the opportunity mindset from finding that larger income producing task. And if you're not sure what that is and you want it to be real estate, like going back to before, find people that do know how to do that and start working with them. Yep. You know, whether that's, you know, finding a coach, that's going to a local meetup and finding a flipper to partner with where, you know, there's there's kinda like the trifecta of things you need to deal, you need money, you need hustle, you need knowledge. Right? If you don't have the knowledge, you don't have the money, you better be in the hustle and you show up and you work for these people that are doing something. Right? You know, and everyone always says people always say this to me. They're like, well, you don't have kids. You all have stuff. I don't know if I man, you have kids. You figured it out. Yeah. Like I

Dan Austin: [30:06] mean, a kids, a job. I got a lot of stuff you figured out, and and I still, you know, have time to do things. Yeah. I like to think of it when you're talking about, like, building these relationships. This is a good maybe a good way for people to put in terms of is, like, what is the lifetime value of a relationship with somebody? Because because like, that's like, maybe feel selfish, like, oh, I'm just looking for this person for what they can give me. But then flip it around and like, what is your lifetime value to that person? So when you're networking with people, if you look at it in terms of lifetime value, like what is that value you can provide them? Because in turn, there's an expectation that that they're going to provide you value and vice versa. That's how relationships work. And so if you can go connect with people and provide them value, they're they're they're going to reciprocate unless they're just a but thole. And trying to take advantage of which I guess there's probably people out there. But generally speaking, I don't know what you think, Mike, but I don't run into too many of those people out there where they're they don't want to reciprocate.

Mike DeHaan: [30:59] Yeah. It's it's very few and far between. Mean, and I found too that people that are, you know, as they get more established, I mean, I I put me in this camp a little bit now. I almost get more fulfillment out of, helping other people get stuff going than, like, my own things because, you know, me and, you know, you and our business and stuff getting deals isn't really, like, exciting anymore. I mean, like, it is, but it's an expectation. Yeah. You know, it's no longer a surprise. So now when I can take that same knowledge and go and help somebody else get something and make money, right? That's like cool, you know, because you can see the excitement, right? You can feel the excitement that they have because you're like, yeah, you just made, you know, $25,000, you know, and your current salary is $60, you just made half your salary And like a, you know, two month deal, that's all extra money for you.

Dan Austin: [31:45] You know? Yeah, it is cool to be able to do that. And then also, you know, kind of gives you a little bit of proof that the systems we're building work, not just for us. It's like, sometimes you gotta think as a business owner, am I the only reason and this is not to be arrogant, but am I the only reason this works? Like, I unique? And you worry about that, because you're like, well, I can't step away then if it's me, if the business is me, then you're kind of in trouble, right? As far as scaling growing. So then if you can kind of apply those same concepts to somebody else, and they can do it, you're like, oh, that is pretty sweet. And then when you can like light up somebody's eyes and see them like, yeah, I was only making $60 a year and I just learned how to make 25. And once you learn how to make money on your own, it's pretty life altering.

Mike DeHaan: [32:26] It is for sure. And you realize it's not actually that complicated. Yep. But, you know. Yeah. And then

Dan Austin: [32:30] you start poking holes in the systems that you've been more operating in the rest of your your whole life before that and you're like, wow. There's a whole another way out there.

Mike DeHaan: [32:37] Yeah. Exactly. But and I guess one thing to backtrack really quick on there was the last comment. When you people are starting out with we found this a lot too is people tend to be afraid to spend money to learn and to like join groups and to do all this sort of stuff. I mean, you should be like skeptical because a lot of people will ask for money and I actually have a lot to offer. But I can say that, I mean, I remember even back when we first started joining mastermind and stuff, we're like, man, $5,000? Like, that's like a lot of money we're going to be paying. But now we have groups that we pay monthly to be in. We paid large, you know, $5.10, $15,000 to be in. And we know we pay, you know, additional money to go to weekend events and like do all this sort of stuff to be part of that group. Know, we put a lot of money out, but the money that's come back is a hundredfold, more than that, a thousandfold on some of those things. Right? So it's it becomes a no brainer. It's like you said, what's the value of that relationship? It's like, well, the value of the initial relationship is $5,000. The value, you know, $5,000 out of your pocket. But then if the value long term for you is $500,000 in revenue, you're able to make or $5,000,000 in net worth, that's obviously a very easy investment. Like, if I could, you know, if somebody said to you, give me $5,000, and in five years, you're gonna be worth $5,000,000. Most people would do that.

Dan Austin: [34:04] No, you're right.

Mike DeHaan: [34:04] Yeah. Yeah. Yeah. You're right.

Dan Austin: [34:06] But yeah, you're but if you have if you have the ability to look backwards, which we do at this point on that topic

Mike DeHaan: [34:12] Yeah.

Dan Austin: [34:12] Is you would a 100% make that investment. Yeah. And you only think about it and like, I'm a person I hate spending money. Mike knows this about me. I just I hate the process of spending money. Even on little things, and I've had to work through that on certain areas of my life of spending the spending the earnings that I have. And I can tell you there's certain areas where you should spend your money and your time because then you you don't just talk about the dollars, but the dollar productive activities. Is it worth your time to spend every waking moment trying to figure things out on your own? Or is it worth your time to spend forty hours and be in a be a somewhat of an expert at at some level?

Mike DeHaan: [34:47] Yeah. Exactly. So so cool. I think it's a good place to finish. Anyway, if you guys wanted to reach out to us about that, please do. Easiest place to do it is on Instagram. You can find me at mike underscore invest. You can find Dan at investor man Dan. You can follow the podcast at collecting keys podcast on Instagram. And if you want to get our ebook, which is the five step guide to generating off market leads, which will kinda get you started right away without a lot of the direct guidance that we would give you if you reach out to us directly, you can go to our website clickingkeyspodcast.com, put in your email, get that ebook. And besides that, any last last minute thoughts, Dan?

Dan Austin: [35:28] No. No. I'm I'm happy to go out and hopefully gonna go look at a new prospect on an eight unit for us here in a little bit if I can hear back from our guy.

Mike DeHaan: [35:36] Yeah. He's excited about bio relationships. We had somebody approach us with an eight unit apartment complex that they approach us with directly because we have built a relationship with these people over the past several years. Yes. And this can be one that if it comes together, you know, we have paid these people money, they've paid us money, and it could be a multi 6 figure deal for us if it comes together. It's a big deal.

Dan Austin: [35:57] Yes. It has billboards. It

Mike DeHaan: [35:59] does have billboards.

Dan Austin: [36:00] I love it.

Mike DeHaan: [36:01] But, you know, but as I was saying, I can't count the chickens before they hatch.

Dan Austin: [36:04] So A 100%.

Mike DeHaan: [36:05] Yeah. Anyways, alright, guys. Thanks for listening. Reach out to us in the DMs, and talk to you guys next week.

Dan Austin: [36:11] Alright. See y'all.

Speaker 2: [36:14] 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.