What Makes a Great Acquisition Manager (& How to Pay Them)

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 know, 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, it would really need a ton. And, otherwise, we appreciate you guys, and let's get into this episode. There are iBuyers that are still out there, and it can be an opportunity if they're in your market, but also to understand that you are competing with them.

Dan Austin: [1:13] You guys ever heard of high rocks?

Mike DeHaan: [1:15] That's CrossFit for people who aren't strong and are just wanna run a marathon instead. It's so dumb.

Dan Austin: [1:20] So glad you said that. I'm so glad you said that because I saw a video today of, like, a high rocks competition. I was like, oh, so another thing marathon runners can ruin for everybody? Totally did. And it's Like, what?

Mike DeHaan: [1:32] Become like the new CrossFit thing. I'm like, that that's what we used to do on a Saturday. And you making like a whole event out of it. Like, it's like doing competitive Murph. It's just dumb.

Dan Austin: [1:40] But my understanding so then, you know you know Aaron, he's a mutual friend of ours. He was telling about this like a couple months ago, I had just had seen an activity.

Mike DeHaan: [1:47] Aaron was on the show last week. Different Aaron.

Dylan Koch: [1:49] He was your replacement.

Mike DeHaan: [1:49] Oh, different Aaron. Different Aaron.

Dan Austin: [1:51] Oh, sorry. Anyways, he he was telling me about it, and I like, okay. But it's like the same exact like body movement exercises or body weight exercises, and I that's the competition. Like that's so dumb.

Mike DeHaan: [2:01] But every single time is exactly

Dan Austin: [2:02] the same.

Dylan Koch: [2:02] This is the power of marketing and branding, Dan. Yeah. But it's

Dan Austin: [2:05] just a bunch of skinny dudes with running shoes.

Mike DeHaan: [2:07] Exactly. It's dumb.

Dylan Koch: [2:08] They have about their Asics shoes or the Yeah. What's the other popular one? I forget.

Dan Austin: [2:13] The the Saucelynne, is that the other brand?

Mike DeHaan: [2:16] I don't know, man. I miss the fitness days when it was just like a bunch of moms and like old dudes like trying to do snatches and shit, and they have like no business doing that. Like they are putting their body on the line for that Saturday workout.

Dan Austin: [2:28] But you know what? CrossFit was bigger than ever and it was That going was

Mike DeHaan: [2:33] a glory day. There was blood everywhere, dirty. Yeah. That's throwing on some die motherfucker die from is that dope?

Dan Austin: [2:41] Good song. Did you

Dylan Koch: [2:42] ever rip your hands on one those bars though? I think that should

Mike DeHaan: [2:45] dude. Yeah. I fileted my hands. Yeah. Well, anyways, welcome to the Real Estate Fitness Show, apparently, everybody. No. What's up, guys? Welcome to the collecting keys real estate investing podcast. If this is your first time here, this is the real estate operator show made by operators for real estate operators. I am Mike DeHaan here with my cohost, Dan Austin and Dylan Cook. And on the show, we like to dive into real estate as a whole and how you can continue to grow and be successful in your real estate business despite all the market ups and downs and, you know, just dealing with general business as a small business owner, which is always interesting. And, of course, a big part of that is staying in shape, which Dan has recently rediscovered. So, Dan

Dan Austin: [3:28] I'm a high rocks athlete now.

Mike DeHaan: [3:30] Yeah. You're a high rocks athlete. I will say, though, there's, like, wall balls and rowing in that, so you're fucked because you're, like, five foot four.

Dan Austin: [3:36] I don't like any of those things. Those are the worst activities. They are so long. I feel like wall balls for a shorter person would be better because you have less to move.

Mike DeHaan: [3:45] No. You gotta throw the ball higher.

Dylan Koch: [3:46] No. You gotta throw the ball higher, bro.

Mike DeHaan: [3:48] Tall guys are always better.

Dan Austin: [3:50] Yeah. I don't know. Well, I guess, yeah, if you're like six five, that'd be definitely a big the row though, I will say is dumb. Yeah. For you. Like,

Mike DeHaan: [3:57] for sure.

Dan Austin: [3:57] I do it all the time and it sucks.

Mike DeHaan: [4:00] Yeah. So, you know, leverage. But anyways, guys, welcome to today's show. We got some good topics to dive into. And one of the first ones, I think, out of the gates, Dylan, which I really like this little post that you found, which I feel like is very relevant for today's space because everyone's always trying to figure out, like, these institutional buyers. And I feel like the iBuyers was such a huge thing in '21 and '22 when the market was red hot, and then a lot of them completely disappeared for two years, and now they're kinda back. So you found this Twitter post that basically said, no. BlackRock isn't buying up all your homes, and here's actually who is. And it went through, like, a handful different ones. Open Doors at the top, which a lot of people will be familiar with, I mean, iBuyer. But the one that stood out to me the most on this was with 4,603 or four properties was New Western.

Dan Austin: [4:52] Great company by all accounts.

Mike DeHaan: [4:55] They they they have like the worst reputation. Anyone that's been around I feel like every time I talk to a wholesale operator, they always go, do you have New Western in your market? Mhmm. And it's like the most frustrating thing because they have these it's a dispo shop, and they sell these shitty deal. But apparently, they're, like, the second biggest buyer in the country with all the double closes that they're doing.

Dan Austin: [5:14] Well, the way that they do these too, so I guess for the new for those that aren't aware, the new western model, like the way their company works, is I I think you almost essentially have to pay to work for them. Like, it's not like they're employees. So like

Mike DeHaan: [5:27] a brokerage. Yeah. Yeah.

Dan Austin: [5:28] They sell

Mike DeHaan: [5:28] like a desk fee or whatever.

Dan Austin: [5:30] Exactly. And so they basically it's like the the no skill wholesaler job. Like, you just show up and call other wholesalers and look for deals that are being dispoed. I mean, that's typically how I've encountered them is they'll see a deal that were disproved and like, hey, I can help you buy it. Which is actually nice because somehow they have a buyer's list of people that will sometimes move the worst deals, but then they'll also screw you over last minute so you can't trust any of them because they're just sales dudes too. They wanna get as many people in their sphere as possible. I guess my point of that is they have a ton of people out there doing this in every market to get that 4,634.

Mike DeHaan: [6:06] If can give me about thirty six seconds, I just wanna share our scale community with you. So SCALE stands for scaling cash flow assets, leverage, and equity. It is our exclusive community for real estate operators looking to take this game seriously. In the community, you'd hang out with myself, Dan, Dylan, and other operators around the country who are all working to be the best in their market. We recently did a survey, and every single member said that the community had directly contributed to major growth experience in the last twelve months. On top of that, you get all of our processes around marketing, sales, building a CRM, and you even get preferred relationships with Lowe's and different financing slash lenders, so that you can get your deals 100% paid for without a headache. So if that sounds like something you're interested in, go to collectingkeys.com/scale. Let's see if you're a good fit. You know how it works though too, Dan. I don't know if you know this, but have you ever when we've gone to one of these new markets, you go and you post in this Facebook group, hey, we have this deal, all of a sudden like six new western people hit you up?

Dylan Koch: [6:59] Yeah. Yeah. Yeah.

Mike DeHaan: [7:00] Do you know why that is?

Dan Austin: [7:01] Yes. Why? Because the first person in their CRM to have contact with you, you forever are their client.

Mike DeHaan: [7:07] Exactly. They get like exclusivity.

Dan Austin: [7:09] So any deal you do, they you could go to a totally different market, do any deal.

Dylan Koch: [7:13] So they guys have push notifications turned on in every Facebook page?

Mike DeHaan: [7:17] Yeah. Oh,

Dan Austin: [7:18] Yeah. They do, they they hunt you down. They're like a like if you went on to like an online insurance company, and it's just a like a lead shop, get like 80 insurance agents trying to call you for your business, they're the same way.

Mike DeHaan: [7:28] It's basically like how, you know, people go on a PPL form, and then they promise to only sell the lead to one person, and then you talk to the PPL lead, and they've been called by 85 other wholesale

Dan Austin: [7:38] Yeah. Exactly.

Dylan Koch: [7:40] One thing I wanted to point out for the audience is Open Doors at the top around just like under 12,000. New Western is second, but it's at 4,600. So like there's a pretty big gap between one and two.

Mike DeHaan: [7:48] Huge gap. It's a huge gap.

Dylan Koch: [7:50] And then the rest of them all trickle down from four to the couples and twos and mostly in the thousands.

Dan Austin: [7:55] Yeah. And so this list is corporate buyers. Right?

Dylan Koch: [7:57] Correct.

Dan Austin: [7:58] So the the interesting thing I think too about this list though is like, I would say New Western probably represents the individual. Probably, yeah. More than they represent a corporate company. So if you take that into account, I would still, I would say mom and pops are still the largest buyer, and these are single family homes, so like, I mean that's, I mean we're still running the market out there guys.

Mike DeHaan: [8:17] Yeah. I mean that that's valid, because almost all their sourcing is from other wholesalers, I don't know if they do any marketing themselves. I'm assuming it's all JVs.

Dan Austin: [8:24] I don't think they do.

Dylan Koch: [8:25] That's a good point. Yeah. And they're probably selling Yeah. Not to other companies. If you and I are trying to buy a property, we're probably not buying from New Western.

Mike DeHaan: [8:32] No. They're you know what they're doing? They're selling the open door.

Dan Austin: [8:35] Honestly, that's probably the trick. Yeah. Right? So that's what

Mike DeHaan: [8:39] this number this charge is actually false because the 4,634 is being counted twice by New Western and Open Door. That's Honestly.

Dylan Koch: [8:47] I mean, we have a couple of these. We don't actually don't have New Western in my market, at least not a huge presence that I'm aware of, I feel like I would know that. We have a couple of these though, and some of them are like Columbus up near me, but honestly, like you said, the heyday, I sold a couple of the hedge funds, like Vinebroke was a big one around here, SFR three is another one, like a lot of Midwestern ones. But they don't one, they stopped buying, and two, a lot of them are are selling a lot of inventory that they bought back then too. So these things go in cycles, man. I know people get pissed if you hear you you sold hedge funds, it's never going back in the market, it should go to someone who's gonna live there. It does, it just takes time.

Dan Austin: [9:20] It does take time. Well, if you think about it, and you're gonna be really smart on this one, Dylan,

Mike DeHaan: [9:24] but the hedge I mean,

Dan Austin: [9:25] the hedge funds, they're just looking at a number on a sheet, and when the time to sell is, it's time to sell. Right? And so, they Mhmm. They're really just looking at different spreads and how much money they can make when they go into the single family game. They didn't do it because they were like, we're gonna get lucky and just buy all the houses and keep them forever. Like, they have a number in their head, once they hit that number, they sell. Whether it's a good number or a bad number.

Dylan Koch: [9:44] Most of them underwrite on some kind of, like, gross yield. Like, so the rent minus expenses, and the the yield's honestly pretty low on what they could get for it. But a lot of them do have bad reputations of not maintaining the properties, like you almost seen that whole property management arm of the business. That might have been ruining the acquisition side of the business, because get a whole bunch of complaints from cities, like overrun lawns, holes in roofs, tenants complain all the time. So I think that's honestly more of is the the maintaining of the properties, not the buying of the properties.

Dan Austin: [10:11] Interesting.

Mike DeHaan: [10:12] Yeah. Well, they've even done shady stuff too, like they'll buy like a whole neighborhood and just keep them empty, because they don't want people to trash the properties.

Dan Austin: [10:18] Interesting. I didn't know they did that.

Mike DeHaan: [10:20] Yeah. There's been articles and stuff that have gone on about that, especially in some of, like, the Sunbelt areas where they're, like, just basically buying entire developments and controlling the comps as, like, more houses get built cause then they can price them up when they go to sell them.

Dan Austin: [10:34] Right. I mean, because it makes sense because if you're if you've got no debt servicing, like that's under, so you're just gonna pay your taxes and all that sort of stuff, your typical small number utility cost because nobody's living in it. And if the market's going up, you just just wait it out.

Mike DeHaan: [10:48] Exactly. The top markets that these corporate buyers are buying in, Atlanta is at the top by quite a bit. It says Atlanta, Sandy Springs, Roswell. So I'm assuming that that's like a suburb of Atlanta. But that's at almost 3,700. And then next one up is 700 less, which is right at, like, right at 3,000, which is Dallas Fort Worth. And then from there, and we're down a whole another thousand to Houston. Yeah. And so, like, those, and then Phoenix is a is a close fourth behind that. So those four markets though, like, there's such a huge divide in Atlanta, apparently, is where where they're at for a lot of these corporate buyers. I'm curious why that is.

Dylan Koch: [11:25] I feel like that's these were been the popular spots in the past couple years anyway. Yeah. Dallas Fort Worth. Yeah.

Dan Austin: [11:31] Yeah. But Huge metros.

Dylan Koch: [11:32] Huge metros, and obviously growing populations. But like, go in these these like sign wave looking patterns where they build, and they overgrow, and then they come back down, and they overgrow, they There's no like just relative choppiness. Like these peaks and troughs that are just so high and low.

Mike DeHaan: [11:47] As you get down the list though, right, there's actually some pretty interesting ones in there. So they have San Bernardino or Ontario, California. They have Los Angeles, Long Beach, Anaheim is on there. And they get down to oh, yeah. Denver's in there. So they're going outside of like the whole red state narrative as well and getting into California, which I know I wouldn't have expected that at all. I wouldn't expect to see anything in California on that list.

Dan Austin: [12:11] Right. Well, rivers so Riverside San Bernardino is probably a red county. Yeah. But it doesn't matter. But then you've got Long Long Beach. You got Long Beach. Either way. Austin. Austin's the blue part of Texas.

Mike DeHaan: [12:22] Yeah. That's true.

Dylan Koch: [12:23] It's the one blue part.

Dan Austin: [12:25] Yeah. Yeah.

Dylan Koch: [12:25] Probably. But there's only one flipper on here too. Like the whole flint, the only wedged one. Oh, you're right. I think that just speaks to the fact that it is very hard to grow a flipping operation

Mike DeHaan: [12:35] Oh, yeah.

Dylan Koch: [12:35] In multiple markets like that. Like, there's a reason there's not billion dollar flipping companies.

Mike DeHaan: [12:40] Mhmm. Well, not in terms of like doing fix and flip. I think a lot of the you were just talking about how Opendoor selling off their properties, that was a flip, but it was a flip based on the macroeconomics and not on a value add renovation.

Dylan Koch: [12:53] Yes. Right? Yeah. Correct. Flipping as in like, they're trying to just turn around and sell it immediately to a new owner.

Dan Austin: [12:59] Yeah. They're just they're trading it just like stock now. Yeah. Time to sell.

Mike DeHaan: [13:03] So it's interesting how that applies to your business. I mean, I think the big thing to take from that is that there are iBuyers that are still out there, and it can be an opportunity if they're in your market, but also to understand that you are competing with them. We actually had a scale member this past week talk about how they lost a a deal to a hedge fund Mhmm. Who came in and offered pretty much what their MAO was a $25,000 nonrefundable earnest money in a five day close. How do you compete with that? I don't know.

Dan Austin: [13:31] No inspection.

Mike DeHaan: [13:31] No inspection or anything like that. That's about as tough as it gets.

Dan Austin: [13:34] It's hard to compete. I think the other thing just to think about is, like, as a business owner, as an investor as well, you're trying to make decisions based on all the information you can take in. And at the end of the day, who gives a show the headlines say? Mhmm. Because, like, you know, I've heard this quote like, oh, the hedge funds are buying up all the properties and it's killing the real estate forever. It's like, not really. I really look at this list and I see that mom and pop investors are buying probably more than all of the hedge funds put together. If you actually just add up all the people that are flipping houses and wholesaling houses and all that sort of stuff in your market and through New Western and all that. So it's not a true statement. You could say that, but it's it's just not a true statement.

Dylan Koch: [14:15] Honestly, it's probably better now than it was a couple years ago.

Mike DeHaan: [14:18] Definitely.

Dylan Koch: [14:18] Because no one's holding rentals anymore. So they are buying to flip them and sell them to, you know, a home buyer.

Dan Austin: [14:24] Exactly. They're they're putting more on the market, basically, and there's more available. Yeah. And potentially, in some of these places where, like, open doors operating, I know back in like '23 when stuff started to get really toppy and and going down the other way, like Open Doors is dumping houses. Right? Which naturally brings down the price of housing Yeah.

Mike DeHaan: [14:41] In your area. So we'll see what comes of that. I don't know. It's always interesting to see it. They keep a pulse. The fact that they are still buying though, I would say is a pretty good bullish indicator for real estate. I mean, if they thought stuff was gonna be going down hard, they wouldn't be buying anymore. Right. But also, I mean, just one caveat on that. Opendoor stock has tanked like 95% in two years. So maybe they don't make good decisions. I have no idea.

Dan Austin: [15:03] Who knows? Yeah.

Mike DeHaan: [15:05] Anyways. Well, Dylan, well, congratulations. You're officially a business owner. Hired your first AM that's actually successful, which was attempt number three.

Dylan Koch: [15:14] Three.

Mike DeHaan: [15:14] I think? Yeah. Yeah. Wow. So because the other AMs that you had, I think you had one that just no showed at all.

Dylan Koch: [15:20] Correct.

Mike DeHaan: [15:21] And then you had one that showed up for one day, and you invited him to scale sales training, he never showed up?

Dylan Koch: [15:27] Never showed up.

Mike DeHaan: [15:28] Again. Yep. So so you fired him, and then you finally got a good one.

Dylan Koch: [15:31] Yeah. As I told the scale community, posted a screenshot on our our little Slack channel, I was just at the gym, and then I get a message from the new AM, the basis says, hey, seller agreed to this price, and we're meeting tomorrow at 10AM to go over the contract, and

Dan Austin: [15:45] Heck yeah.

Dylan Koch: [15:46] It was a surreal feeling. I was like, holy shit, know, here I'm just trying to you know, do my workout, and it's not solely dependent on me to drive revenue in the business.

Dan Austin: [15:56] Yeah. That's cool. That's a good feeling.

Mike DeHaan: [15:58] Yeah. So why do you think this guy was different? Although the bar was super freaking low, because he showed up.

Dan Austin: [16:04] Yeah.

Mike DeHaan: [16:05] So he already beat the first two guys. But going through the process on your third attempt, what'd you do differently in hiring? Why do you think this guy has been able to be so successful right off the bat?

Dylan Koch: [16:14] So a couple of things is, I mean, I really didn't do much different. I really just reposted something on Facebook. In fact, it was my previous year's post that pretty much reshared and said, hey, this didn't work out, anyone looking to make you know, some good money in real estate, reach out to me. Anyway, a handful of people did, but this guy, I had kind of already known from mutual connections just being in the real estate space already. So we hopped on the phone, hopped on the phone, and just started talking, and his really expectation was, you know, what is the job description? How much am I gonna be on the phones, and what's the compensation? Mhmm. We walked through that, which you know, for the audience, he's getting $2 a month flat fee, then we're doing a tiered structure. So the first two deals are 2,000, the next two deals are 3,000, anything five deals or or more is 5,000 a deal.

Mike DeHaan: [16:55] Damn. And that's per month?

Dylan Koch: [16:56] Per month. Yeah. And with the caveat, if something gets pushed from the thirty first to the first year, I'd dickhead about it and still count it to the previous month. Yeah.

Mike DeHaan: [17:04] See how long that takes bro, I'd be playing that game all day. Like come on, we gotta I'd be showing up like moving the lady shit out in the curb, we're closing early.

Dan Austin: [17:13] Stop paying this guy more.

Dylan Koch: [17:14] Yeah. But no, I mean, honestly, we vibe well together. He he kinda already knew a lot of the real estate stuff. Yeah. So really, it's just plugging him to the CRM that I made. I probably have like close to 15 Loom videos, you know, that we share with him on higher end comps on PropStream, here's our accusi like our calculator on offers, and here's some calls that I've done in the past that I think are good calls, so let's echo this. And so we are doing call reviews. We do about one every day right now. And honestly, he's kinda hit the ground running, and now I'm just going through the CRM and making sure all of our tasks are appropriate.

Dan Austin: [17:47] Good

Mike DeHaan: [17:47] guys. Many of your leads has he taken over from you versus are like ones that you just neglected? Like are you still running with leads where you had a previous relationship with the seller?

Dylan Koch: [17:58] So when I logged into the CRM and went to the task, there's ones all the way back from April 2024 that hadn't been touched.

Mike DeHaan: [18:04] Yeah. Remember when you did a little screen share and your CRM was a freaking nightmare.

Dylan Koch: [18:08] Yeah. It was. And so basically, he's taking over probably 80% of leads. Nice. A lot of the ones that I've had very recent, or like more recent conversations are ones that I think are are close. I'm kinda hanging on to those. Just like you said, it's for the Rapport Building. I don't wanna hit it off like, oh, here's Tony now that that's taking over. And so but after this being said, even the first month, I think we're gonna close two deals with him.

Dan Austin: [18:30] So That's awesome. That's That's really

Mike DeHaan: [18:32] a great start too, just like from for his morale. Right? Because one of the biggest challenges for AMs is there's a ton of wholesalers, flippers that are schmucks. Right? And they they don't have a good process. They don't have good lead flow, and they go they hire an AM even though they don't have, a track record of actually being successful. And they think that if they get this AM, it's some magic's gonna happen. And I remember when we first started hiring, like, kind of at scale and trying to get better people, one of the first questions they'd always ask is like, okay. So you guys are actually a legit operation, or am just gonna come in here and realize I'm wasting my fucking time? Right? They would say it more professionally than that, but you get it. And so for them to come in and get deals right off the bat, that's gonna pay compound interest on his success moving forward because he knows that you have that opportunity for him.

Dan Austin: [19:21] Yeah. Totally.

Dylan Koch: [19:22] Yeah. I mean, this is gonna sound somewhat arrogant, but I think I have a pretty good reputation. A lot of people in the real estate market in Cincinnati probably know who I am.

Mike DeHaan: [19:30] Oh, totally.

Dylan Koch: [19:30] Totally. I think that also helped.

Dan Austin: [19:32] Yeah. Right. All you can do is ask around and they know, oh yeah, Dylan.

Mike DeHaan: [19:34] Yeah. I mean, and things like that matter. Right? Like, you have time in the market, You know people. You've treated people well. This is one one of the reasons I always encourage people to be, like, posting about deals that they're closing, you know, or try to have, like, a way that people can find you. Like, honestly, people ask all the time about the podcast and, you know, what sort of comes from that. The biggest thing that's come from the podcast, honestly, is hiring is so much easier. Because if someone sees a job listing from collecting keys, they can go and they can see 400 something episodes from us, and they can see exactly who we're about, what we do, you know, they see our wins and losses on social media and different things, and they can decide if they vibe with that or not. Right? So they're not just like, you know, ABC house buyers or whatever with no anything in a website that doesn't even have content outside of the freaking carrot site templated bullshit. So it looks like a fake company.

Dan Austin: [20:29] Yeah. Exactly. You know?

Dylan Koch: [20:30] Yeah. No BBB, no Google reviews, no anything like that. Right? Yeah. And just being in a real estate business for more than five years, like, honestly, it's

Dan Austin: [20:37] like put

Dylan Koch: [20:38] you as a a dinosaur agent in this business. Honestly.

Dan Austin: [20:41] I gotta imagine that's like a one percenter thing. That's a long time. Oh, yeah. Especially because context where people's a real estate agent, which I can't imagine lasts more than two years or three years on average.

Mike DeHaan: [20:50] If that Yeah.

Dan Austin: [20:51] Yeah. One year. I just wanna for the audience and people thinking about hiring, so how many days did it take or weeks or whatever from you bringing him on and him basically hitting the phones to getting a first his first contract?

Dylan Koch: [21:03] I mean, hit the phones on the first day.

Dan Austin: [21:05] Right, right. And so how many days in between that and his first actual contract?

Dylan Koch: [21:09] Honestly, it was pretty quick, and this is probably not the norm. A new call came in and I changed it, so like it calls his phone. Yeah. Like when the calls come in. We went and walked this property together. It was a little bit unique, where it's like a mixed use building Mhmm. That was zoned as a single family, like, and almost incorrectly, but that's why it came through. But I knew the area. I brought a buyer with me, we walked it together, and we agreed upon it literally that day. So it's probably like three to four days before we got the first one.

Dan Austin: [21:37] So super fast. So outside of that one Which is super fast. So then the next one was how many days? Deal two?

Dylan Koch: [21:43] Probably a week. Okay. But so like, but Mike alluded to, I have almost like a backlog of leads Totally. That he can address. Like, mine is my worry is gonna be if once we get through this backlog, is like, feeding him. But that should take up hopefully a long time.

Dan Austin: [21:57] Well, the good thing is though, like you said, a new call came in and you guys got a deal out of it. Right? And so I think that there's some fear, right, if like, okay, if the new call comes in, they might screw it up on their first day, so I should hold on to these calls. And there's nothing wrong with that logic, but also at the same time, that lead doesn't know who you are or who your AM is. Right? So they're calling in thinking that they're they're calling this company, and they're established, and this is gonna be an experienced sales guy. So it's almost better to let them run with that relationship anyways. And then you can kind of hold their hand through the back end. And if they're good enough on the phone to not fumble it on the phone immediately, they're probably gonna be okay. But if they can't even get through a normal phone call with somebody, but I mean, you're not making an offer call or doing anything crazy on the first call with the seller anyways. So you might wanna reevaluate your selection if they can't get through a five minute intake phone call.

Dylan Koch: [22:45] I mean, he had two like thirty minute phone calls like the first day. I'm like, bro, get off the phone, you're costing me money. Right. Is why Why do them?

Mike DeHaan: [22:51] Yeah. Exactly. That that's what you want though, totally. That's like a good litmus test, honestly, for people is can they actually have those conversations and build rapport with the wide range of people that we get Totally. In this business. Right? The wide range of sellers. You know? Because, like, especially depending on their sales background, especially people that come from like b to b sales or sales where all the lead gen is warm, like they're in insurance sales, right, or something. Like, they're selling car insurance. And so every person they talk to, like, went on to a website and said that I want car insurance quote. That's a different conversation than somebody that's responding to your offer letter Mhmm. That, you know, has, like, a number that you're probably not gonna pay. Right? Or or somebody that's, like, from a cold call to talk to a Filipino that asked like four questions that were super vague, and now they're gonna be picking it up from there.

Dylan Koch: [23:42] Yeah. Totally.

Mike DeHaan: [23:43] It's much more challenging process.

Dylan Koch: [23:45] And meeting people where they are. Like, you gotta recognize someone if they're like, you know, give me the offer now, tell me what it is, like no bullshit, or like, someone just died. Like I said, like a probate, like you Yeah. You address these conversations so much differently depending And on the person on the other side of the to your point about fumbling the calls earlier, we've already had to play good cop, bad cop a couple times. Like I'd call him back, you know, a day later, be like, hey, you know, sorry you had to talk, like deal with that. What's the information that you need? Here's where we'll probably likely be at, can we come see the property like, you know, tomorrow So or all that to say, the most important thing is people pick up the phone, and you can have conversations with them. Totally.

Mike DeHaan: [24:20] You know, and if they're not willing to do that, that's another thing too, is there's a lot of salespeople that are not willing to put in the time for these kind of transactions, it's also not gonna be a good fit.

Dylan Koch: [24:28] What do you guys track as your KPIs for your a lot of your AMs? Is calls made, time on the phone, offers?

Mike DeHaan: [24:33] It's always kinda subjective. Right? People always wanna have these hard numbers. Like, they need to make 50 phone calls a day, which I don't like that because depending on the answer rate, which is completely out of their control, those 50 calls could take two hours, they could take twelve hours. Mhmm. Right? If you get a bunch of people that call and wanna talk for thirty to forty minutes, which can theoretically happen. Right? And so what we look for is trends, and what you wanna see and and what we actually do is we will base good performance off of our our lead managers, our Filipinos, because they should always have higher output.

Dan Austin: [25:07] Way higher output.

Mike DeHaan: [25:08] And nothing else to do. They just sit there. They work horses. Right? And we typically want our AMs that are going a little more in into, like, the the deep end of analysis and everything else to be, like, 50 to 75% of the output of our lead managers. Mhmm. Right? So, like, a good AM on our end will be making 30 to 50 calls a day and typically have one to three hours of talk time, just depending.

Dan Austin: [25:34] And that's doing mostly virtual. Right? Because if they had like five hours of driving around, that's not

Mike DeHaan: [25:38] gonna happen each day.

Dan Austin: [25:39] So you just have to account for that.

Dylan Koch: [25:40] For the AM side. Yeah.

Dan Austin: [25:42] Right. But an office day for a local AM, that's totally equivalent.

Mike DeHaan: [25:45] Totally. Yeah. And yeah. And if they're driving around, it's obviously different. When it comes to like the post call indicators, like appointments, things like that, again, it's always tough because people will say like, I need my guys to be on four appointments a week. What if they don't have four good appointments to go to?

Dylan Koch: [26:01] Mhmm. Yeah. Now they're just wasting time.

Mike DeHaan: [26:03] They're wasting time. Right? Like, so again, it comes down to trends and being realistic. Like, the more important stuff that I like to track is there should be no leads that don't have an active task. Right? Because that means they're not being managed. Mhmm. Every lead that's on the front page should be getting touched at a minimum once a week, if not more than that. And what you wanna see is you wanna see notes in clear communication. Right? And those are the things that will keep you organized and move the deal forward, if they're not prospecting. If they're prospecting as well, they're doing cold calling, it's slightly different because they're gonna be in charge of their own lead flow. But if they're just responding to direct mail and other things, their job is organization and analyzing opportunities as much as it is just like brute force output.

Dan Austin: [26:47] Totally.

Mike DeHaan: [26:48] So really long answer to say it depends.

Dan Austin: [26:50] I would add into that though because, like, there's some, like, quick like you said, trends too, Mike. I don't know. Go look at your dashboard, and if it shows your AM, call, like, six people and text two people, and they're like, I just don't have any leads. That's a problem. What are you talking about, dude? There's a 100 warm leads, and you made six calls and two texts today. Right? Like, what else were you doing?

Dylan Koch: [27:10] They're not gonna fall in your lap. You gotta hunt.

Dan Austin: [27:12] Right. Exactly. Yeah. So there's some of those, like, really quick tests where those numbers kinda make sense, but I would reinforce what Mike is saying too is like, in some senses, this is a high volume, like mass marketing business, but it's not a high lead volume business. And so when you're cold calling, you can go and say, I want you to make 500 to 600 phone calls a day on a three line dial. Like, that's a metric because you're doing some mass outreach. But in the leads that actually we are working on, it's this isn't like a real estate agent who's going through their list of homeowners in a zip code where you're like, I want you to have a 100 phone calls by noon every single it's just that's not how this works. And so, yes, we're mass marketing, but we're not touching mass amounts of leads. So it's a little bit more nuanced and more qualitative than it is quantitative.

Mike DeHaan: [27:54] And I think the the bigger things to look forward look towards as well are like, what is their actual conversion?

Dylan Koch: [28:01] Mhmm.

Mike DeHaan: [28:01] I have a lot of calls with people about this, and people always want their AMs to be fully independent of them for some reason. They're like, I want them to be able to analyze deals and make offers and, like, you know, fully control themselves and keep everything organized and be completely accountable. Like, if they were gonna do that, they will go work for themselves. They wouldn't work for you.

Dan Austin: [28:20] Right. They're now your competitor if they're doing that.

Mike DeHaan: [28:23] Yeah. And your job as the manager, right, of this person is to give them direction and make sure that they're staying on top of their stuff. And then you as the contracts, you should be underwriting every deal. Mhmm. Because you technically have a conflict of interest with your AM. Right? Because they are their only goal is to get a contract. They're gonna get paid based off of getting a contract and having a closed deal. Your goal is to have as good of a deal as possible. Right. So if you give them full rein, they're just gonna do whatever they feel like they need to to get a contract signed.

Dan Austin: [28:52] Mhmm.

Mike DeHaan: [28:52] Right? And then when it comes to managing them, it is up to you to review every single decent lead that comes through. And you can have them keep like, discard leads that aren't good or stay on top of ones that are better. But it's really important for you to go through, read the notes, talk about the leads, analyze the opportunities, and use that to figure out if they're any good. Because if you're like Mhmm. And you've been doing this for a while, can tell, like, pretty early on, that this is a deal for sure. Like, I can just tell based off the situation that way the person's talking. If they fuck that one up, that's a performance opportunity for them. Right? They might not like the offer. There might be, you know, a situation that doesn't make sense, whatever. But that's where your job as a manager comes down to, like, figuring out how good that AM is. And if you're trying to go purely off of just numerical data, it's almost impossible.

Dylan Koch: [29:40] Oh, yeah. Totally.

Mike DeHaan: [29:41] There's always a piece of analysis that has to go down. I can't tell you how many I always felt like it's smaller operators, like the one to three deal operators that are just burned out, and they're like, I just want an AM to do it all for me. I'm like, if you wanna get to five, six, seven, ten deals a month, you're gonna need to be an armchair quarterback, and make sure that your team is playing the game correctly. Otherwise, they're just gonna fucking run all over the place and not do a good job.

Dylan Koch: [30:04] And like the whole reason why I did the compensation structure that I mentioned earlier, was because like the AM, you don't wanna be just like, okay, we make five k or we make 50 k, that doesn't make a difference for me.

Dan Austin: [30:16] Right.

Dylan Koch: [30:16] Because if they're compensation based like on a percentage, then that really does make a difference.

Dan Austin: [30:20] It does. It does. Yep.

Dylan Koch: [30:20] Right? Then they're just going after the bigger opportunities. Yeah. So but the the small ones are where keep the lights on.

Mike DeHaan: [30:25] It is. Yeah. And that's a lesson that we learned pretty early on when we were doing, a 10% or 15% Yep. Commission off of top line, right, whatever it was. And the second she got a huge deal, she had we had one deal. We had, like, a $80,000 fee. And this is our first AM, and she made like 15 or $16 one month. And she's like, I am fucking cruising. Yeah. I'm not doing anything next month now. Right? And from there, it was all downhill. It was so hard to get her excited to chase the 8 to $12,000 deals.

Dylan Koch: [30:54] And then the nuance of, okay, are we gonna flip it? You get paid on the back end, you know, so now you're not getting paid for six months, you know, whatever.

Mike DeHaan: [31:01] Or you're buying a rental. Right? Like, and so there's technically no revenue. How do you pay them that? You just pay them out of pocket? Yep. But if you're doing it front on a commission percentage base, say, oh, well, we could have wholesaled this for $40,000. Don't lie. You're gonna be dishonest about that. You're gonna tell them you could have wholesaled it for 10, so you pay them less money. Everyone would do that.

Dylan Koch: [31:19] Yeah. Yeah. Why would you not? Yep. So I mean, that's that's the whole point though, so like, you know, learned that from you guys at the beginning, so at least this group is worth something.

Dan Austin: [31:28] Yeah. Saved you something.

Dylan Koch: [31:30] Yeah. Cool. I mean, then the other side of being a, you know, a new business owner as you anointed me, Mike, is I got my first demand letter from an attorney, you know, that's always just fun to deal with.

Dan Austin: [31:40] Like a marketing letter or like a No. It's For like a deal you did?

Dylan Koch: [31:45] No. Almost neither. It's basically the the bar owner next to my eight units getting rehabbed. One of my independent contractors, not even mine, shouldn't say mine, he's not mine. But the contractor beat up the guy next door after they had like a screaming match at each other. So apparently that's my fault.

Dan Austin: [31:59] Oh, it's like a legit thing. Yeah.

Mike DeHaan: [32:01] Why is that on you though?

Dylan Koch: [32:02] That's so my attorney said it's probably not on me.

Dan Austin: [32:04] Yeah. Was it on your property or was it on that guy's property? Like On

Dylan Koch: [32:08] his, but he was pissed that my guy was on his property.

Mike DeHaan: [32:11] I mean, you're fine. I don't know, like, what were you there? Like, did you let him off his leash and he was fucking running around?

Dylan Koch: [32:17] Exactly. Like, I had no control over that. Right?

Mike DeHaan: [32:19] It's like he's some kind of pitbull or something.

Dylan Koch: [32:22] And he's not he's not like my contractor either. He's a ten ninety nine guy from the GC that I have on on the job. So

Dan Austin: [32:29] Yeah. All I'm thinking about is the story from episode whatever it was, where the guy had a contractor shitting in a paint Yeah. Paint pan instead of the porta potty outside. Yeah. That's why I'm thinking, like, this is your contractor. Like, he was at this guy's house, like, doing something stupid like that, shitting in his like paint cans or something.

Dylan Koch: [32:47] No. No. It's just been a whole ordeal, but you know, it is what it is. It's more of the like annoyance I have to deal with it now. Like Yeah. You know, this is something else that's on your plate,

Mike DeHaan: [32:56] but Yeah. Is Ohio pretty like friendly when it comes to stuff like that?

Dylan Koch: [33:01] Yeah, I think so. I guess I don't really have much experience in it, but

Dan Austin: [33:04] I haven't heard horror stories like Call that common sense.

Dylan Koch: [33:07] Yeah. Saying that this is gonna get tied up in litigation for years, or or the what's the famous one that some burglar fell off a guy's roof and they sued the Yeah. Property I don't think anything like that.

Mike DeHaan: [33:18] He fell through a skylight. Yep. That's that's what that is in that one, seriously.

Dylan Koch: [33:22] That's See, that's insane to me.

Dan Austin: [33:23] That's wild.

Mike DeHaan: [33:24] So some states are different. So I have one of my GoBundance GoPod members right now who just got sued, and he basically, how he's in the state of New Jersey. And how it works there is regardless of who wins the lawsuit, the defendant is required to pay all of the legal fees. That's wild. Right? And so essentially what happened is he he got sued for the situation, and they it was an ambulance chaser legal company that basically what they do is they just try to find, you know, smaller companies that will get shook down by this. Mhmm. And they just extort them for money. Wow. Right? And so they started at trying to sue them for a million dollars, and they ended up settling for 250,000. And, essentially, they ended up at 250,000 because the option was going to be with how long the judge predicted and his lawyer predicted it to take was gonna cost him about $250,000 if he paid both sides of it. And so the the company got him, was like, yeah, you can either pay it out over four months, and yeah, you'll win, but you're still gonna pay it anyway, or you could just pay it right now and be done with it.

Dylan Koch: [34:32] Wow. See, that is so messed up to me.

Dan Austin: [34:34] That's wrong. It's backwards.

Mike DeHaan: [34:35] Yeah. He moved because of it.

Dan Austin: [34:37] Yeah. I would too.

Mike DeHaan: [34:38] He left his company and he's like, I'm leaving New Jersey, and he moves he moved to a different state.

Dan Austin: [34:42] Oh, shit. What state did he choose?

Mike DeHaan: [34:45] Yeah. He moved he moved to North Carolina, Charlotte.

Dan Austin: [34:48] The South, better weather?

Mike DeHaan: [34:49] Yeah. I'm like, that that's crazy. And it makes me think like, don't know what that process looks like in Washington. I have no idea.

Dan Austin: [34:55] I feel like we're a little more common sense. Like, you hear some extreme stuff, but like, I feel like in Washington, you don't hear too many extreme things like that where people are doing we we do some do some dumb stuff over here, but it's not that crazy.

Mike DeHaan: [35:06] That is one thing I will say that I do appreciate about Washington, even though people call, you know, it's blue state whatever. We have come to find that if you follow the rules and you don't do dirtbag shit, they're actually very friendly here for like whatever.

Dan Austin: [35:18] Yeah. We're not too extreme on anything except for fentanyl. Like, we love fentanyl, but like other than that, we're pretty like, you know, steady.

Mike DeHaan: [35:26] But even then, you know, if you follow the rules and you do fentanyl in your own house and you don't buy any

Dan Austin: [35:31] of us, no

Dylan Koch: [35:31] one gives

Mike DeHaan: [35:31] a shit. So that could be your thing.

Dylan Koch: [35:33] I don't know what this conversation just reminded me, but this would be probably good for the audience, and for you guys if you saw rentals. Mutual friend of mine has a has three properties, like right next to each other, all four units. One of them basically combusted into flames Damn. Like last weekend. And they thought it was supposed to gas leak, and the leading theory was a couple things went wrong. No carbon monoxide slash like working smoke detectors. The gas leak not being reported, I guess, in time, but meth was also a I think that's what triggered my memory, also a

Dan Austin: [36:05] Contributing factor.

Dylan Koch: [36:05] Theory at one point. But, so my point in all this is saying, insurance is still unknown, because they might like say, you should have had this stuff in place, we might not cover you. People did get hurt, no one died luckily, but like literally half the brick wall is like missing. But if you're a landlord, you should have a check-in form with your tenants, and go over it, or your property manager goes over it the day that they move in, And one of the check mark items is working like smoke detectors slash carbon monoxide detectors. Yep. Yeah. So just put that in your repertoire if you don't already have that.

Mike DeHaan: [36:36] That kind of stuff is why certain states, Washington is now one of these states, you you have to get a inspection and a license to have it around a property.

Dylan Koch: [36:44] Mhmm. Oh, really?

Mike DeHaan: [36:45] And then they reinspect it every year. They they have to have license license.

Dan Austin: [36:48] Have they actually ever inspected any of our properties though?

Mike DeHaan: [36:50] I don't know. Our property managers handle all that.

Dan Austin: [36:53] Yeah. Like, have to get a license now. Yeah. You have to get a license now in that that's the city of Spokane. I don't know if it's statewide yet. Yeah. It's a thing, but it makes it makes sense when you drive by some of these shitholes, you're like, how is this guy getting away with it? Like, I pride myself on at least having a roof that doesn't leak.

Dylan Koch: [37:09] Yeah. We have that with like subsidized places, inspections and stuff, but

Dan Austin: [37:13] Yeah. And we do the same thing. Yeah. We have a

Mike DeHaan: [37:16] But now now it's all rentals. It's all rentals here now. Which honestly I support because like Dan said, there's a lot of like shitholes that are out there. And I'm like, yeah, people shouldn't live this way. Like, this is why we were having rules. And of course, those guys are always the first ones too that are like, there's fucking government telling me how to do my best. I'm like, you have a family of 17 living in your property, and you've basically like pigeonholed them there because

Dan Austin: [37:39] Done nothing.

Mike DeHaan: [37:40] Yeah. Because you won't you refuse to allow them to leave, you won't give them like a rental referral. Right? And you know, they're lower income and they don't have running water. Nice job, asshole.

Dan Austin: [37:50] Yeah. Thing I don't like about those rules though, like the only downside is like, that guy will somehow like check the box, and then I'll get like hammered for like something stupid.

Mike DeHaan: [38:00] Yeah. That's how

Dan Austin: [38:01] I You know what I mean? You're like, dude, look how nice this is compared to this guy's rat infest. Like, well, rats? Rats aren't on our list. You know what? Sorry.

Dylan Koch: [38:08] So true.

Dan Austin: [38:09] Yeah. It's like, you know, how the government is, the technicalities, which is like, come on guys, like, use common sense here, but yeah.

Dylan Koch: [38:14] I failed an inspection once. I didn't have my stairs to the basement, which was not even used for the tenant, weren't had some chipping paint on it, which is like their go to thing, I know. But the tenant that was applying sent me a picture of where she currently lived, that was also on the same subsidy, and it was way way worse. Really? So it's like, yeah. Oh my gosh. It just proves your point.

Dan Austin: [38:35] Yeah. It kinda sucks. But yeah, there there needs to be something around some of that stupid stuff just to make it common sense. Yeah. But I will reinforce what you said about the smoke detectors and the c o two and stuff. And I care about it not from a like government thing, from the insurance standpoint. Like, so Mike and I have talked about this stupid house. We've had this flooded so many times. So we call the insurance and they're like, oh, yeah. So we don't cover groundwater. I'm like, so if my house gets flooded with groundwater, it doesn't count. Correct.

Dylan Koch: [39:02] Okay. That's the whole thing about flood insurance, not actually covering, like, with heavy rains. But

Mike DeHaan: [39:06] Right. And so then I'm like, well, we

Dan Austin: [39:07] have a sump pump. They're like, oh, well, if that failed, then we could give you at least $5. I was like, cool. So we do. Oh, your sump pump's on the outside of the house, not on the inside? Yeah. Oh, we don't cover sump pumps that are on the outside of the house failing. But I'm like, it's the same source of water. Like, it's the same problem. Like, yeah, so we don't

Dylan Koch: [39:24] cover it.

Mike DeHaan: [39:24] It's so stupid.

Dan Austin: [39:25] It's like, wait. What? So there's so many, like, little technicalities. Don't let it be something stupid like, you didn't check the box that the tenant is required to, you know, reinstall new batteries in your smoke detectors if the house burns down. You know? Because they will use that.

Dylan Koch: [39:39] And that also goes into the asset protection, like, do you have each property in LLC, know, certain dollar amount in each LLC, umbrella insurance on top of other stuff once you get to a certain size. Other factors play into this once you have a decent amount of like, you know, assets. Dude, the longer I'm in

Dan Austin: [39:54] the game, the more I see these things hurting people.

Mike DeHaan: [39:58] Yeah. You should get umbrella insurance anyway. Everyone that's in business should have that.

Dan Austin: [40:02] It's cheap.

Mike DeHaan: [40:03] I just upped my my umbrella umbrella insurance policy to $5,000,000. My total annual cost is like $680.

Dan Austin: [40:10] It's worth it.

Mike DeHaan: [40:10] Yeah. It's so cheap. Right? And basically, what that will protect me from any lawsuit up to $5,000,000.

Dan Austin: [40:16] Unless the lawsuit has to do with a sump pump on the exterior of a house.

Mike DeHaan: [40:20] I don't know why we would have a lawsuit

Dan Austin: [40:22] with that.

Dylan Koch: [40:22] Tying back to the the mail I got, I was talking to my attorneys, like you might wanna tell your insurance company because I guess in the policy they have something for legal fees that may or may not be present. Oh. Like I didn't even know that was a thing.

Dan Austin: [40:32] That's good to know.

Dylan Koch: [40:33] I'm good if you guys are good or you had anything pressing for the month of March in your business?

Mike DeHaan: [40:38] Not right now. We'll next week, we'll be recording our last one for March. So we'll do a quick overview of just like q one and everything by then.

Dan Austin: [40:45] Q one, baby.

Mike DeHaan: [40:46] So, yeah. Maybe, Dylan, next week, come with your numbers for the first quarter. We'll do the same. We can talk about what we're seeing, trends we're seeing just on the marketing side, on the deal flow side

Dylan Koch: [40:58] Got it.

Mike DeHaan: [40:58] And everything else. And that would be a good conversation for everyone.

Dylan Koch: [41:00] Awesome.

Mike DeHaan: [41:01] Alright, guys. Well, thanks for listening, everybody, and we'll talk you guys next week.

Dan Austin: [41:04] See y'all.

Mike DeHaan: [41:06] 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 to follow and send us a DM to let us know what you think of the show.