Where The Smart Money Is Quietly Moving Right Now w/ Drew Wiard

Mike DeHaan: [0:02] What's going on, guys? Welcome to collecting keys. I'm Mike DeHaan here with Dan Austin and Dylan Cook and special guest Drew Wiard today, who has been on the show, I don't know, four times, handful times. Yeah.

Drew Wiard: [0:14] This is round number four.

Mike DeHaan: [0:14] I know. Oh, wow. We should really just make you the fourth seat and we can have like a proper Yep. Like, I don't know, panel, I guess. Because you and me are complete opposites.

Dan Austin: [0:23] Yeah. It's probably what

Drew Wiard: [0:24] titles It's an odd couple. There's a lot of conflict, but we we figure it out somehow.

Mike DeHaan: [0:29] In, like, 90% of facets of life, I feel like you and me have different opinions, but we're also still good buddies. We just get along, and we're adults about it. So it works out great.

Drew Wiard: [0:37] Yeah. Yeah. Well, I mean, I don't know that I'm showing up every single week for you, but maybe once a month we'll come in and Ah, that's fine. Be with each other.

Dan Austin: [0:44] That's fine. How about that?

Mike DeHaan: [0:45] This is what I'm saying. The biggest thing we realized is work ethic, you just said you're lazy,

Dan Austin: [0:48] and I'm going to do it at some point.

Drew Wiard: [0:50] I said I'm committed to other things than, you know, my highest and best use, but I'll sacrifice once a month for you.

Mike DeHaan: [0:55] That's true. To be fair, if you're looking at, you know, highest and best use per hour, this is probably about as low as it gets.

Dan Austin: [1:00] It's probably for sure, dude. Yeah.

Dylan Koch: [1:03] Distraction midway through my day. You know, it's 01:30 where I'm at. Andrew.

Dan Austin: [1:07] Oh, yeah.

Dylan Koch: [1:08] You guys

Dan Austin: [1:08] are same time zone.

Mike DeHaan: [1:09] Yeah. I will say though, the biggest value for this podcast, you know, relatively small listenership. You have a loyal listenership base that's very niche. Going to some of these professional events, as Dan and I are getting larger into the landing space and different things, And being able to tell someone you have a podcast, you always get the same responses when have a podcast. Oh, that's cool. What's it called? You know? Oh, Ralph, that's I bet that's that's really fun for you to do that in your, like, your broom closet, whatever. Yeah. And then they go and they look you up and they're like, holy shit. You have 480 episodes? Like, that gives you so much immediate credibility because you've shown commitment to something that's hard for a long period of time, and they know that it must be worthwhile for you to do that if you've been doing it for, I mean, at this point, four and a half years.

Dylan Koch: [1:53] Can we put me on the the front eventually? Can I be on the logo?

Dan Austin: [1:57] Oh, the

Mike DeHaan: [1:57] I was actually so when we ultimately I thought you already

Dylan Koch: [2:01] put them on there.

Dan Austin: [2:01] No. Not on the logo.

Mike DeHaan: [2:02] When when when we rebrand from collecting keys, since we're not strictly a real estate show anymore, that's exactly what I wanna do, Doug.

Dylan Koch: [2:08] Okay. Great.

Dan Austin: [2:09] I was talking to somebody recently that's been a listener and they're like, why would you change the name? I was like, I know. I was like, yeah. It's so hard to come up with a good one. And collecting keys could be keys of wisdom. That's dumbass. I need to let's do that immediately.

Mike DeHaan: [2:23] There's the keys to life right here, children.

Dan Austin: [2:25] I mean, I I like collecting keys better than collecting was it you had cash flow?

Mike DeHaan: [2:29] I was like collecting cash flow.

Dan Austin: [2:30] Cash was like the same. Just not the same.

Mike DeHaan: [2:32] The problem is it's really similar to, like, we talked about just Ryan Dossi's group.

Dylan Koch: [2:36] What Dan is wearing right now. He's literally wearing his shirt.

Mike DeHaan: [2:39] I know. I know. We we can just steal his we can just steal his brand. It's great. I'll just swear.

Dan Austin: [2:43] We already talked about He he posted he's not doing it anymore.

Drew Wiard: [2:46] So is

Dylan Koch: [2:46] it really stealing?

Dan Austin: [2:47] He shouldn't even forgot.

Drew Wiard: [2:48] He shut

Mike DeHaan: [2:48] down CCF.

Dylan Koch: [2:49] He's, like, just doing

Dan Austin: [2:50] his last thing. Yeah. Oh, dang. This shirt's worth a lot more money now. He's just collectors.

Drew Wiard: [2:55] He's moving from San Diego to St. Louis as well. So apparently, like, he's had a stroke in his decision making. Yeah.

Mike DeHaan: [3:01] But Everyone makes mistakes after a while. It's fine.

Drew Wiard: [3:05] It's alright. It's family. I do the same thing. I'm stuck in the middle of flyover territory and so I get it. Yeah. I was curious. You were talking about going to professional conferences now, and I don't get to see you at these professional conferences. I see you at KeysCon where Yeah. You know, we'll have a drink or two at the end of the night, and it's flip flops and cargo shorts and all that. Like Yeah. Mike, do you have a blazer now? Or, like, how do you show up at these professional things?

Mike DeHaan: [3:28] No. No. So hip hop wear, like, decent jeans and just like a button up. Yeah. So here's here's the thing that we've learned is you can tell who the employees are and the business owners are. The employees are all wearing blazers and suits. The business owners are wearing, like, polo shirts or, like, button ups.

Dan Austin: [3:42] Yeah. T shirts. Jordans. T shirts

Mike DeHaan: [3:44] sometimes. Yeah. You know, like unicorn laser cat eye tees. You know? That's like the really rich guy.

Drew Wiard: [3:50] Yeah. It's the same joke in commercial real estate. Like, the brokers show up in a, you know, a BMW seven series or Yeah. You know, high end Tesla Plaid or whatever. And the rest of us show up in flip flops and maybe a t shirt that we wore to the gym a half an hour ago, but we're the ones who own the building. Yeah.

Dan Austin: [4:06] Think the key is what is what you're comfortable with. Some people love dressing up nice. Right?

Mike DeHaan: [4:11] I

Dan Austin: [4:11] know. Like they just that's what they feel good. Some people do that. Other people like to dress like scrubs. If you show up dirty and you smell, I don't care how rich you are, I'm kicking you out. Totally. Yeah.

Mike DeHaan: [4:21] I mean, it has to have to suit you. Or like if you just want someone that's like ill fitting, then yeah, you're gonna look dumb. Feel like the West Coast guys were a lot more comfortable in being like less formal.

Dan Austin: [4:30] Yeah. That's very true. And and most of the stuff we've done is on the West Coast too. Bet if we went to the East Coast private lending conferences, there'd be a lot more buttoned up people.

Mike DeHaan: [4:38] Oh, totally.

Drew Wiard: [4:39] Well, and you hate for it to be this way because I'm super laid back. Like, I'd be in shorts and t shirts every day. But you have to know your audience too. Right? Like, we're buying a lot of commercial stuff and it's old guys. Yeah. Right? So, like, if I show up in flops and shorts, like, they're throwing me out the door Right. Before they ever let me in.

Dylan Koch: [4:55] Yeah. I imagine you're doing this at, like, a at a McDonald's breakfast signing contracts. That's what I

Dan Austin: [5:00] think of, like, Midwest commercial real estate. Yeah. He's at a Denny's. Yeah. Except for the guy that's selling owns 12 of those McDonald's.

Mike DeHaan: [5:08] Right. Yeah.

Dan Austin: [5:08] That's what that's what I'm picturing.

Drew Wiard: [5:10] No. We we go we go classier to Bob Evans or something like that.

Dan Austin: [5:13] Yeah. Big time. Yeah. Yeah. Yeah.

Mike DeHaan: [5:16] So you're meeting mister Bob Evans himself. He eats at his own restaurant every single Right? Yeah. Yeah.

Dan Austin: [5:21] Cracker Barrel. That's what was thinking of. Yeah. So Cracker Barrel. Yeah.

Mike DeHaan: [5:25] It's different. I would say like the finance space though is it's very different from real estate because like there is a lot of like banker types And also the level that people are at in the finance space is so different. Like honestly, Dan and I probably should dress up a little bit more because we're by far the scrubs compared to a lot of these dudes.

Dan Austin: [5:42] Yeah. We we look good though. We come in. We counterbalance it with having actual muscle on our frame. You know? That that's true a lot. That's true. A lot with a lot of these people.

Mike DeHaan: [5:52] Hey, man. I I feel like the last two conferences, especially, we've been the only few people at the conference who hit the gym every morning. For sure. You know, there's been nobody else in there.

Dan Austin: [5:59] Most people are too hungover. Yeah. Yeah. There's a lot more drinking going on at lending conferences.

Mike DeHaan: [6:03] But we're also the only ones gambling. That's what don't get.

Dan Austin: [6:05] That's true. Yeah. So what about what degenerates

Dylan Koch: [6:07] People take your bad decisions.

Dan Austin: [6:10] Yeah. Right. Yeah. Yeah. For sure. Wanna make a bet? Yeah.

Mike DeHaan: [6:14] But like the the amount of money that's there is very, very different.

Dan Austin: [6:17] Yeah. It's different money. Let's put it that way. It's different I feel like real estate money is always like, have money, but it's equity. Where in the, like, the lending space is by nature of it, there's just more more money that's liquid, more cash. There's more available money flowing.

Mike DeHaan: [6:31] Like, I've been to big real estate events. Right? And they're like, oh, yeah. We're having like a little meetup. You know, you can get like a a beer or something if you go to, the back room over there. Whereas like this, they're like, hey. We booked out this entire bar, and it's open bar. Get whatever you want.

Dan Austin: [6:45] They're like, you want

Mike DeHaan: [6:45] top shelf to peel up? Doesn't matter. Get it. Like, you can just do everything. They probably rang up a $60,000 bar tab at the end of the

Dan Austin: [6:52] Oh, for sure. For their one little event. Yeah. Easily, dude.

Drew Wiard: [6:55] Dude, yeah.

Mike DeHaan: [6:55] You know? So it's just different vibe. And so as a result, I think there's a little bit more professionalism because they're spending real money and they have real money. Yeah.

Dan Austin: [7:03] You know, it's fun.

Dylan Koch: [7:04] I was along this same subject. I was talking to a fundraiser the other day, and he is like more in the multifamily space, like big 300 plus unit, like institutional, like multifamily space. But they've been a lot of them, not just him specifically, but have gotten not great the past couple of years. They bought too high, cap rates went up, whatever. And having, you know, this kind of fund structure is probably the most appealing to LPs that it ever has been, I would say.

Dan Austin: [7:29] Well, like debt fund structure? What do you mean?

Dylan Koch: [7:31] Anything that hasn't offered a good LP return that's not multifamily is kind of my my pitch there.

Mike DeHaan: [7:38] You think that's the criteria if it's not multifamily? What if what if I'm buying a zoo? Is that cool?

Dan Austin: [7:43] Zoos are great. Yeah. I've heard.

Dylan Koch: [7:44] No. More in, like, so the real estate niche. So, like, what you're seeing with commercial lending.

Drew Wiard: [7:48] Right.

Mike DeHaan: [7:49] Because zoos aren't real estate. There's a lot of land at a zoo. That's all I'm saying.

Dan Austin: [7:52] There is a lot to that, Dylan, and but I was doing like a a bulls versus, bear argument on like funds and stuff like that. And and it it was with you guys all know Mike, Arndorfer. Smart guy. I trust him a lot with everything he does. And he made an interesting comment about they're going into multifamily right now. He's actually doing a deal up in like the Seattle area, I think, that he's raising for. And he thinks that single family actually has more room to go down, where multifamily, he thinks it's kind of towards the bottom now. And so he wants to he's getting into it. And I reinforced that comment from him because we're at the this most recent lending conference, not to keep beating a dead horse here. We talked to probably two or three different, like, president CEO types of their respective fund or bank, and they were talking about how do we fay wanting to get into the large multifamily game and large multifamily debt, and they're talking about how do we structure that debt to be better than what they used to have. Because they know agency debt's impossible to get, it kinda sucks. It's not that great. So, like, they understand the issues with debt because you've got basically local banks, you got the agency debt. There's just the bridge debt that they're getting into to get these things locked up. So, like, they understand all the bad parts of that debt.

Dan Austin: [9:03] And so they wanna come in with a superior product from the private lending space, but have thirty year fixed debt on large multifamily. And my guess is the only reason they'd wanna be doing that is because they do think that in the next twelve to twenty four months, maybe that maybe they are gonna start seeing a slight increase

Mike DeHaan: [9:19] on that. But you're a

Dan Austin: [9:20] 100% right, Dylan. Up until at least this point, everybody's like, I want anything but that.

Dylan Koch: [9:24] I wanna clarify. What you're referring to is GPs, people buying it now for returns later. My vantage point was if you're raising money from LPs or accredited investors, a lot of them just got wiped out. So like, I'm not doing that shit again.

Dan Austin: [9:36] Yeah. They don't care. They yeah. They don't they don't want it. You're absolutely right. They're moving away, which is funny because I I do think it's like there's this crossover point that's probably coming. I'm speculating anyways.

Mike DeHaan: [9:45] Yeah. I think from the big money perspective we're talking about, Dan, is you have these people that are desperately trying to outlay more capital. Yeah. And they're realizing very quickly that doing that with single family residential real estate is a lot. It's a rat race. Right? It's such a you know, there are a lot more assets, a lot more underwriting, a lot more, you know, different analysis they have to do on things.

Dan Austin: [10:04] Less sophisticated borrowers.

Mike DeHaan: [10:05] Less sophisticated borrowers versus if they can get that a low LTV on like a larger asset, they're gonna be able to deploy more capital at, you know, probably competitive or similar rates on stuff that they, I don't know, see as like an un uncaptured marketplace right now. And so, you know, what that'll actually look like, who knows? Because what'll be really interesting will be to see if they start to change how they analyze those properties too. Because, like, fundamentally, you're talking about is it's not agency debt. You're talking about our like, Fannie free debt. It's true private money. And so, like, at the end of it, like, even, like, the BlackRocks and these kind of things, like, it's their own balance sheet that they're doing. They carry this long term debt. So they don't have to follow, like, cap rate rules or anything else, the term value. If they wanted to, they could just be like, yeah, we like this area. We'll give you a loan at 60% Yeah. On this thing at that price because it makes sense because x y z property down the street sold for that. They can completely abandon

Dan Austin: [10:58] And the traditional they're coming up with their own appraisal standards because like we're seeing it. They're just like, cool appraisal, we don't care. Literally. We don't agree. We've had appraisals get like, we don't agree with the value. And you're like, but that's an appraiser. And they're like, we don't care. We don't agree with it. Mhmm. And they have their own interior inside due diligence.

Dylan Koch: [11:13] That ever been an to be good good for you? Like, hey, the appraisal came back low, but we don't care? Or is it always been the appraisal came back high, we want a lower number?

Mike DeHaan: [11:21] It's always they came back high and they disagree with it. Yeah. Because they're going from a defensive position, but that that's something that's really changing with the industry on the private side with, like, all of real estate is the people that are providing the funds are abandoning the opinions of the quote unquote experts that have always been the gold standard. And they are now developing their own standards to provide debt and to underwrite all these things.

Dan Austin: [11:43] They're just really looking at fraud is what they're looking at. They're considering a lot of this stuff fraud. Like when Dylan, when you go and talk to your appraiser and you're like, I think these are my comps. That's fraud. Yeah. I'm not supposed to do that.

Dylan Koch: [11:51] Isn't there a gray area between like, you can provide them that you're like, I expect this value.

Dan Austin: [11:56] Yeah. Totally. And you're not gonna be when I say it's that appraiser who has a certification. And so if appraisers start doing that on a mass scale, like, which they do in some of these markets, or they actually team together and say, hey, if you throw me another $100 on this $800 appraisal.

Mike DeHaan: [12:10] Mhmm.

Dan Austin: [12:10] That's a fraud issue.

Mike DeHaan: [12:12] Yeah. And so they're trying to get rid of that gray area completely. They want and their idea is instead of having like a black and white, they're gonna have their own colors. Could be red.

Dan Austin: [12:20] Yeah. Exactly.

Mike DeHaan: [12:20] Right? It's gotta be their How

Drew Wiard: [12:22] frequently does that actually happen? Like, I'm not saying it doesn't happen where someone tries to bribe an appraiser or something, but that's like this hypothetical example that goes out there. And I mean, of course I try to do things by the book as best as I but like it wouldn't even enter my mind to try to bribe the appraiser just because I mean, it's it's common sense. You just don't do it. Does it actually happen?

Mike DeHaan: [12:43] Some level of fraud. Yeah. Mean, the appraiser stuff, it happens, Dylan's points, a lot of the gray area. So we'll get a lot of borrowers that are like, hey. We wanna use our appraiser for x y z reason, and it ends up getting rejected. But, like, in terms of fraud, so much more frequently than you would think, dude. Mhmm. Like, we've had people submit doctored bank statements. We've had people, like, obviously changing things on, like, leases and, like, different stuff. Yeah. And to be fair, a lot of it, honestly, it's it's someone that is just sick of the bureaucracy that is trying to get their loan done so they can move on with their life. The problem is is mixed in are these people and these enterprises that are doing this on like a mass scale and they are embezzling a lot of money. Yep. And so like last summer, there was this massive was several $100,000,000 DSCR fraud that happened in the Northeast and Baltimore. In on this deal was these investors that were from overseas. Right? And they had their appraisers involved in it. They had the title companies involved in it. Right? They had everyone that could possibly be they possibly manipulate the deal involved in this. And what they were doing is they were buying these properties for dirt cheap, and then they were over inflating the values, and they're refinancing out these huge sums of money on things that were not worth that. And then they just took all the money and jumped ship. Yeah. And, you know, they sold like hundreds of millions of dollars.

Dan Austin: [14:01] So a big thing that people will do too is they'll be like, bought this apartment building for a million dollars, and I put 2,000,000 into it. So now and it's now worth 4,000,000. Right? Well, then they didn't actually put the 2,000,000 into it. But then they a lot of times, at the time, especially lenders were saying, okay, that's your new loan to cost. So they're not doing like a cash out refinance. They have a new loan to cost. So then it's basically a rate and term. So that's pretty fraudulent. But you can see that on a scale where we were talking to the president of one of the banks, one of the originators we work with, and he was like, our sister company basically happened to do the bridge loan, and we were doing the DSCR refi. And on the DSCR refi, the guy said he put $200 into this. Well, they have documents of the statement of work and the work that he showed doing the, all the draws, it was like less than $100. The whole story is the guy wasn't trying to be like a complete fraudster, but the way it worked out, they just happened to talk to them and they're like, oh yeah, we have that loan over here. And the actual work was like under $100, but cause he was, the loan to cost statement was trying to be 200 ks, which would have, they were going do the loan with that, at that loan to cost too, had they seen that. Right.

Dan Austin: [15:05] And so like little things like that over hundreds of millions of dollars to which is getting deployed.

Dylan Koch: [15:10] If you catch someone in a blatant lie like this, instead of like the fix being, hey, let's make it harder for everybody. I just feel like take that person and put them in jail for twenty years.

Dan Austin: [15:17] Right. Right? And then like Right. Yeah. It's like, do you wanna hear my theory on child molesters here? So it seems like a perfect time to bring this up. But you're you're right, Dylan. The challenge here is in the as a lender, like Mike and I, you know, you hire employees and you don't see it. So, like, employees just click away, dude. They're just like, cool, cool. Yep. Even your best employee on this stuff, because they're trying to you have people all the way from collecting documents, to reviewing them, to underwriting them, to completing due diligence on them, to doing QC on them. So you have those are all different departments of different people, And they're just clicking buttons, dude. And so now you've originated some of these places are originating a $100,000,000 a month easy. Like, that's not that crazy. Much money. That

Mike DeHaan: [16:01] What's Shiabi doing? Shiabi's doing 500 or 600 a month, dude.

Dan Austin: [16:06] Yeah. So like, think about that.

Dylan Koch: [16:07] Yeah. But they're the biggest player, right, or one of the biggest players.

Dan Austin: [16:10] They are. They are. Yeah. One of their biggest. Yeah. But there's a lot of guys underneath them that are doing $100,000,000 a month, dollars 50,000,000 a month. That's a lot of loans to have, you know, dollars 60,000 employees being able to do these correctly and catch fraud. And so then they have to create all these rules because you've got the entire industry of $60,000 employees who are just clicking buttons and trying to get to their lunch break so they could do something else, and they just upload a file and don't check it. And it happens so often then it just creates it just creates havoc. And so they have to create all these rules because

Dylan Koch: [16:39] You're gonna start seeing private investigator fee thousand dollars. They're just gonna do that on every loan.

Dan Austin: [16:44] Seriously, dude. I'm gonna add that fee. That's a good idea. There you go. You're welcome. That's a great idea.

Mike DeHaan: [16:49] Drew, I guess with your I mean, you just started your fund, which Yeah. Is

Dan Austin: [16:53] Yeah.

Mike DeHaan: [16:53] So I guess how are you looking at like the wider sort of real estate space? And I guess like how are you standing out? When you're thinking about your investors and, you know, there's a spread, there's all the multifamily that's gone sideways, what have you found is effective to, make your offer appealing, you know, while also not giving away the farm to all of your LPs? Otherwise, I kind of just missed the whole point of, doing anything if you're not making any money yourself.

Drew Wiard: [17:17] Yeah. Sure. I mean, we we could take that discussion a million different directions, but I think you have to kinda start out knowing and understanding who the avatar of the of your potential investor or your desired LP investor is.

Mike DeHaan: [17:31] Yeah. And really quick, so what's your fund for? Just to give people a framework. Yeah.

Drew Wiard: [17:35] Sure. So my partner and I combined, we have about fourteen years worth of industrial, commercial real estate, acquisitions, full cycles, things like that. And we've not done a good job of letting people know how much of that we've done. A lot of feedback we get is, well, what's your track record? I, you know, I haven't seen a lot of I don't know. Maybe it's our Midwest sensibilities. We just don't boast about it a whole lot. So you're seeing more

Dan Austin: [17:58] of that.

Mike DeHaan: [17:59] You should write a book. You should write a book that says it's called, like, self storage and shit. Just put a

Dan Austin: [18:04] big ad split up on there. People like that. Yeah.

Drew Wiard: [18:06] If I write the book, then that's that'll be more ammunition for Mike to to beat me up with later.

Dan Austin: [18:11] Yeah. Exactly. Exactly. It'll come out to you. Nobody's I see. Nobody's immune.

Drew Wiard: [18:15] So, we've done a lot of industrial. The last several years, we've acquired it's just the snowball's rolling downhill, getting bigger and bigger. And we've really built this machine to source industrial properties. And so we've bought a bunch. When we've outgrown our own capital, then we started bringing JV partners in, and that's been a really, really good fit. We've been doing that for a while now. But those JV partners, when they jump in with us, they'll send us $400,000 then we bring the debt, we go buy this thing. Right? Well, argument is we love what you do. We're going to keep sending you money. But would there be a way like when I invest with you now, that $400,000 goes to that one property. And if tenant goes dark or you have an issue there, you know, all the risk is concentrated in that one property. So could we create a fund where we move those properties in, you guys acquire more and more and more, and this first fund that we're doing is built so that it'll hold $25,000,000 in assets and it spreads their risk out across multiple cities, multiple markets, multiple tenants, multiple verticals like oil and gas, manufacturing, warehousing, all of that. So it's kind of a windy answer, but that's the niche, that we're really doubling down on and getting laser focused on.

Dan Austin: [19:29] Yep. Yeah. And you just buy good assets. This isn't a fix and inflate and all that sort of. You're buying good assets at a good price is kind of my understanding, right?

Mike DeHaan: [19:37] Already performing. Already performing.

Drew Wiard: [19:39] Most of them are stabilized, right? In the commercial world, you're either going to buy something that's stabilized, meaning you have tenants in place and it's cash flowing or day it's a heavy lift where needs a new roof or it's vacant, or there are environmental issues or there's some sort of heavy lift. So the fund is geared towards stabilized properties, but we do occasionally take one value add because, for example, real close to where Dylan's at in Cincinnati. We just got a new one under contract. In the next forty five days, we'll need to close. And it's about a 7.2 cap from day one, and we can talk more about that if you want. But that's on the lower end of what we would put into the fund because it doesn't cash flow that well. But we think with some lease changes and things in the next eighteen to twenty four months, that'll be pushing an 11.5, 12 cap.

Dan Austin: [20:27] Oh, wow.

Drew Wiard: [20:28] So we buy two, three, four stabilized ones for immediate cash flow and the monthly distributions for our LP investors will then sprinkle in an occasional value add where we can really ramp up the value. The focus is stabilized.

Mike DeHaan: [20:43] You getting like bank debt on these as well? Are you just are you buying them cash?

Drew Wiard: [20:46] No. There's there's absolutely bank debt. And so that's one of several points that I could probably dig into to talk about how we align with our LPs. Because every syndicator, every fund manager is going to come to you and say, Oh, you know, we're perfectly aligned with our LP investors, right? But here in a minute, maybe we can come back to it. But there's fees to talk about. There's all these different But one of the key things that we do that's atypical is say you're going to go buy a $25,000,000 apartment complex. Well, your sponsor or your operator is probably going to go get non recourse debt, which isn't evil, but it means that if they lose that, they're not putting their house on the line. They're not putting all these other things. Now there may be bad boy clauses in there, if they really get nefarious and stupid, yes, the bank could come after them, and there is some risk there. But with us, our deals average like 1 to 3,000,000 in acquisition price. And in this $25,000,000 fund, we'll stack up probably 12 to 20 of those. But they're small enough that most of those loans will be full recourse loans. So the LP provides the down payment. Tyler, my partner and I bring the debt, but we personally guarantee all of those loans.

Drew Wiard: [22:00] So, you know, like, I can't afford to buy a stupid deal that's going to go sideways and be risky with your money because they are going to come after my house and my livelihood and all of that.

Dan Austin: [22:09] It'll wipe you out. Yeah. That's so fascinating, because that is so rare. That is honestly just such a rare structure. It's really atypical. And you also, just because I know your, your pitch is like, you are not incentivized by acquisition because you're not getting fees and stack and stuff on their management fees. You're, you're really incentivized by getting high quality cash flow and assets so you don't lose your ass personally.

Drew Wiard: [22:28] Yeah. I mean, that's kind of the other bit of alignment that I think we're really leaning heavily on. Now I'll start by saying there are a lot of good operators out there. They charge fees. I don't know that fees are necessarily a bad thing. And the day might come where we go to fund two, fund three, where scale something and there may be fees eventually.

Dan Austin: [22:47] Yeah, totally.

Drew Wiard: [22:48] But here on the front end, like one of the biggest problems with syndications and funds, not problems, but at least misalignment in my mind is if you go buy that big apartment complex or the commercial building, the sponsor gets paid 6 figures, you know, a $100, two fifty day one to acquire it. And then they offer you a pref, which means it's, I mean, it's kind of an IOU. It's not real money until you start paying it, but it's, you know, it's 8% this year and then it's 16 the next year if they haven't paid any. And that pref can start to get so big and overwhelming that that operator starts to get behind. And if they can't get it caught up, their incentive is not to get the asset to perform, but to go transact another one to get another fee to pay their own bills. Right? So with us, there are literally zero fees because I don't think you should have to pay an operator to transact. Doesn't mean it's evil for the guys that are doing it. There are reasons that they justify doing that and maybe we'll come back to that someday. But for us and our fund, I literally get paid nothing until you're getting paid with monthly distributions and we get paid side by side.

Dylan Koch: [23:57] Drew, are you doing five zero six or five zero six?

Drew Wiard: [23:59] Five zero six. That's how I can stand here and openly solicit and shout it from the rooftops. If not, I'd be gearing up for SEC jail.

Dylan Koch: [24:07] Yeah. No. And to the difference

Dan Austin: [24:08] I could report you.

Dylan Koch: [24:09] For yeah. Right. For the audience is basically, c, you can advertise to your credit investors. B is kind of like your inner circle, but not accredited investors. Are these LPs people you've known over the years from your medicine days? Or are you talking to new people? And I guess, like, what is the demographic? Are they older? Are they retirement age? Do they want the depreciation that comes with buying real property? Or is it more the income side of things?

Drew Wiard: [24:32] Yeah. So it's funny because it's a little bit of everything. I have a meeting here at five today with physicians from my previous life. And so we'll see if that bears fruit. Our first tier of people that we've gone to are all of our private money lenders that we've used to flip houses and all that sort of stuff. I mean, they get the first seat at the table and we've got a couple of those that are jumping in, the ones who are accredited investors or will qualify for that. Beyond that then, like even our lawyers that I've been working with the last couple of years, we've got a couple of them in their office who've been watching us forever, who said, look, we're gonna have another team represent you. So there's no conflict of interest because we're ready to put money in.

Dylan Koch: [25:11] Oh, that's that's really good.

Dan Austin: [25:12] Yep.

Drew Wiard: [25:13] Yeah. I mean, it shows the value of like, just be steady, be consistent, do the things you say you're gonna do on all the little things. Because if you can be trusted with little, you can be trusted with much

Dylan Koch: [25:24] right

Drew Wiard: [25:24] down the road.

Dan Austin: [25:25] Tell me about the because you don't hear much about industrial. I mean, you kind of do. And I know talking to you, we do, but we were talking about, you know, apartments was a big one that everybody was talking about for years. And then, you know, you got everybody on the other end of things too. But what does that market look like? How are you guys doing this? Because like, it's cool. I can't imagine Mike and I could do it in Spokane, but the Midwest is a completely different market with your guys' industrial base and everything. So I'm just curious to

Dylan Koch: [25:48] Well, Andrew does travel a little bit if you could touch on that too. I know he does.

Drew Wiard: [25:52] We do. Yeah. You know, I mean, target market is, you know, three or four hours of where I'm at in Fort Wayne, but that gives us Detroit, Chicago, Indianapolis, Louisville, Cincinnati, Columbus, Canton, Dayton. Like it's it's actually a pretty meaningful series of MSAs. But Dan, to your question, I think you don't hear a lot about it because one, it's not sexy. Like, I can put it on social media. It's a big metal box and it's sometimes it's clean, but sometimes, you know, it's a workshop. You know? There's tools all over and little oil stains here and there, and it's it doesn't show as sexy as the granite counters or if you do a big retail something and you make this beautiful, you know, storefront or something.

Mike DeHaan: [26:29] That's why you gotta go out there and just, chastise someone that's at the site, like, really aggressive, then and just, like, show them this is, like, what passion in business looks like.

Dan Austin: [26:37] Just bring investor girl Brit with you.

Drew Wiard: [26:39] That works too. Right. Right. We just need to find one of those. I keep I keep hitting my wife up for that, but she's not Yeah.

Dan Austin: [26:44] She's she's not showing up. She's like, nah. You're to the list of things that

Drew Wiard: [26:47] says no. Yeah. Crossed off. So I think another part of it is it's not very relatable to people. You know, everyone has lived in an apartment or everyone has lived in a house. Like, they know what that should look, feel, and be like at least a little bit. So maybe it's a little less accessible because people don't understand, like, who rents these buildings? Right? Well, it's not a family. Right? I mean, it's these are businesses, whether they're big or small or corporate or global or or whatever. And so I think that's kind of part of it as well. But the magic of it is it's in the numbers and the analysis and we've kind of created a niche within it. And so I think so many people have flocked to real estate and investing because of Instagram and social media because it pops up and it looks good and you see it, and see it, and you Yeah. See With industrial, no one's just gonna throw up a spreadsheet and be like, hey, this makes way more money. Right. And the risk is a lot different and here's some magic.

Dan Austin: [27:41] Yeah. What's interesting to me that I wanna hear about, because you're talking about the numbers. So, you know, Mike and I were with Matt Achick Matt Achickin, I can't say his name, Achickson's, Achickson's, whatever. His, commercial Mattie A. Thank you. I'm hooked on phonics. He That didn't work. Anyways, I don't know if he still runs it, he has a mastermind. Mike and I were in the first year that he did his mastermind talking about commercial real estate. He was more focused on, like, the retail side. That was his specialty. But there's guys in that group doing industrial every everything. Right? Yeah. He talked a ton about lease structure and how there's a lot of value added in the lease structure alone. Do you guys look at lease structure from value add? I mean, like, how does that come into play with you guys?

Drew Wiard: [28:24] It's everything. And I didn't understand it when I was coming to it. Like my partner had been in it for nine years and I've been in it four or five now. And my biggest roadblock was understanding like before when I was doing residential, you're buying the building, you're buying the property. It needs to look good, needs to be appealing, people need to desire it. Some of that is true on the commercial side. But what you're really buying is the lease. You're buying an income stream and the income stream is created by the lease. These leases are generally not one year leases. These are five, seven, ten year leases. And so you've got to get them right, but they can take a, we're buying one, sellers are signing today, I sign tomorrow, where it's $6.50 is the purchase price, and we're signing a new lease, hopefully Tuesday when I go up to visit with the tenant, that'll change it to a $1,100,000 building

Dan Austin: [29:17] Wow.

Drew Wiard: [29:18] Just overnight because of the lease.

Dylan Koch: [29:20] Yeah.

Drew Wiard: [29:20] So, yes, that's That's amazing. That's the value add you want.

Dylan Koch: [29:23] So it's funny that you use that example because I was just about to say there's a commercial guy here in town. He says, what I like about commercial versus multifamily is I can double the value of my building with a stroke of a pen. You can't do that in multifamily.

Dan Austin: [29:35] Oh, yeah. No.

Drew Wiard: [29:36] Yeah. I mean, there's some things in multifamily because it's technically commercial. Right? So you you put all new granite, you add washers and Sure. Dryers and all the like, there's things you can do. But if you're buying a $300,000 house on a road of $300,000 houses, you can do it to the nines maybe it's worth $323.25. Right. But you're never gonna double the value of that house unless all the other houses start to double.

Dan Austin: [30:00] Right.

Drew Wiard: [30:00] That's the difference.

Dan Austin: [30:01] And it seems less common when you're the owner of this like industrial property and stuff like that, that you need to put the actual CapEx into it. A lot of times the tenant is improving it to fit their needs. So a lot of value has to be on the lease. I'm guessing there are opportunities if you do pick up a vacant building where you're like, hey, we need to if we upgrade the electrical, it'll open up to this type of person, or if we it's got a leaky roof. Are there things that you guys do to modify these buildings at all to like add value, or is it purely lease?

Dylan Koch: [30:28] To piggyback off that, to answering the same question, are most of your leases now, do you try to do them as triple net or no?

Drew Wiard: [30:35] That's a key strategic piece is moving to triple net for sure. And so Dylan, maybe we come back to that. We can dig into that a little bit more, what it means and how to do it. To Dan's point, I think we chose industrial because of all of the renovations or what we would call tenant improvements or TI. It's the least, generally it's the least of all of them. If you think like a retail place, retail might come in and that business wants you to paint it a certain color. They need these countertops to match their franchise. Like you, you know, for a normal retail space, you might drop a 100,000, a 150,000 in TIs that are very expensive when you have that tenant turnover.

Dan Austin: [31:15] You know, they, they call it tenant improvements, but it really should be called owner improvements. It always confused me.

Drew Wiard: [31:20] Yeah. Yeah. Yeah. You know? Because for, I mean, it's all negotiable. Maybe they bring 50 and I pay a 100, but like, there's gonna be something that I'm gonna have to plan to change. Yeah. And kind of similar with office as well. It's not as bad with office because office isn't hard to white box it and clean it up. Sure. But with industrial, I mean, you've got, for the most part, it's a giant big metal box. Needs to be clean, needs to be safe. And you might have an office. We've done a couple little office spaces, but I mean, you're talking about clean white paint and some, you know, industrial strength carpet and that's about it. So it's atypical that we have a very expensive turnover plus industrial tenants come into it knowing like, hey, we're gonna make this space ours. Like, we're bringing in huge machines. We're gonna buy equipment. Like

Mike DeHaan: [32:07] Yeah.

Drew Wiard: [32:08] Their demands are very, very low by comparison.

Dan Austin: [32:10] Interesting. That's really cool. I like it.

Mike DeHaan: [32:13] This has been great because I've learned that I'm definitely in the position of my life where I'm an LP because fuck, this is boring. Like like like just just like the real estate numbers, I'm like, I don't give a shit, man. Like, that's great. I trust people like Drew to be good at these things. And as I know Drew very well, but I've I've now learned that I wanna just pay people to be good at these four men. I'm more than happy to give you my money

Dan Austin: [32:36] Yeah. Right.

Mike DeHaan: [32:37] To it.

Drew Wiard: [32:37] Maybe that should be my goal. Right? It's just bore people to death and just be like, hey. Don't worry about it. I'll take care of it.

Dan Austin: [32:42] Yeah.

Drew Wiard: [32:42] Let's go.

Dan Austin: [32:43] I'm glad it gets you excited though, to end to Mike's point. It does. I'm glad it does because that's the one thing I wanted to ask you about in relation to your fund too. So Mike and I are so I'm not gonna say it's a goal, but it's something we're focusing on a little bit as a side project is, is depreciation. Because we do- we are kicking off a lot more cash flow than we have in the past from our active income. And so now we're like, okay, that sucked writing that much money into a check. Is there a strategic way where we're not taking away from our main business for us to get some tax benefit? Do you guys offer that with your fund?

Drew Wiard: [33:13] We absolutely do. Before I answer my version of it with our fund, let, I mean, maybe let's just talk about that, right?

Dan Austin: [33:19] Yeah.

Drew Wiard: [33:19] I think there's a lot of value in finding tax incentive and depreciation, but for a lot of people, like the tail wags the dog. We need to understand tax benefit is the icing on the cake.

Mike DeHaan: [33:31] Right.

Drew Wiard: [33:32] And so in the last couple of years, we've seen a lot of people go hard after syndications or big funds, like the ATM stuff. You guys have have you seen the ATM? Okay. So you put a $100 in and you get a 100% or more loss in the first year to offset your income.

Mike DeHaan: [33:48] Well, you know that was a scam too, right?

Drew Wiard: [33:51] Well, everybody knows now because they lost everything. Yeah. Right? So they-

Mike DeHaan: [33:55] They lost everything. Yeah. Yeah. Yeah.

Dan Austin: [33:56] I never understood this. Were they actually investing in ATMs?

Mike DeHaan: [33:58] No, dude. It was a, it was a Ponzi scheme. So they were like literally just taking-

Dan Austin: [34:02] Well, why do they call it ATM? Because that,

Mike DeHaan: [34:04] that makes Because some that's what their pitch was. They're investing in ATM because you can

Dan Austin: [34:08] appreciate But

Mike DeHaan: [34:08] these things at such a massive anyways, yeah. Okay.

Drew Wiard: [34:11] Well, and to your point, I mean, I think it started out with good intentions, but they bought these and they didn't work and they needed more money to spool it up and it evolves into a, Ponzi scheme. But Dan, to your

Dan Austin: [34:21] point- Points are really good tax incentive because you lose all your money.

Drew Wiard: [34:24] That's right. You have so many losses to offset for the next couple It's of brilliant. So yes, if taxes are a driver for you, that's one way to do it. And so I guess what I would say is there's a lot of groups out there who will give you huge amounts of depreciation, which is amazing. But I don't know if there's a risk reward that really needs to be calculated. And if it sounds too good to be true, it might be.

Dan Austin: [34:47] You need some capital preservation, right? So if I give you a $100 and I get a tax benefit, I don't want my $100 to disappear. Like we're talking about this ATM fund and all that sort of stuff. And the one thing that like Mike and I are looking at is like, we have to have an office for our business. So do we go buy a space, not an office building, but a space that could be an office that we could depreciate? We've talked about potentially buying like an Airbnb, and does that really actually make sense? And the hiccup on the Airbnb thing for me is like, okay, say you go invest a few $100 in Airbnb, we can do accelerated depreciation on it, so we're gonna get some massive tax benefits. But what if you like lose money every year on the Airbnb too? And so then it's like, now you're really you're yeah, you're getting more losses, but it's like, do I really wanna lose? Because you're still losing the money. Who cares you're fucking not paying taxes on? You're still losing the money. It's gone.

Drew Wiard: [35:33] Well, and like we've ranted on this show. Like, I mean, that's a job. That's a heavy job. And maybe you hire it out. Okay. But now you have an employee and you're also signing on for more debt. Do you really wanna sign on for more debt?

Dan Austin: [35:44] Right.

Dylan Koch: [35:44] Isn't the LP depreciation still rather minimal unless LP is also a real estate professional?

Drew Wiard: [35:50] So to answer Dan's previous question, the depreciation you get with us is you should expect 20 to 30% of whatever you invest in year one

Dan Austin: [35:58] because

Drew Wiard: [35:58] we take bonus depreciation. So $100,000 in, you should expect 20 to 30 back. Now what you get to do with that 20 to 30 depends on your situation.

Dan Austin: [36:09] Yep.

Drew Wiard: [36:09] So if you're a high W2 income earner, but you have no passive income to offset a passive loss with, you probably can't Yeah,

Dan Austin: [36:18] you can't use the same Right, exactly. Okay.

Dylan Koch: [36:21] That's kind of my point. Yeah, right, right, right.

Drew Wiard: [36:23] And so I have a guy just like that works at the hospital. This will be his first passive income investment. So all of the income that he makes from us will be able to offset, but he probably won't be able to use all of that. And so I don't know how that carries forward. And that's a very individual type of thing. But Dylan, you're absolutely right. Just because someone says, Hey, you're going to get a $50,000 loss. If you don't have 50,000 doesn't mean you're going

Dan Austin: [36:45] get it.

Dylan Koch: [36:45] Doesn't mean that they can apply it to their situation. Right.

Dan Austin: [36:47] Which is why a lot of the, like the doctors and lawyers got into the short term rental game is because there was that loophole. Yep. Which it sounds cool. I don't I I've never really looked into it as as deeply. It's just to your point where you said it's a job, it's a risk, it's more debt. There's a lot of stuff surrounding that. But the idea though, is just that tax benefits would be super nice if you could get if I gave you a $100, you gave me $30 off my tax bill or off my taxable income, like that would be super cool.

Mike DeHaan: [37:12] Yes. But to your point though, assuming they don't lose the $100 in the next three years.

Dan Austin: [37:16] Yeah. Hope Drew doesn't lose it.

Drew Wiard: [37:18] Yeah. I mean, that's the thing is if you're if you're doing it yourself, like, you have to set up your investment thesis. And I that sounds complex. I don't have a big thesis, like, written down. But what I know is I'm building a work style business. And so triple net tenants where everything is on them. No one's flushing diapers at 3AM. I also don't want multifamily and storage and all these things where I've got 1,700 units. I have 17. That's a lot easier to manage. So like, I think there's a lot of reason behind why you design what you want to design, make sure the returns are what you want, and then decide if the tax incentives that come along with that make sense with it. I guess that's my pushback with the Airbnb. If Airbnb aligns with your investment thesis, then absolutely go get it because the tax incentives, the icing on the cake is thick.

Dan Austin: [38:07] Yeah. Interesting. Yeah. I don't know. It's This is the

Dylan Koch: [38:11] episode where Mike has talked the least, by the way.

Dan Austin: [38:14] Oh, for sure.

Dylan Koch: [38:14] 180 episodes. This is the least dialogue Mike has had.

Mike DeHaan: [38:17] It's funny because he's There's something that

Dan Austin: [38:19] change it.

Mike DeHaan: [38:19] Pace orb.

Drew Wiard: [38:21] Ellie and R that pot.

Mike DeHaan: [38:23] Yeah. Well, no. The thing that I always get stuck on personally is you're right. You talk about, like, your investment thesis. I hear this so much. And everyone's investment thesis is honestly the same of, like, you want to make more money, and you don't wanna lose your money. Right? And I feel like giving it a fancy name, it just makes people focus on the wrong stuff.

Drew Wiard: [38:43] If that's your investment thesis, you're doing it wrong.

Mike DeHaan: [38:45] Yeah. To make more money and not lose money, what could it possibly be besides that?

Drew Wiard: [38:49] Well, those could be guiding principles behind what you're building.

Dan Austin: [38:52] But you gotta have a plan.

Drew Wiard: [38:53] Yeah. I mean, you need to think about what your risk profile is and, like, you know, where you're at in your phase of life, what you wanna achieve.

Dylan Koch: [38:59] What Drew's saying is he can't do this fund in Spokane, Washington. Like, I think that part of his thesis is, like, it being in the Midwest.

Mike DeHaan: [39:06] For sure.

Drew Wiard: [39:07] Yeah. Maybe. My challenge is for people, people chase either the return or the tax or whatever, and they need to decide what do you want your life to look like? Yeah. Right? Because I see a lot of operators building things that make their life miserable, and maybe they throw off huge amounts of money, or maybe they have all these huge tax benefits and these people are effing miserable.

Dan Austin: [39:26] Yeah, totally.

Drew Wiard: [39:27] And I have no interest in that. And so I guess that's kind of what I'm saying is make sure that the assets that you chase or the streams of income that you chase are in alignment with what you want to build. Maybe that's a better way to build.

Dan Austin: [39:37] I hear what you're saying to the way I the way I interpreted you is like, there's a lot of ways to do what Mike said, make as much money as possible and pay as few taxes and don't lose your money. Right? There's a lot of different ways to do that.

Drew Wiard: [39:47] Lots of different ways. Yeah.

Dan Austin: [39:48] How do you wanna do like, you gotta have a plan of how you how you wanna do that. I've realized over the last, I don't know, twelve to twenty four months, buying more single family homes in my local market is not how I wanna do that. But five years ago, that was my thesis. Like, I was like, I'm gonna buy as many of these as I can. And it made sense at the time. It worked great for us. The market's different now. And that to me, when I wake up in the morning, is the last thing I wanna do. And so it's like, I've had to switch my investment thesis and really rethink that. And my investment thesis is the last twelve to twenty four has been like invest in myself as much as possible, and it works. Like, I make way more money now.

Dylan Koch: [40:22] Could you imagine doing the past five or six year we've all done the wholesaling business at some point of doing that over the past six years, and you like broke even. Like, you Yeah.

Dan Austin: [40:32] That would

Dylan Koch: [40:33] suck a whole lot.

Drew Wiard: [40:34] Like Yeah.

Mike DeHaan: [40:34] We all benefited from it. I mean, there's and there's a lot of people like that. Totally.

Dylan Koch: [40:38] Yeah. That's my point. Like, you don't hear about those things, but, like, they they definitely happen.

Dan Austin: [40:42] Or they lost money. They broke even or lost money.

Drew Wiard: [40:45] The only way that it did work for me is because I held as much as I Like for me, that machine was to stack rentals that all just appreciated like crazy. But there were there were probably a couple of years where I was losing $30, $80, something like that, but I was stacking net worth that was just silly and appreciating.

Dan Austin: [41:03] Getting multiples of that in paper money.

Mike DeHaan: [41:05] Yeah.

Dan Austin: [41:06] Yep.

Mike DeHaan: [41:06] Yep. And maybe this is just where my, like, my personal privilege is showing at this point because there's also a lot of I have surplus. Right? My lifestyle is kinda what I want it to be. I make more money than I need, and I have a good runway, right, in terms of, like, equity and everything else. And so for me, my general philosophy is, like, I'm not trying to be like, I wanna be able to cook breakfast for my kids. You know? I I that doesn't fill me up. I I can already do that, like, honestly. Right? It doesn't matter.

Dan Austin: [41:34] But if you couldn't do any of that, you would be probably worried about it.

Mike DeHaan: [41:37] For sure. And it would have more of more of a a thesis around it. I guess my general philosophy, what I like and what I think a lot of people actually want, but they don't fully realize it, is they want some sort of control over it. This is why we get like LPs that are even in our front end, like different stuff that we do, like people invest with us is like, they are overbearing in the information that they want because they want control, but they don't necessarily have it. But they also don't want to do it themselves because like you're talking about, they don't wanna work. They wanna like hang out. They wanna do whatever. And you can't really, like, do both of those things. Right? Like, as you're an investor, you're giving up control because you are investing your money. You know? If you are putting it into your own business, I guess it's still, like, quote unquote investment, but that's much more active. And that will give you a much higher return, but that's where the control comes from, that will give you higher multiples.

Drew Wiard: [42:24] Yeah.

Mike DeHaan: [42:24] And I guess I guess for me, like, that's always been the trade off is like every dollar that I have in a investment is something that that I lose control of that I can't multiply in a much shorter period of time.

Drew Wiard: [42:35] Well, and I think that's, I guess maybe through, and I don't know your world perfectly, but from what I know of your life, I guess that would be my challenge is now that you're kind of killing it. I guess we wouldn't call it W-two side. I don't know what it would be, but your earned income side.

Dan Austin: [42:48] Full active. Yeah.

Drew Wiard: [42:49] So now that your highest and best use of your time probably is your earned income channel of money, right? So if you're going to I guess I would encourage you to do as much of that as you can and then place capital strategically like 15% in crypto and 15% in mobile home parks and 20% in industrial

Dylan Koch: [43:08] 50% in true fund.

Dan Austin: [43:11] I wasn't gonna I wasn't gonna say it. It goes what I

Dylan Koch: [43:14] was Yeah. Yeah.

Drew Wiard: [43:15] No. But then have, you know, 30% of that pie or something be something that is strategically tax advantaged. You're going to get some of that from the whole pie, but if you need something to really go hard at it, do it that way. I have a couple of key investors who say, I need my portfolio to have 10% industrial and I'm going to send you $200 every year to keep doing exactly that. The rest of my money's going somewhere else.

Mike DeHaan: [43:38] Interesting. How do people figure this out? That's what I wanna know. I'm just like, I'll just hold on to it.

Dylan Koch: [43:43] Well, everyone's different too. You get you ask a 100 people, you get 100 different answers. Yeah.

Dan Austin: [43:47] Right. Well, I think maybe you're worried about giving up control, Mike.

Mike DeHaan: [43:50] Totally. I mean, because, like like, that is with when we've had control of our own money, Dan, in the, you know Yeah. Seven years now we've been in business, we've we've been able to do a lot with it. And pretty much every time we've been in like a bind, it's because we locked it up in something that we shouldn't have.

Dan Austin: [44:06] For sure. Yeah. I mean, that happens inevitably if you do all the things we've done. But yeah. No. You're right. I think there's a time, and I'm I'm not quite there. I mean, maybe I am. I don't know. Where there are things in life that distract you in a good way that make you need to give up control and invest. Yeah. You know? So you say you get to a point, you get a couple little kids running around you, and you're like, oh man, I gotta go do this, I gotta go do that. I can't work right now. What if my money was working for me?

Mike DeHaan: [44:32] What if I hired a new employee that I paid $55,000 a year that just did those things? Yeah.

Dan Austin: [44:38] Totally. Absolutely. And I guess that's a that's one way to look at it. Right? Go pay a $100,000 employee or bring in some people, in house staff Mhmm. To take care of their personal things. And maybe you pay them $60.70 grand a year because it gives you more time to do stuff with your family.

Mike DeHaan: [44:52] Yeah. Exactly.

Drew Wiard: [44:53] Well, and the key thing, like, with us, like most of us are killers of some nature. Right? Or you go to GoBundance, they're all type a's. Like, meaning we all have a thing that if the highest ROI is the goal, you put it in your own thing. You control it. You drive it. You can make multiples for yourself no one will ever create for you. But at some point, like for me, maybe it's because I'm ancient. Even Dan makes fun of me about being old and he's like eighteen months younger than I am. But, I just get

Dan Austin: [45:21] the gap keeps getting shorter. Don't know.

Drew Wiard: [45:23] Yeah. Like for me, eventually I want multiple streams of passive income. Right? And so that's specifically, that's what our fund does is it really appeals like to physicians or people in their forties and fifties are starting that transition to, Hey, like, I don't want to do this forever.

Dan Austin: [45:39] Yeah.

Drew Wiard: [45:40] And you know, with us, you make the investment in years five, six, seven, we start to refinance capital back out, you retain your shares indefinitely and you own these assets with us in perpetuity. That's a cool thing. And that's not a good fit for everyone. It's not a good fit. If you're looking for the highest ROI, usually comes with higher risk. That's not what we do. So that's why I say like people kind of need to know what they're pursuing. If they want to work for the next ten years, making as much earned income as they can, they should focus on that and sprinkle their money other places. And you know, some of those will give you big returns. Some of those can turn into passive things for the long run.

Dan Austin: [46:17] Yeah. A 100%. And, I know Michael will agree with this, despite the conversation going towards investing in yourself, is at some point in time you'd have to take some chips off the table. And if you keep putting all your money back in your business, this is what go back to the, like, the wholesalers that broke even or lose. A lot of times it's because you kept reinvesting in your business, and then all of a sudden it went away. Yeah. Sometimes having equity in your business is not necessarily the best thing, or like, hey, let's buy this new equipment, let's buy this new asset, let's reinvest in this new system. And not everything works out. In fact, like eight out of 10 things I feel like don't work out that you buy, you spend in your business. It's the one or two things that work out that make all your money, but eventually the clock runs out. So if you invest too much singularly, you don't take enough chips off the table, I. E. Paying yourself, the risk is really high.

Dylan Koch: [47:02] Or Mosie, I don't know when it was. It's a really good podcast on that entire subject. And actually, listening to it, I took like a 6 figures for myself. And I was like, just gonna put this away.

Dan Austin: [47:10] Really? Yeah. Yeah. Just just do it. Yeah. Take it off the table.

Drew Wiard: [47:13] Well, you're really talking about concentration risk.

Dan Austin: [47:16] Yeah.

Drew Wiard: [47:16] Right? Like all your eggs in one basket versus having them somewhere else. And again, I get it. We're creators. We wanna create

Dan Austin: [47:21] in our

Drew Wiard: [47:22] own world because that's where we get the most multiples. And it's not that I'm that much older than you guys, but I just had kids when I was like 12 years old. Like I've lived through a whole different thing.

Dylan Koch: [47:30] So smoking cigarettes at nine.

Drew Wiard: [47:32] Yeah. It kind of is.

Dan Austin: [47:34] It kind of is.

Drew Wiard: [47:35] But my point with that is like, guys will probably get to a point where you're like, okay, if something happened to me today and my wife stay at home or maybe her income is something different, like I like streams of passive income that my partner can help carry forward that my For sure. Doesn't make my wife go back to work for the next fifteen years until retirement. And you know, maybe you guys aren't tasting that yet because you're so busy with diapers and PTA meetings that you just don't know. Yeah. But I would encourage people to start thinking about like, okay, as I head into different phases of life, what do I need to set up that's going to carry me a little bit further? Stock market can be some you just you need to figure out what that looks like.

Dan Austin: [48:17] I agree. I can already taste it. You know, I've got an eight year old at home, and so it's like, at some point in time, I know the the clock will really it does I don't feel it now. I'm just so into it. But like the clock of like, oh, the days are running out Because, know, I've got ten more years with it, which feels like forever. And I know you've gone through this with your kids, Drew. It's like at some point in time, it's like, I don't give a shit what's happening right now. I'm gonna go do this with my kid, or go to this event, or take them to this trip. Right? And so like that stuff, being able to like set my life up to be able to do that, and that doesn't necessarily mean passive income. It just means I have to set my business up to be able to do that. And which is not always easy, as Mike and I find out sometimes when I'm out for a day. Smart. Cool.

Mike DeHaan: [48:55] Alright, guys. We gotta wrap up here. Drew, thanks for coming on the show and being a father wisdom as always.

Drew Wiard: [48:59] Yeah. Yeah. Father time.

Dan Austin: [49:02] Yeah. I really do. I'll just give you a shout out, Drew, because I really do. I think your pitch of your fun, not that that's what this show was meant for, but like it's it's a good pitch. If you guys wanna hear more, like, you should reach out to Drew because it's it's a unique setup. Like, I have never seen somebody set up a fund as honest and Midwestern as Drew.

Mike DeHaan: [49:18] Yeah. Is it is it flying investor on OnlyFans? Is that what it is?

Drew Wiard: [49:22] Beyond onlybufffans.com. Yeah.

Dan Austin: [49:25] Onlybuttfans. Like that. Goddamn. You should get that website, actually. That domain.

Drew Wiard: [49:28] I know. Actually. Yeah. Yeah. That'd be smart. Yeah. But then I gotta do something with it, and I No.

Dan Austin: [49:33] You don't. Just a month.

Drew Wiard: [49:34] Who knows?

Dan Austin: [49:34] Yeah. But do you wanna say actually where people can find you?

Drew Wiard: [49:38] Yeah. Sure. So my company is Clear Sky Commercial. You can find us clearskycommercial.com or me personally. You can you can follow me on Instagram the flying investor.

Dylan Koch: [49:48] Hold on. Drew's phone number is no. I'm just kidding.

Mike DeHaan: [49:52] Yeah. It's 616324. I don't know the rest. Sorry. But alright, everybody. Well, thanks for listening. And, yeah, check out what Drew's doing. If you guys haven't followed him after so many times in the show, I don't tell you. It's a good follow-up. Smart guy, obviously, and he fits in with the rest of us as you can tell. So thanks for listening. We'll talk to you guys next week. See you.

Dan Austin: [50:11] See you all.

Mike DeHaan: [50:12] This episode is sponsored by Sir Lenzelot LLC, also known as SLA Capital, which if you didn't know, is Dan and I's private lending company. So, yes,

Dan Austin: [50:21] we are sponsoring our own show,

Mike DeHaan: [50:22] but what you're do about it? It is our private lending company that offers hard money and DSCR loans to real estate investors of all types. So you can be a new investor, an experienced investor. You can be buying flips. You can be buying rentals, whatever. We can do everything. And not only that, but the rates that we offer are just as competitive, if not cheaper than pretty much every other company out there. So whatever big company you've been working with, bring us their term sheets, and I guarantee that we can probably beat it. We have the same connections they do. We just don't have all the overhead and middlemen. So if you wanna come and check us out, go to slacapital.com/keys, and I will know that you came from the show. And by seeing that you came from here, when you get the closing, you will save $500 on your first loan with us. So slacapital.com/keys, we would love to fund your next deal. Thanks for listening, everyone. If you want more from us, you can shoot us a follow on Instagram. I am at Mike underscore Invest. Dan is at Investor Man. Dan and Dylan is at Dylan underscore Does underscore Deals. Choose a follow and send us a DM to let us know what you think of the show.