Where to Go When You Want the Best Interest Rates

Dylan Koch: [0:00] Competitiveness in lending is probably a good thing for most real estate investors.

Mike DeHaan: [0:06] Dylan added, like, three notes, so they're not, like, real notes. And to be fair, I mean, I don't know. What what's the news of the world? It doesn't change that much week to week. That's why South Park started doing, like, two week episodes because they need more time to create actual commentary on the

Dan Austin: [0:20] Oh, they're every other week now?

Mike DeHaan: [0:21] They are. But And I just I need to watch them.

Dan Austin: [0:24] It sounds like an exciting new, season. I just They're

Mike DeHaan: [0:26] just fully going after the Trump administration in every way possible. Although my favorite character is the Vance little, like, minion that they have. It's fucking hilarious.

Dan Austin: [0:37] Oh, vice president Vance.

Mike DeHaan: [0:39] Yeah. What's going on, guys? Welcome to the Collecting Keys real estate investing podcast. You got the full gang here today. Mike DeHaan here with my cohost, Dan Austin and Dylan Cook, the kid from Ohio. And we are here first week of September talking business, real estate investing, and whatever else we feel like for today.

Dylan Koch: [0:59] Yeah. Hold on, Mike. Did you I'm sure you've seen have you seen the South Park skate where they make fun of real estate agents?

Mike DeHaan: [1:04] Oh, yeah. Totally. I mean, that's My mom's

Dylan Koch: [1:08] a real estate agent. She's an effing retard. I was like, oh god. It's so funny. Oh, yeah.

Dan Austin: [1:13] Looked like Cartman and

Dylan Koch: [1:13] his mom.

Mike DeHaan: [1:16] So well, well, cool. We'll edit that for YouTube. Drop that in the first thirty seconds, Although I guess this this is Trump's America. You can say that now. It's when I saw this stand up comics, he was talking about single cause voters. And he was saying about how so many people, they voted red purely because they wanted to own the libs so they could say the r word again. And he's like he's like and that was like their whole thing. It's like they didn't care about the economy, care about anything else. All they wanted was to be able to say the r word. So and now, like, the same people they're posting about how, you know, they're they're not making as much money, like the state of the economy, the tariffs, all the other things. And I just wanna look at them and be like, was it worth it you retards?

Dan Austin: [1:55] Great punchline.

Mike DeHaan: [1:56] Great punchline. But anyways, cool. Won't go too political today. How's business going for you, Dylan? I know that you posted on here that you've been getting hit up by lenders a lot, which is funny. And I can tell you why that's happening.

Dylan Koch: [2:10] Mean, literally like multiple calls a day. And I hate to be rude, but and I get the cold calling, like, we even do it, but I'm just like, I have a good lender. Thanks. I'm not interested. Bye. Like Yeah. I don't even have the time of day.

Dan Austin: [2:22] You're like, I work with SirLens a lot. They're based out of Washington. They're a fantastic lender. Great couple of guys. Own them. That's what is

Mike DeHaan: [2:28] that

Dylan Koch: [2:28] what Every I every conversation that is the same. If I ever string it out, like, I'm in the car, don't have anything else to do. Okay. What's the rate in terms? Do I have any points? Yeah. Origination fees. And they're all the same. Twelve and two, 75% LTV, and they need an appraisal and a credit score. That's all the same.

Mike DeHaan: [2:41] So the reason that you're getting a lot of that is twofold. One is because loan originations in general are down, not even because there's less transactions, but because there's less purchases rather, but there's less properties that are selling. And so kind of the lender motto revolves heavily around having recurring clients if you're in private lending, right? And if your recurring clients are not able to sell their inventory, they're not going to be getting more loans because their books are eventually going to get too overloaded, right? So that's one part of it. The second part is there is this trend in the lending space right now where you see people that are building out these models. I say, I don't want say like right now, might've always been this way. I'm just new to the space myself, Where they have these models where they are building out these teams of loan officers or brokers that are entirely commission based or very heavily commission based. And how it works is after a certain period of time, they have to eat what they kill. And so they're out there heavily prospecting, trying to find opportunities. And the reason that they're all priced the same, because it's a perfectly competitive market and there's only so much margin that you can have on your pricing. But the highest pricing is always going to be through the brokers or the LOs because they're having to pat on their commissions on top of whatever their their strike price is with their fund provider.

Dan Austin: [3:52] And so That's a symptom though.

Mike DeHaan: [3:53] It is.

Dan Austin: [3:54] Because it's the only place that there's yield for big money. Absolutely. 100%. Right. Know what I'm that from. They can they can invest more money in the Fab seven or whatever they call those guys or they could get some real estate exposure and give their investors a consistent six to 7%. And that's what they're doing. And so then all these dorks like

Mike DeHaan: [4:10] us are out there making money. Totally. And in general, if you are ever getting a loan, you should not work with a broker because they're going to go and they're going to mark you up a significant amount and they're going to shop you around. You should always go directly to a lending company and ideally a small one. Like Sterling's a lot, not even to plug us, but smaller companies, we do have less overhead. And so we do tend to be out a lot of the bigger groups because we are not having a line of brokers and loan officers that are needing to have their commissions built into our loans. So we can just naturally be a cheaper option, especially if we have lines to the cheaper money on the back end, which if they're a decent lending operation, they should be able to get that whether it's via their own fund or it's via their own hustle and just making connections. But anyways, that's why though. It's just a symptom of the marketplace. And it's, I would say a chain effect of the slowing down real estate market and stuff is just sitting a little bit longer and their recurring income is reducing.

Dylan Koch: [5:06] Yeah. And then it makes sense. And then the competitiveness in lending is probably a good thing for all, for most real estate investors because, I mean, you can really only compete on points, interest rate, and I guess, you know, some of the upfront costs, like origination fees, yeah, that kind of stuff.

Mike DeHaan: [5:22] Well, especially like the whole industry is feeding like a couple of funds that basically buy all of the private debt. Like if you go far enough down the chain, regardless of who does your loan, whether it's a small shop like us or it's Kiovy or it's Lending One or one of the other big companies, right? All is going sold to the same person if you go two or three slots down the chain. Know?

Dan Austin: [5:47] It's sold a couple of times and then it ends up in Wall Street.

Mike DeHaan: [5:50] Yeah. And then there's like three sales processes that go down the line, right? Because there's the Wall Street like base, they kind of set the pricing. And then there's going to be the ones below them who are selling it there that's going to have their margins they need to make. There's going to be the ones below them who's probably the investors that are feeding the companies that you start with, right? That you end up talking to as a real estate agent. And there's going be the LOs below that who work for the companies. And so you have the LO that's basically pitching you the pricing. Then they take that pricing. You have to go back to their company to get approval. And they will basically massaging some their end because then they have to go to the larger investor who has massaging to their end who then goes to Wall Street.

Dan Austin: [6:29] I would look at it this way to simplify it like to what you're saying, Mike, is like, yeah, have like the LOs and you have the smaller companies as well like Sir Lancelot. Then you have, like, platform companies where they are, like, like, key Avi because they have a very good platform to for, like, them to intake loans. And then you have, like, the aggregators who then take a $100,000,000 of those loans, and then they have the hedge funds. It's like those are like the tiers. You know what I mean? Like there's like purpose for all of them because the hedge funds, they don't know how to freaking do real estate. Know? And some people are like really good at software, so they build a platform. And other people are really good at aggregating these platforms outputs and like securitizing the debt and then selling it off.

Mike DeHaan: [7:07] Yeah.

Dan Austin: [7:07] It's like those are the tiers.

Mike DeHaan: [7:08] And to relate it to like a real estate business specifically, at the very bottom, you'd have the seller, right? Who's getting the lowest strike price on the deal. Then you're going to have the wholesaler who has their price, right? And their margin, they're selling it to a buyer for. And then you're going to have the buyer who is selling it to the retail buyer and or the full market value after it's completed. And so it just kind of like goes up. Because at the end of the day, the seller could have done that process themselves. They won't. Just like the hedge fund could have gone through that process themselves of finding the debt and making more money. They just not, that's just not what they're the business of doing.

Dylan Koch: [7:38] It's another good example of how many tentacles that real estate has in the economy, right? All different. Totally. So

Dan Austin: [7:45] many people feed the economy. Like real estate feeds so many people in the economy, Exactly. They're title companies, wholesalers, lenders, LOs, every so many people.

Mike DeHaan: [7:54] Contractors. Right? Like just general homeowners. Like how many homeowners, baby boomers, older people have the entirety of their net worth in their home? A lot. So many, Like that has to be probably the financial cornerstone of The United States.

Dylan Koch: [8:10] Or the second, there are second homes too. There's lot of people, like two homes and there are millionaires just from those two things, right? They don't really have liquidity or maybe not a big retirement account. But right now, the quote unquote search for yield is one of the biggest problems in the investment space, no matter what avenue you look at, bonds, real estate, because everything's really at all time highs. So where do you try to allocate your capital to, especially with a lot of people thinking that the sky will be falling?

Mike DeHaan: [8:38] Dan and I were talking about this this morning and like especially specifically with stocks and how stocks are no longer about like finding undervalued companies. And it's all just about like where's the money going to flow to and that's what's going to drive stock value. You know, there's some of these extreme examples like Palantir is a big one. Take them up a lot. Where currently it's being traded out like six ninety times its earnings.

Dylan Koch: [9:00] Earnings potential, yep.

Dan Austin: [9:01] Does it? That's in my opinion though, it's like a government subsidy because they're basically, that's what people are looking at is they're going be one of the next general dynamics, right? And so that's just, that's being manipulated.

Dylan Koch: [9:10] It is. That's talent too. You can find examples like that all over the place. Of course. Costco is another big one. That trades like 400 times earnings.

Mike DeHaan: [9:18] Yeah. Just doesn't make any sense. But the funny thing is, is like, even if you zoom out, do you know what one of the best performing stocks is over the past five years? I don't know if it's like the best one, but it's pretty damn close.

Dylan Koch: [9:30] I know. I just saw this circulating on my X2, so it's probably the same example. Build Bear and Yep. Also Domino's and Monster Energy drinks. All three of those.

Mike DeHaan: [9:40] Yeah. Domino's. I saw that one too. Yeah. Build A Bear was the number one over the last five years, and it's it's had like it's like 1700% growth. It's gone from like $2 to like $68 since Yeah.

Dylan Koch: [9:51] Outperforms things like Nvidia, Tesla, like some the biggest It's kind of crazy.

Mike DeHaan: [9:56] But you know what the funny thing is? It's companies like that, right, are so unsexy, but that growth on that is literally going be based off of the growth of the company or the reinvestment of the company. Because it's not like it's doing anything innovative. Like Nvidia doesn't have like a huge R and D department. They're just standing up more locations, having better connections with like Disney or whatever they're doing. Right? And they're producing more revenue. And a big reason they've been so massive in their growth is because their revenue projections have just been getting blown out of the water quarter after quarter after quarter. Right? And it's like, I think that there's still that opportunity to find those companies that are value companies like that. That's just not like you just can't be following any of the buzz, you know? But like

Dylan Koch: [10:43] Well, the S and P four ninety three, which you take out the MAX seven, has actually underperformed the past like ten years.

Dan Austin: [10:49] Right? The MAX seven has drugged up, right?

Dylan Koch: [10:52] Yeah. Yep.

Dan Austin: [10:53] By a lot.

Dylan Koch: [10:54] Yeah. And so the theory is if you get some of this reduction in if evaluations for AI companies start coming down to a normal level, then the whole entire index would theoretically go down. Right? Because that's what's currently just kind of propping everything up. Time will obviously tell, but like this the Warren Buffett used to call it the cigar butt method. He basically could find companies that traded below their book value. So if you're a real estate company, let's say you own $5,000,000 worth of real estate and you could buy that that whole company, whole portfolio for 4,000,000. But because of things are not as asset heavy anymore, there's more IP and stuff like monetary and fiscal policy have just driven evaluations to the roof. Now you're paying 100,000,000 for something that might be worth 5,000,000 just with the expectation that it's going to keep growing at an obscene rate.

Mike DeHaan: [11:43] So Yeah. I feel like it's every asset though, right? You can say the same thing about real estate. You know? Like there's so much that's been carried just on the real estate growth in terms of people spending power and local economies and different things. Because you think about it, if you're in a market where half of more than that, say the entire house market increased 2x over the last five years, Pretty much everyone that was a homeowner now has an asymmetrical advantage than everyone that wasn't at that point. You know, because especially if they like refinance during that period of time, you got a bunch of tax free cash. Right? You have a bunch of security with like a lower monthly payment that you can live off of, right? You have the ability to sell that house and capture a bunch of money. That's going to bring up the cost of everything in a way that doesn't necessarily make sense. And so I think that's when people are talking about some of the affordability issues and different things. The problem is, is it's not taking into account the people that, yes, they are spending, you know, 60% of their income, 70% of their income every single month, but they also made $350,000 a couple of years ago when they sold a house at peak market or they cash out refinance and they pulled out a shit ton of appreciation they didn't actually deserve. You know? And so it goes down it comes down to like, what is the actual health of the economy?

Mike DeHaan: [12:59] Like, is that just like the debt economy is pushing things down? Like how overinflated are a lot of these assets and has it like falsely propped up a sense of security for a lot of people?

Dylan Koch: [13:09] I mean, I think the answer to your question is directionally yes. And my opinion is that it's been monetary policy mostly up until the past couple of years that it's driven a lot of asset price inflation. QE Jerome

Dan Austin: [13:19] Powell, man.

Dylan Koch: [13:20] Jerome I mean, even Janet Yellen, even before before

Dan Austin: [13:23] her He was actually really bad.

Dylan Koch: [13:25] Yeah. And so, like, the zero interest rate policy and people can just borrow at nothing, put an asset at yield. I mean, the carry trade, how that is termed, never had more of an opportunity to to shine than it did post COVID.

Mike DeHaan: [13:36] Sure. And I

Dylan Koch: [13:37] think that created a lot of wealth inequality. And there's, like, there's the people like us who kind of figured it out, like, and should we feel bad about that? No. But like, there's also people who didn't know.

Dan Austin: [13:45] We should we should take money from wealthy people and give it to poor people.

Dylan Koch: [13:49] You can do that whenever you want, Dan. You can write checks to

Mike DeHaan: [13:52] whoever you want. I do, dude. I I

Dylan Koch: [13:54] have to

Mike DeHaan: [13:54] write have to write

Dan Austin: [13:55] checks to the government and they just give it to

Mike DeHaan: [13:57] I the was about to say, yeah, we do it all the time. Technically, all write checks and we give it to the poorest person of all. It's in what, dollars 25 Yeah. Trillion in

Dylan Koch: [14:06] It's like 33,000,000,000,000

Mike DeHaan: [14:07] in debt. It's 33,000,000,000,000 now,

Dylan Koch: [14:08] jeez. Yeah. Yeah. But I did want to ask you, because we were talking about data a little bit before we got on the started recording. Mhmm. I had a real estate agent who's been an agent for a long time, basically asked me this question and I'll and I don't know the answer, I'll see if you know. How much of the sales data that MLS has is skewed because more and more deals are getting done off market than before? It's not obviously a sublime demand on the MLS, but this less people are going to the MLS because real estate investing and wholesaling has gotten more popular over the years.

Dan Austin: [14:42] Think it's infinitesimal. I don't think it's big enough.

Mike DeHaan: [14:44] I don't think so either. I mean, like the old sort of like pitch that like Brent Daniels and those kind of people would say when they were trying to sell you wholesaling back in like '21 was that 7% of all real estate transactions are off market. Right? And their whole thing with that is like this is x amount of millions per year. If you did like this many per month, like or per year rather than you would be rich. That was what they used to pitch people. I would imagine it's increased from that a little bit, but like it's not like it's gonna be 30% or something crazy. Yeah. And like a lot of

Dan Austin: [15:15] those might just be those non arm lengths transactions, which yeah, maybe that skews it down. But those are probably always there where people are oh, I'm selling to my sister or my brother or whatever. And like wholesale transactions. I don't feel like in Spokane, like I actually I feel like probably there's less wholesale transactions going on in Spokane now than two years ago, feels that way anyways.

Dylan Koch: [15:33] Yeah. I guess the overall question is what percent of every transaction is full of transactions and would that skew data that maybe the MLS and realtors and etcetera are relying on?

Dan Austin: [15:45] Yeah. My guess is for our market, and I can't speak across the nation is like maybe 5% of all transactions are off market.

Mike DeHaan: [15:53] Sorry, I can't even ask fucking Google AI. So some estimates suggest between 10% to 30% of homes. That's such a range. Like that's not Do a deeper dive AI mode. You got to I was going to sit here and spin. So this says off market according to NAR in 2019 was 10.

Dylan Koch: [16:12] How would even they know unless they're manually scraping data? See that's

Mike DeHaan: [16:16] the problem with all this stuff. You need to look at where the data is coming from because also too, if you look at NAR now, I bet they would say a significantly higher percent because they are being threatened.

Dylan Koch: [16:25] Right.

Mike DeHaan: [16:25] Right? That's why you're seeing all these changes in laws. This is big thing in Washington right now starting next year. Every single real estate transaction has to have an agent involved. So otherwise there's like all these rules that are just like silly. So like in Washington State, it's going to be, if there's no real estate agent involved, then you have to have in your contract that the seller is allowed to have an appraisal. And then you as the buyer has to pay for the appraisal. And then after they get the appraisal, they have five days to decide if they want to accept your offer or not. But that all is waived if you have a real estate agent who's a part of the transaction.

Dylan Koch: [17:01] To me, that's just asking for more conflicts of interest. Of course, it is.

Mike DeHaan: [17:06] But but the real real estate's never like, the real estate the real estate agency fucking whatever, you know what saying, industry has never cared about that before. Right? Didn't Keller Williams just, like, lose a big lawsuit?

Dylan Koch: [17:19] Yeah. I mean, they did a couple of year like and wasn't that the whole commission thing that, you know, they I don't know.

Mike DeHaan: [17:24] Yeah. So, yeah, it was yeah. Commission lawsuit in February 2024, the antitrust stuff. Oh, I guess they were the main ones that were behind all the antitrust stuff was Keller Williams, isn't it?

Dylan Koch: [17:35] Yeah. There was there was a couple. Yeah. The Berkshire Hathaway, think Coldwell, I think the biggest brokerages that you can think of. Right? But I mean, but my I don't know. My soapbox here is, I see a bunch of realtors shit on wholesalers because they're like, you don't have any ethics. You'll do whatever you want to get some money. And yes, some of that is probably true. That's true probably in any industry. At the same time, if you're a buyer's agent, you don't get paid unless someone buys the house. So you are probably even unconsciously trying to get them to buy even though it might not be in their best interest.

Mike DeHaan: [18:05] Yeah. And see, whenever people push back on things in that way without actual evidence is because they're threatened.

Dan Austin: [18:14] Yeah, it's because they're threatened and they're uneducated. Just get better at your job as a real estate agent. Don't worry what other people are doing.

Mike DeHaan: [18:20] If you are a real estate wholesaler and flipper and you want to be around other people that are looking to grow and expand your businesses in this ever changing economy, then you need to check out our scale community. Go to collectingkeys.com/scale, and you can get all the details there. But long story short, we are a small tight knit little group of serious real estate entrepreneurs that are looking to really make massive income and not just passive income to this ever changing economy. So if real estate, wholesaling, and flipping is kinda your thing, go to collectingkeys.com/scale. You can book a call with me in there if you want. I'd love to see if you'd be a good fit. I found a Zillow article. So it said 96 pocket listings accounted for 2% of transactions and off market transactions were nine and a half percent in '23 and '24.

Dylan Koch: [19:11] That's actually a lot high.

Dan Austin: [19:13] Spokane last year, there was 5,600 MLS transactions. So do you think there was say 600 off market deals in the Spokane area? That seems reasonable. Sure.

Mike DeHaan: [19:24] Yeah.

Dan Austin: [19:24] You know, say you know say some of the big wholesalers are doing 50 each and then you've got a bunch of little people out there and you've all these mom and pops doing just like inter family transfers and stuff like that.

Mike DeHaan: [19:37] Yeah, it seems reasonable. This Washington Post article that said it pulled directly off the MLS And it said, depending on the market was averaging between 10 to 15%. So up from the 7% that Brent Daniels used to sell, but still not outrageous. Yeah. It's always hard to tell because you never quite know what's truly arm's length, what uses an agent. Also there's stuff where an agent does get involved that are not on market transactions. But those would probably appear the same on the back end. Yep. I don't know. But relatively small though. It's not like it's all of a sudden 50% of them are off market because wholesalers are buying them. If it ever gets to a period where 50% of the deals are being done by wholesalers, just know everybody's fucked because that's really

Dylan Koch: [20:21] hard to play. Yeah. There's something you said for there's probably, there's an end to how much houses should be wholesale, right? Like other people should go on market and that's not going be 50% of transactions.

Mike DeHaan: [20:35] Yeah. I mean, especially when the market's hot, like in 2021 and 2020, 2022 period, pretty much nobody should have been selling to a wholesaler, honestly. You could have put like a bag of garbage on the corner and sold it for over asking price. Now I actually do think it's a pretty valid option for people.

Dan Austin: [20:57] Totally.

Mike DeHaan: [20:57] And like, we we have never seen more leads that are like on MLS leads than we have over the past sixty days. And the houses are generally fine. The problem is is they're just not updated compared to the house in the neighborhood. And even if you're like at a slightly cheaper price, people can go and they can say, well, this house down street is $3.50. It's fully remodeled. Your house is $3.30. So it's $20,000 cheaper, but it needs like a new kitchen. It still has like nineteen seventies interior or whatever. The average home buyer right now, they're gonna go and they're gonna pay more money because on a monthly payment basis, they can probably afford the difference there. And they know that the cost to get the work done with an increased cost of materials, increased cost of labor, and just general headache of having to find people to do it is not worth it.

Dylan Koch: [21:44] Yep. And my biggest, I guess, the deals that we've been able to close lately have been one, we've been allowing two to four weeks of post closing occupancy. That's a big one. And then honestly, just being able to being willing to buy with tenants in place.

Mike DeHaan: [22:00] Yeah. Yeah.

Dylan Koch: [22:00] Again, an occupancy issue.

Mike DeHaan: [22:02] That's a no brainer right now. I don't know the last time we had a deal that didn't have that in some capacity, at least for like a very short span, like over a weekend. It's just impossible, you know? Because people need the money to be able to go to their next location.

Dylan Koch: [22:15] Yeah. That's what I've found too in a lot of stuff that, you know, they're usually been in the house for a while, so they got all kinds of crap. And so the pitch is also, you know, leave whatever take whatever you want, but also leave whatever you want and we'll take care of the rest. Yeah.

Mike DeHaan: [22:27] My favorite is when you get like the text or call saying like, Hey, I cleaned out the house, I'm gone. And then you show up and there's an entire house full

Dylan Koch: [22:33] of stuff. Like

Mike DeHaan: [22:36] what did you

Dylan Koch: [22:37] say? The worst is like, if you're not there for a couple of days soon, then maybe they cut off the power or whatever, but then you open the fridge for the first time.

Mike DeHaan: [22:43] Oh, yeah.

Dylan Koch: [22:44] Right. That

Mike DeHaan: [22:45] gets it. I'll always remember this one that Dan and I did where they these people like stole an RV. Like, they had to have stolen it because they had no money. They were the tenants. And literally, they it was them sitting in the two front seats in the RV.

Dan Austin: [23:02] Oh my god.

Mike DeHaan: [23:02] Like, from their backs to the back of the RV was, like, completely full. Like like like the entire like a like a bus full of stuff. And somehow, the house still looked exactly the same. Like, still hoarder

Dylan Koch: [23:16] house. So old shit there. That's amazing.

Mike DeHaan: [23:19] So they they never made any sense. But there was, like, five washers and dryers in there. There was, like, so like, just piles and piles of stuff, like eight beds. I'm like, what is happening in here? They took none of it, but also cleaned the house out at the same time.

Dylan Koch: [23:35] It doesn't make sense. And I'm at this point, I'm just not in surprise on what you walk into, how people can live, you know, and not Very

Mike DeHaan: [23:43] eye opening. I think that's probably one of the most common things that shakes people out of this business is when they first start getting leads in walking houses and they walk into their first like, holy shit. And they go, this is not for me. Right?

Dylan Koch: [23:58] Yeah, totally.

Mike DeHaan: [24:01] We had people like come through scale that are like that. That's always why before people get too involved in like building their brand or their company or doing like all the kind of romantic side shit of owning a business. I'm like, just talk to sellers. But what you need is you need to get your first ass chewing on the phone where someone's just like real nasty to you for no reason. You need to get that off your back and you need to walk your first like, oh shit house. And then you need to make your first offer that is so embarrassingly low to what the seller wants that you're like physically uncomfortable making it. If you can get through those three things and not be shaken, you can do fine in this industry. Yep. That's great. If any of those don't work, then just go do something else because this is not for you at all.

Dylan Koch: [24:44] I I keep a mask in my car now because sometimes you walk in, the black molds on the wall. Like, people don't usually live there, but, like, I'm not breathing this shit.

Mike DeHaan: [24:51] It it it's funny. You you said that. I thought you were gonna say so you could conceal your identity when you make some offers. But you're you're you're like an ICE agent, bro. You're walking around with your mask on to, like, bring them your contracts so they so you don't have to show your face and how embarrassed you are.

Dan Austin: [25:04] There's a cloth mask from COVID that says let's go Brandon around the front.

Dylan Koch: [25:09] I know do.

Dan Austin: [25:11] I know you do.

Dylan Koch: [25:12] I don't. But that would go well with some of the people in the houses I go. Hell yeah, dude. Totally, man.

Dan Austin: [25:17] You gotta get a little political. That's how you know you're gonna do good. Yeah.

Mike DeHaan: [25:20] You gotta just go with whatever they're wanting to do.

Dan Austin: [25:22] Yeah. Exactly.

Dylan Koch: [25:24] We were trying to dispo a deal last week and I showed up back to the the property and my buyer ended up backing out and they're buying it anyway. But my point is the people in Cincinnati are just dirt balls because she's like, once you

Mike DeHaan: [25:39] It's not just in Cincinnati, it's everywhere.

Dan Austin: [25:41] Oh, wow. I love it.

Dylan Koch: [25:42] Yeah. No. She's like, had so many people call me, like asking if I was selling the place and want to go direct. I was like, basically, the day after that I emailed blasted some of it out, people just tried to go around me and go direct to seller and buy themselves. If I I didn't find out who it was, but if I would have, would have outed them on Facebook.

Mike DeHaan: [25:58] You didn't you didn't find out? You definitely should.

Dylan Koch: [26:00] Well, she wouldn't she was like, there's she's an older lady. I don't think she could even remember if she could, but Yeah.

Mike DeHaan: [26:06] It's true. I mean, you'd be it wouldn't be shocked. It is shocking how often we sign contracts and we're through closing, we're getting to the end and they just have no idea who they're selling their house to. Right? Just be just because they've been hit up by so many people, can't remember the company names. They'll remember like our AMs. Right? But they don't remember like the actual companies or brands. And then also too, if people are prospecting, they'll have like fake names, they'll have VAs, they'll have, you know, people that aren't actually involved in the transactional process. You can't loop things back to them.

Dan Austin: [26:38] We had one this summer where the guy wanted to re trade us. So he started calling the postcards on his counter and he called us and asked us for an offer. Yeah.

Mike DeHaan: [26:47] And Dan well, Dan went and got it. It was locked up.

Dylan Koch: [26:49] That is awesome. I love that.

Mike DeHaan: [26:51] Yeah. Yeah. So there was after we made our offer this this is actually pretty bad. So we made our offer, the guy didn't like it. He was real nasty about it. And so we started calling through the postcards. One of them just because he was in our system and where he was, it went straight to Dan's cell. So Dan answered it, knew who the guy was, played dumb, went and showed up at the house because he hadn't met Dan yet. And Dan, you like really low balled him, made it sound like so bad. And then he came back to us and we closed the deal because the offer that he got from you was so much don't remember what price it was.

Dylan Koch: [27:27] You basically anchored him price anchored him. Yeah. Yeah. Yeah.

Mike DeHaan: [27:33] Then all sudden he was like, oh, damn. Okay. I guess I'll go back to these other This

Dylan Koch: [27:36] 50 k offer doesn't sound so bad.

Mike DeHaan: [27:37] Yeah. Then then because the industry is such amateur hour, most of other people never even call them back.

Dylan Koch: [27:43] Yeah. Yeah. Oh, I've we've got one where they they call back and like they're like, is Dan there? I'm like, this is like, you definitely called the wrong person. Yeah. Like, hey, how you doing? Yeah. Absolutely. And I'm closing some of those too.

Dan Austin: [27:58] I think it probably plays into our favor because we have a DBA for our marketing name versus what we actually signed PSAs on. So when they see, they'll go see our postcard and they're like, well, I have a PSA with Elevate. I'm gonna go to backyard home buyers.

Dylan Koch: [28:10] Yeah. Yeah. Makes sense. One other thing you guys wanna talk about if you got time.

Mike DeHaan: [28:15] Let's do it.

Dylan Koch: [28:16] We, I have this lead in the CRM that's been there for like just under nine hundred days. And originally he had a four unit building that was right next to two of my duplexes. Well, he sold that, but it turns out he has like a just under 16,000 square foot office building, decent part of town. He's older. He inherited it from his dad. And long story short was we had coffee for the first time this morning. Now I didn't get anything signed today, but it looks promising. I'll just say that. But the moral of the story is his main business is he runs a car dealership around Cincinnati, a couple of them. And we just got talking about the economy, kind of things that we were just talking about earlier. And basically his repossession rate of cars in 2025 through the same time point is up about three x than where it was last year. And it was that that was about two x from the previous year.

Mike DeHaan: [29:07] Oh, wow. So it's up, like, go back two years, what, six times?

Dylan Koch: [29:10] Yeah, exactly. Wow. Yeah. He and I asked him, he was like, are we don't we're not even that like, it's a used car dealership, but so he's probably selling to a lower to middle class people anyway. But they do 0% financing out the gate, a couple thousand down, and then it but then the year goes by and then it accrues.

Mike DeHaan: [29:29] See, that's the problem, right? Is you're seeing like the junk loans for the auto insurer the past couple of years really start to come crashing down. Because some the payments and stuff people are making on some of these vehicles are crazy. And it's like adjustable rates and different things. I see this Instagram feed. I don't know if it's satirical or not. It's always like these trashy people and they're like, how much you put down on this car? And it's like $20,100 dollars. Like, what are you paying per month? $600. And for how long? And it'll be like three hundred and eighty four months. Yeah. I'm like, what?

Dylan Koch: [30:07] So Yeah.

Dan Austin: [30:07] That it's always been there. So when I was in the military, the all the used car dealerships, they would like you're in like you would legit get dudes, 19 year old guys that are making $800 a month and they've got a 24% interest payment god. On well, I'm not kidding you. Shit like that. And like they would sell them like a used Mustang

Mike DeHaan: [30:25] convertible for like That's what all this shit is.

Dan Austin: [30:27] Like 50% more than it's even list for like the yeah. So they're like always like that, but then times get tough

Dylan Koch: [30:34] and That's credit card rates.

Dan Austin: [30:37] Oh, a 100% credit for it. Yeah. They have that and they have like lawyers or not lawyers, bail bondsman's and every scummy thing you can find right outside the military base and they all charge a lot, you know, strip clubs as well, but those are, you know, reasonably priced.

Mike DeHaan: [30:50] Yeah. I I remember so I I grew up in Montana and there was a period of time a couple of years ago, I would go home and, you know, Montana has a very large Native American presence. And there was this commercial that would run on the local TV. You know, my parents are older. They listen to they watch like cable news. Right? That's just like their nightly routine. And I would see this ad that would come up on the local news. And it was a I don't know if it was like a credit union or a private lender, what it was, but it was specifically for native people. And so like it had this whole thing. They have like the presentation and all sorts of stuff they did. And then if you looked at the very bottom, there was this teeny, teeny, tiny print. And on the tiny print, it said interest may meet or exceed 18000% on the money. Yeah. I I have, like, a picture of it somewhere. But it was like I I was like, how are they I was trying to figure out if I was like reading it wrong or what it was. But I'm pretty sure is it what it was is it was like payday loans that was like specifically for people that were from the tribe. And it was the most like predatory thing that I've ever seen. Cause like the whole pitch was like, oh, you can get your money now. You can like get your money for like the next, like, couple of months that you're going to get paid now.

Mike DeHaan: [32:05] But the interest that they paid on it was like insane. Like there was six numbers before the percent.

Dylan Koch: [32:09] Oh my god.

Dan Austin: [32:12] That's a lot.

Mike DeHaan: [32:12] That's like the mafia dude. That's like, yeah, you're gonna pay us. We'll give you your money now, but you're gonna be paying us back for the next ten years or we're gonna break your kneecaps.

Dan Austin: [32:21] So repo rates are up. Yeah. What else is up in the debt space right now?

Dylan Koch: [32:27] Credit card volume's at all time high, but that's a little bit of a misleading metric. I think you have to look at that compared to income.

Mike DeHaan: [32:34] Yeah. And and compared to inflation, I mean, it shouldn't be like 10% higher than last year? Technically

Dylan Koch: [32:40] Yeah. It's costing

Mike DeHaan: [32:41] 10% more. Yeah. Mean, rent's certainly not up. Can tell you that.

Dylan Koch: [32:47] Yeah, rent's nice. Probably mid profit.

Mike DeHaan: [32:50] It's actually like

Dan Austin: [32:51] 20% less now than we were even a year ago. Seems like this is easy down.

Mike DeHaan: [32:57] Yeah, but taxes and everything are up. Although I am very excited for our taxes next year, because I'm pretty sure the tax on all of my property are gonna come down, which is great.

Dan Austin: [33:06] Of not. You'll I think they

Dylan Koch: [33:11] have to fight it. They're not going do it automatically.

Mike DeHaan: [33:13] I have one that's come down because they In

Dan Austin: [33:17] a significant way?

Mike DeHaan: [33:18] Yeah, this house that I'm in right now. So it's a new build. So I underpaid on taxes for two years And then the taxes went up a shit ton for the third year that I was in here. And then this year, they actually came down. It was like $250 a month.

Dylan Koch: [33:35] That surprises me because I don't think there's a chance in hell any of my properties will Yeah. Go

Mike DeHaan: [33:40] Well, that's what you get for for living in a, you know, backward state like Ohio over there, Dylan. Over here, they're very progressive.

Dan Austin: [33:45] Not in my neighborhood. They're not.

Mike DeHaan: [33:48] Well, that's that's because you're in the county. You're on the other side of the line up there, dude.

Dan Austin: [33:53] Yeah. But they it's all county taxes, dummy. I'm just talking shit.

Mike DeHaan: [33:57] I'm I'm also in the county even though the end of my cul de sac isn't. Is it really? Yeah, dude. Dude, dude, it's it's wild. The freaking trash truck from the city you, drives bro.

Dan Austin: [34:06] They are. You boating in the city.

Mike DeHaan: [34:08] The trash truck drives past my house for the city, goes in, like, picks up the trash bins in the cul de sac and then leaves. And then we have to wait for waste management to come. The worst is in the winter because Oh, no. Because they get plowed. Right? And we don't because we're in the county. And so what'll happen is you'll have the snow plow that will drive down our street with the shovel up, get to the end of the street, do the cul de sac, turn around, and drive away.

Dylan Koch: [34:31] That is so

Dan Austin: [34:33] so dumb. They redlined you, man. They did.

Dylan Koch: [34:36] Yeah. Bet people in a cul de sac are even pissed off about that though. You're building in and out, like like, that doesn't help them.

Dan Austin: [34:41] Right? No.

Dylan Koch: [34:42] It doesn't.

Mike DeHaan: [34:42] It helps nobody. It helps nobody. So

Dan Austin: [34:44] silly, dude.

Mike DeHaan: [34:45] So silly. So but I bet they'll come down though. Like, it probably won't be significant, but like the taxes says value on some of my properties has dropped like close to a $100,000.

Dylan Koch: [34:54] Yeah. Wow. The biggest thing that a lot of Wall Street analysts look at is credit spreads with like corporations. Those are like thin tight right now. Like would be no indication of a recession. So like you'll you can see one metric here, it's like looking a little toppy and you can look at one over here and be like, everything seems perfectly fine.

Dan Austin: [35:13] Yeah. Well, and then from the economy standpoint, this is this is where I would the conversation Mike and I had earlier about kind of like how the stock market doesn't seem to work like it did twenty years ago. Right?

Dylan Koch: [35:24] It doesn't. So

Dan Austin: [35:25] Right. See see? That's good observation by my dumbass. But like you just look at it like, if the Fab seven, they have all the they get all the capital flows. And then you look at like plays like Berkshire and Apple and they've got hundreds and hundreds of billions of dollars on their on their balance sheets like in cash. Like they could just do stock buybacks or they could reinvest into a new market or do something and it's going to continue to drive the index up, you know, which is the main index everybody's tracking. Right? And then the Nasdaq is part of that as well getting drug up by like Nvidia and stuff like that. And so it's like, if they have all this cash available like in the in the financial sentiment, economic sentiments based on the S and P 500 or the Dow Jones, it's kind of like a self fulfilling prophecy at at some level. And and I don't know where it breaks or where it stops or where individual consumers credit becomes the the a problem, whether that's with car loans or credit card loans or, you know, mortgages, like where does it stop?

Dylan Koch: [36:22] Well, I think if you're thinking through it, everyone's most recent memory is like with any significant drawdowns 2008, which was a global phenomenon, which was like the elevator down. Historical recessions are more like a stair step down, right? It doesn't have to be this big plummet that just happens And because it was mortgages and a global thing last time, it could just be segment by segment this year, you know? Sure. Certain things get overvalued that become back normal or undervalued. And so I'm not one of these people that say, do think there will be a correction, but I don't think it's going to be anything like, oh, it was.

Dan Austin: [36:58] Doesn't have to be immediate, right?

Dylan Koch: [37:00] Yeah, doesn't have to immediate. It might play out over time, over years.

Mike DeHaan: [37:02] Well, of course. I mean, and this is always a thing with history, right? As people always like to cite history for what's happening right now. The problem is, is that you can analyze history in fifteen minutes when in reality it took a very long period of time, right? And so yeah. Like for Mhmm. Years, I feel like which is I think is such a douchey thing. Don't know. People have, like, compared The United States to, like, the fall of the Roman empire. There's a whole thing of, how often do you think about that if you're

Dylan Koch: [37:25] a man?

Mike DeHaan: [37:25] I'm like, well, I'm not a fucking loser, so I never think about that. But You're thinking for right now. Or I am because I looked it up as like a as a common thing. So the the collapse of the Roman empire took roughly two hundred and ninety six years. Yep. Right? And so you can go back, that was a very long period of time ago. But like, let's say even if we like, if it's one one hundredth of that now, that's still three years, right? For something to happen, which is fundamentally a pretty long period of time when you're living in it day by day.

Dylan Koch: [37:52] And the big and the other thing is everyone calls for the death of the dollar. Like that's the biggest headline you've seen really since 2008 since they started doing this. But if you listen to people like Brent Johnson, Luke Gromen, Linnell, all these like analysts, they're basically like, where else are they going to go? Yes, there's bricks, which is like Brazil, like China, India.

Dan Austin: [38:08] The eruption where there's no rule of law, all these sorts of

Mike DeHaan: [38:11] things. Right.

Dylan Koch: [38:11] The global trade has to take place in usually one currency, not several. And it's still going to be the dollar. Not with the yuan, it's not gonna be the rupee. It's not gonna be this any other metric. Like global trade will still happen in dollars for a very long time.

Mike DeHaan: [38:22] It will, amongst the Western community, right? So BRICS is Brazil, Russia, India, China, South Africa. If they

Dan Austin: [38:30] decide Which one like of those are not known for corruption?

Mike DeHaan: [38:33] Well, doesn't matter. Right? It doesn't matter if they're known for corruption or not. Because the unfortunate thing about the real world is the bad guys can't win. It's not a fucking James

Dan Austin: [38:41] Bond Yeah. I don't know that I believe that though, as far as like what matters, right? Like I think there's a lot of things people talk about with China and Russia and all these things. And China obviously is the leader in all that, but like, I don't I just don't see that anytime soon.

Mike DeHaan: [38:55] Well, so if you if you think between those countries, they're what? 40% of the world population, if not more?

Dylan Koch: [39:02] Probably a little bit more.

Dan Austin: [39:04] Yeah. But you could okay. So take India and Brazil out of that.

Dylan Koch: [39:07] But take the click the

Mike DeHaan: [39:08] jungle Until we have China, which is still, like, still with them, that's gonna be 30% of the world's population.

Dan Austin: [39:14] And then rest

Dylan Koch: [39:15] Compare population to GDP though. China will be up there, but the rest of them won't.

Mike DeHaan: [39:18] Yeah.

Dan Austin: [39:19] Yeah. And that's kind of my point is, like, you have, like, Brazil. Okay. They're they're big. They've got a lot of good economic factors, but the corruption is so high there. It's so dangerous. Nobody's gonna make that a financial capital of the world. They're not gonna do anything meaningful over a long period of time. You know, India, you know, they're talking about,

Mike DeHaan: [39:35] you know 56 of the world's population by the way.

Dan Austin: [39:38] Which makes sense. That's a lot. India, I mean, if if The US decides and US manufacturers decide to move stuff from China to India, that's a big swing the other way from the the whole bricks theme. Right? That's where I'm like, I just don't see it. To Dylan's point, the dollar for at least the foreseeable future that I'm worried about is gonna just be the thing. It's just too hard to get away from right now.

Dylan Koch: [39:59] Right now, yes. A lot

Dan Austin: [40:00] of fear

Dylan Koch: [40:00] around The problem with the yuan that that would the China has the CCP, which is the kind of, or PCOB, sorry, People's Bank of China. They manipulate their currency all the time. So like, why would and because they're they're a top down economy. So why if you're doing trade with them, they're gonna say it's this one day, next week it's gonna be something totally different. And that fucks up everything.

Dan Austin: [40:20] In their benefit.

Dylan Koch: [40:21] Yes, of course.

Dan Austin: [40:22] Right. That goes back to the rule of and then not I don't wanna call that corruption, but it's definitely not something that you can you can forecast and bank on because if it's all gonna be one-sided benefit, not that The US isn't always trying to do that, but we're just a little bit more open source with it. That's the only difference.

Mike DeHaan: [40:36] I'd use it to do exactly the same thing. Like, the rate thing with a lot of those countries, they don't give a shit about the lower class, and The United States is rapidly moving towards a more open presentation of that.

Dylan Koch: [40:46] If you if you even go back to the origins of how we got to the dollar being the reserve currency, there's, you know, conspiracies out there that, you know, it's kind of fucked up too. Right? It's just how the world has been for seventy, eighty years.

Dan Austin: [40:59] The winners get to write the history.

Dylan Koch: [41:01] Yep. Yep. And that was post World War II, which The United States wasn't ransacked because there's a giant ocean between the two continents.

Dan Austin: [41:08] Hell yeah. It's true. You know? Geographically better.

Dylan Koch: [41:13] Yeah. That's I mean, that's just facts.

Mike DeHaan: [41:15] Yep. It is facts. The winners write the history. That's why in the real estate space, you wanna be a wholesaler and slash off market guy. Because we're the ones making the money while the realtors are going, we're taking all the deals. They're all going off market. I can't figure it out. Sucks to suck realtors. You're basically the poor people of the real estate world.

Dylan Koch: [41:32] You're losing. Oh, now we know we got we what clip we got for the for the injury.

Mike DeHaan: [41:40] Oh, man. That's that's a brutal injury right there.

Dylan Koch: [41:42] Yeah.

Mike DeHaan: [41:43] So awesome. Alright, guys. Anything else?

Dylan Koch: [41:46] I'm good.

Dan Austin: [41:46] I'm good.

Mike DeHaan: [41:47] Alright, buddy. People. Who the fuck you are? You guys are my buddies. Guys. Alright. Alright. Call me your buddy. Not

Dylan Koch: [41:54] my buddy guy. 3,000 miles away.

Mike DeHaan: [41:56] Yeah. I mean, from Ohio, I'm not too afraid. Alright, guys. Well, thanks for listening, everybody. We'll talk to guys next week. 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.