Why Driving for Dollars Is a Waste of Time

Dan Austin: [0:02] On Air Brands.

Speaker 2: [0:07] Welcome to the collecting keys real estate investing podcast with your host, Mike DeHaan and Dan Austin. From wins, losses, horror stories, and tactics for optimizing your business, Mike and Dan take a real uncensored deep dive into the ins and outs of running a full time real estate investment and wholesaling

Mike DeHaan: [0:28] business. What's going on, everybody? Welcome to episode 29, the Clayton Keys real estate investing podcast.

Dan Austin: [0:37] We've kept the wheels on this shitwagon for twenty nine weeks.

Mike DeHaan: [0:40] I know.

Dan Austin: [0:41] Hell yeah.

Mike DeHaan: [0:42] I mean, it's it's longer than, you know, the... I I think that we were on the rocks for our business for longer than we were, like, long period of time than we were with this. We've been going with this for a little while. But, man, yeah, I'll always remember talking about that first duplex that we bought together, and we had this whole just shit storm of stuff that happened. You know, I went there, and all of a sudden, we were spending 30 some thousand dollars that we didn't have Right. More on this property. And it was a lot of just BS with the property and then some confusion on my fault... My, part with the contractor. And when I say confusion, basically means that I fucked up, and I did not specify what we actually wanted, and it cost us, like, 10 and cheese.

Dan Austin: [1:22] I remember that. We're just standing there, and I'm like, oh, I didn't realize you're gonna pay to rebuild an entire fence. Right? Like... And then we're like, should we sell this thing?

Mike DeHaan: [1:31] I know. Yeah. I didn't realize the fence either. And then we had to do the furnace, and then there was a huge bathroom plumbing issue. All all came in the course of, like, three hours. Yeah. I remember when I called you, and I was like, so here's the deal. And you're like, yeah. Can we just can we just, like, sell it, like, right now? Yep. We've been

Dan Austin: [1:49] And then fast forward, we still owe it. We still own it. It's our best cash flowing asset. It's very well valued. But then the work, the plumbing, the thousands of dollars we spent on plumbing that, like, was bad plumbing and it leaked, and I'm like, oh my god. Like, what's going on here? So, yeah, we... That was our first learning. I mean, we learned a lot, and luckily, we still picked a good asset.

Mike DeHaan: [2:11] Yeah. I mean, I think that comes down to... That's why you generally don't wanna sell real estate. What do they say? Don't don't wait to buy real estate. Buy real estate and wait. Yep. It's not how Well, and

Dan Austin: [2:19] and that was a... Yeah. And that was, like, a low point too for us just in general. And, like, when you look at it now, though, not that long... It wasn't that long ago, but, like, we burned all of our money out of it. We're cash flowing. It's our best cash flowing asset. It's cash flowing really well for us. The tenants never bother us. Mhmm. Like, it's just simple, and it just keeps going. We don't have really any maintenance issues ever on it. Like, it's just there compared to some of our other properties that cash flow less and that we might even have some money left in and, like, there's just headaches.

Mike DeHaan: [2:50] Yeah. Yeah. I mean, typically how it works, I feel like. Well, I mean... And to be honest, I think that is a benefit of having a... I wanna say, like, nicer, but, like, a c class property with higher quality tenants Mhmm. Is, you know, so many people fix it on the class of the property. Really, it's the class of the tenants. And if you have people that are used to living in a c class neighborhood but are a class people, those are gonna be the best because they're used to fending for themselves everywhere else in their life. So they're gonna just take care of it. Like, if, like, little things come up, they're generally like, I'll fix this. You know, what you want to avoid is, like, the c class, tenants, you know, in, like, b or a classrooms because they're gonna a wreck stuff they're not gonna fix anything.

Dan Austin: [3:36] Right. Right? They're more entitled. More entitled to it, and they're stretching just to get in that unit. That's what I like... Love about our tenants in similar areas. Like, we have a few tenants that do this like, hey. So I noticed this at the property. Would you mind if I fix it? I'll... And just pay me for the receipts I turn in. I'm like, totally. You know? And I wouldn't always do that, but, like, do... Would depend on the tenant because sometimes, you know, tenant modifications might not be good. But you have to build that trust with them and know that it's gonna be okay. But, yeah, I mean, that is, like, perfect.

Mike DeHaan: [4:05] Yeah. One... Yeah. Well, it depends on what it is. It's minor. Someone's like, hey. Can I, you know, blow out this wall? Yeah. The master bedroom. Yeah. Absolutely. Let them do that. Yeah. But if it's something like, hey. This light fixture really sucks. Do you mind if I install, like, a new light? It's like, what's the worst that's gonna happen? They're gonna, you know, maybe damage your ceiling a little bit, and you're gonna have to get a new light fixture again. So what? It's gonna cost you, you know, $100 to have to do that on your own time afterwards and makes them happy and keeps them there for a period of time? Leave it alone. It really doesn't matter.

Dan Austin: [4:38] Speaking of we're speaking of tenants, like, so we just kind of officially... We've had the contract for a six unit for a while, but we just officially... I did the final walkthrough. Great property. Like, was not expecting it to be that great.

Mike DeHaan: [4:52] Which is never said by you ever. I know. When when you say that, it's really good. Because I'm always like, this property is awesome. And then you're like, cool. I'm good with it. And then we buy it, and you walk into it for the first time after we've paid our money. You're like, what the hell, bro?

Dan Austin: [5:04] Well, here's here's how here's how it it checks some of my boxes. Right? The exterior is actually good condition. Newer roofs. Right? The exterior... Like, the the curb appeal doesn't look that bad. It's somewhat modern. It was probably built in, my guess, the seventies or eighties. So things are... Construction's more standardized. All the units are standardized, and they are functionally built. It wasn't built and hacked together over a hundred years. Right? This is like a true nice multifamily. And, they need carpet and paint. They don't look that great on the inside, but it's nothing that can't be done quickly and easily. And it's like rinse and repeat. When you bring in a contractor, it's like, yep. Remember that unit? We're doing the exact same thing here, and it's all fits the same material packages. So even if it was in worse shape, I'd be happy with it. But it hits it hits some of those things of ease of management, ease of construction if we have to do anything. But, yeah, great unit. But speaking of tenants, so kinda became aware to us recently that all of the tenants are section eight. Does that scare you?

Mike DeHaan: [6:05] Uh-oh. Uh-oh. So that's a bad word. We don't we don't want poor people in our properties. We wanna make things, you know, extremely nice so we can inflate the market. Right. And, like, you know, spend a bunch of money to try and squeeze out a little bit more cash flow. But at least there'll be people that can afford exorbitant rents.

Dan Austin: [6:21] Right. And and so when I walked it, other... Like, one tenant was kinda grumpy because she didn't get the notification because the landlord didn't do it properly. He text them. He's an old guy. And he's like, oh, whoops. It said text didn't go through. I'm like, yeah. They're probably upset we're knocking on their door. Right? Yeah. But other than that, like, really, just really sweet tenants. I was like, hey. Is there anything wrong in your unit? I asked one of the one of the tenants. She had been... She lived there twenty years, and she took me to the bathroom sink, and there was, like, a chip out of the the porcelain in the sink. I was like, okay. We'll fix that if that's what bothers you. Right? But everything else is functional. Very very nice people. Like, I hope you're a good landlord. I'm like, yeah. We're we're good. Trust me. Yeah. But the other thing, like, people... Like, section eight, it doesn't mean that they're bad people or bad tenants. It... Be quite honest, several of the tenants were immigrants to The US, and they're older. Right? And so, like, yeah, they just don't have the same opportunity as everybody else, and they're low income, but they're taking care of their unit just like they would, if it... They owned it. Right?

Dan Austin: [7:20] But the other thing about that is is that's government money. Right? You're securing your rent from these tenants. And if they're good tenants taking care of your property, they don't wanna move. And for us, as far as rent increases go, yeah, we'll have to jump through some hoops, but we can at least work with the local housing authority and say, hey. Market rents are here. We know we're below it by this much. What can we do to keep your tenants in place and also increase the rents on this? Because we don't wanna displace the tenants. Like, that's not our game. Like, generally speaking, if we can, we don't wanna displace tenants because Yeah. If they're good long standing tenants, a, it just feels unethical to just say, get out of here so we can make $200 more a month. That that doesn't feel good to me. And that's the problem. Landlords get kind of dinged with that. The second thing is is it costs money to to move them. And if you don't need to do that, like, let's find a happy medium on on price. Like, we don't need to be maxed out on value and put quartz countertops in here, which we could, and we have on units, but it was on units we weren't displacing people, and we knew we had a lot of room to grow.

Mike DeHaan: [8:25] Yeah. Yeah. I always appreciate you bringing that up because I think that's one of the biggest misconceptions that there's... A lot of people have about investors in general is that we're just trying to buy things, gentrify them, max them out, and sell them, which, you know, really a landlord's job is to provide housing for people. You know? And that, you know, a lot of the people that need housing are typically the people that can't afford to buy houses. I know it's changed a lot over the recent years just with how real estate has gone up so much and most people can't afford to buy houses. But, you know, at its core, you are providing a service for people that are in a position in their life where they need a safe place to live. Probably doesn't need to be perfect. You know, it doesn't need to be somewhere that you would live as the owner. But if it's what they want and what they're comfortable with and it's safe and it, you know, checks the boxes of being a habitable living area, let it go. Right? And I think people fall into that trap because they buy really poor deals. Right? So the only way that they feel like they can make a return on their investment is if they turn it into an a class property and they really jack up the rents.

Mike DeHaan: [9:28] But if you're marketing for your own deals, you're doing your own negotiations, you're not competing with all the idiots on the market, and you're buying at a good price, then you don't have to go down that same route. Absolutely. Can literally buy this property and do very little to it. You know, we can go to, the city and say like, hey. You know, we just bought this property. There's people that live here. You know, the rents needed... Can be increased a little bit. Like, what do guys think about this? And the rent... The city will subsidize that difference. And we'll make more money, and those people, probably all of them will never leave. And we will just collect checks forever.

Dan Austin: [10:02] Yep. Yeah. And so the pro... The the process, like, I'm envisioning how this will work with this once we close on it, what we typically do, especially in these multifamily situations, is we go... So we've walked and we've done our light inspection. It... It's passed. Then we go back to the tenants, and we say, is there anything in your unit that you would like to have changed or upgraded that's not working? Obviously, that doesn't mean we're gonna completely go put them in a hotel and completely blow out their unit, make it nice for them because that just doesn't make sense. But, hey, if a tenant says, hey, my faucet drips weird. Perfect. That's on the list. Hey, would it be crazy to put new carpet in my bedroom because it's trashed? Well, if you're okay with that, you know, that doesn't... That cost us a few $100. Yeah. Let's do that. You know? And so we're gonna fix the things that are nagging them that they would like to have done that the old landlord wasn't doing. And then make the outside. Give a... You know, paint the outside so it looks a little bit better. Maybe add some lighting outside, whatever it takes to have some curb appeal so they can be proud. Like, that's where I live. I live in the...

Dan Austin: [11:00] In in this place here. It's maybe not the nicest place, but it's well taken care of and well maintained. Just like anybody with their home. Like I know. So if we can do that, the tenants are initially gonna say, these guys take care of this for us. So they're going to take care of it for us as well. And in that process, they feel a little bit better if they end up having to come out of pocket on anything for rent. And the city and this... The housing authority understands that we are trying to do right by them, and they're okay with providing a larger subsidy to them. It's a win win for everybody. Because if those tenants move to another unit outside of our area because we displace them, they're still gonna have to pay market rents. They're still in section eight. The city still has to subsidize them. Right? So let's try to find a win win win for everybody.

Mike DeHaan: [11:42] Yeah. Yeah. And, I mean, I would say it's a fine line because we've also dealt with the tenants where you're going, and they're like, oh, I want to do all this, you know, unnecessary work for this property just because this is the standard that I want. But it's more, what are the things that need to be fixed? Are there any, like, minor upgrades you can do that will make their quality of life better? And, honestly, it's like being a parent. Right?

Dan Austin: [12:04] Yeah.

Mike DeHaan: [12:04] You gotta be kind of firm but fair with what they're asking. And if they ask for something silly, you can say, like, no. We're not doing that. But if they ask for something that, you know, you're like, yeah. That seems perfectly reasonable. Don't fret. Yeah. You know? The thousand bucks, couple thousand bucks. If you're buying properties like this, you can probably afford it. Be honest with yourself. Feel like it'll deoptimize reserves. So what? You know, you're gonna get it back when they stay there for the next year because, you know, you got them the new dishwasher that wasn't working or whatever. You know, just just, you know, you gotta think big picture with these things. And at the end of it, if you're buying well, you know, you don't have to do anything crazy to make really, really good returns on your money.

Dan Austin: [12:44] Exactly. You know? Gotta buy right, which we did on this one.

Mike DeHaan: [12:47] Yeah. Yeah. We did very well. And, you know, and that didn't just sort of come around. I mean, this guy actually told us to kick rocks several times over the past couple of years. Mhmm. You know, he initially called... Actually, I know if he called us or if we reached out to him via a cold call. And, you know, I had a number of good conversations with him over the past couple of years. And several times he'd be like, I'm not interested. Or he would say like, well, what we're not gonna do right now. Was like, no. I don't wanna do that. And we'll just keep kicking it down the lane. And then we we followed up periodically. We kept going. Sure enough. Now he's... It's been a terrible winter up here in Spokane. It's been gray. This dude's been down in Phoenix just enjoying himself. And he's like man. Yeah. He's got tan. He's like, I don't wanna deal with this at all anymore. Let's just sell this thing. And sure enough, he came up. I believe this is the only time he's coming up is to sell his property. He's headed back down to Phoenix. And he's like, I don't wanna deal with it anymore. You know? And there's a few things that need to be fixed. He knows that. He doesn't wanna displace the tenants. He has an attachment to them.

Mike DeHaan: [13:51] They've been there a long time. And he's basically been like, cool. I'll sell at a discount to you guys directly to you, not on the market, and let's let it go.

Dan Austin: [13:59] Because a, he trusts us over those those couple of years. We built rapport with him, and he's like, okay. These are these are... This is a legit person. I've built... Like, I trust them so that if, in fact, I do wanna sell and I wanna make it easy and fast, which he's realized he wants to do, that they will close. Yep. That's it. Simple.

Mike DeHaan: [14:19] Yep. Right? That's all it takes.

Dan Austin: [14:20] That's all it takes. Yep.

Mike DeHaan: [14:22] Yeah. Especially with a corporate... I say corporate. With an absentee owner of, a larger property that, you know, is gonna be a savvy ish investor, you'd be He knows what it's worth.

Dan Austin: [14:31] He's knows what it's He told us that. Right? He told us, hey. I know it's worth more than that, but I understand the situation and that you guys that you guys buying it the way you are, I have to give up some of my profit, some of my equity. Mhmm. He understood that the whole time, and we talked through that with him. Mhmm.

Mike DeHaan: [14:47] Yeah. And when you have someone like that, you would be amazed at how far you can get just by having intent over an extended period of time. Totally. He just wants to know he's legit. I'm sure he's been around other investors that are super flaky and do all this nonsense or come in for five seconds and then never heard from him again. And, sure, it's a lot of work to be following up with, someone for years. Right? It's a lot of patience, but we are now walking into several $100,000 worth of equity and a property that will cash flow us for the next, you know our long run. Really. Yeah. Foreseeable future.

Dan Austin: [15:21] Yep. And the interesting thing about this is maybe we can pivot after this into our educational topic today, which is the lead source. Because when you drive by this thing, it doesn't look like a distressed property. And in fact, it's not distressed at all. Right? You said we may have cold called him off an absentee list or maybe he got a mailer of ours. I can't... Like you said, I can't remember that. But driving through the neighborhood, there's definitely some some great some great properties that look like they're in distress. But, the way we marketed to him versus what we see a lot of people coaching and teaching now, I think the environment has changed a little bit on how you find some of these deals. Would you agree?

Mike DeHaan: [15:59] I do. I agree very much so. And that's what digs into our topic for the second half of the show, which is, in my mind, the extreme boomer version of marketing for real estate. We just did a video talking about boomer real estate, and I'm just gonna ride with this, I think, for the next few episodes. But it is driving for dollars. And this question has come up several times in our instant investor program on what does driving for dollars look like. You hear a lot of people talk about it, and I wanna talk about my opinions for it, how it can work, how it can be a waste of time. You know, just because it's the it's the boomer version doesn't mean it's bad. Just understand that it's very limited in what you're actually gonna be able to get from So really quick, we're gonna talk about our group coaching program, the instant investor program, and we'll be right back to talk about some driving for dollars. Hey, guys. I wanted to take a second to talk to you about our instant investor program. The instant investor program is our group coaching program, and it is an eight week program with the goal being to have you talking to motivated sellers within the first two weeks. Believe it or not, you don't have to be the person that's out there overpaying for investment properties and competing with everybody else on the MLS. You also don't have to be one of those investors that flushes thousands of dollars down the toilet on ineffective marketing methods. To talk to motivated sellers on a regular basis, all you need is an effective marketing system, and we will give you the system that we have been using for the last two years, as well as a weekly call where you can sit in with us and other investors and just be a part of a group discussion while everyone works to optimize and grow their businesses.

Mike DeHaan: [17:37] At the end of the day, our goal is to create a like minded community of people who not only are trying to grow as real estate investors, but as people and as business owners so they can go and take the knowledge they learn from us and use that to change their lives just like Dan and I have been able to do. So the question I have for you is, do you really wanna keep sort of standing by and waiting for these opportunities to land in your lap, or do you wanna get started right now? And if you're ready to jump in and start changing your life for the better, go to instantinvestorprogram.com and book a call with me, and we can hop on a call and see if the program's right for you. Alright. So really quick before I dive into the, driving for dollars, I just looked up that deal we were talking about, and it was indeed a cold call by our man, Ricardo, getting after on the phones. Yeah. He... It came into the system. He said it was years. Let me exaggerate a little bit, but it was a full year because it came into our system on May twenty fifth twenty of twenty one, 2021. So, about a full year till we got it starting around because now it's April 2022. So it's been a long time coming.

Dan Austin: [18:44] Was that a absentee... Probably corporate owned if it was Yeah.

Mike DeHaan: [18:48] So, we have we have, no. It's it's individually owned, absentee owned, cold call just off of the giant list that we run. And here's the craziest thing too is I guarantee you he's received calls from other people. Everyone calls Oh, yeah. These days. Yep. You know? So I guarantee you he's received a lot of calls, but we're the ones that snagged.

Dan Austin: [19:05] When we we

Mike DeHaan: [19:06] grabbed the bag, found the treasure. So I wish I could see easier how many contacts we had. That would be an interesting thing to see. But just scrolling through our notes, it's a lot. Probably at least 30 outreaches. So

Dan Austin: [19:20] There you go.

Mike DeHaan: [19:20] Anyway, driving $4. This is something that has been asked about several times in the instant investor program. It is a very common thing for people to plug on social media as, like, the no cost way that you could start wholesaling real estate. Right.

Dan Austin: [19:36] Yeah. You just need a car and a cell phone.

Mike DeHaan: [19:39] Yeah. And you just drive around and you find that crappy property, and then you go and you find their phone number somehow on the Magic Space Internet machine, and you call them and you say, hey. I see that your property is looking pretty rough from the road. I wasn't creeping in your neighborhood at all. I just happened to be going through there to my friend's house. Would you be interested in selling me that property for a massive discount? And they say, f you. Never talk to me again. Yeah. Well, that's the real estate.

Dan Austin: [20:07] What I would I would I would say in theory, and this didn't used to work, and we've paid for D4D guys to do it for us, like college kids and stuff. The idea being is... And there are several app services out there now that I'm sure pitch D4D because that's their job. Right? You can put, like, DealMachine's one of them. Other... There's the d four d app. Right? I can't I can't remember all their names. But

Mike DeHaan: [20:27] Yeah. Well... Yeah. Well... Yeah. So DealMachine's a big one. Guess really quick. We didn't touch on driving for dollars even is. Driving for dollars, you drive around, you see a crappy property, and you say that person didn't take out the property. They'd probably just sell it at a distressed price. And then

Dan Austin: [20:42] you The idea is is you're building a list, and that's why you would have an app. Right? Because usually those apps on there will tell you the owner, and then some of them can pay... You can pay for skip tracing directly through that app so you can get their phone number, or you can just get their address and mail. So what you're trying to do is build a list without having to, I guess, pay for PropStream or any other other list type data source, which is not that much money. But the idea is is you could drive around and visually see that that property is in distress and see if it's owner occupied or if it's, like, non owner occupied, absentee type owner, vacant, all that sort of stuff. And so now you might have a list. So say you spend a week driving around and you build a targeted list of 400 sellers, potential leads, I should say rather. And then you can do door knock... You can door knock them. You can cold call them. You can text them. You can mail them. And that's kinda the idea of, like, no money into this. But, really, what what we're trying to say here is is that why would you spend that time these days when there's so many other ways to do this?

Mike DeHaan: [21:42] Yeah. Any... And, you know, it saves no money. It requires gas. We're currently sitting on gas being $5 a gallon. Honestly, the cost per deal is probably gonna be higher than if you just send a batch of mail.

Dan Austin: [21:52] No shit. Yeah. But the most important time... Thing about it is too is, like, there there is a time expense with it for the quality of what you're getting out of it. And the cost may not be that much cheaper because, like, you know, what is what is a PropStream subscription?

Mike DeHaan: [22:10] So, mean, for basic level, $200 a month for... But most people can get deals from that.

Dan Austin: [22:15] Deal machine is, like, 99 a month or what? You

Mike DeHaan: [22:18] said

Dan Austin: [22:18] So, 99 a I mean, what I'm talking here 300.

Mike DeHaan: [22:20] Yeah. You got $300 a month. And then you gotta, you know, do the time to drive around, and then you gotta skip trace those people, which will have a cost, and you gotta send them letters. I think I think at its core, what you mentioned before, Dan, is key is it's ideal for building a list if that's what you wanna do. But what that real estate will need to look like is you take that driving for dollars list that you build, and you stack it against other larger lists that you pull. Right? So absentee owners, people that have bankruptcies, things like that, things that you can publicly pull. And this is all stuff we sort of go over in our our instant investor program that you can pull off a PropStream or other list providers. You stack them together and you can see, oh, these people have a visually distressed property and they have a recorded financial distress. I should probably mark to them a little bit heavier than just like a regular absentee owner. But the funny thing is, and this is one of the reasons I hate driving for dollars, is honestly, these days, most people that have a visibly distressed property, I can almost guarantee you that they have something going on in a publicly restored... Recorded setting that is gonna be some kind of distress. Right? Totally. You know, like, especially right now with how hot real estate is, if people...

Mike DeHaan: [23:31] You know, if they have... If they're they're vying for bankruptcy, their house probably looks like shit. Let's be honest. If they have liens against them, they're probably taking care of their house. You know? And there are definitely, like, ways... Like, like, deals that can probably be found driving for dollars. Are actually no new ways. You know? I mean, I guarantee there is, but now you're playing a lottery game. And in my mind, driving for dollars is an easy, not scary, passive thing that people can do, right, to feel like they are creating an opportunity for themself. When really the things that... Well, the thing that will get you closer to your next deal is talking to people.

Dan Austin: [24:09] Right. Well, and what's the point what's the point of spending all that time driving around when you're just gonna mail them or cold call them anyways? Anyway. Yeah. And the team is likely already there. There's just... It just doesn't make make sense. And one thing that I would add that is pro driving for dollars, and I would say it's maybe a hybrid. So if you're driving around and you do see, like, a distressed property that looks distressed, like, go and door knock them. Like, so... Like, Thatch Nguyen, I love this guy. He always talks about door knocking, and he still does videos of himself door knocking. I think that's awesome. And I do think that if that's what you wanna do, like if if you if you have the guts to door knock, I think you're going to be way... It's gonna be way more productive time than just collecting leads to mail, honestly. But one of my other, like, favorite ways to do this is you... Like, remember, we were down at one of our Airbnb's on a weekend. I can't remember what we were doing. We're dropping something off or whatever, driving around, checking properties out. And the neighbor next to us is a rental property, and the owner was out there. Mhmm. Hey. How's it going? Hey. We're we're we're the landlords over here.

Dan Austin: [25:11] We're landlords over This guy owns 23 properties or something like that in the neighborhood. That Yeah. Right there, that conversation is valuable. We just swapped business cards so we know, hey. Told the guy, hey. If you ever wanna sell, call us. Like, we love buying houses. We, take care of and do all this sort of stuff. And so I've always found, like, when you're renovating a property, like, if you have one under contract, that's the time to be out in that nave... That specific neighborhood you're in looking at distressed properties in your neighbor. Go door knock them. Go be friendly with the neighbors. I know more people that have gotten deals from talking to the neighbors of their rental properties or their personal residence than, than people driving for dollars just doing it, just driving around collecting lists.

Mike DeHaan: [25:49] I mean, you... You've done it several times.

Dan Austin: [25:51] Right. I guess I have. I forgot that I've done it personally.

Mike DeHaan: [25:54] Yeah. Right? And and and, well, that goes back to what I saying before. You're talking to people. You know, you are creating those opportunities. You are you are instigating some kind of, you know, rapport building transaction. Right? Like like, you're you're you're getting things going forward that way because... Just because the house sucks doesn't mean they wanna sell to you. However, if they know that you know the house sucks and they know who you are and they know that you have an interest face to face more than just, like, over the phone, they're gonna be much more likely to do business. Now obviously, know your neighborhood. If you're going and doing this through the hood, don't be an idiot. So like Thatch, right? He doesn't... Didn't he live in like Bellevue? It's like Calvin Dorno.

Dan Austin: [26:30] Not so nice.

Mike DeHaan: [26:30] Yeah. But you can like find find a Microsoft employee whose ex wife like doesn't want to take care of the house anymore. Right. That's fine. Right.

Dan Austin: [26:37] Well, and and his business model is a little different because he's doing a lot of, like, ADU conversions and apartment building type multi... Like, townhomes and stuff. So door knocking a million dollar home for him, even though in his mind is actually valued at 3,000,000 if he does what he wants to do, is a totally different story. Right? But I still believe, like, that foundation, if you're going to do it, like, that is... That's actually a more productive way to do it because a, you're learning how to talk to people, like literally talk to people. And a lot of folks are scared of that. And b, especially if you're targeting an area you're already investing in, I do think that's valuable. But it's not something I'm gonna intentionally do every week and drive around all day and look for these opportunities because I don't think that is worth your time at all.

Mike DeHaan: [27:22] Yeah. Yeah. I mean, you know, it's like it's like every other sort of passive activity. You know, it's like it's like the equivalent of my idea of looking for a deal is sitting on Zillow and just cruising through the MLS and looking. Right? Are absolutely deals on Zillow every single day. But if I find one a week that is way less valuable than if I send a bunch of mail, I make a bunch of cold calls, you know, or I talk to... I even talk to a bunch of other investors and realtors, and I'm now analyzing 10 deals a week instead of that one. I'm having 10 conversations instead of one. That's what will get you moving forward. You know? And I I think as well, the issue with driving for dollars these days is, you know, my kinda call, like, the the boomer version is before real estate kind of exploded or started to explode, you could probably do really well that way because... I mean, even, like, 2016, 2017, if you had kind of a crappy property, you couldn't sell it. Now you can sell a crappy property on the market in five seconds. It's like, sure. You might not get retail, but they're gonna get more retail than you wanna pay for as an investor. Right. You know? Yeah. Let's be honest.

Dan Austin: [28:26] I I mean, I was still trying to make offers on deals on the MLS, and you were able to actually get pretty good deals in 2018. But Oh, yeah. If if you're trying to build a business on gurus or coaching from that that their heyday was, like, 2016. That's probably not... You gotta adapt. You gotta you gotta adapt, but you gotta grow.

Mike DeHaan: [28:47] Yeah. Even earlier than that. I mean, a lot of the Giant Reddolls people that we know, you know, like like people on biggerpox talk about this or, other you people. I don't know how to put their names on blast. You know who you are. You posted Instagram stories right now about this. But, you know, they're our things, like, even before that, 1314, like, when we were selling the recovery. And then '16 was when it started to get interesting. But, I mean, one of our local, I guess, ex competitors didn't really exist anymore. At one point, they had entire teams of guys that were out there driving for dollars and door knocking, and that's how they did all of their business.

Dan Austin: [29:19] Right. Yeah. And it may and it may... It did. You're right. It made sense. It was a totally different market environment, and now it's not it's not the same. In three years from now, maybe it's good again. I don't know. Mhmm. But it's not good right now.

Mike DeHaan: [29:30] Yeah. I know. And and with that company that used to do that, where are they now?

Dan Austin: [29:34] It's a one man show. Yeah. It's a

Mike DeHaan: [29:35] one man show. You know, he he nixed everyone, and he's he's operating as a solar operator now, you know, running a leadership, and he's doing what everybody else is doing that's doing deals, which is sending mail, having conversations, picking up the phone, you know, doing the hard part. And, I mean, I I think that that's just such a key thing. And even if you are marketing, you know, like we do, where you're sending... You're you're just doing all the all the practices. Right? That talking to people is so key. And So if you're if you're, like...

Dan Austin: [30:04] Let me ask you this. So if if you're a new investor and, like, you don't have any money or you have a very little bit of money, like, what are you gonna do? Hey, man. All I all I have is a car and a cell phone. Like, that's why I'm trying to do driving for dollars. Like, what else do you do? If we're saying that's probably not the best use of your time, what is the best use of your time?

Mike DeHaan: [30:23] So, honestly, what I would say, if you... If you're serious about wanting to be an investor and you don't have any money, go work for an investor that's actually getting deals done and be their acquisitions manager. Because what you're gonna do is you're gonna get exposure to the investment process, and you're gonna learn the hard part about running a real estate investing business, which is having the acquisition conversation. Right. You know? And and if they're a legit company, you will probably make a lot of money. Yeah. Totally. And and, you know, and if you don't, like, start to make some decent money, then... You know? Or if they're not paying you what you need, then try to take down a deal yourself from them, from having the opportunities that they are finding, flip your own house. This is what our sales guy, James, just did. He just closed on a flip. I think his net after being said and done was, like, $38.

Dan Austin: [31:09] That's awesome. I mean, that's amazing.

Mike DeHaan: [31:11] You know? And it was a deal that he bought from the business. He got paid a commission when he bought it. Right? He didn't quite have enough money to take it down. So, you know, he... But we trusted him. We've been working with him for a while. So we lent him the down payment. We ended up helping him get a loan. You sort of coach him through the whole renovation process. We helped him with the listing. He made $38. And now you know what? He... He's set up to go and do, you know, so many other investments. And, you know, I mean, if you wanted to go honestly start his own business, you could. You'd have to do all the systems and all that if you wanted to. But either way, has such a strong financial base now that is gonna set him up for the rest of his life if he's smart with it.

Dan Austin: [31:49] Absolutely.

Mike DeHaan: [31:49] And along that whole period of time, the last, I think, like, months he's been working for us now, he's gotten up to an aggressive clip where his pay is just growing and growing and growing as he is learning to have better conversations and close more deals himself. So now he's gonna have a high paying job. He's gonna have investable cash. That is where the opportunity comes from. Know? And there's so many people that are like, you know, I don't make any money. I want... I wanna become a real estate investor so I can change my life. No. Go and find real estate investors. Start to work with them. Find the people that are doing what you wanna be doing. You know, show them that you're worth it, and make your money... Like, build your base there, and then go and start investing. Like, it's a pay it's a pay to play business. Anyone says that you can just go and take pictures of shitty properties and send them letters, and you'll... And you're gonna make, you know, life changing money, They're lying to you, or they're basically... You know, you're basically just trying to win the lottery at that point, honestly. Yeah.

Dan Austin: [32:46] It's it's about having great intention. And that's what I love about our our acquisitions manager, James, is he didn't have any experience in real estate when he came to us. He wanted to be in real estate. He understood that's where wealth is built. And he came to us, which was massive intention to leave his career before that to come with us and look where he's grown. Just like you just said, look all that growth he's getting because that intention, that truly wanna be in real estate, not just saying, well, I just wanna own some rental properties, and I'll work at Applebee's during the day to pay for it. That's not gonna happen. Like, go take that massive intention if you truly wanna do it because, like, that is where wealth is built.

Mike DeHaan: [33:20] Yeah. For sure. And it and it wasn't easy. He's had his ups and downs. He's had great months. He's had terrible months. But he's built up to a level of consistency and competency now that it is just regular intervals of success. You know? And it is... It's it's just like everything in real estate. It is periods of extreme growth and success followed by kind of dead periods. Right? Right. And that's just that's just the business regardless of where you're at.

Dan Austin: [33:43] And the and the measure of wealth in in the context that we're talking about isn't just dollars and cents going into your bank account. It's the knowledge you're building so that you can scale the dollars and cents in your bank account.

Mike DeHaan: [33:53] Yeah. And that... And that's the most understated thing, and that's almost a good topic for another time is

Dan Austin: [33:57] Right.

Mike DeHaan: [33:58] You know, the best... This... Was super cheesy that all the all the gurus post on Instagram is like I know. The best investment you can make is in yourself. You know? And people are like, you're right. I'm going back to college. You're like, no.

Dan Austin: [34:08] You missed. No. You missed. Yeah. Exactly. I get my third degree.

Mike DeHaan: [34:12] Yeah. Right. Oh, god.

Dan Austin: [34:14] Another another topic. So Yeah.

Mike DeHaan: [34:17] Alright. Well, I think that covers it. So I guess as a, summary, driving for dollars, kind of a waste of time if you're... If that's your sole purpose, it's not gonna be the cheap, quick way to get rich. But if you're using it appropriately with the other kinds of marketing and data strategies that you can easily use, that anybody can go and do, you know, that we teach in our our instant investor program. It's a great way to sort of give you a little bit of an upper edge, but it's not gonna be the magic button. I'm sorry. And I wish people would stop acting like it was and stop selling it as a get rich quick scheme because it's just a giant waste of time. Let's be honest. So... Well, it's a giant waste of time with that mindset. Agreed. Alright, guys. Thanks for listening. You should go and, check out our our social media at collecting keys podcast on Instagram. We got a good clip of stuff coming through there now with different highlights and content I'm pretty excited about. You can follow us individually on Instagram. I'm at Mike underscore invest. Dan is at investor man Dan. You should go and check out our group coaching program, the instant investor program. It is a community of nationwide investors that we are teaching to build a business exactly like our own. We go through all of the marketing stuff that we talked about, go through how we build our system, how we do sales processes. It's a DIY course with a weekly group call with us where we can sort of help keep you accountable and help sort of move you along as you're going through the ups and downs of this business. And then besides that, we got a lot of stuff going on. Got a new new YouTube channel coming out.

Mike DeHaan: [35:48] It's a little bit different from the podcast. It's called the Mike and Dan Show, and it is gonna be more of a visual version of this stuff. We're gonna get into the weeds about other stuff in real estate, more specifics about deals that we've done. So can you go and, keep eyes open for that. It hasn't officially launched yet. May launch by the time this comes out, so be a couple weeks, but we'll see. And then besides that, anything to wrap up, Dan?

Dan Austin: [36:10] No. I'm good. I'll sign us out. This is investor man Dan with Magic Mike. Mad Come come back come back next week. We'll be performing every Wednesday.

Mike DeHaan: [36:20] Every Wednesday. Oh, man. That that was almost not a bad outro. Almost. We're getting there. Alright. Thanks, everybody. See you next week.

Dan Austin: [36:26] See you.

Speaker 2: [36:28] Thanks for listening. Please leave us a review on iTunes or wherever you get your podcasts, and check us out at collectingkeyspodcast.com for tips and guides on starting your own real estate investment and wholesaling business.