Why Real Estate Investors Should Ignore Market Cycles

Mike DeHaan: [0:00] Really quick before the show starts, in case you haven't heard, we have a growing community of investors called the scale community, which is full of people learning to make massive income with their real estate businesses, so they can reach financial freedom a little bit faster than building a rental portfolio solely over time, because honestly, that takes decades and who has time for that. So if you're an investor who is serious about growing and creating a scalable business without needing to be a slave to it twenty four seven, then go to collectingkeys.com/scale and apply. And if you're a good fit, we would love to have you join the community. So again, collectingkeys.com/scale, go ahead and apply, and see if you're a good fit.

Dan Austin: [0:38] Be a real estate entrepreneur, not just a real estate investor because those are two different people.

Mike DeHaan: [0:43] What is going on guys? Welcome to today's episode of the collecting keys real estate investing podcast. Day is Wednesday. It's the off market operator show. And this is your first time here. This is the show where you can make massive income and not just passive income with your real estate investing business. I am Mike DeHaan here with my cohost, Dan Austin and Dylan Cook. Hey. And on these Wednesday shows, we talk about real estate news, what our businesses are looking like, things that are currently working in our markets, in our businesses, everything else, and kinda whatever else we feel like. So welcome to today's show. Right on. So I think one of the big pieces of news that we have for today just regarding real estate, and especially those of us that have been holding things for the long term. So unless you've been living under a rock, we had a massive real estate spike in 2021. And then 2022 interest rates are going up '23. Everyone has been saying we are going to have a large crash for me, I guess really since I started doing real estate in like 2018, everyone said it was too late.

Dan Austin: [1:48] We've been talking about it for a while. Yeah.

Mike DeHaan: [1:49] Yeah. But this article you sent over Dylan for the show, I guess it's a link to tweet from Reventure is showing that inflation adjusted now that real estate is at an all time high that it's ever been. And I mean, it's a kind of interesting article going into that because, like, the whole thing with real estate, right, is it supposed to be like, supports you going through inflation and everything like that? And this, I guess, absolutely just shows that that's true. Right? Give me like your quick breakdown of what you got out of this.

Dylan Koch: [2:23] So I mean, this is from the the Robert Schiller index, which is kind of like the gold standard for most economists and what they use for like their inflation data. And basically from 1890 to like the 2000, it's one hundred and thirty year average of all around like fall to trend line essentially. And once we got to 2000, it spiked up. Now it's right before all the way to the great financial crisis of two thousand and six. Crashed all the way down, obviously, crisis, and then it steadily been creeping back up. And recently, we've passed even what it was pre GFC, right? So now the doom and gloom out there is like, you know, that we're past this, we're gonna have this basically freefall down to the historical average, which would mean that prices fall exponentially quickly.

Mike DeHaan: [3:08] Yeah. People always say like, well, store guts have that happen one time.

Dan Austin: [3:12] Yeah. I was gonna add to that, like, what I would be curious, and I don't know this. What happened in 2000? We obviously know what happened in 2006. And then 2010, we know what happened. We can talk about in a minute. But what happened in 2000 that would cause spike? Because it's a noticeable spike inflation adjusted, a huge run up in the market.

Dylan Koch: [3:28] So I think it's kind of the the same thing that just caused all the way up to 2006, which they lowered interest rates down to near zero. That's when they had the the tech blow up like everyone had stocks on tight end companies, the dot com bubble. And so they went to like a moderate session, everyone's worried about y two ks and all this shit. And they so

Dan Austin: [3:45] they took rates back down to zero. They print money?

Dylan Koch: [3:48] No, no, they didn't do start doing QE till 2008. But but still taking rates to zero. But then these were they were doing like the CDOs like they're they're all packaging these junk bonds together and trying to

Dan Austin: [3:59] sell them off as more direct securities. That was kind of like the run up to there. That was the first time they did. So they introduced a completely new product to the marketplace.

Dylan Koch: [4:07] Correct. Which yeah. They would pack up it's basically like packing up dog shit and presenting as a grade.

Dan Austin: [4:11] Right. Because you got a bunch of dog shit. Because you have more dog shit. It's not just dog shit.

Mike DeHaan: [4:16] You know what? The thing is, though, whenever it comes to stuff like this, people always look at these macro things that were going on and try to use those to explain consumer patterns, which is really what drives the market. And the thing is, if you look at honestly, I think that one of the reasons that 2000 to 2006, thousand and eight, the market really took off. You can talk about the way that they're doing loans, like all sorts of stuff. Sure. The only reason that was possible is because that was like the rise of the internet, right, on like a modern level. And all of a sudden, the process of buying homes, of getting loans, of like going through that whole process was significantly easier. And so it just expanded the buyer pool an incredible amount. And so the demand increased incredibly. Like, I think that you could have gone back in time and the feds and the way they're doing mortgage could have been exactly the freaking same. And the same thing would have happened just because all of a sudden, more people are able to enter the marketplace. Right?

Dylan Koch: [5:08] With that too, Mike, the one thing I'll add flavor to that is there's a common saying in, like, the economic circles that demographics is destiny. And twenty years ago, the most people who were buying homes are like some of the, I guess, younger baby boomers, like the larger generation. You said more people available to buy housing at that point in

Mike DeHaan: [5:24] time. Exactly.

Dan Austin: [5:25] For sure. Yeah. I mean, if you look at 1920 to 1940 in this graph, it kinda sucked to live in The United States then, so it makes sense.

Dylan Koch: [5:32] We had the roaring twenties, the depression, World War two

Dan Austin: [5:36] Yeah.

Dylan Koch: [5:36] And then you came out of that after like the 1945 or whatever.

Dan Austin: [5:39] You had World War one on the shoulders going into it, then World War two coming out, which is kind of like the greatest generation, all that sort of stuff. And then it just kinda we kinda rode it out for a while. And then you introduce all these new products and all these new things like the Internet in 2000 going up. And so to me, I look at these things and I say, yeah. But what are the circumstances that have changed? Like, we printed 80% of the world's money in COVID between, like, I don't know, 2020 and 2022. Of course, what happened? Shit got crazy. And you see that kind of spike up there a little bit where it goes really fast, but

Mike DeHaan: [6:14] Yeah.

Dylan Koch: [6:15] Yeah. And then it would track with m two. Like, that's what a lot of people these columns covers like the m two, which is like the overall money supply. If you just like would throw that on a graph like with this with like home prices and interest rates, it's like almost a one to one correlation.

Mike DeHaan: [6:28] Yeah. And that makes sense. But I also too, I would say going back to like 2020 and 2021 and 2022, and that rise, people look at the printing money, there was different things. Look at the smaller microeconomic individual behavior that's gonna be happening at the same time. And this is in my opinion, what really drives that is you have a bunch of us that are millennials. And for all the people that didn't have shit, there's also a bunch of us that kinda figured it out. And like went to school, have been making money since like 2010, living frugally. Right? And then all of a sudden, we went into COVID. And you had a bunch of people that had like vacations or other shit they're gonna do with like, well, I'm not spending money on that anymore. I might as well buy a frickin house. And rates are low. And so a ton of people took all their savings and all their expendable income they're planning to use on other shit or they would have in the past, and put that into a home. Right? And that led to the market taking off. And now it's led to a ton of us adding a ton to our net worth because the properties that we bought were worth 10% more the month after we bought them. Right?

Dan Austin: [7:32] And they are protected against inflation, Rex. They went up with with or values went up with inflation.

Mike DeHaan: [7:36] Exactly.

Dylan Koch: [7:37] But most of these are thirty years fixed at these things, not the five one three one arms that you're seeing in the 2,006, 2007 time.

Mike DeHaan: [7:45] Exactly. And so that was a ton of us that have a bunch of money. It created this huge wealth gap that exists. And so people always post things like this kind of trying to allude that there's going to be a market crash. The problem is is those of us that were the beneficiaries for the past five years, we're all sitting in a very good spot. Right? And we have the ability to buy up into another house. We have the ability to stay into a home that we already know we can afford. Right? So we've been here for a set period of time. A lot of us that have survived this period have learned to make money or have good careers. Right? It's made the haves and the have nots further apart than they've been probably, I don't know, ever maybe in The US.

Dylan Koch: [8:23] So I'm gonna rant a little bit. Yeah. There's something called the quintillion effect, which basically means it's the growing wealth divide between the haves and the have nots, and it's directly correlated to how much money that the government prints and spends, both at the treasury and at the fed. The reason is this being, one, if you're already on the assets, your assets are gonna go up in value. But two, if you have those assets, you are more lendable. Then the closer you are to the money printer, you can go borrow against your portfolio at 2%. Or somebody doesn't have any assets, they're getting terms at 70%. And those people know how to do it are gonna leverage 2% and make 910%. And so ever since even COVID or the GFC, they've called it a K shaped recovery, right? Where the 20% are going up into the right, but there's also the 80% are going down to the right. Right? So if anyone that wants to look that up, look up the cotillion effect on Google, and you'll see what I'm talking about.

Dan Austin: [9:14] Yeah. That's fascinating. I haven't heard that before.

Mike DeHaan: [9:16] Sure. But I guess what does that mean for the big picture? Like, I I would say that that doesn't mean that housing marketing is gonna crash because what's gonna happen is there's a bunch of us that have money. We're gonna stay in our houses. Also, there's a bunch of us that have this desire to build wealth, financial freedom, and all the other things. We're gonna buy more freaking houses.

Dylan Koch: [9:32] Well, real estate as a medium of investment vehicle has definitely gotten more popular over the what? The even five years, but ten, fifteen years.

Mike DeHaan: [9:39] Absolutely. Like the rise of bigger pockets. And I would say like the rise of like the recreational investor has never been bigger. Right? Like like so many people now that own like a couple homes, you know, as like a long term investment strategy. Like it used to be there was like landlords that owned a bunch. Right? Or like maybe you own like dirty landlords. Yeah, you owned like one property that you moved out of or your parents gave you but now you have sophisticated people that are high income earners that are like, I wanna own like three rental properties, but there's a lot of those people now.

Dylan Koch: [10:13] Yeah. There's a video out there by Ray Dalio. He's a billionaire hedge fund manager for Bridgewater Associates. It's called how the economic machine works. It's like a thirty minute video. But it's basically like the short term debt cycle and the long term debt cycle, and how they're intertwined on top of each other. And his thesis is that short term cycles take anywhere from five to ten years. These are like the normal business cycles that you see. But there is a long term debt cycle that lasts every eighty to one hundred years. And people are making the arguments that because our debt to GDP is above 120% higher than it's ever been, or worse, the fiscal side is spending, buying back all the mortgage backed securities that it has been. We said that we might be at the end of this long term debt cycle. Okay. So Mike, what does that mean? This is when you get the populism, The people like the haves versus the have nots. And does government try to come in and change policy to redirect that, I don't know, where it's going?

Dan Austin: [11:07] It's seemingly they continue to propose policies that would focus on the have nots. Correct. In the hidden agenda, the haves are always gonna get policy in their favor because they're the ones supporting the politicians in their roles. Right? So then it's like, is it lip service? Or do they they continue to print money, then this cycle keeps coming up? Like, you keep incentivizing certain areas of the economy, and then that's when you have this, like, excess cash that then gets invested in TVs and, whatever the fuck else people buy that aren't assets that don't go up with inflation. That's kind of the where you get that and possibly be at the end of your debt cycle.

Mike DeHaan: [11:43] Yeah.

Dan Austin: [11:43] Yeah. Because it just keeps growing. There's a breaking point where you can't take on more debt because the economy won't support it.

Dylan Koch: [11:50] How the government measures inflation nowadays is so different to how it used to. They started implementing something called hedonic adjustments. I forget what year it was. But basically, the concept is, if a car costs you $10,000 in 1980, but now that car has power steering and power windows, it could still cost $40,000 in today's dollars. But it's basically the same as spending $10,000 because it's a more efficient view. Mhmm. That doesn't make any sense to me.

Dan Austin: [12:15] Yeah. So they they adjust it.

Mike DeHaan: [12:16] It has like a lifetime value of it. Yeah. Alright. Like, it's funny. Because I always hear stuff like that about different debt cycles and things. And I think the thing that people tend to discount is the speed of information or the speed that people can transact. Right? This is another thing too where when you get into, like, securities and stocks and that sort of stuff, people always talk about like, oh, the stocks can go you know, stocks crash, things like that. The problem is it's so easy for people to trade now that it means nothing because there's, like, people in, you know, algorithms with a with a quonson sort of stuff that just go and watch for that, and they just buy it up again. They're just constantly propping up the market.

Dan Austin: [12:50] And that's what I would argue. There's no way to can't use data from nineteen twenties and forties to predict a graph that you're seeing today. Yeah. Like, can't because there's so many different variables now.

Mike DeHaan: [12:59] Yeah, there's so much automation.

Dylan Koch: [13:01] Yeah. You remember Silicon Valley Bank, Mike? Yeah. That was actually the thing. They're like, they were, the figureheads were surprised at how quickly people took money out of the account, because they can do it from their freaking phones instead of going into a bank branch.

Mike DeHaan: [13:13] Exactly.

Dan Austin: [13:13] People were texting each other, and then people were like, oh shit, let me hop into my app and pull money out real quick. It was so fast. And that's how fast the media cycle was too, in a twenty four hour media cycle as well. It's crazy.

Dylan Koch: [13:24] I think people discount. Like you said, that's how quickly information can spread in today's day and age.

Mike DeHaan: [13:29] Exactly. Well, and real estate's not the same too, because, you know, we have people that are have more access to cash so they can do a faster transaction. People are willing to buy properties sight unseen. They have the ability to do due diligence at a much faster rate. You have lenders now that are so accessible that will give you cash like loans so you can buy stuff in a one or two weeks. Whereas, if you went back a long time ago, and you had to do, like, all your loan docs and everything through paper, it would take a hell of a lot longer than it would now.

Dan Austin: [13:58] Yeah. I would I would also add that, like, I think your just ability to educate yourself. Right? You don't have to spend twenty five years becoming an expert in real estate. You can do it in YouTube in twenty five hours. And so, the ability to access that information gives people more confidence, and you kinda get like this community effect, right? You start seeing other people do it, and you're like, shit, I could do it if they can do it. And so then it just things just naturally speed up. And then people see you do it. And it just keeps going and going and going.

Dylan Koch: [14:22] That was literally like my startup real estate. I went to meet up and I talked to someone. I'm like, this guy's an idiot. And he was like, six properties.

Mike DeHaan: [14:29] Totally. That was why Dan and I just started to decided to start going off market because Sure. I got invited to, like, the local, like, cool kids club meetup from a local wholesaler who was just trying to find who the good buyers were. And I met the guy who was a big dog in town. I was like, are you fucking serious?

Dan Austin: [14:44] This guy can do it?

Mike DeHaan: [14:45] I was like, we can totally smoke this guy. Like, it doesn't make any sense. And so we did. You know, we came in and took over the market. It was great.

Dan Austin: [14:51] Yeah. And now he doesn't do it anymore.

Mike DeHaan: [14:53] Yeah. Now he's he's a junkie. That's another story. Yeah. I mean, I don't know. I just think that the direction things are going are are interesting with that because it discounts human behavior, I think, at at a level. Because most of those things are are put together by people that don't fundamentally think about human behavior or, like, the way that society works. They think about how, like, rich people work or, like, people that are really big picture thinkers, and that's not really what drives a lot of the economy.

Dan Austin: [15:21] Does it tie back to that conversation we just had, which is, like, because information flows so quickly that that movements, human movements can happen. And so a graph Yeah. And you're trying to predict you're trying to predict human behavior from a time that never had this type of ability to have human behavior in such a way for it to mobilize. I mean, you think of like Wall Street bets. Right? You can mobilize worldwide essentially a group of people that will completely shock the system. And now you're like, well, in 2006 this happened, you're like, yeah, cool, but that's not the same thing as '96, and 1986 is a different environment.

Dylan Koch: [15:52] Yeah. Yeah. You're starting to sound like an Austrian economist instead of a Kenisia economist. I don't know what the fuck that is, but

Mike DeHaan: [15:57] I don't even know what the fuck you're talking about, Dylan. Go back to school. Do whatever you're

Dan Austin: [16:00] so smart.

Mike DeHaan: [16:01] You're so smart.

Dylan Koch: [16:02] No. I just was nerd on this shit for a while. But basically, the difference is one's very quantifiable, and all they look at is data and let it be data driven. And one is like, the whole premise is human action. Humans are complex species, and you can't interpret what they are gonna do next.

Mike DeHaan: [16:17] I agree. Yo, If you don't follow me on Instagram, which is at mike underscore invests, by the way, then you might not know that we officially have a new mission as a brand, and that is to help 2,000 real estate investors build million dollar businesses. Obviously, to do that, we need to get in front of as many people as possible. So quick little ask to help us reach that goal. First, shoot me a follow on Instagram at Mike underscore invests. Second, follow collecting keys podcast on Instagram. That's at collecting keys podcast all written out. And third, every time the algorithm is kind enough to show you a post from either of us, share it on your story or in your post and tag us. If you do that, I'll DM you and we can have a little DM conversation about what is preventing you from having that million dollar business that everyone is seeking. And we can see if we can come up with a plan to help you make that massive income, not just passive income. So again, if you

Dan Austin: [17:12] see any of our posts, just go ahead, reshare them, tag us and let everyone know that you enjoy the content we produce. It will help us a ton, and then I'll be happy to help you as well. Because now which we could segue is like now with what's going on in the world, like, media as well can now, like, what engineer and adapt what humans instincts are or what they're doing?

Mike DeHaan: [17:35] Exactly. And this is my current conspiracy theory. We're talking about this before the show. And a conspiracy theory that I'm pretty adamant is true because of what we've seen with the content space, you know, both through the podcast as well as, like, social media, through talking to a lot of other people that try to produce this kind of, like, financial and business material. I thoroughly believe that all of these different platforms, you know, Instagram, Facebook, you know, I guess it's all meta. Right? But, you know, YouTube, that they are intentionally throttling access to, like, financial education or, like, things around financial freedom or building wealth or things like that that aren't just, like, pure, like, brain candy. And they say it's because the algorithm or, like, it's not exciting content, whatever. I'm pretty sure that they, like, have an AI or some part of their algorithm that looks at, like, the message and goes, yeah. We're not gonna shout to that many people because they are concerned about how it is affecting the workforce where all of a sudden you have all these people, and a lot of them too that are coming from these kind of companies, these large tech companies where they're like, man, made $400,000 last year.

Mike DeHaan: [18:41] You mean I I can go fucking move to Portugal instead of doing this shit? Right? They are worried about those people discovering and getting completely enamored with these things. Right? And so they're just making it harder for people to find it on a recurring basis. My thought with this is I have so many people that I know that have, like, very large volumes, like significantly larger than ours, hundreds of thousands of people on Instagram, you know, hundreds of thousands of downloads a month on their podcast. And all of a sudden, the only content that they produce that does well is the shit. Right? It's like the memes. It's like the jokes. It's like the the panoramics of the patio that they're work pretending to work on their computer for fucking brain candy. That stuff crushes. If they go and they post anything that's, like, analytical, that's actionable, that, like, actually, like, some sort of value, it doesn't get 50% of the views and engagement. Gets five or 10%. It just throttles it completely. And this has all happened in the last eight to nine months.

Dylan Koch: [19:40] Do think it's algorithm or bot driven or probably both, I guess?

Mike DeHaan: [19:43] Probably both. But it doesn't make any sense though. Because the other thing too that's very fascinating, and my wife and I were actually talking about this last night, is it's not even the engagement necessarily likes and comments and got that goes down. It's just the exposure.

Dan Austin: [19:56] Yeah. Less views.

Mike DeHaan: [19:58] Yeah. We'll produce content that's good, and it'll get, you know, like, it'll be something super actionable. It'll get, like, 70 likes, and it'll get a bunch of comments, but it'll get showed to, like, 600 people. And then Dan will post a meme of fucking Lady Gaga. Right? Do like that's just seriously. And it gets, like, 5,000,000 views.

Dan Austin: [20:14] I'm pretty freaking famous from that.

Mike DeHaan: [20:16] You know? And people are like, oh, this goes it's lady it's Lady Gaga, whatever.

Dan Austin: [20:19] In the comment section on that was awesome.

Mike DeHaan: [20:21] This is just nonsense. But the thing is it doesn't translate to anything else in the account. Right? But, like, there's even more, like, celebrity aside, I've had similar examples with just stupid stuff that I've posted. It doesn't mean anything or add value to anything, and it just gets shown to so many people.

Dylan Koch: [20:37] But now you guys are incentivized as the content creators to promote dog shit.

Dan Austin: [20:40] Yeah. Exactly. Yeah. Yeah. Yeah. I think maybe maybe people are educated up. They're like, I don't wanna learn more about this shit. Maybe real estate's not cool anymore.

Mike DeHaan: [20:49] I mean, that's definitely not cool. We know that everything's about buying a business, you know, and, you know, just

Dan Austin: [20:54] Even that. Like, you're right, though. Like, even generally in, business stuff, and, like, it's not as, like, prolific anymore. You know what is prolific? It's ads. There's a lot of ads. Many ads. So many ads.

Mike DeHaan: [21:05] But even then, like, the ads, or, like, the promoted content I get will be like, look at this. This is the one I got the other day. It was like, look at this little kid. He's, like, pushing like a plunger, and then, like, the fucking thing behind him, like, blows up. I'm like, why is that the promoted content? Right? That's not my algorithm. I don't follow things that show me that that Oh,

Dan Austin: [21:24] I know your algorithm.

Mike DeHaan: [21:25] Should be what I'm getting exposed to.

Dylan Koch: [21:26] I know your algorithm.

Mike DeHaan: [21:28] You know you know my algorithm? I know

Dylan Koch: [21:29] your algorithm.

Mike DeHaan: [21:29] I I know your algorithm, the angst of all the freaking shit you send me all the time.

Dan Austin: [21:32] Yeah. I think there's there's definitely something to be said. I do believe that social media in general, I don't know who, I do have a belief that TikTok has driven a lot of what's going on in American culture and American, like, social media because they literally, like, you do the research, they have something special. They basically have what Google had when Google's search engine was created. Like, their algorithm is so freaking good, and it's just so engaging and keeping people on their platform that it's really hard for anybody else to to get to that. And that, we know, being social engineered, or social engineering is happening with China on that app. Like, that's just known. Like, I think even Chinese people are like, yeah, that's what we do. Like, why wouldn't you? You know what I mean? It's like, duh. And so, I think there's some of that. Like, they're trying to chase that. But I also just think, like, we know more now. We're starting to see more where, like, we're finding out more that these apps are engineer trying to engineer socially what's going on in the world or in a country.

Dylan Koch: [22:27] You know what you guys should do, real quick? Because I know you're just finishing up your first flip that you, you know, you haven't done a flip in a while. You should post, like, before and afters because it's usually crush for us. Like, the before and afters has always been, like, a sexy real estate content. And compare that to some of your other stuff and

Dan Austin: [22:41] see what happens. It probably won't do well at all.

Mike DeHaan: [22:43] You know what you should do? You should post one that's just like the picture and see how it does. And then you should post one where you actually talk about how you did it at Better than It's Worse. We know that social media is influencing like that though because, I mean, literally yesterday, Mark Zuckerberg released their his little letter talking about how they're doing stuff during COVID, during the last election, doing all these sort of things, and now they say that he's not gonna do that anymore. But

Dan Austin: [23:08] I'm not doing anymore, guys. I'm cool now. Look at me. I got curly long hair. I got, you know, what if what I don't know. What are these wearing? It's like, yeah.

Mike DeHaan: [23:15] I'm gonna go drink go drink a White Claw on my wakeboard instead.

Dylan Koch: [23:19] So

Dan Austin: [23:19] On my surf boat. He's realizing life's too short, man. You just gotta be who you wanna be.

Mike DeHaan: [23:23] Here's also another conspiracy theory that I have. I'm getting into these recently. So, like, we have all these, like, super rich people right now. They're just, like, doing stuff. He's like, are you fucking serious? Like, they're just kind of unhinged. I think that there is a decent possibility that there is going to be a world like ending event, like, in the next, like, couple of years, like, next, like, five years. And they all know about it. And they're just like, who gives a fuck? Yo, lo Like, I might as well just party.

Dan Austin: [23:49] Yeah.

Mike DeHaan: [23:49] Who cares about all these peasants?

Dylan Koch: [23:51] Yeah. I have something like the the billionaires getting bunkers thing on. So, yeah, you're done.

Mike DeHaan: [23:56] Yeah. Right? And they're, like, slowly getting the bunkers, like, doing this thing. Right? Yeah. Where was the one that Zuckerberg built? Is that in Hawaii?

Dan Austin: [24:03] That's

Dylan Koch: [24:03] Yeah. So Hawaii. Like, in the side of a mountain.

Mike DeHaan: [24:06] Yeah. And then then Jeff Bezos has one because they built, like, this insane clock that's supposed to be, like, uninterruptible in there.

Dylan Koch: [24:13] I think Dan's starting to sweat.

Dan Austin: [24:14] Yeah. Yeah. I'm like

Mike DeHaan: [24:15] Well, no. But seriously, I'm Honey, so

Dan Austin: [24:17] do I need a bunker?

Mike DeHaan: [24:18] And everyone's like, you gotta save the oceans. Like, don't worry about it. Twenty thirty, it's all gonna be fucked anyway. Yeah. Right? We got we got a big asteroid coming.

Dan Austin: [24:27] Yeah. They're not talking about that anymore. Like like climate change, like, that's not a thing right now.

Dylan Koch: [24:31] There was a article that popped up. It's like research or like, the Atlantic Ocean is getting colder and scientists can't figure out why. And like, I don't know. It's just like, no matter who you ask, they're gonna have fifty fifty each side of the other.

Dan Austin: [24:43] Well, I'm worried now.

Mike DeHaan: [24:45] There's this TV show on on Netflix this past year called the three body problem. It's actually pretty interesting because basically the whole premise is that, like, these people this, like, Chinese scientist finds out that there's these aliens that are coming to destroy Earth, but they're not gonna be here for, like, three hundred years. And so there's, like, this whole thing where everyone's like, okay. Like, do I care? Because it's so far in the future. It's kinda think supposed to be kind of, like, symbolic of a climate change. But then there's, like, a whole bunch of people that, like, having this movement of, like, they're trying to, like, figure out how to disrupt the aliens so they don't come and, you know, destroy everything. But I feel like that could very legitimately be a real thing. You don't even know.

Dylan Koch: [25:24] So, inside of all that, just it doesn't matter. Just go buy real estate and try to get a company. It doesn't all matter.

Dan Austin: [25:30] Yeah. What else are you gonna do? I mean, just keep doing it, whatever you do. Do it every day.

Mike DeHaan: [25:34] Totally. I mean, and and that's Alex Tremozi's thing too, which I always appreciate too, is he's like, no one's gonna know you in, three generations anyway. So who cares?

Dan Austin: [25:41] Right.

Mike DeHaan: [25:42] Right.

Dan Austin: [25:42] Do what makes you happy. Kinda morbid to say,

Dylan Koch: [25:44] but it's true. I don't know my great great grandpa, or, you know, who they are.

Dan Austin: [25:47] I mean, some people don't even know their own dad. That's a vain. So it's just like true. You know what mean? Like like legit. But, yeah, I mean, I feel like I've lived by that. It's like, don't worry, because you can worry yourself out of actually taking action, and we always know that, and we you hear, you know, you used to hear all the people say, like, you just gotta take action, put one foot in front of the other, and really, what that distills down to is like, don't give a shit about macroeconomic things, or macro policy that doesn't affect your business. Now, if you have all sorts of, you know, we're going into a election year, we're in election year, like, yeah. If there's social policies that, like, you're concerned about, be concerned about this, but not in the context of how it affects your business, because there's a good chance it doesn't, and so just keep doing what you know is the right thing to do, and just keep working on it, because your business will grow, while other people are running scared or stopping, and that's that's Mike and I's personal experience during COVID. Everybody that was like, oh, jeez, kinda shut down. And we're like, I got no choice. I'm I'm invested. Let's roll. Like, we hadn't made our nut yet. So you just just be that person.

Mike DeHaan: [26:42] Yeah. I mean, and on top of that too, when people have like these macroeconomic issues, I think that if you really wanna protect yourself from it, you should be doing everything you can to learn to

Dan Austin: [26:53] make as much money as possible.

Mike DeHaan: [26:55] Yeah. Right? Because ultimately, you know, some people say cash is trash. Either way, learning how to build an income, right, is a skill that will never be taken away.

Dan Austin: [27:05] Like Won't go away.

Mike DeHaan: [27:06] There's a reason that there are, like, these, like, landscapers that come up from fucking Guatemala, don't even speak English, and then you find out that they own, like, seven houses. And, you know, they they like crush. It's because they learned how to hustle, they learned how to make money, and they now brought that skill to where the money currently is in The United States.

Dan Austin: [27:26] They probably know how to landscape, but they just know that you'll pay them for doing the work.

Mike DeHaan: [27:30] Exactly. Honestly, though. Right?

Dylan Koch: [27:31] They figured it out. Yeah. And if you're gonna be worried about stuff, one, be worried about the local level, not maybe the federal level, or even the state level for that matter.

Mike DeHaan: [27:40] On that same note, right, worry about the local level because especially in The United States, it's such a huge area. Things are gonna be different. You know, just like if you go back to the recession, the Pacific Northwest did okay compared to, like, the Midwest, like, industrial cities, little towns that the entire town was based around the tire factory that built all the tires before the shutdown. They got wrecked. But the Northwest did fine, So

Dylan Koch: [28:07] we actually all know someone who used to be a wholesaler who left to go build an AI company that recently went belly up. And my point in saying this is, I think real estate is one of the safest businesses you can build because everyone will always need a place to live.

Mike DeHaan: [28:21] Correct.

Dan Austin: [28:22] Yep.

Mike DeHaan: [28:22] Yeah. I mean, he didn't go belly up. He sold it for 6 figures Dylan.

Dylan Koch: [28:25] He went belly up. Yeah. We're belly up. Figures inside of it.

Dan Austin: [28:28] 7 figures of losses, but he sold it for, you know, 6 figures. Yeah. I agree with that, Dylan. I think that's those two points too, being super which we know real estate's hyper local, and surprise, like, there's always a rich dude in every local area. So there's a way to make money in every single town, city, state, wherever you live. You can't say, well, it's this or that, blue, red, whatever, it doesn't matter. Like, there's always a rich guy that's figured it out. So just figure that thing out, And real estate being hyper local, you can make opportunity for yourself on a small scale and keep growing. And it has a long that's one thing is it does it has a long lifespan of being a way to protect yourself against inflation, to produce cash flow, to produce growth. Like, there's a lot that it can do for you. So if you're listening this, you're obviously in real estate. The only twist is, is we say, be a real estate entrepreneur, not just a real estate investor, because those are two different people. And you can be the same person, like we all three on this on this podcast are both real estate investor and real estate entrepreneur. The real estate entrepreneur in you is how you create that massive income, and how you learn how to create that cash flow, which will always serve you well. Because we know a lot of dudes through abundance that they figure out how to make real estate investing decisions, they don't know how to make cash

Mike DeHaan: [29:36] or build Exactly. A

Dan Austin: [29:38] They just don't.

Mike DeHaan: [29:39] Yeah. And on top of that too, this is why I've always been a big fan of like residential real estate, is because that's the one thing that people are always gonna have some desire for is somewhere to live. Commercial stuff, people aren't always gonna necessarily need strip malls. We're already seeing that start to disappear. As soon as there's some reason or I would say as like, honestly, the millennials get older, things like self storage because we're like hoarding less shit will probably get less interesting. Right? I mean, I would say the only like commercial stuff that are really like long long term is if you can figure out how to get in with hospitals or really big medical things or actual necessary facilities. But even multifamily stuff, we saw a lot of those, how those have panned out over the last little bit. Like, unless you're an area that's super high demand and has affordability issues. But like, you know, some of these people that are buying some of these multifamily deals in like the middle of freaking nowhere, Oklahoma. Yeah. I'm like, are those really gonna continue to be in demand over the long, long term? I don't know. But residential homes probably will.

Dylan Koch: [30:43] Detroit, you know, when they the when all the car factories left, you know, there's nothing you could have done about that.

Mike DeHaan: [30:48] They had one major employer. Exactly.

Dan Austin: [30:51] Yeah. Totally. Well, I also think with residential, every human being in America can relate to a house or a duplex, because you have or can see yourself living in it. You can understand what humans want. You can be like, I don't wanna live in that part of town, so less people will, which means it'll probably be renting for less. You could clearly see the delineation between products in residential real estate. When you get into the larger asset classes like large multifamily or commercial, it's not quite as apparent. Right? It's not human instinct to understand why a strip mall is not going to be as profitable or something, or your that your competition to buy that strip mall is different than it just the human person you're gonna be competing with on a single family home.

Mike DeHaan: [31:33] Yeah. Well, and then the thing is too when it comes to bigger stuff like that, like people always like to talk about what their properties are worth when you get some of these larger properties.

Dan Austin: [31:40] Yeah.

Mike DeHaan: [31:41] If no one is willing to pay you that amount of money, that property is not worth that.

Dan Austin: [31:45] Not worth it.

Mike DeHaan: [31:45] But, like, like, anything. Right? This can be with real estate. It can be with a fucking watch. It can be with whatever. Like, I don't care what the city says it's worth, what cap rate say it's worth. If you can't find someone that's gonna go out and, like, give you that amount of money for that thing, it is not worth that much.

Dan Austin: [32:01] Exactly. Totally agree.

Mike DeHaan: [32:02] Where people tend to get lost. Agreed. Alright. Anything else, guys?

Dylan Koch: [32:06] No. Think that's it.

Dan Austin: [32:07] That's it.

Mike DeHaan: [32:07] Alright, everybody. Well, thanks for listening to today's Wednesday ramblings. You should share this with your friends. Really appreciate it. And also too, we are, as of time recording, five reviews away from a 105 star reviews. So if you wanna go and give us a five star review and send me a little screenshot on Instagram, Mike underscore Invest, I just might send you a little something, little T shirt or hat or whatever else I have sitting over here in this box of miscellaneous stuff that I have.

Dan Austin: [32:31] We got good stuff. We got good products. Good swag.

Mike DeHaan: [32:33] We do have good swag, gotta say. We actually have the high quality shirt.

Dylan Koch: [32:36] It's comfy. I'm wearing one right now.

Dan Austin: [32:38] There you go. A good shirt. KeysCon.

Mike DeHaan: [32:40] Check out on YouTube, and you can see Dylan's KeysCon shirt that you don't get unless you come to KeysCon.

Dan Austin: [32:45] That's a one of a kind.

Mike DeHaan: [32:46] Yeah, it is. Technically, yeah.

Dylan Koch: [32:48] Yeah, they even got stolen once.

Mike DeHaan: [32:50] Yeah. That's that's shit. You're right.

Dylan Koch: [32:52] Yeah.

Mike DeHaan: [32:52] There's, like, 12 people in the world that have that shirt, Dylan. That's a collection.

Dan Austin: [32:56] I know. That's an elite group.

Dylan Koch: [32:57] I shouldn't even wear it. I should just put it in one

Dan Austin: [32:59] of those, like, shadow boxes on the wall

Dylan Koch: [33:01] and Yeah. Shadow box it.

Mike DeHaan: [33:02] Yeah. We can speculate how much it's worth, but if no one give you that much money, then it's not worth that.

Dylan Koch: [33:07] I'll put it on eBay. I'll find out what the

Dan Austin: [33:08] actual price is. Yeah. Exactly.

Mike DeHaan: [33:09] There we go. So cool. Right on. Thanks for listening, everybody. Talk to you guys next week.

Dan Austin: [33:13] See you.