Will Trump’s Presidency Change the Real Estate Market?

Mike DeHaan: [0:00] Real quick before we jump into the show, we created the collecting keys podcast to be a real estate investing podcast that is created by real estate operators for real estate operators. And we want operators everywhere to know what it really takes these days to be successful in this business rather than all the fluff that all the other content creators and podcasters out there make. And so one of the challenges with this is that it's challenging to grow because most operators are too busy out there working. Right? And they aren't always learning or actively seeking new learning material. And so if you could please share this show with any fellow operators who know, you know, you can text it to them. You can post it on your socials. You can leave us a good review that you then share somewhere. That would be amazing. But really, whatever, it really helps us continue to get excited to create content, and it will also help you because everyone that you expose us to will get better as a real estate operator and close more deals. So if you could do that for us, it would really mean a ton. And, otherwise, we appreciate you guys, and let's get into this episode. There's a lot of weird stuff they can do if they wanna change the model, but it would fundamentally change how the mortgage industry works in The United States. What is going on, guys? Welcome to today's episode of the collecting keys real estate investing podcast.

Mike DeHaan: [1:17] This is the show by real estate operators for real estate operators so that you can run a better real estate business as the economy and world continues to change and adapt and things get great or things get weird. Who knows? Because that's the way the world works. We are recording today right after the inauguration on January 20. It's the day after. So if we top anything today and it's no longer true or anything super crazy happened, by the time you hear this, sorry. There's a weak gap. That's the way that, you know, things sort of, like, laid out. So if this is your first time here, my name is Mike DeHaan here with my cohost, Dan Austin and Dylan Cook. And how are you guys doing? Did you guys have a you guys all celebrate yesterday? I know Dylan, I saw you decked out with, like, the red body paint in your Instagram stories at Dylan does deals. You're just crushing it,

Dan Austin: [2:05] dude.

Dylan Koch: [2:05] I mean, that's that's just simply not true. It's starting out with lies. But Lies. No. No.

Mike DeHaan: [2:10] I was talking about the football game, national championship. I I

Dylan Koch: [2:12] knew you were, but, like, still yes. I was happy that Ohio State won, and I watched the entire game.

Dan Austin: [2:18] So What a scam that is. Like, Ohio State winning another cheated national championship.

Dylan Koch: [2:23] Dude, they haven't once in for a while. I guess since Urban Meyer was there.

Dan Austin: [2:26] But Yeah. Urban, when they cheated.

Dylan Koch: [2:27] I mean, they do have a $20,000,000 payroll, the whole NIL thing now. I think that

Dan Austin: [2:31] That's wild, actually. They're that's probably not the biggest, though. Are they the biggest?

Dylan Koch: [2:34] No. They're not the biggest. I think some S E T, like by Texas or Alabama. Yeah.

Dan Austin: [2:38] Totally, dude.

Mike DeHaan: [2:39] But that's that's such a fascinating thing, honestly, that how quickly it went from, like, Reggie Bush getting everything stripped away for accepting money to now they just, are paying kids, like, multi 7 figures.

Dylan Koch: [2:51] Yeah. Stay in college Like, you give an 18 year old or 19 year old, like, a couple million bucks, like, I don't know. I don't know how many I know how long was 18 or 19, and I wouldn't have kept it.

Dan Austin: [3:02] How's that paid out? Is that actually paid out in cash, does it have to go to some like weird thing?

Dylan Koch: [3:06] I have zero idea. Like a trust or something. I don't know.

Mike DeHaan: [3:09] You know what I'm surprised we haven't seen with that is, like, like, a personality kind of player. Right? They're, like, kinda sucks. They're, like, you know, big dude with, like, pink hair. You know, that's just like out of control, like

Dan Austin: [3:22] I bet you they have them, dude. I bet you they have to. Like, just like obscure athletes though. Like, you know who's actually kinda like that? Nobody's gonna know this guy. Well, people might, but like, you know, Timmy from Gonzaga?

Dylan Koch: [3:33] Yeah.

Mike DeHaan: [3:33] Like, he

Dan Austin: [3:33] was actually like he's not like that good. Like, he's not like an amazing player, but he his deal was actually pretty good for Gonzaga. He's like literally one of the highest scoring players of

Mike DeHaan: [3:42] all time in college basketball.

Dan Austin: [3:43] I know. But like, he's

Mike DeHaan: [3:43] not like He's not that good, dude. He was. His stats are insane.

Dan Austin: [3:48] I know. He's good, but let's be honest. Like, for Gonzaga, if you go look at Gonzaga's, like, NIL deals now, like, there's some standout players that are not making what he made. Like, he did very well for himself, especially his senior year when he kinda just went flat.

Mike DeHaan: [4:02] But I mean, like, I'm surprised there isn't like you know you know I'm saying? Like, someone who's based like an influencer player

Dylan Koch: [4:08] Yeah. Yeah.

Mike DeHaan: [4:08] That he's literally recruited because he has, like, just for the views. And the team is, like, you know, seven and seven. They're not even good. But he makes, like, insane money from all the local companies just because he's, like, is the guy. I mean, that might exist. I have no idea.

Dylan Koch: [4:23] You know what's gonna happen. You know, like, the Sunday night or Monday night games, and they do, like, the the interviews, and they'd be, like, you know, Mike DeHaan from Gonzaga or whatever. Mhmm. They'll be like, my dog from Gonzaga, Rutgers, Texas. Do say transfer every year for the Panadeo? Yeah.

Dan Austin: [4:36] Go to the transfer portal. Yeah. God.

Dylan Koch: [4:38] Never gonna be a one team.

Dan Austin: [4:40] Yeah. If it does happen, Mike, in my strong belief, it will end up being some, like, really good looking chick that plays, like, water polo.

Mike DeHaan: [4:48] Well, they already have those. They already have, like, several females that are like that, that are in, like, track and field and different things.

Dan Austin: [4:54] Yeah. Because

Mike DeHaan: [4:55] they'll they'll also, like, go to the Olympics, do different stuff, and they have, like, these huge followings.

Dylan Koch: [4:59] Yeah. There's a gymnast from LSU that's dating Paul Skeens, the MLB pitcher, who apparently has, like, a huge following from her social media. Right? Like Yeah.

Mike DeHaan: [5:09] Good for her.

Dan Austin: [5:09] Plenty of money. I wonder why. Is she good at gymnastics, think?

Dylan Koch: [5:12] Yeah. No. I think she's actually good at gymnastics, but she's also attractive.

Mike DeHaan: [5:15] Yeah. Which which helps. I mean, no one knows the ugly person that does whatever. That's not how the world works.

Dan Austin: [5:20] I'm gonna say now algorithms work with Instagram and TikTok.

Dylan Koch: [5:24] No. It's just your algorithm, Dan. Mine looks nothing like that.

Mike DeHaan: [5:26] Yeah.

Dan Austin: [5:27] I sure

Mike DeHaan: [5:28] it doesn't. Yeah. Yeah. I I wanna know what yours looks like, Dylan.

Dan Austin: [5:31] Dude, mine algorithm is now approaching with, like, forty year old shit would see, like, silly stuff that's not okay anymore.

Dylan Koch: [5:37] Yeah. That could have gone so many different directions, but let's let's maybe move on.

Mike DeHaan: [5:41] No. I woke up today to

Dan Austin: [5:43] a meme that was like kids born in 1985, and it's like the number 85 and then the age 40. It's like two guys, like, running after each other.

Mike DeHaan: [5:50] I was like, fuck, dude. Like, 40 this year. I mean, you were a short stint away there, Dan. I thought you're gonna be like Matthew McConaughey in a Dazed and Confused. You know? The best thing about high school girls Yeah.

Dan Austin: [6:01] You get old, but it's the same age. I got a daughter. I'm not a pervert like you guys.

Dylan Koch: [6:06] No. That's Leo DiCaprio. Right? It's like every girlfriend's 25 years or younger? Yeah. Right. God. Whatever.

Dan Austin: [6:12] It's like every rich famous person now.

Mike DeHaan: [6:14] Yeah. Seriously. Except for this is a good transition. Jeffrey Bezos.

Dan Austin: [6:19] Yeah. Except for

Mike DeHaan: [6:20] him. But the inauguration was yesterday. And and, again, I always never know, like, what stuff is put on the media versus, like, what's standard. Is it normal for there to be, like, every celebrity at these sort of things, or is that just because that's, like, his crowd? And it

Dan Austin: [6:34] was It's because they're who donates. They donate, man.

Mike DeHaan: [6:36] And it was, like, extra attention was brought to it this year just because, like, that's what their whole brand has been the entire time. But Jeffrey Bezos and Zac and, you know, obviously, Elon and all these other guys standing right behind Trump in front of all of the politicians during the inauguration, which was quite telling with Bezos and his wife, girlfriend, whatever she is.

Dan Austin: [7:01] So Bezos, I think what yeah. He was at Biden's as well.

Mike DeHaan: [7:05] Yeah. Was he? Oh, interesting. But don't

Dan Austin: [7:07] think his girlfriend was so prominent though.

Mike DeHaan: [7:09] Yeah. Yeah. Back then. But yeah. The inauguration and what came in with a lot of that, which is something that will be an interesting thing to watch, is a lot of these executive orders that Trump signed, which I don't really fully understand the power that these really have when they're so vague. But a lot of them pushing things around like affordability and, you know, undoing a lot of stuff that the Biden administration apparently did to make things more expensive. But this one that is right at the top, which is very interesting, with the price relief for American families and deleting the cost of living crisis bill, that's what it's called, it very specifically addresses making housing more affordable and increasing housing supply. And how they're gonna do that from their white castle, I have no idea, but it obviously is something that they are going to allegedly try and change. What that means from a real estate investment standpoint, I don't know.

Dan Austin: [8:05] Yeah. My only guess is it's gonna be because this is something that Trump's talked about a lot is like reduction of regulation. What that looks like from HUD, FHA, and all that stuff. So I mean, obviously, they could stimulate the economy by like dumping money through FHA and all that sort of stuff. Right? Yeah. But I'm wondering if it has to do with some regulation, which again, the federal government, I don't know how much they can actually meddle in like local stuff. First, so like where we're at in Spokane, I'm building a house. So I know permits to build the house are, like, gonna be, like, $20. Mhmm. That's kind of expensive. I don't know. $20, you know, the average house here is probably what's the average price point now, Mike? $3.50, 400?

Dylan Koch: [8:47] Yeah.

Dan Austin: [8:48] $3,400

Mike DeHaan: [8:48] ish. I think it's like $40.02 or something. Yeah.

Dan Austin: [8:50] I don't know. So maybe it's like eight or 10% of, like Mhmm. A house. So that's kind of expensive, but the federal government doesn't get a bite of that. So the federal government can't reduce that. But that regulatory kinda is the only thing I can think of.

Mike DeHaan: [9:03] There's the top line price of real estate, right, which is what the house actually costs. The thing is most people, they don't operate on that number. Mhmm. What they care about, and this is why we saw such a huge increase in values in 2021, is what their monthly payment is. Of course. Most people work on a monthly basis, a monthly budget. The federal government can do things, technically, to bring down

Dan Austin: [9:22] Well, they can stimulate through, yeah, through through loans and FHA incentives and stuff like that for lowering

Mike DeHaan: [9:27] folks. And in my mind, what this is like, the people that are most drawn to things like this are the people who can't afford qualify for a mortgage. They can't afford a monthly payment. They can't get a loan. And so if they wanna do something, that's where I think it would be, and not necessarily on the actual real estate top line value or even the supply. It's gonna be like, how can they play with the numbers to make it so that the monthly payments people are getting into are actually affordable.

Dan Austin: [9:52] Yeah.

Dylan Koch: [9:53] No. I I have to agree with everything you guys just said. And I mean, to make things truly more affordable, I think it doesn't beat the law of supply and demand, and you need to build more housing. And that's gonna be more on the local level than anything the federal government can do. If

Mike DeHaan: [10:08] they're not able to increase the supply, but they increase the demand by making Loans cheaper. The loans cheaper, it's gonna drive the value

Dan Austin: [10:15] Which they can't do. Right? That's the Fed's job.

Dylan Koch: [10:18] And what do you do change? Like, I forget what the debt to income is for, an FHA, but it's really like you're gonna let people buy 50% of their of their DTI go towards homes.

Mike DeHaan: [10:26] Like Maybe. Maybe.

Dan Austin: [10:27] I mean, I wouldn't be surprised, but who knows?

Mike DeHaan: [10:30] Like, they can do longer term mortgages. I mean, there's other countries that have fifty, hundred year mortgages even. There's even countries that will do things like negative interest rate loans for certain people to get them into housing because they buy the security. There's a lot of weird stuff they can do if they wanna change the model, but it would fundamentally change how the mortgage industry works in The United States.

Dylan Koch: [10:48] Right.

Dan Austin: [10:48] Do we already have like a forty year product? Is that a thing? They talked about it years ago.

Mike DeHaan: [10:52] I don't know if went through.

Dylan Koch: [10:53] The only forty year product is like a it starts out with a ten year IO. Yeah. Interest only, and then it transitions to a thirty year fix.

Dan Austin: [10:59] That's what it is. Yeah. Okay. Yeah. Because like other countries, like Mike is saying, like like Canada's had zero interest rates. Japan has had zero or negative interest rates for a long time. It's kind of a weird way, but they also have different loans and structure where it's like way harder to own your property in your lifetime.

Mike DeHaan: [11:13] Yeah. Or just trade subsidized housing. Like, are we gonna get to a point where all of a sudden you see the government basically owning neighborhoods and renting it out to people at a lower rate. Almost like section eight, but it's passed on to larger institutions.

Dan Austin: [11:28] I would say in the next four years, that is unlikely. I think it'd be more likely that they would allow companies to own houses. Exactly.

Dylan Koch: [11:37] Yeah. Corporations.

Mike DeHaan: [11:39] We're a capitalistic country. I would be surprised if the feds did

Dan Austin: [11:41] it. Like incentivize them to do it.

Dylan Koch: [11:44] Literally, there's a HUD apartment complex that just sold to a private buyer here in Cincinnati.

Mike DeHaan: [11:49] Interesting.

Dan Austin: [11:50] I don't know that that's any better than the government owning it, but I could see that. Right? Like like I know Elon did in, was it down in Texas? Like he pew and this was like a thing a few years ago. There's a couple big companies doing this where they're going back to what it used to be like in like the, I don't know, fifties, sixties, and seventies, would see where a company would move into a town, and the town would be created kinda by the company, and the company would own the house. So they would pay you to work, and then they would own the grocery store, and they would own the house you lived in, and you just paid them rent. So the company kinda just owned you and everything. It's almost in debt to service you. So don't like I said, I don't know if it's good or bad, but that was a thing that I I felt like it was like three or four years ago was becoming a thing that some of these companies are trying to do, especially in areas where they need to bring in infrastructure to have housing for a factory or whatever.

Dylan Koch: [12:36] Mhmm. Yeah. Totally. Totally. One thing, like with Trump's second term, in his first term, he did like the JOBS Act. Right? Well, that actually expired at the end of twenty twenty five. And so like a lot of those would get repealed, that changes tax brackets, business taxes, all that kind of stuff. So I would assume that is something that he would look to either reimplement or like renew up before 2025 is over, especially since they control their, you know, portions of the house and the senate. And if for real estate investors too, I mean, not only is that your your tax brackets, but I would assume, and I've heard this to the grapevine that a bonus depreciation might come back. He's a real estate guy. So Yeah. You know, if we can go back to a 100% bonus appreciation, feel like that would bring even more investors back into the market.

Mike DeHaan: [13:20] Yeah. That's probably fair.

Dan Austin: [13:21] We should start a syndication. 100% bonus depreciation is what you get. That's it. That that's your return.

Mike DeHaan: [13:27] Right? No shit. Dude, you could sell fuck out of that to these dumb people.

Dylan Koch: [13:31] Just threw up in my mouth a little bit, Dan. Thanks.

Dan Austin: [13:33] Go find some doctors, some doctors in Southern California that could make too much money, and they're like, yeah, I need to I need to save on taxes.

Mike DeHaan: [13:39] I made $200,000 last year. Do have any idea how much taxes that is?

Dan Austin: [13:43] Here here's the whole thing. Here's the whole thing. We're gonna lose money so you can use it to write off on your taxes.

Mike DeHaan: [13:49] Has that movement gone away? I feel like there was a

Dan Austin: [13:51] like It's gonna come back, baby.

Mike DeHaan: [13:53] During the Madden Ofrio period, there was like a whole

Dan Austin: [13:56] There's some weird stuff going on.

Mike DeHaan: [13:57] Thing like that where it was everywhere.

Dylan Koch: [13:59] Kathy Wood, who manages our fund, she basically tweeted like, hey, because we lost so much money, we don't have to worry about capital gains for years. Like, she said this is like a good thing.

Mike DeHaan: [14:09] Oh my gosh.

Dylan Koch: [14:10] She just admitted that she just lost literally hundreds of millions of dollars.

Mike DeHaan: [14:13] Well, she didn't because she was peeling it right off the top.

Dylan Koch: [14:16] Right? She was

Dan Austin: [14:16] getting her 1% fee,

Mike DeHaan: [14:18] baby. Such a bracket.

Dan Austin: [14:20] You know what's more than a million dollars? One percent of a trillion dollars. Yeah. Right.

Dylan Koch: [14:25] You're not wrong, buddy.

Mike DeHaan: [14:26] Yeah. So but Was there anything else you're gonna go with that, all that, Dylan?

Dylan Koch: [14:30] Not really. Yeah. I just keep an eye on it. And like we've said before, you know, I just subscribed to something locally. It's like the Cincinnati Inquirer that Basically, for this the reasons that you see new developments come in. Like, hey, are new developers coming in here? Mhmm. And that's just being aware of your local market, knowing where to put money, knows what's gonna be new, what's gonna be not.

Mike DeHaan: [14:50] Yeah. I mean, I think that's the biggest thing. Right? And then a lot of this federal stuff understand that 95% of what the feds say, like, highest level might affect you a little bit, but probably not, like, as much as you wanted to. So put your eggs in your local basket, not in what the big, big dogs are saying.

Dan Austin: [15:07] There's a lot with that. Like, if you can cozy up to, like, your local government and figure out where they're gonna be, you know, that's where some of these folks that you see in your local town making all the money. Yeah. Because they they know ahead of time where to invest their money. And so your local government politics freaking matter a ton because you don't need to have an opinion. You just need to follow whatever they're doing.

Dylan Koch: [15:28] Yeah. It's like legal insider trading, like what Nancy But Pelosi does with you can just know about it in in real estate.

Dan Austin: [15:35] Exactly.

Mike DeHaan: [15:35] And there's very wealthy, successful people in every city that are doing that. Right? And then have made a lot of money doing the most boring stuff. Yeah. There's actually this this great or mosey highlight where he's like, who here would be happy with $10,000,000? And, like, everyone raised it. He's like, cool. So you can abandon needing to, like, invent a new vacuum cleaner or, like, have some crazy tech startup. Instead, just go and start a basic trade business. Yeah. Yeah. You know? And you will make that amount of money much more simple than trying to, like, come up with some new fancy thing that no one's ever heard of before. Yeah. Yeah.

Dan Austin: [16:09] That's a great point.

Dylan Koch: [16:09] Actually, have a question for you guys along the same lines. I know of a guy who basically gave a million dollars to a portfolio manager who's well connected within the city. And fully, like, expected, like, mediocre returns, like, 70%. But he's like, and I know I could take that million dollars, re input it back in my business to make a lot more money. However, I basically proximity is power, and I wanna be friends with

Mike DeHaan: [16:30] this guy.

Dylan Koch: [16:31] And he's he knows all the insider stuff. He knows what's coming. So basically, his million like, yes, he was also friends with this person, but he basically took the trade off of reinvesting his own business and just to have a connection with this very powerful person. Is that something that you think is worth it?

Dan Austin: [16:46] Oh, yeah. Makes totally. 100%. Totally. That's why you should pay for access to country clubs as well. Mhmm.

Mike DeHaan: [16:51] A lot of people do that. Right? That's why dudes like Grant Cardone can raise money at 6%. Doesn't make any sense. It's because people wanna be closer to Grant Cardone. Mhmm. You know? Or why, like, people can go and buy what's like the platinum club or whatever from Tony Robbins, like a $100,000 for the year.

Dan Austin: [17:09] Because you get to shake his hand.

Dylan Koch: [17:10] Yeah. Wow. That's crazy.

Mike DeHaan: [17:11] Plus, you still have to pay for all your travel to all the things that you're required to go to.

Dan Austin: [17:18] It's like Yeah.

Mike DeHaan: [17:19] You're paying like a buck 50, probably more than that to hang out with Tony Robbins. Oh,

Dan Austin: [17:23] yeah. I think there's a lot to it. Like, as long as it's not like you're making a stupid investment or a stupid play, and you're going to leverage and utilize that.

Dylan Koch: [17:30] Is this like pure quantitative play? Like, oh, I know I could take this and reinvest it at, you know, what's our marketing, you know Right. Return on ad spend. Right? Versus Mhmm. This isn't gonna do much, but now I have access to this person. And I think, you know, there's a trade off between proximity to power and people. Well, it it comes down

Mike DeHaan: [17:47] to how like, how much is that million dollars to you. Right? Like, if you only have a million dollars and you do that, it's kind of dumb. If you have $5,000,000 and you choose to do that, sure. Why not?

Dylan Koch: [17:56] No. That's cool. Best to wonder your opinion on that.

Mike DeHaan: [17:59] Yeah. So much of everything is networking, right, at all levels. Regardless of any business that you're in, so much gets done based on who you know, who you're connected with. Right? Who has good things to say about you and is willing to share your connection with other people or to share connections with you. Like, that's how the world works. Like, if you

Dylan Koch: [18:19] need $500,000 for transactional funding to close by the end the month, you know who to call.

Mike DeHaan: [18:23] Yeah. Exactly. And you can call us. We're just, you know, sitting on money and able to do that for you. But cool. How's things going on in your business, Dylan?

Dylan Koch: [18:32] I mean, they're good. They're rocking and rolling right now.

Mike DeHaan: [18:35] You got a ton based on your wins channel post that you had right before this.

Dylan Koch: [18:39] Yeah. I mean, some of these was kind of the norm. Some lower fees, like, I got two or three, like, five to 10 k assignments, which is below. And I was just trying to basically squeeze something out of nothing, which I was able to do. But then there's, you know, one seller. This is like the opportunity that anybody can get. One seller has a ton of properties that they wanna sell pretty much all at once. They don't really have a timeline. Don't don't really care about taxes. He's like, I'm just done with these. And I was able to put all three of these under contract. They're all getting sold to the same end buyer. Right? So that makes it a little bit more convenient.

Mike DeHaan: [19:12] That's awesome.

Dylan Koch: [19:12] And, you know, it's gonna be a record breaking January for us because of these total of, I think, seven or eight deals now.

Dan Austin: [19:18] That's awesome. That's really

Dylan Koch: [19:20] cool. The best part about this is he this same seller has two or three, basically, commercial properties in good areas of town. They're small commercial, but they're still commercial. Like Yeah. Retail spots that he's we've already talked about, and I could potentially seller finance some of these. And so it's almost like these front end deals might fund the down payment for these seller finance deals that we could buy over the next couple months.

Mike DeHaan: [19:44] That's great. That's awesome. I mean, that's the way to do the business. Right? Just create that massive income, so then you can put it into the long term investments.

Dylan Koch: [19:51] Yeah. No. Exactly. Exactly. So I mean, all things are going well, finding all cylinders. Still just struggling with what other marketing to do, if I'm being honest. It's all of this based on direct mail and PPL, which I've not had success with. I know other people in scale have had success, so I'm gonna keep give it another month, but so just grinding.

Dan Austin: [20:07] How's your mail? Is it delayed? Do you have mail delay issues like we did? Or because you're in the Midwest, it just got delivered?

Dylan Koch: [20:12] No. We had was some the the wet like, we had some really bad weather. Like, it's like six

Mike DeHaan: [20:15] degrees out

Dylan Koch: [20:16] right here right now. Yeah. And so we had some ex cold and snow problems, but so it's not delayed by a lot, but a little bit.

Mike DeHaan: [20:22] Ours are so delayed, dude. We're finally getting mail that's slowly starting to hit that was mailed out right after New Year's.

Dylan Koch: [20:29] Oh, wow. Yeah. That's very delayed.

Mike DeHaan: [20:30] It's like three weeks. It sucks ass, dude. We've been so Yeah. Like, slow. And and working with Ballpoint, it's been nice because they actually have, like, all the tracking information, so

Dylan Koch: [20:39] you can

Mike DeHaan: [20:39] see the status of everything.

Dan Austin: [20:40] Mhmm.

Mike DeHaan: [20:41] And so the first batch finally started getting delivered over the weekend. But then, like, our second and third batch third batch should technically be hitting right now. It's just kinda like, it's somewhere. Like, we we can see that it got dropped off at the post office and was scanned in, but it's just like, wherever. And the USPS status is like fifteen days late. I'm like, wow. Thank you. Yeah. That's helpful.

Dylan Koch: [21:03] USPS ticks me off. I literally got a return to sender the other day. That was the stamp on it was from 2022.

Mike DeHaan: [21:09] Nice. Yeah. Nice.

Dan Austin: [21:11] Yeah. We get those a little bit every once in a while. It

Dylan Koch: [21:14] was just gone in the abyss for three years? Like, I just don't understand.

Dan Austin: [21:17] Yeah. They spent $3,000 to get you that 50¢ postcard back to you.

Mike DeHaan: [21:21] Right.

Dan Austin: [21:21] With all the bureaucracy of it.

Dylan Koch: [21:23] Yeah.

Dan Austin: [21:23] Yeah. I went in this is just a a little vignette of me going in the post office recently because to get our kids' passports. And so I scheduled an appointment. So I go in and like and it's kinda busy. We went in on on New Year's Eve or something like that or maybe it's like, don't remember. It's like around New Year's. And I walk in and there's the passport like lane and there's just a lady behind the counter. So I walk up. I'm like, hey. I have an appointment for like 10:45 or whatever. She's like, get in line. And I was like, what? Like this line? And there's, 20 people in line for their passport. Was like, alright. Okay. Cool. I guess the appointment scheduling does not matter. That was it. I was like, alright. Thanks for the customer service, guys.

Mike DeHaan: [22:04] That's why have all that stuff. There's something like the DMV. Right? It's just like, what does it actually matter?

Dylan Koch: [22:09] It's just like, what the heck, dude?

Dan Austin: [22:11] Yeah. No wonder why our mail's three weeks behind.

Mike DeHaan: [22:14] Hey. So you've heard us mention our scale community before, and I don't have a lot of time, so here are the quick highlights. In scale, you get all of our processes and systems that we use to do about a 150 deals every single year. You also get a community of investors that are verified crushing it in their markets. Otherwise, they wouldn't even be members. And that way, you don't have to waste time with nonstarters like you find in other groups. You also get preferred relationships with marketing companies and even lenders that will give you 100% financing. If you just heard all that and said, nah. I don't really need it. That's not gonna help me. I don't know what to tell you. You're lying to yourself because all those things are guaranteed to help you explode your business and buy more deals next year. So go to collectingkeys.com/scale, and let's see if you qualify. That does bring up a valid valid question though, Dylan, because there's always this talk in business around, like, you know, different kinds of marketing strategies. And if you have, like, this single, you know, marketing risk or a single channel risk like this, you can get thrown off by things that are out of your control.

Mike DeHaan: [23:15] But these days, like, there's so much regulation coming around cold calling and texting. New regulation around things like pay per lead. PPC is pretty expensive and difficult to do. Doing, like, brand building stuff, media, marketing, radio, TV, whatever, all these things are quite expensive and take a while. What are your backup plans? Right? You know what? Like, the options that even there were generated leads from years ago are so much, there's so fewer of them than there were used to be.

Dylan Koch: [23:46] You can go back to the try and true bandit signs, which I've never done by the way, but I know people have had success with them. Yeah. Yeah. Yeah.

Mike DeHaan: [23:52] Maybe. Just like stuff like that. Throw up a billboard if you wanna look a little

Dylan Koch: [23:55] bit more official. Billboard. Wrap your car in a decal. Have people drive around. Yeah.

Dan Austin: [24:00] Yeah. Honestly, branding.

Dylan Koch: [24:01] Yeah. Yeah. I mean, to answer your question, Mike, I, know, I I don't really know. Mail has always been the tried and true. And do I actually think that's gonna go away? The answer is no.

Mike DeHaan: [24:10] I think it's gonna go away. But the problem is you're always at risk of issues. Right? Yeah.

Dan Austin: [24:15] Because you're single sourced. There's one provider of mail, and that's the mail, the USPS. Mhmm.

Dylan Koch: [24:20] I guess where my head goes too is like, this is where it's almost better to be bigger than just like a one or two deal operation a month. Because if mail is your only source, and you're sourcing one or two deals a month, and you go dry for two months, like, that's kinda like when you're you're testing the waters a little bit. Right? Yeah. It's almost like you always need something in the in escrow to be closed.

Mike DeHaan: [24:38] Yeah. That's also why it's important to never stop marketing. Right? Even if you do have these delays or you are busy. Say, for example, our all our mail has been delayed delivering this month, but we still have signed, I think, seven so far for the month. So even though we haven't really had lead flow, like, all Yep. And most of that is from either the pay per lead stuff, which has come through and we've been working, or this from old leads that came have been in the system for a couple of months. We've

Dylan Koch: [25:05] Mhmm. Yep.

Mike DeHaan: [25:06] Right? So it does give us some wiggle room while things kinda figure out because, you know, you're saying six degrees over there. I'm sitting here thinking, well, fuck. It's still gonna be delayed going into future months because you guys can't figure out how to deal with freaking weather.

Dan Austin: [25:18] Damn, Midwest.

Mike DeHaan: [25:19] Do you know? It's like it doesn't happen. It happens every year. Why is it continuously a problem? It's never been cold in the Midwest before. Jesus Christ.

Dan Austin: [25:26] It's a valid point. A very valid point.

Dylan Koch: [25:29] So hold on. Just logistically, if you're already from Ballpoint, I'm pretty sure they're based in Saint Louis. It's just not even anywhere near me. So that doesn't

Mike DeHaan: [25:35] Dude, it's all the same thing. It's all the same chunk of America.

Dylan Koch: [25:39] No. It has to be at least 600 miles apart. It's called the Midwest, bro.

Mike DeHaan: [25:45] It's the same thing.

Dylan Koch: [25:46] Anything over the mountains is the Midwest you.

Mike DeHaan: [25:48] No. It's not. Wait. Here's the question.

Dan Austin: [25:50] Is Ohio East Coast, or is it Midwest? That's why you're here. Is it Midwest? Yeah. Okay. So we're Midwest.

Mike DeHaan: [25:55] Exactly.

Dan Austin: [25:56] You're almost. You're almost.

Mike DeHaan: [25:58] It's 800 miles, like, that's not even far, bro. That's, like, almost here to Seattle, which I would call is like very close in proximity. That's like a day trip.

Dan Austin: [26:06] And also, if if you're gonna be statist, like, I know a lot of people from your part of the world that don't want to have any idea what's beyond the Rocky Mountains.

Mike DeHaan: [26:13] Totally. They're like, do you guys have telephones over there?

Dan Austin: [26:16] Yes. We do. And trains.

Mike DeHaan: [26:18] Yeah. I see what all your people do when they come visit. They show up and they roll out of their pickup truck they rented from Hertz in, a cowboy hat and boots. And they're just like, where are the cowboys? I don't understand. I'm out west now.

Dylan Koch: [26:32] I hate that. I hate that that's very accurate.

Mike DeHaan: [26:35] It's so accurate, dude. It's John Candy in

Dan Austin: [26:37] a yellow rider truck getting home, getting the the Home Alone mom home, dude. That's what it is. That's all you guys

Dylan Koch: [26:43] So Cincinnati to Saint Louis is 350 miles. I just googled it.

Mike DeHaan: [26:47] That's even closer than here in Seattle, bro. Oh my god.

Dan Austin: [26:50] That's so close, dude.

Dylan Koch: [26:51] Is it really that close?

Mike DeHaan: [26:53] Yeah. That's what I'm saying. It's it's the Midwest. You're you're basically in the same state.

Dylan Koch: [26:57] Whatever. I mean, anyway, to get back to your thing about like USPS. I mean, think I if you're an entrepreneur and you run a business, you'll figure out something. Like, you just gotta be have that figure it out mentality.

Mike DeHaan: [27:07] You have to. And you never know what the answer is. Right? That's something that Dan and I were discussing earlier is like, when we're slow, what should the strategy be? And I don't know. I can't, like, go and Google how to find leads when your wholesale business is slow. Like, that's just nothing. Yeah. Because it always goes to, like, direct mail and, you know, oh, you can cold call people. You can do whatever.

Dylan Koch: [27:29] I mean, I've been known to cold call from a Google Voice number on very select, like, lists or, like, locations.

Dan Austin: [27:34] Yeah.

Mike DeHaan: [27:35] That's what we're doing. Yeah. What does

Dan Austin: [27:37] any new business do? Right? They give you like, if you're an employee at a business or a new business that's starting up, they give you a cold call list and a cold door knock list to say, go talk to these other like, your b to b, go talk to these other businesses and try to get them to buy our services. And you're gonna spend a lot of time, and then you're gonna finally get someone to say yes. And that's kinda what you have to do.

Dylan Koch: [27:55] That's what, like, roofing companies do. Where after, like, a storm, they go door to door and be like, hey. So the roofs came through. Let's see if you are missing any shingles and all of your insurance paperwork.

Dan Austin: [28:03] Really? They have to do during when there's no storms? They've gotta do something. Right? And because, like

Mike DeHaan: [28:08] Yeah.

Dan Austin: [28:08] It's not a good way to run your business.

Mike DeHaan: [28:10] They go and provide a free roof inspection, and they kick some shingles off, and they go, we're gonna have to fix this.

Dan Austin: [28:14] That's exactly how it works. That's okay. Yeah. We gotta just find how we can kick our shingles off someone's house. Oh, you're just kinda going Arson. Arson.

Dylan Koch: [28:23] Dan's basically saying, let's go, like, bust a window in a house or two, and and follow-up with it a week later. Like, yeah, this area is not getting very safe. You know?

Dan Austin: [28:31] We're gonna drag homeless people out to other people's houses, let them camp in their front yard.

Dylan Koch: [28:36] Oh. Dan's creating his own market. Yeah. Anyone's listening take erase the last thirty seconds.

Dan Austin: [28:41] Yeah. I'm a market maker, man.

Mike DeHaan: [28:43] Yeah. Right. Goddamn. But so no. That's awesome, Dylan. Yeah. Congrats on that. That good start, though.

Dylan Koch: [28:49] Yeah. I mean, you know, if the goal is 7 figure top line, I guess, you know, what is that? 87 ish thousand top line a month? You divide it by 12? Mhmm. So you have you know, that's the target. So we'll beat that in January. Hopefully, I can just continue Yeah.

Dan Austin: [29:03] There you go.

Mike DeHaan: [29:03] I mean, you're doing it in the slow months. You'll definitely be able to do

Dan Austin: [29:05] it in the hot months. So you

Mike DeHaan: [29:07] Brian, any good lessons from this week? I know Dan's got a couple.

Dylan Koch: [29:12] Yeah. Dan, you go first.

Dan Austin: [29:14] Yeah. So we have a deal where the buyer right. I should just back up. The deal we found out has to have the taxes paid. The county needs the taxes the day before the closing date were set. I didn't know that. So lesson number one, if the house you're buying is going to tax foreclosure, you should probably know that.

Mike DeHaan: [29:35] Uh-huh.

Dan Austin: [29:36] Right? Yeah. That's a good lesson. I I just you know, it's a virtual market for us. It wasn't something that I was aware of from the beginning, and I didn't go I didn't go and look. It's not something I commonly do. But that's you know, understanding the seller's situation is key. Because she even said in a text, like, hey, the county has to be paid by the twenty seventh. And I was like, okay, like, property taxes, whatever. Like, I it just didn't she didn't say tax, but I just kind of overlooked it. So lesson one. The second lesson here is the buyer on the deal, He didn't get all of his documents into the lender until like last Monday, and I think we've been in escrow for a couple weeks prior to that, like two weeks or something like that. And so I always check to make sure like who's the lender you're gonna use. And in this case, the buyer's using Keyavi, which is a reputable, very common, you know, national hard money lender. I was like, okay. They're gonna be, you know, a little longer to fund, but you know, I didn't know we had to worry about it until he said, you know, he's just like, I just kinda wasn't really in a rush because I didn't know we had to make this date. And what happened was the I called the county, and they're like, yeah, you have to pay us the day before the auction by 4PM with a cashier's check. Closing the title company was like, to do that, we need to close the property, get the funds from KIAVI, let that clear our bank account, which you guys know as well as I do, anytime you get like a 200 and some thousand dollar check-in your account, they don't usually release it right away. You gotta wait a couple days for it to release, then they have to print the cashier's check and physically get it over to the county. So it's like we need to close actually the Friday before, so like a week before.

Dan Austin: [31:06] So the whole thing kinda came out. So now we gotta figure out what to do, which is do we just go and the taxes out of our pocket before closing, so it doesn't actually get foreclosed on, or do we double close the property? And typically, close is not a big deal, but in Washington, we do have excise tax. So that's 2% of the gross sale of the house we'd have to pay.

Dylan Koch: [31:24] Gross sale of the house?

Dan Austin: [31:26] Mhmm. Gross So it's like a transfer tax or excise tax. So it just it's say another 4 or $5,000 that we would have to come up with.

Mike DeHaan: [31:34] That's pretty significant. Yep.

Dan Austin: [31:35] And the buyer is like, I don't really care. He's like, I just wanna this is the deal or that they were it's not the deal. And so we're having to figure out how do we make this deal work. So lesson learned there is not only confirming with your buyer who their lender is, and I've done this in the past, especially when I'm a little shaky, but calling that other lender so you can talk to them and say, what's your funding time? Because I've used Keavi a bunch. And they might say they can fund in a week. They can't fund in a week.

Dylan Koch: [32:03] Most hard money lenders are ten days at a minimum. Minimum. At a minimum.

Dan Austin: [32:07] And definitely, because they're probably gonna wanna send somebody out there to look at it and all that sort of stuff. So it's just a matter of making sure, not just to confirm the lender, but confirm the submission of the documents, What, you know, especially if you have a short timeline, because that lender is gonna be the other thing that holds you up. If it's a private money lender, it's easy to get get on the phone and talk to them. And then for you, you maybe make a contact for a new private lender. So it's actually a good idea to talk to them. But also, private lenders usually can fund, you know, super fast. And so by getting that connection, just making sure, is this good? Because the lender might tell you something totally different. Mhmm. Like, yeah, it's good, but I think this deal sucks, I might not fund it. Well, so Well, my buyer didn't say

Mike DeHaan: [32:44] that. Especially with those larger companies, I don't think people fully realize that they are not your lender. Like, they're actually the giving you the money. They are selling your loan to somebody else right off the bat. And so they have a whole process they have to get approved. Your loan has to get approved with them. It's possible they don't even necessarily know who's gonna be buying your loan at first, which is, you know, totally standard. But that's why there's extra hurdles versus if, you know, Dan and I, we have our hard money lending company. It's typically our cash that we're lending on. So that's how we can lend in, like, forty eight hours because we have the money sitting here, like, ready to go.

Dan Austin: [33:18] Mhmm. Yep. And we look at the deal personally. We look at everything. Right? And so it's like we're just much there's no middleman in this situation.

Mike DeHaan: [33:26] Yeah. I was actually looking to see if it says so I was looking at an old Reason Lending one a lot too. This isn't a promo for these guys or just who have used. But it says very specifically in their emails that I never noticed before, so I wasn't paying attention to it. That by basically working with them, you recognize that they are not the direct lender, and that they are gonna be brokering your loan. And these are, like, basically the rules that apply at different states. And there's, like, this big block in that bottom of every email that's, like, you know, several inches long in your email that basically outlines all conditions for their loans. But, of course, in their marketing material, they advertise it as super easy to work with with no hurdles and everything else. It's all bullshit.

Dylan Koch: [34:03] Which is why their terms change a lot too because it depends on who's buying it. They're trying to back in their own profit into it.

Mike DeHaan: [34:09] Exactly. I mean, like, Dan and I, with all these lenders, we have had several times where we're literally, like, driving to closing. They're like, hey. We're actually gonna need to change it so that you're bringing 20% down now instead of 10% just because we woke up and felt that way. You know, they never have, like, a good reason because they don't wanna tell you that they're selling your loan. Just if they were honest about it, honestly, it be easier.

Dan Austin: [34:28] Nobody cares.

Mike DeHaan: [34:29] Nobody Yeah.

Dylan Koch: [34:31] It's the changing at the last second. Yeah. My tip of the week will be more boring, but it it's still important. So I as the audience might know, hired an assistant probably, like, halfway through it, maybe two or the thirds way through 2024. And so, like, we switched bookkeeping in that that time. And I was trying to review everything today, and it's a mess. And so, like, it just get your bookkeeping, your ten ninety eights, like, all of this stuff organized, and don't wait until the last second. Because last year, I had to extend. And then when you extend, you're also paying, like, interest on the extension. So get your books in order. Try to do it quick. I know it sucks. I know it's boring, but it's also important. It is very important.

Mike DeHaan: [35:07] Or if you have like a business partner like me. I got fucked. I got actually

Dan Austin: [35:11] I got a penalty because of my past year. So Mike Mike actually owes me money.

Mike DeHaan: [35:16] Yeah. Well, because I extended. Then I'm not gonna blame Mike for that. Then our accountant, because he did both of our personal stuff and our business stuff just assumed that Dan wanted to extend too. And so he just never filed Dan's taxes and ended until, like, October. Yeah. Oh, man. Reaches out and he's like, hey. You ready to do your taxes? And Dan's like, I thought you already did. Yeah. And I

Dan Austin: [35:33] was like he's like, you owe a $100 plus another like $3 for penalties.

Mike DeHaan: [35:37] I was like, what the fuck?

Dan Austin: [35:39] Like, penalties for what? I didn't do anything wrong. Jesus.

Dylan Koch: [35:44] Yeah. Sorry.

Dan Austin: [35:45] Yeah. That's a that's a valid point though, Dylan. I'm actually meeting with one of the guys at Scale, I think, what's his date? He's tomorrow, to go over kinda like bookkeeping. Because like that's something that can be hard to figure out, and it's commonly over complicated. Yeah. And what I think Mike and I have kind of the realization on this is like, there's only so much when it comes to, you know, the size of our business and the importance of the financials of our business. You only hand so much off to a virtual bookkeeper or an employee, unless you have like a full on, you know, bookkeeper in your business. And they're trained, and they're like there next to you. Right? Because so much gets dropped, and so much gets missed, and you end up having to like be the person that codes it anyways. Because they're like, what is this? And you're like, I'll just go hop in and do it. And so it's like, yep, figuring out the way to do that so that come January 1, you can pull all your reports and reconcile everything and be done and just throw it to your accountant.

Dylan Koch: [36:37] And it's different versus fix and flip versus the wholesale business versus advertising versus rentals. They're all kind of taxed differently. Even rentals inside, like a maintenance item versus capex item. Ten ninety eight things for from hard money lenders can be reduced off of. So like your interest expense, all that kind of stuff.

Dan Austin: [36:54] Totally. Yeah. Yep. And if you can reduce that down to like twenty minutes a month, thirty minutes a month, then just you're sometimes almost as a business owner of a business like ours just just doing it yourself. Yep.

Dylan Koch: [37:04] Yeah. I mean, I spent probably two hours going through it today, and that's two hours that I'm not calling sellers. Right? So

Dan Austin: [37:09] Yeah. Exactly. Yep. Yep. So Good point. Good lesson.

Mike DeHaan: [37:12] And one other thing just on taxes, real quick, just because I've I've seen this come up a lot recently. Understand, guys, that if you do take depreciation on your properties, that's cool. Can reduce your tax burden and everything, but you do have to pay that back eventually. So don't feel like it's a free pass. You're still gonna have to pay a 25% Tax on that. Taxes on that sometime in the future. And, you know, there's so many people out there that go and preach this accelerated depreciation, all these different things. If you're someone who made, like, a $100 and you're gonna go and, like, rack up this accelerated depreciation and try and pay less taxes, just save it. Just pay the taxes. Wait for the year that you make, like, a millie. Right? And you're actually saving money, and you're not just, like, you know, doing what you think is cool.

Dan Austin: [37:56] It's almost almost kind of a government scam if you think about it.

Mike DeHaan: [38:00] It really is, dude.

Dan Austin: [38:01] Because think about this. And I'm not saying you shouldn't do it, because I think it's a useful tool for the people that use it the right way. 100%. Like, it's kinda similar to, like, if you do four zero one k, like, you do pretax Mhmm. Or do you do post tax? Because at least post tax, you own it, and your taxes aren't any higher on that stuff. But pre tax, you get more time with more money in it to grow. Well, with depreciation, the idea being is you could save on taxes to reinvest that money now, and let that money grow faster. And that's the people, like, if you could do that and you could keep reinvesting, it makes sense. But really, what if your tax rate, what if your effective tax rate is like 15?

Dylan Koch: [38:33] Mhmm.

Dan Austin: [38:33] And you're doing depreciation, and you would have just paid 15% of that tax, but when you get the recapture to sell it, you're paying 25. Yeah. That's what I'm saying. Maybe it's a scam by the government if you don't do it right.

Mike DeHaan: [38:45] Especially because most people, they don't take that money and go and put it into their business. They're like, I'm taking that money. I'm gonna go buy a boat. Yep. Right? Like, Boats are cool. Boats are cool. Totally. But you're going to come out worse and, like, I would almost say the long run, because most people look to sell their property on average five to seven years. Yeah. You're gonna be paying it sooner than you think. Yeah. Right? And just understand what you're doing.

Dylan Koch: [39:06] Sorry not to keep going down this, but I think the, like, for dancing, doing it right. Also for those people who may be married to someone with a high w two, and you qualify for real estate professional status, which is just a tax designation, and you can reduce your partner's active income, that's also a bigger component to this.

Dan Austin: [39:23] Because their tax is already super high.

Mike DeHaan: [39:24] Right.

Dan Austin: [39:25] And that does make sense. But if you have a low income, it's not as helpful.

Mike DeHaan: [39:28] Yeah. These are these are things that Dylan thinks about with his sugar mom over there, because both Dan and I's wives don't work. So

Dan Austin: [39:34] Hell, yeah.

Dylan Koch: [39:34] It's not on my radar.

Dan Austin: [39:36] But

Mike DeHaan: [39:36] sorry, Dylan. I had to call

Dan Austin: [39:37] you out

Dylan Koch: [39:37] for No, Mike. What's your lesson?

Mike DeHaan: [39:39] Yeah. What's my lesson?

Dan Austin: [39:40] Yeah. Yeah. Marry rich.

Mike DeHaan: [39:42] Yeah. Right. That yeah. That's my that's my lesson. Shit. Marry a doctor. No. So my mine mostly goes to the single single channel risk on marketing that I've been trying to focus on this week. Mhmm. And because the the lesson that we have sort of shot ourselves in the foot with a little bit is we started doing some more brand based marketing and some online stuff, which takes time to ramp up like everything else. How it was timed was it was supposed to basically start kicking off as our mail was starting to hit for January. I failed to predict that an inch of snow means the entire shutdown of 30,000,000 people in the Midwest. So,

Dylan Koch: [40:17] you know,

Mike DeHaan: [40:17] I just assumed that was something that happened. So now as a result, we have this weird, like, belly super slow period in our marketing. Whereas what I should have done in hindsight is kicked off that stuff at the end of December, so it would be sort of, like, ramped up by now. But I didn't do that because I was going off of my historicals, and I didn't pick the, like, what the black swan event coming into play there. Yep. So but point being with less than that is make sure that you always have other options for finding deals even if it means you're just gonna have to work hard enough to network. Because if you are always just relying on a singular thing, you're always at risk of it being shut down.

Dan Austin: [40:52] Boom. That's good advice. Cool.

Mike DeHaan: [40:53] Anything else, guys? I'm good. I'm good. Right on. Alright, everybody. Well, thanks for listening. Please share our show with your friends. It helps us out a lot, especially in this saturated space with the old Zuck now throttling everything, wanting you to pay for exposure. Seriously, you guys should go and look at there's there's all these different studies and things about how much, like, organic exposure on social media has dropped over the last, like, six months. It's insane, honestly. Everyone we

Dan Austin: [41:21] talk to says the same thing, man. Nothing's happening.

Mike DeHaan: [41:23] They're trying to get you to pay to play. And, you know, it's kind of unfortunate, but it is

Dan Austin: [41:27] what it is. You know what you're gonna start seeing? You're gonna start seeing people, like, boost their posts just so people see, like, you know, their family pictures and shit.

Mike DeHaan: [41:33] Honestly, bro. Like, it's it's only a matter of time before people start doing that. And then where it was gonna get really weird is those people are gonna be competing with, like, businesses that are trying to get actual exposure. But, anyways, everyone have a good week, and we'll talk to you next Tuesday.

Dan Austin: [41:48] See you. See y'all.

Mike DeHaan: [41:50] 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.