TGCI 205: Corporate Engineer created scalable & repeatable systems to find motivated sellers

Top 6 Reasons To Invest Outside of Wall Street
Download this free e-book to find out why it's critical to your financial success and what the alternatives are.



Episode 205: Corporate Engineer created scalable & repeatable systems to find motivated sellers

Copy of EP #18 - 2 Guests

Summary

In today’s show, Pancham interviews Mike DeHaan – a real estate investor, lead generation master, systems specialist, and host of Collecting Keys Real Estate Investing Podcast.

After realizing that being a corporate engineer was not for him and began to explore other into business opportunities, he became acquainted with investing and quickly recognized the power of real estate and its income potential! Today, he continues to build scalable and repeatable systems and expanding his rental portfolio.

In this episode, gain new knowledge as he shares his story of generating passive cash flow and building scalable systems through real estate investing. He’ll also unpack his perspective on finding his niche and the importance of partnering with others when exploring investing opportunities.

PanchamHeadshotTGCI
Pancham Gupta
Screen Shot 2022-08-22 at 1.36.59 PM
Mike DeHaan

Tune in to this show and enjoy!

Timestamped Shownotes:

Copy of Quote #00 - 1 Guest
  • 0:39 – Pancham introduces Mike to the show
  • 1:54 – Giving up employee benefits to start a real estate investment firm
  • 5:10 – On exploring business opportunities and discovering real estate
  • 10:51 – Discovering his niche of buying rental properties at a discount
  • 15:50 – How partnering with others will help scale up your business faster 
  • 19:51 – First deal vs. current deal and how he analyzes his deals
  • 26:29 – How morning walks help with his productivity
  • 29:24 – Taking the Leap Round
  • 29:24 – His first property investment outside of Wall Street
  • 29:57 – Overcoming his fear of losing his partner’s investment
  • 31:04 – How a renovation mistake ended up with losing money
  • 32:02 – Why you should invest in assets that really interest you
  • 32:57 – How you can connect with Mike

3 Key Points:

  1. Listening to podcasts can provide you with an understanding of what it’s like to invest in real estate and what benefits are available for you.
  2. Having a partner when investing is beneficial, especially when you are just starting out because it allows you to learn how the industry works and gain opportunities.
  3. It’s difficult to leave your W2 job, especially with golden handcuffs. But once you’ve done it, it’s actually easier than you thought.

Get in Touch:

Book:

Read Full Transcript

(intro)

Welcome to The Gold Collar Investor Podcast, with your host Pancham Gupta. This podcast is dedicated to helping the high-paid professionals to break out of the Wall Street investments and create multiple income streams. Here’s your host, Pancham Gupta.

 

Hey, this is Dave Zook. I listen to Pancham at The Gold Collar Investor Podcast, and so should you.

 

(interview)

 

Pancham Gupta

Welcome to The Gold Collar Investor Podcast. This is your host Pancham. I really appreciate you for tuning in today. My guest is Mike DeHaan on the show. After spending five years as a corporate engineer, Mike found his major skill set and passion in building scalable and repeatable systems. After quitting his engineering career in 2018, with no plan, he spent the following two years studying real estate investing in business before joining forces with Dan in late 2019 to start their investing business. Since they started, the system he designed has been tweaked, defined, and simplified to allow them to speak to hundreds of motivated sellers every month and build a rental portfolio of over 40 units between 23 individual properties, while simultaneously completing almost over 50 transactions in 2021 alone. Mike, welcome to the show.

 

Mike DeHaan

Hey, thanks for having me. Excited to be here.

 

Pancham Gupta

Excited to have you on. Before we get started, are you ready to fire up my listeners break out of Wall Street investments?

 

Mike DeHaan

Absolutely. I mean, who doesn’t like to talk about making money, especially if you can do it on your own terms and not having just to rely on the market all the time?

 

Pancham Gupta

Absolutely. Well, great. Mike, before we get started, do you want to give your quick background and, more importantly, the person behind that background?

 

Mike DeHaan

Yeah, absolutely. So, I grew up at Montana, sort of in a rural town. Exposure to tech and even the stock market and things like that was actually foreign. For me, back then, a lot of people that I grew up around lived on ranches or were small town folks, right? The only people that invested in stocks were at the banks, people that worked at banks or had more corporate jobs, which was not super common there. Despite that, my family grew up from more of a traditional working background. My dad was an entrepreneur. When I went through school, the plan was always for me to go to college, get a good job, and do that whole thing. So, I left that town, pretty much right after I graduated from high school. I started to move to Eastern Washington, town of Spokane to go to college. There, I got an engineering degree. After I graduated from there, I got a job at Boeing, where I worked for several years working as a Boeing engineer. As I was in that process, I was making good money. I was working a very stable job. It had a lot of opportunities like the 401k and the health insurance and all those things that people strive for.

 

After a number of years of that, I just decided that it wasn’t for me. So, 2018, I quit. I didn’t really have any plan. That was about five years after I had been working there, but I don’t have any plan what I want to do. All I knew was that I didn’t want to do that. So, I ended up getting into real estate after a few other roundabout things in the middle there. But I ended up starting a real estate investment business, which is now what I do full-time. That was my real estate investment business. We buy off-market real estate. I have a team of 17 people, and we do that all around the country. So, we buy things at massive discounts which allows us to have a pretty healthy return. So, that’s the super, super short version of what I do and my background.

 

Pancham Gupta

Yeah. I mean, there’s a lot to unpack there. You said that you grew up in a small town, and then you went to Boeing. It went five years you said, right?

 

Mike DeHaan

Yeah.

 

Pancham Gupta

You’re an engineer, you say?

 

Mike DeHaan

Yep.

 

Pancham Gupta

What kind of engineer?

 

Mike DeHaan

I was a systems engineer. I worked mostly on the manufacturing side—designing, manufacturing processes—both on the technical hardware and on the software side, most part.

 

Pancham Gupta

Wow. That sounds pretty cool, actually.

 

Mike DeHaan

Yeah. In theory, it was quite cool. The problem is just the giant bureaucratic machine. That is something like—Boeing makes it terrible. I mean, I’m not going to lie saying it wasn’t cool when you’re actually on the factory floor and you’re seeing an entire wing being manufactured in a process that you helped design. That is pretty cool. But the bureaucracy of a company like that is hard to enjoy.

 

Pancham Gupta

Yeah, I know. I totally get it being an engineer. I was a software engineer. My wife was an electrical engineer. She designed the boards that went into Motorola Razr. She was the one who designed that at the very forefront. No one knows about them now. But back in the day, they were really popular. So, I totally get it. You were at Boeing for five years. You didn’t enjoy the political stuff there but, obviously, the engineering side was cool. You then decided to quit. Was it right at the fifth year at the time of it that you decided to quit, or was it a long time in the making?

 

Mike DeHaan

The tension that led to me quitting was a long time in the making; the decision was very quick. I mean, I’ve been unhappy for several years up to that point. I’d had some personal things go on with my life. My father had some health issues. Those just gave me a new perspective on life, especially because he was very healthy and then he had these issues very suddenly. It makes you realize that life is pretty short. That put me down a path of wanting to explore new things. So, that’s when I actually started looking at different forms of investing and business opportunities. I went through a period of time where I was doing day trading. I was trying to swing trade stocks. I was looking at different businesses, anything I can do. I started getting into cryptocurrency, all that sort of stuff.

 

One of the things that I realized, though, as well was that with my income and with the way that those investments worked, I wasn’t really going to be able to replace them, replace my income without an actual business. So, when I realized that— I actually read The 4 Hour Workweek, and that completely just changed my framework on how to use leverage and how to build passive income. After I read that book, I think I quit my job three months later.

 

Pancham Gupta

Wow. So, you were doing all of these things, swing trades. I can totally relate to that. I know so many people who do that, where they’re trying to time the market or try to make a lot of money there, and the crypto thinking that they will eventually quit or want to get away from their full-time job. But it feels like that water in the desert the camel sees, the camouflage, right? They offer—what you call that—mirage, right? The water is just 10 feet away. You keep walking 10 feet, and it never comes, right?

 

Mike DeHaan

Yeah.

 

Pancham Gupta

So, you’re doing that. You read the 4-Hour Workweek. That changed your perspective. You quit after three months, right? What I want to unpack there is, what went through your mind? Were you comfortable enough? Because I get this question a lot. Didn’t you have fears, that you went quitting without having income or not knowing what to do?

 

Mike DeHaan

Yeah, of course, I did. Because when I quit— my wife worked as well, but she made a fraction of what I did. So, when I quit that job, basically, our income was cut by 80% right on the spot. Over the years, before that, I had been pretty smart with saving money, living within our means, investing money. So, we had a little nest egg, a couple $100,000. But that was our investments and our savings. That wasn’t really meant to be lived off of. But when I quit my job, my wife was— fortunately, she was on board with me making that decision. So, we cut all of our expenses down quite a bit. We went from living a relatively luxurious life—being able to go to nice restaurants, do whatever—to, literally, we were counting coupons, and we were buying things in bulk on sale. For doing activities, instead of going to shows or traveling, we would drive to a nearby campground and do like hikes and things that were free. That was a compromise that we decided to make, which is hard to do. We were lucky we didn’t have kids. I think with children, it would be much harder. But with just being us, I mean, we just made the decision to suck it up and deal with that for a short period of time. Having that cash in investments that we knew we could draw on was a little bit of security, but my goal was never to use that for living expenses if I didn’t need to.

 

Pancham Gupta

So, what did you do? You quit, you read that book, you didn’t have any plan, 80% cut off in the income which is really hard to do, living on coupons. How did you come to realization that real estate is the thing?

 

Mike DeHaan

The main way I made money after I quit was I worked in a gym, teaching like strength training just in the evenings for fun. I did that for years. So, I started doing that more. Then I would drive for Uber. While I was driving for Uber, I would listen to tons of podcasts and things like that. So, I listen to different business podcasts, podcasts about wealth, podcasts like The Gold Collar Investor, similar sort of stuff. Real estate comes up very frequently. I started to really see the power of real estate, particularly with the four ways that you can make money in real estate which are the most obvious, which is passive cash flow from rental income, the debt pay down on your mortgage that you get, the appreciation as the market value of the property goes up, and then the tax benefits. As I started to learn about that and also learn about the fact that you could potentially buy properties at a discounted price—which just increases that potential return even more—it just seemed like an obvious thing for me to start to get into. The barrier to entry was relatively high, so it took me a period of time to start doing what we’re doing right now. But once I really started to learn about the different processes and the potential of it, I was hooked and decided that it was something that I needed to pursue more seriously.

 

Pancham Gupta

This is so true. On this podcast, we talk about so many different things like different asset classes, different ways you can be investing. Real estate is one thing that comes out so many times. Obviously, you made that observation. Within real estate, there are so many things. There’s self-storage. There are so many different sub-asset classes: self-storage, retail, and multifamily, single family, mobile home park, commercial. How did you pick a niche within that? That’s very hard in itself, right? You basically picked a niche, and you just went after it basically, right?

 

Mike DeHaan

Yes.

 

Pancham Gupta

You did what you did, whatever resonated with you the most.

 

Mike DeHaan

Yeah, because of my income situation at the time, I needed income. So, what I originally pursued was transactional income-generating activities around real estate. I didn’t want to be a realtor, because the income potential there is capped on the value of the properties, which around here at that time was about $20,000 on average. I was like, “If I sold houses, I’ll only make $6,000 bucks,” which would be fine but the cycle time was so long. I, instead, was like, “I’m going to start flipping houses.” So, I got into that. I’m like, if I flip houses, the average market margin I can make per property, if that same three- to four-month timeline of being a realtor, I can make $30,000 to $40,000. So, I started down that route.

 

Then as I got into it, I was like, “Okay, well, this is hard to do at scale. So, what if I started marketing` these properties myself and just selling the paper?” So, I became what people call a wholesaler. So, I will get a property under contract that’s worth $300,000. I will have the contract for $200,000 now sell to somebody for $215,000. I’ll never actually close. I’ll make an assignment fee on that spread payment, $200,000 and $215,000. So, I started on that to generate revenue. Then as I continued with that path, my ultimate goal was to buy rental properties, especially because of the passive nature of them and the massive net worth you can build by buying properties at a discount. So, I just really started keeping, taking all the revenue I was generating, rolling into these rental properties at a discount. Then after we would fix them up and stabilize, we would pull out all of our cash. People who are there into investing, they call it the BRRRR method. So, it’s buy, you rehab, rent, refinance, and repeat that process. What that allowed us to do is really increase the velocity of our money. Because now all of the returns that we’re getting on the property from the appreciation, the cash flow, the debt paid down, everything, we have no cash left in the deal. So, we refinance all of it out. So, the return on our principle is ultimately infinite when it comes to that. Not only that, but the income that you get when you pull out any surplus on those refinances is all tax free. So, it allows you to scale extremely quickly, especially when you’re looking from a net worth perspective or the value of the asset from a Wall Street investor. Imagine if you could buy Tesla stock for 60% of what it’s worth right now. Would you do that? Absolutely. Everyone would. We do the same thing. We just deal with hard assets. So, it just becomes a velocity of scale as you build up a team and just try to do more and more.

 

Pancham Gupta

Exactly. So, that’s great. Is that what you do now full-time? You buy discounted properties, you search for them—either you’re direct mailing to the owner, or cold calling, or whatever methods you have—and then basically buy them, and then do BRRRR on them, and then keep them in your portfolio?

 

Mike DeHaan

Yep. So, whenever we get B or A class assets, we get less newer properties, less maintenance, heavy properties, we’ll generally keep them. If we get C class properties or heavy rehab properties, we will wholesale those for the most part.

 

Pancham Gupta

Are they mainly in Washington state where you are at, or it’s different places?

 

Mike DeHaan

Yes, we currently operate in nine different markets around the country. When we started, we were just in Washington State, in Spokane area. As we started to grow and we had the desire to do more deals, we had reached the point where we had maxed out the opportunities for this local population. At that point, we had learned the business processes, so it was pretty easy for us to just go and start that in another market, and how we would operate in these different markets. Because we didn’t know the nuances of the neighborhoods and things like that, we would basically just find local partners in those markets that did. We would split costs with them. When we would go, they would help us underwrite deals. They would help us move properties, finding investors, things like that. We just split things with them 50-50. So, it helps work out pretty well.

 

Pancham Gupta

That’s awesome. Switching gears, now you’ve done that, you’ve quit your job in 2018, found your niche, scaled into nine different markets. Knowing what you know now—both for your full-time job experience and your way to discover your niche, all the things in the middle that you did—what would you do differently? If someone is listening, and they are wanting to go take the same route that you are but not make all the mistakes— I say that loosely, because everyone goes through those mistakes. It’s very hard to just copy and paste and find Mike did it. Let me do it, too. It’s not that easy. It’s always— there is a discovery process. Knowing what you know now, how would you have done differently if you have to do it again?

 

Mike DeHaan

If I have to go back, I think the thing I would do earlier is I would have gotten out of my own way and started to find people that could either teach me or partner with me on these different opportunities. Because from 2018 until I started this business in 2020, I was trying to do it all myself. Because that’s sort of how we’re raised to do things. You got the education system. You’re taught that you’re a worker, and you try to do all the work. Once in 2020, when I start working with my business partner, and we start bringing on staff and things like that, I was able to— I’m not going to say staff but also partners and people that had more knowledge. Even though we were giving up our potential revenue by working with these people or giving up parts of it, we were able to scale much quicker. That was the catalyst. If you are trying to learn about something, you’re trying to get involved in something, don’t be afraid to find people that are doing what you want to be doing. Offer to partner with them. Be okay making the money as an exchange for knowledge and opportunity. That would be a big difference that I wish I had made earlier.

 

Pancham Gupta

That’s a great point. Knowing what you know now, would you do it sooner? Would you wait quitting your job?

 

Mike DeHaan

In hindsight, I wish I would have quitted my job several years earlier, for sure. I wrote it out. I would say, I’d quit in 2018. I was pretty unhappy in that career by early 2016. So, I was there for two full years, just miserable. But you had those golden handcuffs. I would always latch on to things like, “Well, my wife’s company doesn’t have health care. How are we going to pay for that?” Once you leave, you realize it’s really not that bad. Especially, when I left my job, we were able to get state-sponsored health care. But as we graduated from that, if your wife has a higher income or you have reserves, it’s not the end of the world to have to pay for that. Same with 401k match, I would latch on to that. That’s like what, an extra $12,000 a year, which is fine. But then if you look at the big picture of what you can actually make working for yourself, that $12,000 is not very interesting anymore.

 

Pancham Gupta

Right. Exactly. The human mind is crazy, right? We think of all the things that can go wrong if you’re thinking of quitting. What about health insurance? What about all the other benefits and all the whole nine yards? You have that. It’s not just you. Your wife, your family, everyone thinks the same way and stops you from doing the things that you want to do.

 

Mike DeHaan

Yeah. Comfort is the most addictive drug that there is out there. Threatening that comfort, especially if you’ve felt like you’ve worked hard to achieve it, it feels very daunting. Unfortunately, that’s also where we grow. It’s by getting those uncomfortable situations. So, it’s a necessary thing if you want to have anything more with yourself.

 

Pancham Gupta

Exactly. Right. Mike, this has been great. I want to ask you. Majority of the listeners on the show are engineers like yourself. They like numbers. They want to analyze the numbers. So, do you mind sharing numbers on your first deal or the last deal that you did on, typically, how much you paid for it and how much you put into it, if you bought it or sold it, just so that they have an idea?

 

Mike DeHaan

Yeah, so, I’ll share my first deal. I think it’s a great perspective for you guys, so you know the arc I went through.

 

Pancham Gupta

2020? It was 2020?

 

Mike DeHaan

Yeah.

 

Pancham Gupta: 

Okay. All right. Go ahead.

 

Mike DeHaan

No, sorry. My very first deal, it would have been 2018.

 

Pancham Gupta

  1. Okay.

 

Mike DeHaan

Yeah, that’s when I first started flipping properties, and I was trying to do it all myself. So, I bought the property for $180,000. I had a renovation budget of— I think it was about $45,000. I had an estimated sales price of about $280,000. With the total cost, I was expecting- I have an all in cost of about 225. After sales costs, I would think it was going to be making $35,000. What ended up happening, I went into it. I tried to cut some corners on the work, tried to do some of it myself. I didn’t have the appropriate professionals and made a mess of things. There was some stuff on the property that I didn’t know. My renovation budget ended up going from $45,000 to about $70,000. Then there was a lot of stuff I didn’t know. Then when I went to list it and sell it for 270, I ended up selling it for 262, I think. This was my first project. It took me four months. After four months of going through all this— I had a partner on this deal. They were bringing a lot of the money because I didn’t have it. I was just trying to do the work. Four months and all this nonsense back and forth, I made just under $4,000.

 

Pancham Gupta

You, personally?

 

Mike DeHaan

I personally made $4,000, yeah. At least, I didn’t lose. But if it you look at dollar per hour, I probably made less than $1 an hour amount.

 

Pancham Gupta

Yeah, exactly.

 

Mike DeHaan

So, that was my first deal. Now, as I’ve learned and grown, I learned to get better deals and underwrite properties better. This is the one that we did recently. It was a duplex. We bought it for $198,000. It was a single, basically, one bedroom, one bath upstairs. It had an unfinished basement. So, about 198. We went in, and we spent $80,000 to make the upstairs nice and to finish the downstairs, to make them three bed and two bath units. So, we’re into it, after costs, about just under $300,000, like $285,000. We got to refinance out our money. The thing appraises for $425,000. We do a full cash out refinance on it. I got to figure out my exact math on the loan. So, we did a 75% cash out refinance. So, 425 times .75, so you got a $318,000 loan. We’re into it for about 280. So, we got about $40,000 extra in our pocket, tax free. Now with the way the rental is on both sides, we make about $1,500 a month.

 

Pancham Gupta

Awesome. You got all your capital back, and then some. Then on top of that, you’re making $1,500. Can you beat that?

 

Mike DeHaan

They’re fully renovated properties. There’s no more work that needs to be done for the foreseeable future.

 

Pancham Gupta

Yeah, I mean, anyone listening, this is a great example. If you have a stock and paying 3% dividend, let’s say. If you’re going to argue that that stock is paying you 3% dividend, you’re paying taxes on that dividend, too. So, you have that. Then you have something where you put in a lot of hard work, which doesn’t seem to come up, but you have to have all these systems and processes. Let’s say, you have that. You basically made $40,000 to do all that work. Then now you’re making $1,500 on top of that every month.

 

Mike DeHaan

Yeah, exactly. I’m gonna pay taxes on that money. Especially, as you build the tax benefit, like you alluded to there, it’s the real stuff.

 

Pancham Gupta

It’s the real money. Yeah, exactly. I mean, the 3% is just something in your mind. If you really do the tax adjusted number, if your tax bracket is 40%, you’re just 1.8%, like 60% of 3 which is in the bank right now, we’re getting 1%.

 

Mike DeHaan

Yeah, right. Then when you get so much of your income, it’s tied to this debt that’s being covered, you can have a huge amount of cash that you pay. By come in, that you pay no taxes on it at all. So, I guess this is number for you. Last year, I personally made just over a million dollars in total revenue, if you include all our cash out money and our wholesales, everything like that. What the average person pays on taxes for that? About what? 40%.

 

Pancham Gupta

Yeah.

 

Mike DeHaan

I paid $15,000 in taxes last year.

 

Pancham Gupta

Your effective tax is like 1.5% as compared to whatever, 40%, right?

 

Mike DeHaan

Exactly.

 

Pancham Gupta

There it goes. I mean, you paid less tax what you paid probably on your Boeing full-time W-2 income, which was way less than 1 million. You made more money and paid lower taxes.

 

Mike DeHaan

Exactly, yep. That’s the real power of the whole thing right there. It’s being able to have that. Because when you have that much liquid, there’s no cash on it, there’s no tax on it. Especially, moving forward, because we’ve done so much work on these properties so we have all these capital expenses that are all depreciable over the next couple of years. So, our tax burden is going to remain low for the next 10, 15, 20 years, as long as we own these properties.

 

Pancham Gupta

Exactly, and they’re appreciating. So, that’s another thing. That’s awesome, man. Even knowing this, after talking to you, I want to know more. Let’s do more, go find deals. This has been awesome. I have one question for you before we move on to the second part of the show, which I call Taking the Leap Round. My question is this, completely different from what I have asked you, do you have a morning routine that you follow? If so, what is it? Do you think it attributes to your success?

 

Mike DeHaan

Yeah, so, it’s funny. I used to have a morning routine that I was very diligent about. So, I used to wake up. I’d workout first thing in the morning. I’d go for a walk, I’d eat breakfast, then I’d read a book. I did that every single year for two years. Then my wife and I, we went on a vacation for two weeks. We went down to Central America for two weeks, and I didn’t have that morning routine. We got back, and I was like, “You know what? I hate that morning routine.” I stopped doing it. So, I don’t do it anymore. My productivity is still good. I work out middle of the day now. That’s my preferred time. I think the only thing I do consistently in the morning is I do like to just go for a short walk. That’s about it. So, I honestly don’t have anything too crazy anymore.

 

Pancham Gupta

Got it. Cool. Whatever works, right?

 

Mike DeHaan

Yeah.

 

Pancham Gupta

Cool. We will be back after this short message.

 

(commercial)

 

Pancham Gupta

Do you ever feel overwhelmed by the thought that you have no time after work and find no time to learn about investing? Do you feel left behind that you are not putting your money to work for you? Do you want to create passive income, but you do not know where to start? If so, I have good news for you. I have created an investor club which I call the Gold Collar Investor Club for Accredited Investors. I will be putting together investing opportunities exclusively for this group. These are the opportunities where I have done my part of the due diligence for you and will be investing my own money alongside you.

 

If you are interested, please sign up on thegoldcollarinvestor.com/club. I repeat thegoldcollarinvestor.com/club. I will reach out to schedule a 30-minute phone conversation to discuss your investing goals once you sign up. This can be a good opportunity to diversify and take some chips off the hands of Wall Street to produce some cash flow. In case you are wondering what is an accredited investor, accredited investor is someone who has earned more than $200,000 as filing single or more than $300,000 filing jointly for the last two years. Another way to qualify as an accredited investor is if your total net worth is more than $1 million, excluding your personal home. It includes your stocks, 401Ks, IRAs, cars, et cetera—just not the equity in your personal home. If this is you, I would highly encourage you to sign up.

 

(interview)

 

Pancham Gupta

Mike, let’s move on at the second part of the show which I call Taking the Leap Round. I ask these four questions to every guest on my show. My first question for you is, when was the first time you invested outside of Wall Street? Would you say that 2018 home that you shared before is the one, or was it before, something before that?

 

Mike DeHaan

Yeah, I started buying crypto in 2016. I don’t know if that counts as outside of Wall Street or if that’s kind of similar.

 

Pancham Gupta

It’s similar. I mean, that’s like paper product. They’re not really hard assets there. Someone would argue that Bitcoin is, but I would say no.

 

Mike DeHaan

Yeah. Okay. So, it’d be 2018 then.

 

Pancham Gupta

Okay. So, let’s talk about the second question there. Did you have any fears to overcome when you first bought that house for $180,000 with a partner, presuming that partner bought a lot of the capital here?

 

Mike DeHaan

Yeah, I mean I was terrified of actually losing the money on that. Because when you have stocks, even if it goes down, it’s easy to believe it’s going to go up. But when you’re working on a project or you have something like a real estate, it’s easier to feel like it’s going to go away. Even though, it’s funny because in hind sight, you always have a hard asset. You can always accept from it. Even if you have to take a little bit of a haircut on the deal, it’s most likely not going to go to zero.

 

Pancham Gupta

Right. Yeah, I know. True. We all have those fears. How did you convince your partner there? Sorry. I’m adding my own question out of curiosity. Given that you were doing it for the first time, how did they believe in you?

 

Mike DeHaan

I mean, they were also newer so we were both kind of ignorant. So, that helps. They just had more money than I am.

 

Pancham Gupta

Okay. Got it. That makes sense. Cool. So, my third question, can you share with us one investment that did not go as expected?

 

Mike DeHaan

Yeah. So, that first one really didn’t go as expected. It was so much work and made so little. Then I had another one about a year later that I thought was a super awesome deal. It was a large house, like A class neighborhood of town here. I made the mistake that so many new investors and renovators make. Because it wasn’t the nicest part of town, I decided that I needed to make the house as incredibly nice as possible. So, I really jumped into the guts of it and started doing a ton of extra work that wasn’t necessarily required to sell the house. I over renovated it, and I ended up losing $25,000.

 

Pancham Gupta

Wow. Well, you do these things, and you learn, right? These are real world university lessons. My last question for you is, what is one piece of advice would you give to someone who’s thinking of investing in Main Street that is outside of Wall Street?

 

Mike DeHaan

I think one of the biggest things— So, I guess when you say Main Street, you’re talking about like real estate, like businesses, private equity.

 

Pancham Gupta

Yeah, exactly. Like outside of Wall Street money, hard assets, and all that.

 

Mike DeHaan

I think one of the big things I would say is find— whatever you’re investing in, especially if it’s outside of securities, make sure it’s something that really interests you. Otherwise, you’re not going to educate yourself properly, you’re not going to do it for the long term. When it comes down to investing, just like investing in stocks, it’s all about the long-term picture. If you’re going into it and you don’t have a long-term time horizon, you’re going to be jumping around, you’re not going to do well in any form of investment.

 

Pancham Gupta

Great, great advice. Thanks, Mike, for your time here. How can listeners connect with you if they want to reach out? You have a great podcast as well. Why don’t you talk about that? How can listeners connect with you?

 

Mike DeHaan

Yeah, so, I have my own Real Estate Investment Podcast. It focuses on business in how we find deals and how my business operates. It’s called the Collecting Keys Podcast. You can find it anywhere if you listen to podcasts. If you want to connect with me directly, the best way is through Instagram. I am @mike_invests. So, you can send me a DM on there. I always like to chat with people, or you can also send me an email which is mike@collectingkeyspodcast.com

 

Pancham Gupta

That’s awesome. Thank you, Mike, for your time here.

 

Mike DeHaan

Cool. Yeah, thanks, Pancham. I appreciate it.

 

Pancham Gupta

Thanks for tuning in today. If you have questions, don’t hesitate to email them to me at p@thegoldcollarinvestor.com. That’s p—as in paul—@thegoldcollarinvestor.com. This is Pancham signing off. Until next time, take care.

 

(outro)

 

Thank you for listening to The Gold Collar Investor Podcast. If you love what you’ve heard and you want more of Pancham Gupta, visit us at www.thegoldcollarinvestor.com and follow us on Facebook at The Gold Collar Investor. The information on this podcast are opinions. As always, please consult your own financial team before investing.

Copy of EP #18 - 2 Guests

Leave a Reply

Your email address will not be published.