Episode 154 | Dan Austin | Military Millionaire

00:00 - 05:00

David:

What's up Military Millionaires! I'm your host David Pere, and I'm here with Dan Austin, who is a former Army Ranger and a real estate investor who's in CCF. So Create Cash Flow Ryan Dorsey's coaching program that I am also in. And so when they reached out, they were like, Hey, we might be interested in being a guest on the show. I was like, oh, shoot, I'm in CCF. I love CCF. I'm, you know, obviously, like the military. So this would be a good fit. Let's jump on a call and have a podcast and talk. I mean, that's, that's the intro you're gonna get.

Dan:

Perfect!

Intro:

Welcome to the Military Millionaire podcast where we teach service members, veterans and their families how to build wealth through personal finance, entrepreneurship and real estate investing. I'm your host, David Pere. And together with my co host, Alex Felice. We're here to be your no BS guides, along the most important mission, you'll ever embark on your finances.

Sponsor:

Hey, guys, I want to talk to you real quickly about Propstream, which is actually one of my favorite platforms that I've ever used for real estate investing. And I really wish I'd used it sooner. So Propstream is essentially if you combine list source with the MLS or multiple listing service with the ability to comp and pull tax records and all kinds of stuff. So you can pull super, super super niche lists like somebody who inherited a home and tried to sell it and has 70% equity and failed to sell the home. And then you can send them letters, you know, all kinds of listings and just more data than I even know what to do with. But you can also if they have a property, you can see what else they own. And you can do all kinds of stuff. You can skip traces, you can send mailers, you can do I mean everything through this platform. And I recommend you check it out. There's like a two week free trial if you use our code, which is frommilitarytomillionaire.com/propstream or down in the show notes slash description. You'll see it and I recommend you check it out, because I've used it now for four months. And I've got four deals that were all pulled through Propstream lists, so it is incredible.

Dan:

I love it, man. That's good enough. Rangers do it. Yeah, all right, let's. Yeah, man!

David:

You know, it covers all the cool stuff, right? You are a Ranger and you buy houses.

Dan:

That's the only cool things I do. So.

David:

Why don't you give the audience a little bit more backstory. Tell us a little bit about yourself.

Dan:

Yeah, yeah, sure. Since you know, this is Military to Millionaire. I'll start back there. I Joined the army when I was 18 for a job. You know, I was kind of misguided in a lot of areas as many of us were. I always like to tell funny stories, like how I picked the army because I did not know what I was going to do. But I walked into the recruiters office and it was one of those like, like, they had all the branches there. And the Marines were on the right. And I didn't have an appetite for crowns at the time. So I knew Marines weren't going to be my thing. But in all seriousness, the army, the army was the first to a door on the left. And so I walked in, and I said, Hey, I think I want to be a helicopter pilot. They're like, nope. And so I just turned around. And then I came back another week. And I was like, I think I want to be an Army Ranger. And they're like, Do you know what that is? I'm like, No, not really. They're like, that's probably not going to happen. And so anyhow, I joined the Army and worked my way up through basic training, did some Airborne School and got into the rangers and spent six years there. With the second Ranger Battalion doing several deployments to Iraq and Afghanistan, I had a kick ass time. I loved it. The Army has, you know, tons of hardships, obviously, going overseas. And all that kind of is a bummer. But between 2004-2010 That's kind of where my life was just focused on combat and being better at what I was doing. And then once my second enlistment was a, I pivoted away, because I wanted to get a college degree. It was a goal of mine. In hindsight, was it a great goal. Not really.

But you know, I wanted to be the first one in my family, a college degree. And so I went, joined the National Guard, and got my degree in electrical engineering, which, you know, I didn't put too much thought behind that either. I just knew that, you know, electrical engineering was a harder degree to get, so I'd probably be able to get a job, which I did. That plan actually worked out, I got a job working for a company here in town. I live in Spokane, Washington. And we made it like 11 months as an engineer before I realized, like, you know, I just went from carrying a gun, jumping out of airplanes, and all that is sitting behind a desk, like drawing on paper. And that wasn't that fun. And so I ended up getting a management job at the same company and still work there today. And I've worked my way up through different leadership roles and that sort of stuff and really, actually enjoy it and love it. That's why I haven't left yet.

05:00 - 10:00

Dan:

But even then, like leaving the military, and having a full time job was not as fulfilling as I thought it would be. And I just there's just I had extra bandwidth, right and so I overheard a guy talking about somebody that was a real estate investor at my company. And so I immediately went over introduced myself to this guy, and he's one of my good friends now, and just started talking to him and about real estate in like, two years later, I bought my first rental property and he coached me through it mentored me through it to student rental right across the street from a local university. And then, in quick order, I bought the house next door off market and had an awesome deal. That was like my first real brrrr deal. I'd been listening to bigger pockets and just didn't understand the value of brrrr at the time. But then it kind of worked out, I got this house at a discount, spent a ton of money on renovations and I was like, I kind of want some of my money back. So I refinanced it and got all my repair costs out and all that sort of stuff. And I was like, this is pretty cool. Now I can see how you scale. And so I started putting out offers on the MLS and wasn't finding anything.

And then 2019 my business partner now and friend at the time had reached out and pitched me this idea for what's our business now he had been investing in real estate as well, kind of the same time I was and we just kind of decided to join forces, and that this buying them off market would be better than putting offers in on MLS. And so that's when we joined CCF late 2019. And Ryan, I mean, he's a kick ass guy, and CCF is awesome. That really took us from zero to 100 super quickly, we ended up dropping our first batch of marketing in March of 2020, which is a perfect time for the world to shut down. But we hadn't, we had no other options. So we put our foot on the pedal and just kept going. I think we ended up spending like 20 grand before we got our first deal. That's partially because like we just weren't good at it right away. Like we were not, I don't know, we just didn't know what we didn't know at the time.

But since then, you know, we scaled up pretty well. I think last month we did 14 wholesale deals, some referral deals and quite a bit of other stuff. And we bought 20 doors since then also because we're trying to just our main intention was like, you know, buy the best wholesale the rest type thing. And so we've gone back and forth on wholesaling, flipping and buying certain things, but we've always consistently, you know, bought something every so often just because the cash flow is really our big goal is that passive income. So that brings us to today.

David:

I'm in the same boat. I got an acquisitions manager out there and I'm always talking to him. I'm like, I just want to buy everything and then if we have to wholesale stuff to keep the doors open. Okay.

Dan:

Yeah, I mean, that's really what you do. And then you find I was talking to somebody at one of the meetups that were just down in Florida for CCF. And there's this constant tension doesn't matter how much money you get in the bank because the more money you get in the bank you're going to buy stuff with it right like you can you can go and take down a flip and and bankroll that or you're going to go and buy a house or multifamily and or you're gonna buy more marketing like there's this tension so you're always kind of flipping back and forth between God I really want to buy this deal but maybe we should wholesale it because it doesn't necessarily fit our Buy Box because like right now especially like we're hard on buying stuff we're trying to you know, hedge against inflation and all that sort of stuff but it's a it's a comfortable tension right now. It's a good tension.

David:

Yeah, I'm buying stuff with creative financing. The nice thing is when you wholesale there's like a box everything has to fit inside this box in order to be able to be wholesale and when you when you add wholesaling you can kind of expand the box a little bit depending on the market. When you're buying stuff yourself to like, Man, this guy deep. We locked up one the other day, like two grand down subject to mortgage, and then we locked one up we got it for she wanted like, like 14 15,000 more than what we got it under contract for because she's getting foreclosed on and like a month and a half, and nobody would let her live in the place. And so we're like, Okay, well, hey, how about we let you live there for free for 12 months? She took amazing care of the house.

Dan:

Yeah.

David:

But to do that, like we're gonna just pay your mortgage off nothing else. And she was like, Okay, I'm like, awesome. So we just got this thing under, you know, so yeah, I'm gonna be stuck with a tenant who's not paying anything for like, a year, but I also got a $14,000 discount on it. And amazing shape. So whatever.

Dan:

That's awesome.

Yeah, that's how you make it in this business, right? Like, you just stick to the box you just talked about, like, you're probably going to be okay, but you're just not you're you're not going to do you're not gonna be maximizing your opportunities. And there's so many cool things you can do that reminds me of one deal we're doing right now like we're buying a trailer like a mobile home for like 10 grand and it's not in bad shape. We'll probably have to put some money into cleaning it up. But we're like, you know, we could just sell this and flip it and you know, probably sell the contract for 50 grand, so it'd be good cash in our pocket. But now we're thinking about it from the cash flow standpoint. What we're gonna do is we're gonna just sell it on the owner's contract because like we can, we can pay cash for this thing and do the renovations and so Have a little bit of money into it. And then we'll just take a downpayment, sell it and then get, say, five 600 bucks a month of passive income, which is awesome, right? It's like, if, you know, if we had one door we added to our unit or our portfolio and were making five 600 bucks, you know, a month we'd be happy. And so this is the same thing, except for we're not handling any of the maintenance or anything on this property, right. So.

10:00 - 15:00

David:

Yeah, I like it.

I agree.

Dan:

Yeah.

David:

So it's like, I'm dabbling in seller financing. Trying to, I bought a piece of land that I normally wouldn't have bought, but got it cheap enough. That makes sense and trying to sell or finance it off to somebody rather than rather than just listed. But..

Dan:

Yeah, yeah. I don't know. I like it, it is another cash flow model. Actually, I was talking in Florida this last week to Aaron Bill, who's also in CCF, and he was kind of doing something similar. And so in this trailer I came across it. I was like, No, it's a little riskier. Maybe we're gonna be 15-20 grand into this thing. We'll take like a $5,000 down payment. So yeah, we're 10-15 into it. So reasonable risks that take 500 bucks a month cash flow, in my opinion.

David:

If they don't pay, you get the asset back and you go again?

Dan:

Exactly.

It's a trailer so you can't like, trash a trip too much, right? Like it's like tin walls and like, it just goes back together, right?

David:

Let’s say you can but that's how people expect them to look anyway. So.

Dan:

Yeah, exactly. Yeah, exactly. You don't have to make it the Taj Mahal by any means.

David:

People get a lot less upset about a scratch on a Honda than they do a scratch on a Rolls. So.

Dan:

Right, exactly.

David:

So alright, so how are you? How are you finding deals? So it's, you know, Washington is not the cheapest of markets in the world. And it's November of 2021. And the world is a seller's market. And everybody says, oh, you can't find deals anymore. So obviously, you are, what are you guys doing?

Dan:

Yeah, so we have a couple different ways we do. But the main one is definitely direct mail. We finally dial that into where we have a funnel. And this isn't just like, as you know, sending out yellow letters and just hoping something sticks, right, like we have our lead funnel that that we've kind of put together our mail funnel, I should say, rather, right, like we're mailing some of these people 11 and 12 times before we get something.

And then, of course, depending on how hot the lead is, how many, how many of their lists, they pop up on whether the three, four or five lists, they might be getting a different type of marketing, or we're telling a different story, right. And so that's like our main one. And then we do cold calling as well. And so cold calling is like at the top of our lead funnel, and we just kind of blast and get the data, we skip trace it all. And we just have our dialers going. And we'll pull good leads out of that too. And then really, that direct mail is just right below that. And then however we niche down down to some of the some of the specific asset classes like RV parks or stuff that we're looking at those lists are pretty mission small and they'll get a specific type of mailer.

But that's it. And we do that in Spokane. And then we also have a second market that we market to virtually which is down in Knoxville. Both are producing deals we've never flipped a house in Knoxville never been there. I've actually never seen the house. I don't remember the address. But I love that we made like 37 grand on this thing on the flip and then got a handful of wholesale deals in the pipeline down there right now. And then yeah, Spokane, even though it's at a high price point, I mean, there's still, you know, money to be made, right. And what we're obviously you know, with who you're targeting, there are people that can't sell, right. I'll share an example. We got one up in north Idaho last year that we made, we got it under contract at like $30,000. So not the expensive market number you'd be thinking. And we wholesaled it for a $35,000 fee. And no realtor would touch this because it was just a dog house, but it was up near one of our ski mountains. And we were able to connect a buyer on this one that was trying to renovate and do kind of short term rentals in that area and kind of beautify the town a little bit. They lived there. And so that's one of those deals where we sent a letter out, might even have been a cold call. I don't remember it looked like a junk deal, right? Like I said, No realtor is gonna list this thing and make like no money on it and it's gonna be hard to sell because just by putting it on the MLS doesn't mean you're gonna find a buyer. So we connected it, but the dots together found a buyer and it was totally worth it.

David:

That's awesome.

I like that you mentioned cold calling too. So obviously I do a lot of direct mail. You know, for those you listening who may or may not have seen my face all over the ballpoint ads. I'm a fan.

Dan:

Right.

David:

But I just hired... I hired two. I haven't heard back on whether or not the second one accepted my offer. But I've got two cold callers that I just hired. One is starting on Monday after training and the other one assuming they accept my offer will start the following Monday. With that exact intent. I'm like man, I'm getting a lot of returned mail and there's a whole lot of like, just like I can only hit so many people with mailers. So if I can just blanket call like 20,000 people this month, then alright. Maybe some of that turns right. I'm excited.

15:00 - 20:00

Dan:

Cold calling is like one of those things where it feels like you're wasting your time because you're just like, you know, cold calling people and you're kind of hitting these broad lists. But then you get one deal and it pays for all your cold calling for the next few months. So it's like, definitely worth it, it's, you know, pay per click as well, we do some of that, where we won't even think about it for a while, and then we'll pay cash, man, we're not really getting deals on Pay Per Click, but then obviously, you get one and it pays for all your pay per click for the year. And you're like, Well, you might as well keep that funnel open, because it happens. And it works. And what we find with cold calling for our system, but we had to do was we had to, we have a lead manager, who takes care of all of our incoming leads, and kind of pre screened them a little bit, because cold call leads, a lot of times you get those tire kickers and they're a waste of your time with your act managers time. And so being able to filter some of those out, because you might get an overwhelming amount of leads, but they're just people that like, well, what's my house worth, or, you know, they just want to yell at you or something like that.

So, if you can have that filter, that pre-screen filter, and the better cold caller you have, the better that filter is. And then if you have a lead manager yourself filtering those out, so that you're not setting appointments, and going to places that just aren't really deals, that's when you can optimize that cold call lead system to where it doesn't feel overwhelming, because we've been there where we've actually shut off cold calling. So we're like, dude, all these leads are shit. They're like retail leads, which aren't bad, like you can definitely monetize retail leads as they come in. But we're just like how these things suck. And we didn't have a good filter for and we didn't have a good, cold caller at that time when we first shut it off. But now we're kind of getting back into it because we see the value there.

David:

Yeah. I agree. I like that.

Dan:

Yeah.

David:

Also direct mail, cold call. And then a lot of pinging people multiple times.

Dan:

Yeah, I mean, that's the thing that what we didn't realize, when we first started doing wholesaling with like direct mail and just direct to seller marketing in general is like, rarely do you send a piece of mail and close on a property in 30 days, I think it's like, our average is like somewhere around 90 days before from from actual contacts like they call us, or we call them to to closing that property, it takes a while.

But then once you build that funnel up of 90 days of leads behind you, you're starting to consistently close them. And it's just, it takes time. And we've definitely lost deals because we didn't close them right or we didn't follow up, right. But if you have a good follow up system, you're going to kill it. And like one thing we do, like if a lead comes into our system is we call that person two times a day for two weeks until we get a hold of them.

So we're pretty aggressive on that, we have our lead manager doing that. And he's a killer, right? Like he doesn't mind it. Like I don't want to call somebody two times a week, or two times a day for two weeks, right. And so he does it though, and he's brought leads back to life, which is really cool. Because you just never know what's going on in someone's life. And all of a sudden they call. Same thing with mailers, like we've had, you know, sellers say, man, I've been getting your mailers for a long time. But you know what, my mom just died. And now we have to sell this house or whatever it is, you know, yeah. So that consistency is like, you can't just send out like, I get them all the time in my mailbox, where you'll just see like, somebody sends a letter out, I get like one letter, and like, That's it, I'll never hear from that person. Again, it's like, that's probably not the best way to do it. Just like any marketing, you've got to it's about timing, right. And I think it's like the average time to conversions like, this is just general for marketing is like seven contacts, seven points of contact for that person to actually buy your product. And so that's definitely, you know, rang true for our business.

David:

Yep, I think that's yeah, super powerful.

Finally, I've been doing some manual follow ups when I'm finally doing my first like, you know, dropping direct mail the letters next week, and then dropping postcards every month for the next six months, seven months, you know, and running through, like, all of the different variations of postcards. You know, I'm excited about that. And I think that's going to be fruitful. And then you target that with cold calling all your return to senders and all your super high priority leads. And yeah, it's kind of crazy. You know, at that point, you get to a point where you're like, Oh, holy crap, now what, like, get all these things under contract. And now what I'm learning is that dispo is just as important and, you know, often way easier to forget about.

Dan:

Yeah, yeah, you get under contract and like, Oh, crap, and I gotta sell this thing. And like, you know, there's, there's, you know, wholesalers out there that'll just contract everything and then try to renegotiate, or do whatever if they can't dispel it, but like, we're pretty, like, you know, take pride in the fact that we don't cancel contracts if we don't have to. And we don't try to, we don't try to renegotiate if we don't have to. And that's where you have to, like, be hardcore on the dispositions. And so now with us having two markets, we just hired a dispositions manager, and that's his sole job is to find buyers, and to build our buyers list and continue to do that and kind of have that presence because you're right, it's so easy to be like, so focused on getting in contract and be like, Oh, crap, you know, like, we got to sell this.

20:00 - 25:00

Dan:

In our home market for us, because we've networked really well. It's not that hard for us to sell something But when you're virtually you know, we've never been to Knoxville. So in the deals where we're trying to dispo, like, you can't do that part time, you got to really be dedicated on it all day like sending it out and then following up with every single person you're sending out with, and trying to get a sense and feel for what people are trying to buy. Because, you know, one of the deals we tried to dispo down in Knoxville, until I was talking to this guy, and he's like, Man, I just don't think you get it here. Like, you know, we buy houses cheap, they don't appreciate, you know, like, oh, okay, because you know, we're so used to it for me in an appreciation market where it's like, you buy it cheap, you add value to it, make it really nice, and then get a reappraise and it's worth a ton of money and you can rent it for more. They're like down there. They're like, No, you know, houses there haven't been used to appreciation, like the rest of us on the coastal markets have, although they're seeing now but historically, they're, they're like, we, we buy them cheap. We make them nice enough, and then we rent them out. Like, Okay, makes sense. So don't don't be thinking you can dispo property there on the full brrrr strategy, where you're looking at increasing the value 45%.

David:

Yeah.

Dan:

Yeah. Because they don't see it that way.

David:

Yeah, I've been to one of those weird markets. So I have a buddy I partnered with on a few deals, and we went and walked the property when he's here. And he's like, this is a total shit show. And I was like, throw some paint on the cabinet, like, literally, so we bought it right. We bought it for 72 five, we're gonna list it for 95. And all I'm doing is killing the walls, killing the ceiling and white paint on the cabinets. But he went in it and he's like, Oh, my God, this is a gut. And I'm like, yeah, in San Diego, right?

Dan:

Yeah, yeah.

David:

Everybody wants granite countertops and marble flooring. Here this is a paint job. Like, yeah, because this is a rental neighborhood. And nobody cares. You gotta bring you any more money. In fact, if I was gonna rent this, I wouldn't even paint the damn thing. But you know, for selling like, okay, sure to demand and paint like, whatever. But yeah, it's a totally different ball game than when I was stationed in San Diego last and like, if it doesn't look like HGTV, it's not gonna sell. Yeah,

Dan:

You're right. And that's kind of like in our home market. Like you can get away with a little less than certain neighborhoods. And that's always a fine line about renovating. Like you never want to over renovate. Because that's just lost money. Especially if it's gonna be a rental unit or flip. You're just like, how much, what is the minimum I need to get into, but we're just so used to our home market, we ended up doing so many new kitchens with stone tops, new bathrooms, like it's got to look super clean. Which is fine. But yeah, kind of like the idea of being able to just paint a house.

David:

It doesn't increase the value nearly as much, but it's a whole lot less headache.

Dan:

Yeah, well, and if the bandwidth of the value, right, like if you're at that lower price point, what is 10% more? Like 10% more of 100 grand is nowhere near 10% more like 800 grand, right. Like when you're talking about those higher price points. Yeah, the dollars make sense. So.

David:

Absolutely.

Yeah that’s cool.

Yeah, so disposes important finding deals, direct mail, cold call, the systems are there. So what have you found? I guess, like, you know, you've grown a lot over the last year, year and a half, what are some of the challenges that you've been experiencing? This is a selfish question, because I’m behind you in this, and I'm coming up on it. So you know, what are the struggles?

Dan:

Yeah, so everybody talks about systems in real estate, like, that's a hot button topic, like, Oh, you gotta have your systems, you gotta have your systems. And like, that is really true. But it's like, what are those systems? And like working through that pain of doing like, oh, you need your marketing system? It's like, okay, yeah. But like, there's a lot between actually knowing what you need for a system and implementing that system.

You know, when we first started, it was just me and my business partner, we're doing everything in the business. And then we quickly realized, like, we weren't that great at certain things. So we, you know, hired out our first position, which was acquisitions manager. And we brought on the lead manager, now dispositions manager, and I'm sure in the next six, eight months, we'll probably have another acquisitions manager as well. But hiring people is fine, and they do a job. But if you don't have these right systems in place, you're kind of in trouble. Because what you end up doing then is just working in your business all the time, right? Because you're putting out fires, because they're like, What do I do here? What do I do there? And so what we focused on the last probably six, eight months is actually understanding our business and being like, at a high level, like okay, here's the here's the marketing piece, like how can we make this like automated so that if one of us aren't here is still works, but also make it super consistent? Because like, your most important thing coming in is leads.

I don't know how many people I've talked to recently. They're like, Yeah, you know, I just got so busy, I shut off my, I just shut off mail and like, No, don't, you can't do that, right. If you're so busy, then then hire something out and keep those leads coming in because you're gonna bite yourself in the ass. And you know, earlier in the conversation, I said, you know, for us, it's like 60 to 90 days from you know, lead coming in to contracting that property. And so, if you shut it off, you're gonna be waiting 60-90 days unless you have this huge backlog that you're able to follow up with which most people when they shut their marketing out, they're also not following up with their existing leads.

25:00 - 30:00

Dan:

And so building that marketing system through the whole the whole time business, I think about it in our CRM, like, how are you bringing those in? And then how are you caring for those, which is like the next part for us was a struggle was a follow up, and realizing just how much you need to follow up with and building your tasks and your systems within the CRM, because we have to ask for, you know, everything for our lead manager, acquisition, banner dispo manager to do, right. So if a lead comes in, it's like, automatically. Here's, here's the follow up sequences, drip campaigns, here's where you post the photos and everything. So it's an actual, like, system that people can follow. And then you can tweak that as you find errors in it. But I would say those were kind of the focus points for us were systems all the way through our business.

We are still working on it, right? Because at some point, like, you want to be able to step back and let that machine keep running while you do other cool stuff too.

David:

Yeah I agree on that.

Yeah, systems is definitely a buzzword. But, man, it's easier said than done.

Dan:

It is.

It's like what do you mean by systems? Like, yeah, I'm going to systematize this. It's like, it's totally I don't know. It's just, it's something different. But I mean, for you, like what, like, how do you set up like, how are you like, if you're going to mail like a batch out, right. Like you said, You just dropped a bunch of mail? Like what is in your mind? Like, what are your, what are your steps you're taking now to bring in a lot more money than you sent out?

David:

Well, right now, it's working on dispo.

Dan:

Right, yeah.

David:

But yeah, so I run everything through, I mean, Ryan systems, right?

Dan:

Yeah.

David:

Through direct mail to call Porter goes, it simply goes, I use Rei Sif to sort out the lists. And then you know, I've got an acquisitions manager who's making that phone call, or usually hopefully going to the appointment in person. And then, you know, we lock it up and start working on the dispo side, and then order in the next set of mailers, right, it's consistent. And that's gonna change a little bit over the next week or two, as I finally get some cold call action in, start picking up the phone and making some phone calls, finish building out that whole system, I've got a friend who's helping me put everything together. So I'm gonna jump on a call with him tomorrow and work through that. But..

Dan:

So are you doing like? Are you doing any follow up? Or is your acquisitions manager doing all of the follow up for you? Like, how does that work?

David:

Right now he's handling the vast majority. I'm still involved in the CRM, and I'm doing, you know, obviously KPI of CRM meetings every Monday. And then I'm touching base by sitting down and talking through all the properties and stuff, but we're trying to get it to where keys essentially run that entire process. Because I have mean like you, right? You've got a W two in this business. I've got two businesses effectively that I'm trying to.. So it's like, I can't focus everything on that one. But I need to make sure that it's still getting focused on.

Dan:

Yeah, I mean, that's a good model to have, like, trying to find that person that ends up kind of being like your COO, right, and starting them out, especially on the acquisition side. And like one thing, depending on how much how much data, you're trying to push through the cold callers in your mail, like thinking about like that lead manager person, as you get your acquisitions manager, like as they elevate and skill set, I think there's a ton of value in training them and understanding how to go through that stuff. But when you have an acquisitions manager, if you can feed them only highly motivated leads, they're going to be in such a better mood, right? Like not, they're not having to call people getting told to piss off and go and run in appointments that are shitty. Like, for us, we have our Acquisition Manager, basically, once it's appointment set, like that's his job, he takes that lead from there, he walks the property. And follow up after we have we have kind of like our system of like, 1,2,3,4, you know, follow up calls after the offer and the negotiating. And we're still involved in things like the MAO setting, and all that sort of stuff. But we're training him up on that. So he could do a lot of that himself. Because like you Yes, step out, I want to do that. But a lead manager could help as you guys scale up your marketing, to help filter that because at the end of the day, I mean, you're always gonna get shitty leads. In fact, most of your leads are gonna be shitty leads. But it's those ones where you're closing 10 deals a month out of the 150 leads you got that month, those are the ones that are making you wealthy and finding new deals. So.

David:

Yeah, it's definitely lead manager and dispo are probably the next to two big hires, or I say dispo. But I might just, it might just be a transaction coordinator.

Dan:

Yeah, that's kind of how we run. Our dispo guy does transactions too. And so he's kind of flip slack back and forth. Because you know, like, the transaction piece is a ton of work. You know, you have all these weird seller situations, which is why we're able to buy the house. I mean, we've had just some wacky stuff like you probably saw Mike posted into the CCF group, but like he told the story this weekend and in Florida, but like one of our sellers got kidnapped, right? Like, how do you deal with that, right? Literally like we're like you we always laugh like you cannot count your eggs until they've hatched or whatever they said can't count your chickens till they hatch. We're all like, this guy was literally signing with a mobile notary and some dude kicked in the door and took him away. It's like, what the hell? Like how do we? How does that happen, right? So soon our transaction coordinator's job is like you got to find this dude and possibly save his life.

30:00 - 35:00

David:

We need that signature.

Dan:

I don't care what you have to do. So but there's just a ton of like with, especially if you're in situations where there's like family members involved and there's multiple people on title. We're like we found a few lately where like, there's a break in title. And so like there's a lot of minutia where you're calling the closing agent or you're calling the seller or the buyer and like keeping all that communication where that transaction coordination piece is definitely huge.

David:

I forgot about that. It’s just crazy.

Dan:

Weird things out there. But that's why we make money we're willing to deal with it.

David:

Yeah, you know, it's funny when I first got into like, I actually hate wholesaling. So I say wholesaling, because that's what everybody thinks of when they, if I say buying off market deals, people like what's that? But if you say wholesaling, they're like, Oh, I know exactly how I'm doing that. I just try to not have to get rid of most of them.

Dan:

Yeah.

David:

When I first started doing the whole off market deals thing, though, like you when you get into real estate people like yeah, just start wholesaling. And see, like, you know, it's a good way to build capital. It's like, Yeah, but like, people don't talk about the fact that like, there is like banging on doors and wholesaling a deal or two. And there is like wholesaling. And it is a full freakin business. It is not like, I mean, I'm like, four months into scaling. I've been at it for about a year, but I'm like four months into like, okay, he'll hire some people, I gotta take some stuff, you know, whatever. And it's like, it doesn't stop. It's like, oh, now we gotta keep going. Keep going faster. Gotta keep going. Like, it's not like, oh, yeah, we did some deals. Let's just lay off for a little bit. No.

Dan:

Right.

Well, it's tough too because you do four deals, and you're like, Oh, I did four deals last month. I wonder what eight would be like? Yeah, I mean, so there's like a little bit of addiction there, like, keep going. But you're right, like the wholesaling pieces, a lot of times your cash flow to keep finding deals, because you know, you might come across deals that don't fit your Buy Box, but you know, they fit other people's Buy Box, so you're going to make some money there. And then you're going to send out the next batch of marketing, you're trying to find that deal that fits your buy box. And for us, like I would say, on average, like every other month, we find something that fits our Buy Box, sometimes more often than that, but that's, that's one we're gonna keep, we're gonna pull into our portfolio. But then for every one of those, we find four or five that we're like, that's not really the one we want to keep. But we know somebody that likes that property. And then you start seeing the value of that cash generation. Once you do that, you're starting to be like, Hey, we made 100 grand last month, like, that's pretty cool. That's definitely better than, like, $400 a month, right? And so there's like that tension that I talked about earlier, like, of growing that and seeing that this is a business that you could do cool things with. But at the same time, you know, for us, it's definitely a huge cash generation business so that we can do other things too.

David:

Well, it leads into my next question, which is what's next?

Dan:

Yeah, yeah, good question.

So I mean, it's hard to not have shiny object syndrome, right in real estate investing, there's so many different asset classes and those sorts of things. But right now, we're really just kind of focused on, like, stepping away from the business and working on it, as opposed to in and keeping that machine going. So that it keeps producing us cash. Like, we don't want to shut that off, because we want to pivot to other things. But one of the next big goals, we said, is to actually raise a fund and do some lending. You know, we've got a pretty established brand in our community. And we have a pretty established group of investors that we work with individually. And so we're like, Well, you know, we're always needing money. We know other people that always need money. So can we, you know, build up that fund, and kind of do some hard money lending there. But also look at, you know, bigger asset classes, you know, typically bigger dollar amounts, tend to have higher profits, even if the ROI is the same, there's different you know, just just different money.

So looking at some of that stuff, and kind of not getting away from like single family or small multifamily, but like keeping that going. But looking at just those, those bigger deals, not necessarily apartments or anything like that, but probably in some of the commercial spaces. Just because we're always constantly thinking about the lifestyle as well, like having that lifestyle business at some level where it doesn't take as much work.

You know, we just bought our first Airbnb. In fact, we got two now that we're working on and it's like, Man, this kind of a lot of work, like how do we systematize this? And so I can't imagine having like 20 Airbnbs. Like, there's just a lot of stuff, right? And so we're kind of logically thinking like, how can we go out and get other cash generating business, such as raising a fund or looking at a commercial space where the tenants are a little bit more self managed, if that's the right term?

35:00 - 40:00

David:

Yep.

Yeah, I agree. I think the fun thing is a cool option. Actually, a lot of people don't talk about that, right? I think that's a cool option because people think of raising, you know, getting out and being a syndicator. And raising all this money for your deals, like am syndicating is not like something that sounds fun to me at all. I've been a partner, I'm a GP on one syndication, and it was just like the SCC headache paperwork stuff is just not cool. So like, the idea of just pulling together a fund and doing things that way. Seems like it would be a little bit less painful.

Dan:

Yeah, well, like, you know, everybody's syndicating right now. And like, there's, there's definitely some bad money, some bad deals out there. And we kind of looked at it too, like, we kind of like owning our deals, you know, not that we want to syndicate like, we came across a great deal, it was like a $10 million deal, you know, we just couldn't take it down ourselves, we totally syndicate it, like not shitting on it at all.

But when we look, when we're looking at things, you know, we know how to underwrite deals pretty well, in our local community, within just the general Northwest region, like we know, a lot of players. And we know a lot of investors that are looking to park their money somewhere. And so it's like, you know, we feel confident, you know, that, if we're going to be, you know, lending out on single family or small multi family homes like that, we can be pretty risk averse, because we understand that, that how to underwrite them, and what it takes to do these things. And also, we have a business.

So if we have to, you know, if we say, hypothetical, or lend to a flipper, and they go to you on us, like, we can take that property back and actually do something with it. Like, we have the systems for that. So it's very adjacent, where, for us, syndicating is also an adjacent business. But there's just a lot of different elements to it that don't lend themselves to the rest of our business.

David:

Yeah, I agree.

I think it's cool, right? I think most people get into the active side of real estate, wholesaling, flipping whatever, and then they eventually move on to something else, because the goal is to stash the money somewhere where it grows on its own, and you don't have to continue. Because it is definitely more stressful doing this than it is just holding rentals.

Dan:

Totally, absolutely.

100% agree.

David:

What do you think are some of the, if you were starting out, like right now, which I mean, you know, both of us are fairly new to this, and both had some success with it. But if you were starting out, you're like a service member listening to this. And you're like, man, that wholesaling or finding deals off market sounds really cool. Like, what would be like the piece of advice that you would throw to them and say, like, here's how you do it.

Dan:

Yeah.

So the first thing, this is tough, because I can't just give one thing, I'm going to already give a little bit more of a brain dump. So the first thing I always tell people is like, get around like minded people, like, go find people that are doing what you want to do. That doesn't have to be just real estate, like if you want to go, I want to start a plumbing company, go start hanging out plumbers or people that own plumbing companies like that's easier than you think it is to do.

And now there's like Facebook groups and groups are just about anything you could ever want to do, especially real estate. So get around those people. You know, a lot of our success is attributed to meetups and getting out there joining mastermind groups, I mean, you don't have to join CCF. I personally think that's one of the best groups out there. But if you can pony up and pay, you know, there's masterminds out there that are cheap, like 250 bucks a month, that if you're really dedicated and want to do it, if you join that and take action, you're gonna make progress.

And then the only other real big piece of advice is that it's hard to land on newbies, but it's like, just take action, like do your first deal. Like you hear Brandon Turner say this all the time with bigger pockets like that first deal doesn't really matter. And in the grand scheme of things it doesn't. Like if you're planning to do multiple deals, just get that deal done, find it and make it work. I was just coaching a new investor on the phone last Monday night, and they were looking at this deal on MLS, they want to invest and I was like, okay, so really just matter what your goal is, I would not buy that deal. But here's why somebody else would buy that deal. And make that deal work. Because you're going to have more deals, you know, you just have to understand it, learn it. So just take that action and do something. Don't spend three years learning.

David:

Yeah, I agree.

I think taking action is huge, right? Because they say it all the time. Like that first deal is not necessarily going to be the best deal in the world. But if you don't do that first deal. I'm never going to do the other ones right?

Most people don't land a six figure deal on day one, right? In fact I'm still looking for my whale. I'm hoping it's on the board because I was like, Dude, I threw, yeah, I think I threw out I don't know 40 or 50 grand in the last month and most of which is money that will absolutely come back. But you know, like 5000 on hiring and training to cold callers and seven more seven grand on mailers and 5000 towards the acquisitions guy and then okay, we've got this one. I bought cash this one I bought cash this one Gotta put you know, whatever. And it's like, man, one of these, I'm hoping is that big one, but I haven't landed a whale. Like my average my average fee is probably hovering around 15.

40:00 - 45:00

Dan:

Solid!

David:

Yeah, which is good! But I'm like, Man, I see some of these people in like CCF that post like, ah, $70,000 win. And I'm like, where's mine? One of these is, like, cool. I'm gonna put that in the operating fund, and I'm good for the next three months.

Dan:

Yep.

Well, the thing is like for my experiences, those happen, but you got to be present, right? You got to be in the game, you know? And we get a little jaded sometimes I guess I do anyways, because a lot of podcasts, or folks are bringing on guests that are like that one in a million like, yeah, I started last year. And now I want 1000 units. I don't know anybody personally that can do that, right. And so there's sometimes you know, circumstances, but the one thing I will say about those people that got in the game, and so they made, they created that opportunity. But you're right. It's just like, those don't come very often.

You gotta be consistent.

David:

Yeah. And I'm at the point now, where when I hear those stories, I'm like, Alright, what's he not telling us?

Dan:

Right.

David:

Like, like, yeah, I got started in real estate two weeks ago, and I own 1000 doors, really? Yo, so you're just an LP. And I’m like of course you invested in one fund. Great! Good job! Do you manage anything?

Dan:

Right.

I know, there's been so many times where I beat my head off the wall trying to analyze a deal. I'm like, gosh, this should be like the million dollar deal. A guy said that. And I'm like, there's a lot of stuff that's just unsaid, you know, and a lot of the, you know, the sexy the top line numbers are super sexy. But then when you back into, your like this, that's not that great.

David:

Yep.

Yeah, I tell people all the time that I own a hotel, I don't usually bring up in the first conversation like, yeah, we own this hotel. And we've put $30,000 in capital into it over the last six months and haven't actually pulled anything yet, but it will eventually. You know, the reality is long term. Gonna be an amazing deal.

Dan:

Right.

David:

But it's like, nobody wants to hear like, yeah, man, we bought this hotel, and we just keep pouring money into it. And it's gonna happen eventually. Because like, that's not sexy.

Dan:

No, no.

That's the reality. But like, that's the reality of real estate. I tell this to new investors, too, it takes time. Like you don't just you don't just become really wealthy overnight. Like, that's why you just gotta start. And then over a period of time, it does truly snowball, and you look back, you're like, Oh, I'm still not driving a Ferrari like Ryan, but I do have several million dollars in wealth that I just added in two years. Like, that's pretty cool.

David:

Yeah. One day.

All right, Dan. So we talked about advice, you know, young young people looking to get into this, is there a resource that you would recommend for anybody looking to get into, like, the more active side of real estate or business in general?
Dan:

Yeah, I guess the main resource, I'm just gonna, this is gonna be so general, it's like people like that's my biggest resource.There's definitely good books out there. And I can refer you. I got a stack behind me, I've read quite a few of them. I'm reading Brandon Turner's multi multifamily millionaires over there. You know, that's a great resource if you want to get into a multifamily. But like people are for me, like looking backwards. And why I've talked about CCF so much. Because those people and they're just so valuable, you don't have to join a mastermind to find those people. And like, it's interesting. Because like, if you're listening to this podcast, and there's a guest on this podcast, and at the end of it, they're like, how do they get ahold of you? Like, usually people are willing to drop their Instagram or whatever, like, just get hold of them. You'd be super surprised. Like, I would have never thought that, like Ryan Dossey would like to answer at the end. But he does, right. And he's a pretty popular guy. I'm sure you do, too, David, like, you're probably not gonna get ahold of somebody like Brandon Turner right away directly. But like, for the most part, most people that are on podcasts are out here doing this, because they do want to connect and they want to talk to people. And so like, just do it like, what do you have to lose?

David:

Yeah, reach out. You never know.

And if you aren't gonna, you know, be able to reach out yourself. Like find that warm connection, right. So like, you know, not to, not to say I wouldn't have had Dan on the show, right? Because I would have, but like the moment it's like, oh, yeah, he's in CCF. It's like, oh, like there's an immediate connection, right? And so, you know, if you're trying to get ahold of someone like Brandon Turner, who you know, hates using his cell phone and it's not one who's like texting people back all the time. He's actually very, very limited to how much he uses his phone.

You know, you texting him is probably not gonna work. But you have someone who's close to him, say make an introduction. You know, a warm intro is or or, or a name drop actually goes a long way in, in the networking world. So I think that's, you said it was kind of a goofy answer, but I think people are in the real estate business. If you get around the right people, you're gonna be good.

Dan:

Totally. I agree.

45:00 - 46:55

David:

That's awesome.

Any, any parting advice, words of wisdom before we give out your contact info and wrap things up?

Dan:

Yeah, just get out there and get stuff done. Get in the game. Like if you're not in the game if you're a newbie if you're experienced and all that kick ass. I love it. Look backwards and show some gratitude to yourself for what you've done. But yeah, it's fun.

David:

I like it.

Where can people get a hold of you?

Dan:

Simple you can just hit me up on Instagram, that’s probably the best place investor man, Dan, you can DM me I always respond. It's not a big deal for me. I have a website, investormandan.com. If you want to go there and kind of cruise around. There's nothing too crazy there. But just talking to me hit me up on Instagram.

We did just recently, my partner Mike and I just started a little podcast called Collecting Keys. So if you want to listen to that, I'd love some feedback, David.

David:

Yeah!

Dan:

Yeah, anyhow, that's how you can get all those.

David:

Awesome.

Well, thank you very much for joining us. It's been fun and I look forward to running into you at the CCF event one of these days or abundance one of these days.

Dan:

Yes, definitely. Welcome to the tribe!

David:

Hopefully by the time this airs, I will have been allowed to pay for it.

Dan:

Yeah, exactly.

I gotta get the wife's like Okay, fine. You made enough money this month to pay for it.

Dan:

Right, rr just just write the check and don't say anything and then you know, you'll make it just be confident in yourself.

David:

The checkbook’s down there.

Dan:

Yeah, it's probably a bad idea but once she sees that clear, there's gonna be some questioning.

David:

Why does the HELOC have 10 grand on it? What do you mean? Oh, I don't know.

Dan:

Just marketing.

David:

I'm gonna pay it off. Don't worry about it.

Dan:

Yeah, exactly.

David:

The reality.

Dan:

I know.

End:

Thank you for listening to another episode about my journey from military to millionaire. If you liked it, be sure to visit frommilitarytomillionaire.com/podcast to subscribe to future podcasts. While you're there. We'd love for you to rate the show. Give us a review on iTunes. Now get out there and take action.