452 | The Truth About Passive Income: Debunking Myths

Apr 22

Mike DeHaan 0:00
Don't really think I care about cash flow anymore because I just got a $40,000 check.
Chaz Wolfe 0:04
You're not saying don't have passive income. You're not saying no to that. You're just saying, Wolfe, that's not the strategy. The strategy is
Mike DeHaan 0:12
We've done about 400 off market transactions since the middle of 2020. It comes out to about almost like a deal every business day for the last couple of years.
Chaz Wolfe 0:20
But there's been a couple of calls where you get in your, like, this does not happen in the everyday business. We
Mike DeHaan 0:26
had a seller get abducted from a closing by, like, a squatter that was living on the property. Didn't want him to sell. I had a a landlord and a tenant get into a fist fight at the property. But the crazing about that is they were both women in their eighties. And so it was like Jerry Springer style.
Like, yeah.
Chaz Wolfe 0:46
What's up everybody? Welcome back to Gathering the King's podcast. I'm your host. Chaz Wolfe. And today, I've got a king on the stage who is in the real estate industry, Mike Dahan, who is the owner and podcast host, of collecting keys.
Today, on this show, we go through an incredible conversation as we discuss your mindset how it's wrong on passive income and how it's flawed. We talk about cash flow myths. We talk about real estate horror stories This episode is an absolute must watch for any of you looking for the real deal on real estate investing or just how you can get started in real estate investing. Maybe just need a mindset boost around engineering, the life that you really want. Make sure you subscribe and hit that like button for me.
Drop a comment below It helps us bring amazing guests like Mike back to the stage every single time enjoy the show. Alright, Mike. Welcome to the King stage. I appreciate you being here today. Welcome.
Welcome. Welcome.
Mike DeHaan 1:45
Awesome. Yeah. Thanks, Chaz. I really appreciate you having me on. It's really nice to meet you.
Chaz Wolfe 1:48
Yeah, man. This is gonna be fun because I get to do these shows with with a lot of great but not only have you developed a wonderful, real estate investing business. I'll get to that here in a second, but you've got an incredible podcast as well. So we get to kinda rip back and forth here as kind of 2 fellow hosts which is always fun. So tell us, Mike, what kind of business do you have first?
And we'll start with that.
Mike DeHaan 2:07
Yeah. So I have a off market real estate acquisition business. And there's a few different parts to that, but the core of it is that we focus on direct to seller real estate acquisitions, usually working with distressed or highly motivated sellers in some capacity, whether that's because of distressed property or financial situations or personal situations or complex legal situations. You know, we, I guess, the little niche that we have in real estate isn't necessarily about the assets, but more about the news that we can create by working with people that have these complex problems.
Chaz Wolfe 2:45
Yeah. I love the the solving people's problems kinda just notion to business in general. Typically, when you solve big problems, big results come. What is that for you? Cause you didn't say single family, you didn't say multi We didn't say commercial, and I've, you know, I've done a little research on some of your your your content, and and it's a little bit all over, I think.
Right? So, like, tell us why that is and maybe press into this complex of helping people with their situations.
Mike DeHaan 3:09
At its core, what we are is we're a marketing and sales business. Right? But real estate's kinda the collateral that we used to get paid. And, you know, the the notion of you need to be like realizing one kind of real state I think is a little bit of, like, a limiting view that people put on themselves because if you under stand kind of the fundamentals of just like most basic level of real estate values. You don't have to be like an absolute professional to make money with different kinds of assets.
You kinda do if you're going to own them for the long term, which we do own a decent little portfolio, mostly if residential properties, But when you're doing this direct to seller marketing and you're conversing with a large range of people that have assets that they need to sell, you can find ways to monetize those in a very, very broad fashion, right, whether that is through when you're doing wholesaling via assignments, which is kind of like our core You can flip properties that are relatively simply. You can set them up to do realtor referrals or, like, get paid referral fees by large buyers and large operators that different from assignments because it's usually more sophisticated. And if you can develop just like the ability to identify opportunity, you can usually monetize And so when I say we're a marketing and sales business, it's because we don't necessarily focus on how to, like, find the perfect asset, but when we find people that have these assets they need to part with, we try to figure out, well, how can we find somebody that this deal makes sense for? So that we could monetize it one way or another.
Chaz Wolfe 4:40
Yeah. I love that breakdown. I mean, really, you know, the the moving pieces there, the value that you're offering what a lot of people do. It's like, hey, I've I've got this thing, and I'm gonna find somebody that needs this thing, and I'm gonna bring them together. Right?
I don't always have to make the thing. I don't always have to be the guy that needs the but if I can just put these two people together, right? Yeah. It it's like an oversimplification, but it really is how a lot of businesses work. So I appreciate you kind of giving that rundown.
Why real estate for you? I mean, I've heard you talk about how you've tried several businesses and but real estate was kinda like the first one that kicked off for you. Why do you think that that was?
Mike DeHaan 5:16
So I guess, like, my my backstory a little bit with that is I didn't come from, like, a real estate background. I started my adult life. Yeah. Like, most people do. I went to college.
I got an engineering degree. I was on, like, the w 2 pack. And I was an engineer, actually, for 5 years. And then in, you know, I was miserable the entire time. I did not like it at all.
After 5 years of that, I decided to just make a change. And, you know, I was in basically a deep depression for four and a half out of those 5 years. And one day, I was driving to work, and I was just in dead silence in the car. And I just, like, had this thought, and I called my Wolfe. And I was like, I think I need to quit my job.
And she was like, well, would you be happier if you did that? And I said, yeah. Probably. I was like, well, what are you gonna do? I said, I don't know.
And I went in and I quit my job that day. I didn't really have any plan or anything else. And all I knew was that I wanted to do something different. And by leaving that that career, right, sort of jumping off the cliff and building the parachute on the way down, it forced me to start learning about business and wealth generation and all I knew was that I wanted to have some level of control over my time and some upward momentum in my financial position that having a salary was gonna give me. And real estate came around mostly because it was such a reoccurring theme in every single business and wealth generation book.
And so when I left, like, literally I went from, you know, making low 6 figures as something in my mid twenties to, like, making nothing. I was worried in a gym and driving for Uber and doing, like, odd jobs on Facebook. And then the real estate stuff just seemed like a very tangible, like, move forward because kind of talked about it. It didn't have, like, a major skill set that I needed to learn. Real estate's obviously an abundant resource and there's so many different, like, networks and people in place that, like, wants you to complete transactions Chaz it was just an easy thing to sort of move into.
Chaz Wolfe 7:17
I love it. I I you it's it's from a from a bird's eye view. I've seen this very analytical person analyze, but completely jump off the cliff with no thought at all. So it's like, do you have, like, this split ability? When you say engineer, I just think of so many people that are just so process oriented I even know of an engineer right now who recently just left, but it took, like, a lot to get him there, which is more typical of that of that maybe profile.
But you have both. Like, you jumped, but, like, on the way down, you were thinking, what works? What doesn't work? What's the system? What can I do?
You know, it's like, super fast on the way down before you crashed. Right? Like, is this kind of like a 2 split for you?
Mike DeHaan 7:56
A little bit. So, like, I I was never the right architect for an engineer. Like, honestly, I went down that route because I was good at math when I was in high school. And when I just started college 2009, right, you know, right in the midst of the recession. And it was a job that I knew I was gonna be able to get very easily and was going to have and starting pay.
And that's what mattered to me when I was, you know, 18 when they tell us to plan out the rest of our life, which doesn't make any sense, but that's what we do, right, in this in the United States. And so I sort of forced myself into that that field. And then as I was in there, honestly, as an engineer, I would constantly struggle with the fact that I wasn't analytical enough. K. And what I would always be doing, my wife always sort of used me about this.
How I'm like a professional life hacker is I would always be just looking for ways to make my job as an engineer as easy as possible without having to do as much work. And so the analytical systemization part of it I guess, has always sort of forced me to have kind of like a high risk tolerance because I was always like, well, I'm going to sort of risk it all risk my job to do this thing really simply, mostly because I just hated it. And I was trying to make things easier. And then when I, you know, jumped off the cliff to sort of figure stuff out. I knew sort of how to solve complex problems because I had forced myself to do that through my engineering career.
And so I knew that if I just, like, worked for long enough, things would eventually come together in some way. Right? But honestly, like, it was slightly out of desperation because I was just in such a bad spot mentally that I needed to make changer. It was gonna be a problem.
Chaz Wolfe 9:27
Yeah. I love that breakdown too because you're right. I mean, most entrepreneurs have that. Like, I didn't fit And so I just jumped or, you know, sometimes they jump a little slower, but for the most part, you know, the ones that that I can see and and the hundreds that I've interviewed. It's like, I was a a square peg in a round hole, and I just couldn't figure it out.
So I appreciate that that backdrop. What do you think now? Like, looking back years years now of a successful business, of that engineering, kinda like you you forced yourself into that math and process. And maybe even some of the maybe lazy intelligence that you have of making things easier, how has that helped you specifically in your business and maybe just in
Mike DeHaan 10:06
Yeah. So, like, a lot of the small things that people tend to spend a lot of time on, mostly around, like, marketing systems or trying to configure their plat their software platforms or, you know, the back end side of stuff that people spend a lot on. I guess I was kind of able to do that a little bit faster than people that don't have kind of a technical background, but also too, I think, because I understood like, the flexibility of those things, I was willing to allow more of those things to sort of live in the gray. And so when I was starting out you always hear people. Like, I mean, there's whole brands about this, about, like, how you need to just take action.
You start overthinking and do all these things. I guess I kinda naturally had that And I still do, and I've always been, like, an action first. And then, you know, plan things out later kind of person, which has just been emphasized even more since I walked away from my my career.
Chaz Wolfe 10:58
Right.
Mike DeHaan 10:58
The point that, like, even now, like, with my wife or my friends, if I, like, bring up an idea about something that I would like to do or, like, you know, a trip somewhere we're gonna go. My wife already knows that I've actually already booked it. I'm just telling her about it right now. Like, we're we're already we're already done. And I don't know.
I don't even know what we're gonna do when we to Central America, but we're going, and we'll figure it out at the airport. Right? Like, that's just kinda my my mentality. And I guess that the fact that I'm confident with solving complex problems I'm willing to sort of, like, put the cart before the horse a little bit knowing that things will catch up and not necessarily be stressed about it.
Chaz Wolfe 11:32
Yeah. What do you think that that's done for her? And or your marriage because that that could be a recipe for disaster, but it it hasn't been or or or or
Mike DeHaan 11:42
Yeah. No. I mean, it's it's not. Well, I'm I'm very fortunate in the way that, you know, my my wife is, like, low key. Like, I am definitely like the driver, and she is you know, happy to be along for the ride.
And she's an artist. So she's like an artist personality where I'm definitely like the high d on the disc profile. Sure. And so, you know, it it acts she works out pretty easily.
Chaz Wolfe 12:02
Yeah. She's she I'm gonna take you. As long as you just give her just maybe a little bit of notice on South on Central America. Maybe, like, a day. Yeah.
You know, just pack a bag maybe. You know? Yeah.
Mike DeHaan 12:12
Well, we always gotta plan out because, you know, we gotta start working with the pets, and that's always the things. You know, we gotta make sure the dog sitters able to take the dog someone's gonna be able to come in and they feed the cat and all those sort of things. But outside of that, I mean, we're generally pretty flexible.
Chaz Wolfe 12:24
That's funny. It makes me think of a I think it was our 4th wedding anniversary Julie, I've been married for 16 years this year, coming up in May. And so 8 years ago, 4 years in, I surprised our caller. Actually, it was in front of my sales team at the time because I wanted them to see her session. And so I said, hey.
It was, like, Tuesday morning. Hey. Calling you from work. And she's like, what's going on? Everything okay?
I'm like, yeah. Tomorrow, we're gonna go. Pack your bag today. She's like, wait. What?
You know, so it's kinda fun like that, but we have 4 kids now and, like, 30 something chickens and some cats and dogs. And to your point, like, 0 chance that's working. So we've got the family mastermind that we do with all the families, part of our community, and some others that come out. And so that's, like, well in advance. We got thing lined out.
Looks a little different when when the family grows a little bit. So, let's talk. Let's let's keep this vein of just creative thinking and doing things a little different. You you kind of have a a thing right now, like a little itch that you've been scratching around passive income and some limiting beliefs. You you say you think about it differently than most.
What is passive income to you? And how do you think about it?
Mike DeHaan 13:26
Yeah. So this is something I've been talking about a lot different shows and on social media. And I guess my sort of hot take when it comes to passive income and financial freedom is that people use their, I would say, like, their goal is, like, financial freedom numbers or the passive income numbers. As an excuse to not take, like, big risks or do things that are actually hard. And Give
Chaz Wolfe 13:51
us an example of what that looks like or what you've seen.
Mike DeHaan 13:53
So, like, all all the time you see people that are saying, like, I cannot leave. And this would be like a high earning w two employee that has money in the bank, and they are saying, like, I cannot risk anything in business or leaving my w two until I have enough passive income to replace my w two income. And I'm like, well, you make $200,000 a year. It's gonna take a shit ton of properties. I don't know if I can swear in here.
Sorry. It's gonna take a ton of properties to replace that, right, And I know you've been doing this career for 15 years. You must have some savings. I know you have a 401 k why on earth, if you really are motivated to leave your career, spend time with your family and your friends and travel and do all these things, you honestly need to get past the incredible fee of getting $200,000 a year in passive income. When if those things were actually important to you, you would leave right now and figure it out.
K? You already have a job where you're making real money. The worst case is you can always go back can do that again. Right? But with any sort of level of drive, you should be able to just take the lead take the leap.
Live off your savings a little bit. If you have to, you probably have enough to live for 6, 8, 12, 24 months But, like, there's there's not willing to do that because they're fascinated by this thought and, like, the comfort of having regular monthly money come into their bank account, which is not honestly needed to live a, you know, successful or fruitful life.
Chaz Wolfe 15:25
You know, it's interesting that you say that because, well, first off, you're spot on and and really the the person that you're talking about is not willing to be a quote unquote entrepreneur. An entrepreneur is someone who's willing to take a risk that's maybe not gonna work out for layman's terms. Okay. So that's not a real entrepreneur, but they see value in creatively creating more income or passive income, maybe an investment strategy for their retirement. Like, they're just thinking about it differently, but I am, I am curious because, you know, $200,000, like, that, that automatically puts somebody in the top, probably 10, maybe even 5% income earners in America.
And so the way I see it is that person who's making, you know, 150, 200, 300,000, they just aren't willing to lower their lifestyle for a period of 6 months a year, 2 years, 5 years. Right? Would you agree with that?
Mike DeHaan 16:16
Yeah. I think that a big part of it. And I also think that people, like, if we're being completely honest, they get into those sort of roles. They come from a position where they've never had to, like, live a simplistic lifestyle or, you know, they've gone through school. They've always had a very linear path in having something that feels a little bit more turbulent is very uncomfortable to them.
Totally. And the comfort is really what their desire. Right? They say what they want is is financial freedom, and they to be able to do, you know, all these different things in their life. But, like, in order to have that, you kinda have to give up comfort.
Right? And that's something that don't think most people realize. Like, their view of financial freedom is I just have money that just lands in my inbox and I can go and, you know, sit on the beach and drink margaritas or go to the park with my kids on a random Tuesday afternoon or whatever, which is true to an extent, but everyone that has built any sort of like passive portfolio or built any sort of business that they're able to put real money off of. They know that in order to get that, you have to have either a very turbulent time to get to Chaz, or you're going to have turbulence during that process of just maintaining that passive income. Like, what, even if it's a real estate portfolio, everyone knows it's not truly passive.
Right? You always are gonna have things that go up. You're gonna have months make way less money than you do in other months. If you have a business, you're gonna have, like, that key hire that quits. You know, you're going to have a issue with one of your vendors that's going to affect and that's kinda part of it.
And it's a just I don't think people that are fully bought into, like, the passive income sort I don't wanna say like myth because I'll it's definitely a real thing. Sort of bought into that view. They fully understand what it actually takes to get there when or and and how honestly, I don't think that's possible if you kinda have one foot in one foot out.
Chaz Wolfe 18:05
Yeah. I think that's the crux that you're that you're leaning on going, look, man. If if this is really what you want, no matter kind of how it exists, whether it's truly passive or a little bit turbulent, if that's what you're saying that you want, money that comes in fairly automatically, fairly regularly with with little or no effort. Okay. Well, it's gonna take some effort.
And I think this is just the value. I mean, as an engineer, you could probably break this down in a, like, a, like, a professional way as opposed to the the uneducated Chaz over here, but I just see it input output. Like, at some point, whether it's passive income or a big business, like, the result that you're looking for takes a formula. Whatever that formula is, there's a part of that that's time and work. And so it's almost like they're trying to skip over that to be able to get to the thing because they don't really wanna do that, they're just gonna stay in their comfortable place, which is the job, which it gives them this false regular piece, but they could lose their job tomorrow.
You and I both know Chaz. And they're not calculating.
Mike DeHaan 19:02
Happens all the time. Yeah. Right? Like, you know, especially if you work in PAC or some of these things. Like, you have these people that were making $250,000 a year that thought that their lives were set, that were living at the max end of their means, and they showed up a ton over the past 12 months.
Right? They showed up one day and they're like, cool. You no longer work here anymore. Bye. And not only that, but none of those other companies and the other tech companies those people because they're all doing the same freaking thing.
Chaz Wolfe 19:25
Yeah.
Mike DeHaan 19:26
You know? And if you don't have any sort of control of your own situation, like you're always at risk, I guess just for context for people too, like, when I left my my w 2, my me and my wife's income, it dropped about 75%. K? And so it's not like my wife was like a dentist where she was making a $4,000,000 a year, and, like, we were still just, like, living within you know, our our sort of very comfortable lifestyle. But we went from making I guess you're making probably about $160 a year as Chaz a household mid twenties.
We're very comfortable. And we went from making basically $40,000 a year, which is what my wife made at that point. And We had to go from going out to restaurants, being able to travel, being able to do what we wanna do to counting coupons, doing free activities, Like, if there was some place we wanted to trash and we wanna do, we'd be looking for, like, a group on for it. Right? Like, that's what we had to do.
But we were also able to do that because within those 5 years as an engineer, I had been living well below my means. I had a $100,000 in the bank and savings. I'd built up 401k. And I'd made those intentional steps at that point. And I also knew that by reducing our costs, we were able to live pretty close to my wife's income, right, where our spend was about the same as that.
And for us to have start digging into our savings, if my wife kept her job and we Chaz the savings. We could go for a very long time. And even if she lost her job at that point, we were so accustomed to living on $4 a month Chaz we could have lived for 2 years. And so I gave myself so much freedom to figure myself out and to fully dedicate, you know, my my mind and my focus on the next big thing that It really wasn't risky at all because also worst case, I still have that engineering degree. I can just go back and get another engineering job at some point.
Chaz Wolfe 21:08
Hey, Kings and Queens. Chaz Wolfe. I wanna talk to you about something that's super important to me. We put a lot of time and effort. We, meaning myself and my team, into this podcast into the content that goes out every single day.
And if you have been getting any sort of value or insight from this, we want it to be able to reach other business owners too. So we would love if you would like, comment, share, leave a review, post, share again, all of the things. On social media, on all the different platforms, or even on the podcast mediums of Apple and Spotify. We would love to be able to get our content into more hands, more entrepreneurs so they can grow their business as quick as possible. Together, we are building a community of like minded entrepreneurs who are committed to growing their businesses to new heights.
So let's do this. Let's help each other. Let's help each other grow. Yep. Yeah.
It's so true. And your story, aligns with mine. I wasn't as engineer, not nearly smart enough for that, but I was I was a great sales guy. And the same thing, you know, I left my very lucrative six figure career to open up our first business, and my wife had her job. And and so we we had always done the same thing that you did.
Just very keen on paying attention. We still do it today. We we still, on a weekly basis, have a handwritten tracking of our expenses and monthly budgeting because there's power in writing it down and doing it together. We're on the same page. We're not overspending on anything.
Because we know that there's value in doing the next deal, whatever that is, whether that's investing in a business or investing in a piece of property, And we both also know that truly, unless I'm gonna go invest with one of my contacts and and they're fun, it's not passive. That's all. I can call it passive because it's kinda, but you get what I'm saying. So the message here for the listener I mean, they're an entrepreneur possibly. They've already left their job, but what I'm hearing you say is don't overthink it.
Don't be average. Don't be don't be Don't make wrong choices even in the money that you are making, find out what you really want, and go for it. Is is there more to the story there that you wanna add?
Mike DeHaan 23:12
I mean, funnily, it's like it's like don't be afraid of the work. Right? And don't be afraid of the fact that you will have to spend a lot of time doing things, making lasting, you probably feel like you're worth. Right? And there's always just shooting towards the goal and the hope that you will have asymmetrical upside when things come together.
Right? And the thing is that you can fully control is your own effort to things, your own way that you respond to challenges. And I said, I think too is be honest with yourself because honestly a lot of people aren't cut out to be entrepreneurs, and that's okay. Just understand that people that go and get into entrepreneurship will probably make more money and Wolfe have more financial freedom than you. If their success but they're also less likely to be successful.
K? And I, like, there's this, you know, entrepreneurship is so romanticized right now.
Chaz Wolfe 24:03
Oh, yeah.
Mike DeHaan 24:03
And I would guarantee you for even though there's, like, this huge thing with all these w two people that are really depressing in bad mental spots, I absolutely can guarantee that the percentage of entrepreneurs who are even in worse mental space and even more depressed is much higher. Right? Like, honestly, because we work incredibly long hours. The income fluctuates incredibly did a ton of people that fail, and that's just part of the gig. But it's about building that development process, learning from and just doing it for long enough that you will eventually be successful.
And a lot of people just don't have Chaz, and I think that that's something that they should realize and be okay with.
Chaz Wolfe 24:44
Yeah. It's interesting that you use the, kind of comparison between the entrepreneur and the w 2 because you and I both know, and I know you don't talk about it a whole bunch kind of a purp or on the front end of things, but you have you know, coaching programs, you have a community for people who wanna learn to do what you do. And so I just wanna give it a little plug there, but the the community piece of what you do is exactly what gathering the Kings is about. So I've done the research on the fact that, you know, 71% of entrepreneurs have some level of mental stress dysfunction. You know, there's different ways to say Chaz, but, you know, there's there's stress and overwhelm.
Probably that's leading people to either not be healthy in their bodies, of course, in their mind, but then bad results. Like, obviously, the worst case scenario would maybe be even suicide. And so, like, there's a lot of that happening in entrepreneurship. And so gathering the Kings exist very similar to your community where it's like, hey, look. Like, you don't have to do this alone.
Whether you're cut out for this, like, naturally, and you're kinda crazy like I am or like you are, or not, either way, having the support of others around you is key to solving that problem. So if you will, just talk about your community for before we hit the record button, you were telling me about some calls that you do and just the joy that that brings you, but talk about how you're helping these people.
Mike DeHaan 25:53
Yeah. So with the real estate side of business, the biggest thing that people tend to struggle with is, like, how exactly they build out a pipeline of, like, good opportunity right, and good investment opportunities and and deals. And how do they, like, truly monetize things that are sort of outside their box? And so our community is called Scale, you know, and our our whole brand with the collecting keys podcast is we teach people how to make massive income, not just passive income through the real estate investing business. Because, you know, that's the other thing too, right, is going back to that financial freedom piece, I really firmly believe that it is easier to make a $1,000,000 than it is to replace, like, a a high paying w 2 with passive income, like, honestly.
And in order to really replace most high paying w twos, you need to make a heck of a lot more than a $1,000,000. So you might as well just learn to make real money, and it'll go a lot faster. And so, you know, with my business, we've been able to be very successful We've done about 400 off market transactions since the middle of 2020. So as of right now, it's in the past about three and a half years.
Chaz Wolfe 26:53
Yeah.
Mike DeHaan 26:53
Comes out to about almost like a deal every business day for the last couple of years. We're able to do that because we focus on building that pipeline and learn to bring value to sellers in identifying those different opportunities. So what we do with scale is we take people that wanna buy more properties. They wanna generate more wealth, and we feel focus on how exactly to get people calling you, how to run a sales process, how to truly analyze the different sort of exit and things that are out there, whether that's a wholesale assignment, flipping the property, doing a subject to doing innovation, whatever that looks like, and being able to be, like, the all comprehensive toolbox in your business to monetize every single opportunity that comes through. So you're not just leaving a bunch of money on the
Chaz Wolfe 27:37
Yeah. Do you find a lot of real estate investors that come to you are kind of like the one legged Flamingo that we're talking about is they only do this one or Chaz. Right?
Mike DeHaan 27:46
Always. And in fact, I have the same story with pretty much every single person that applies for scale where they they come in and usually they're in some sort of like, w 2 position that they're unhappy with, and they are almost always like, I've done 1 or 2 properties. My goal is to they always say I don't really want a wholesale. I don't wanna flip. What I want is to just buy enough rentals to have enough cash flow to be able to leave my w two.
What I tell them is, like, that's awesome. What we're gonna be able to do is help you get a pipeline, and you're gonna be able to buy a lot of discounted properties which is gonna be great. But I I can also tell you right now because I have the same conversation with everybody. About 3 months in, you're gonna have more deals than you know how to buy. Gonna wholesale one of these, and you're gonna make probably similar to a couple months or more of pay that you just make, and you're gonna be like, I don't really think I care about cash flow anymore because I just got a $40,000 check.
Right? And it's gonna completely change your mindset. And then what I told people is, like, if that doesn't sound interesting to you, then we're probably not the best fit. But if that's something that you wanna explore, then you should definitely come check it out because that is really what we focus on at the end day.
Chaz Wolfe 28:55
I think that, you know, in the in the business world or at least in my my story, it was sales, sales, sales, make as much money as possible throw it into real estate, which is in essence what you're saying. You're not saying don't have passive income. You said you have a portfolio. You're not saying no to that. You're just saying, Wolfe, that's not the strategy.
The strategy is make more money, like, a lot more.
Mike DeHaan 29:17
Exactly. Yeah. And and, you know, and you always wanna, like, keep the best stuff you can find, especially if it's like a high quality asset, you know, it's a newer home. It's in, like, the gray area. Those are absolutely ones to hold on to, but I don't think that you should be complete just like hamstringing your own business or your own sort of financial position to do that, which is currently what people do, right, is if they're in that too.
They have limited earning. They save up. They save up. They save up. They take all their savings and they dump it into the next property.
Like, like, the the first property they find that fits their limited buy box. And they go, cool. Well, now all of our liquidity is gone. Now we gotta save for the next 6 months, 12 months, 18 months, 2 years Right. To do the next one.
And we say, like, how about you build the war chest first? If good stuff does come through, you leverage debt, you leverage other people's money, you leverage partners to keep those ones. But otherwise, focus on building that war chest so that you can actually give yourself the flexibility and the peace of mind to be able to actually be choosy about your investment and not buy just kind of whatever real estate deals because that's all you have at your disposal right now.
Chaz Wolfe 30:18
Yeah. And you're giving people options. You know, I know that 4 hour work week is a book that you've spoken highly of since you've read it probably, but that's what I think of when I think of the 4 hour work week. It's just really just options. Like, there's just a different way to do things.
And sometimes people just don't know. And so guys like you are in the enlightenment business. You know, it's like, hey. You could think about this a little different. And if I showed you how to do it even better, Right?
What would you say just real quick 4 hour work week? How's that changed you?
Mike DeHaan 30:45
4 hour work week is honestly the book that I say pushed me over the edge to wanting to leave my w 2. So I was actually this is my last summer at my engineering gig. I was in Hawaii with my wife and my now business partner and his wife. And I picked up the 4 hour work week because it was in a podcast I'd listened to. And I was reading it And I was, like, having all these epiphanies.
Right? I was like, you know, saying to my business partner now, and I was like, bro, we don't have to go back to work next week. Right? Like, like, you could literally do this. Like, it's so repeatable.
It's so simple. It's like, we could be, like, those these guys down here on their laptops. It's like, I bet these guys are, like, making money right And we're just here hanging out. I was like and I'm I remember saying to him, imagine if we could be like them, we could go and work a couple hours and make, like, a $1000. Wouldn't that be crazy?
A foul. And at that point. And and sure enough, 3 years later, our business, we'd started up and going, and we were all in Hawaii again. It was me and my wife and him and his 5. And we got a a $17,000 assignment check, like, while we were there.
Chaz Wolfe 31:48
What makes it makes it makes the perspective all that sweeter. You kinda mentioned briefly your podcast, you know, it's called collecting keys, but tell us why your podcast I I'm gonna bring up some unique stuff that you're doing with it, but why is your podcast? I mean, they're listening to it right now. I've had hundreds of real estate investors on the show. Why should they stop listening to this specific episode?
Hop over to collecting keys and Get start learning from you? Why why should they do that?
Mike DeHaan 32:11
Yeah. So the thing that we really pride ourselves on with collecting keys and what a lot of our our listeners comment on a regular basis is we talk about what it she takes to be successful in this. Right? And we really focus on the actionable things around, like, the building the business part and the goods and the bads as opposed to so many different real estate shows that are just highlight reels all the time. Like, you know, we'll we talk about when we lose money.
You know, we talk when things go sideways. We talk about what you actually have to put in in order to grow a business like this because it's not easy. Right? Like, it's an expensive business to run if you're gonna run any sort of marketing, but it has asymmetrical upside for the opportunity that you can generate. Especially if you look over the lifetime that you hold some of these properties.
And so many people right now that are just trying to like sell courses or sell masterminds or coaching or whatever. They just they want you to think that it's easy so that you give them, you know, your money. But it's just like, doesn't need to be that way. And so we have us as a slightly more honest angle. We are operator first.
And then the podcast, honestly, like, a passion project. Yeah. And so I think that allows us to sort of be that way. Yeah. But if you have any interest in wanting to build marketing systems, wanting to build sales systems, wanting to grow a real estate business that can make you, you know, wealthy and have freedom over the next couple of years and like, over the next 20 years, like, that's really what we dive into most of the time.
Chaz Wolfe 33:34
Yeah. And I told this, to you, Mike, before we got started, but this is for the listener. You know, all the stuff that I've heard you talk about before today. And then even today, you've mentioned it's not real estate investing. It's your real estate investing business.
And so inside of a business, their systems, marketing system, sales system, operating system. And so I think that that's just a unique approach It's not unique to the industry because everybody that does what you do has a marketing or a real estate investing business. They just don't call it that. They just say I'm a real estate investor. Like, well, no, there's actual business here.
There's systems here. There's process here. Right?
Mike DeHaan 34:04
There is. And it's all repeatable, right, to different things. And and you know, real estate isn't like the thing. Real estate is kinda like the thing that gets to the thing. Right?
It's like the means to the end. And a lot of people I I think this goes back to just like the sort of general career and school system and stuff that we have where they think that if they start something now, it needs to be something they're gonna do forever. And I don't necessarily believe that. Right? I I think that you can adapt the skills that you learn throughout your life.
2 different things. And if you learn to build a real estate business, It's a very challenging business to grow. It has asymmetrical upside, like I said before, which is why people kinda get drawn to it. It has the wealth generation Chaz well as the passive income potential Chaz well as the income potential. Right?
But once you learn to build a marketing team, build a sales team, you know, network, you learn how to leverage debt. Different things. You can go and do that for, like, an HVAC company or a restaurant if that's your jam or, you know, a franchise, whatever you wanna do. It's the same fundamental skills. And so I really like to make sure that that's clear with people, you know, that, like, we're we're not gonna like, this is how you buy, like, your next duplex, but it's like, here's how you can leverage all of that to buy 20 duplexes in the next year, right, in order to reach your goals.
Chaz Wolfe 35:20
Yeah. I love it. Talk about being creative and maybe even a passion project. On your podcast, you've started to recently do, like, a cartoon podcast. Tell us about this because I I watched 1 and just thought it was a little it was comical and funny, but it was very engaging.
Tell us about it.
Mike DeHaan 35:36
What is your craziest real estate investing story? The only rule is you're not allowed to tell a story about discovering a dead body in a property because people always use that as their crazy story, and it just gets super depressing. Yeah. Yeah. I appreciate that.
We've you know, this is something I've talked about for a while because in the off market real estate world, especially when you're when you're doing wholesale stuff, you encounter a lot of crazy situations. Know, you're dealing with, like, hoarder houses. You're dealing with people that have insane living situations. And one of the the questions we always ask guests that come on our show is what is your craziest real estate investing story? And when we started doing that very early on in the show, I was like, we should, like, make a good web series or something of, like, just these, like, that we can turn into cartoons or or something different.
And, you know, that was two and a half years ago that we started the show, but we're finally at a position now where it makes sense to invest in money in that. So we have, like, an animator that goes, and he, like, picks out some of the best stores that we have. And our goal is gonna be to release We just released the first one, but we're gonna be shooting to release one of those every single month, if I'm just like the craziest stories. And the one that's coming out here in the next couple weeks, is a great story about this. I'll I'll give a little bit of a spoiler with it, but it's basically with a old guy seller who's gonna move in with his son And then going along the way, they found out that the son actually hadn't talked to the dad in 65 years.
Oh. And the the the dad was under the opinion he would just be able to move in with his son. And don't worry.
Chaz Wolfe 37:04
Through the house or whoever whoever the guest was?
Mike DeHaan 37:07
Yeah. Whatever the guest was. Yeah. It it has a it has a happy ending, but it's a pretty story just going into all the details with it. That's crazy.
Chaz Wolfe 37:14
Yeah. I I saw on the the one that I watched. I don't think it was you, but you were, like, in the cartoon version. You know, what's your what's your worst story? And don't tell me about some dead guy that you found because everybody has one of those.
And it's like, you know, some people might, you know, listening right now, they have the HVAC company, and they're going, Wait a second. There's dead people in real estate? What? Mhmm. But when you buy distressed properties, there's some interesting things that come up, don't they?
Mike DeHaan 37:36
Oh, yeah. Like, all the time, man. You can't make up the stories. Like, honestly, the the Chaz, crazy stuff that's happened. We've had, like, we had a seller get abducted from a closing by, like, a squatter that was living on the property.
I didn't want him to sell. I had a a landlord and a tenant get into a fist fight at the property. But the crazed thing about that is they were both women in their eighties. And so it was, like, Jerry Springer style. Like, yeah.
And that's, like, why I was there with my with my sales manager that was, like, new to the job. Oh, yeah. Yeah.
Chaz Wolfe 38:07
How long did they figure out?
Mike DeHaan 38:09
Well, so that one that one was because we're we're in Washington state, so it's a blue state. And the crazy thing is is The landlord actually filed an assault claim against the tenant, and it still took us almost 8 months to get her out of the property. So, you know, it's it's just Chaz stuff like that. You know, we've had all sorts with, like, you know, people, like, having to buy properties from people that are in jail where, basically, we have to schedule the call because they're allowed to make collect call, like, twice a week. And so we're having to, like, be on the phone, like, hoping that they're gonna call on time just so that we can have, like, the 15 minute conversation with them.
Mean, just all sorts of stuff, man. It it it's it's very interesting.
Chaz Wolfe 38:44
Wow. I think, you know, when I when I hear of entrepreneurs and the ups and downs, you know, like, oh my gosh. I had a crazy day today. I think those stories, you know, and I haven't I haven't seen a lot of that with the real estate investing that I've done. But we but a few.
There's been a couple of calls where you get in your, like, this does not happen in the everyday business. Also, what keeps you sharp. Yeah.
Mike DeHaan 39:06
Yeah. Well, and honestly too, as as a wholesaler, We can make very good proceeds on traditional residential houses. Right? Yeah. And so, like, it's not uncommon for us to make a 20 to 30 to $40,000 spread on, like, a $300,000 house versus, like, a realtor.
If it's like a problem house like that, they're probably not gonna wanna list it. They're gonna have to have their name on it. They're going to put it on the market at a discount and hopefully make, like, $6 plus they're gonna have to deal with the troublesome seller that comes with a bunch of headaches on the back end through title and everything else. Whereas we're willing to do that because we're gonna make $30,000. Yeah.
Right? And so, like, the opportunity creates that upside, which is which is really, I would say, like, hard people to comprehend. It is very challenging because there's also deals like that that we've worked for 6 months. And then it goes sideways for some reason or another because, like, literally, they're not able to sell the property, but that's also the the risk reward with the asymmich upside.
Chaz Wolfe 40:02
So Yeah. Exactly. How can the listener find you? I mean, they're drawn to maybe just the way that you think differently about passive income. Maybe they wanna join your community and learn more estate investing or maybe making these massive gains as opposed to just passive income.
How can they find you?
Mike DeHaan 40:16
Yeah. So the collecting keys podcast is like more long form content for me, that's the best place to find it. You can find it anywhere that that podcasts are posted. If you wanna reach out to me directly, the best way is on Instagram. Just at mic_invests.
I've really been putting a lot of time into building some more content out over there. You know, they we were talking about this earlier. The creative social media stuff is so hard. Like, you know, especially as kind of like an introverted person. It takes a lot, but we've we've got some some good educational going on over there.
And then if you were interested in scale, collecting keys.com slash scale has a breakdown of what all that offers for you. And you can see a little highlight video of the last in person we treat. Retreat that we did. That was really, really awesome.
Chaz Wolfe 40:54
Love it. Love it. Well, we put on that show notes for you, for the listener, and I hope that they take you up on on some of those we to be able to connect with you. You definitely are not the typical real estate investor, and I have enjoyed the conversation. Look forward to actually some conversations around that passive income a little bit more.
I think that you and I have some, some agitation of thought to do there. I I've appreciated the way that you think. Thank you for being here. Blessings to you and all the people that you're gonna help here in 2024. Thank you.
Mike DeHaan 41:20
Awesome. Thanks, Chaz.
Chaz Wolfe 41:21
Thank you for listening to gathering the Kings today. Hope that you were able to pull out a few nuggets to go apply into your business right away. More importantly, though, I hope that you're realizing that it take more to be successful than just being by yourself, doing it all on your own, carrying the weight all by yourself what I have realized, not only in my own journey from multiple businesses and multiple different industries and now interviewing the over 2 or 300 other very successful 7, 8, and 9 figure business owners is that it's tough to do it alone. And so gathering the Kings exist to bring together successful entrepreneurs. In fact, we are putting together 1000 kings, specifically who are grateful, but not done.
We're intentionally assembling kings who fight tooth and nail for their business, family, and communities, and here's what we believe. That in the pursuit of excellence in those areas, that it ignites within us the responsibility to govern power and forge a lasting legacy if that relates and resonates with you and you know that you need people around you, sharp, qualified, other very successful business owners. I want you to go to gathering the kings dot com. I want you to take a look at what we're doing and see if it makes sense for you to be part of our pursuit. To 1000 kings.
Talk soon.

Host Chaz Wolfe is joined by real estate industry powerhouse, Mike DeHaan, Owner and podcast host of Collecting Keys. Together, they explore critical topics for anyone interested in real estate investing: -The misconceptions around passive income -Debunking common cash flow myths - Sharing shocking real estate horror stories This episode is a must-watch for those seeking genuine insights into real estate investing, starting their journey in the industry, or looking for a mindset shift to engineer their dream life. Don't forget to subscribe, hit the like button, and leave a comment below. Your support helps continue bringing incredible guests like Mike to the show. Enjoy the episode!

Mike DeHaan:

Youtube: https://www.youtube.com/@collectingkeys

Website: https://collectingkeys.com/

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