On this episode, Mike Deaton shares his experience in land flipping and multifamily investing. He explains how he got started in land flipping and the process of finding and marketing parcels of land. He emphasizes the importance of finding a coach or mentor to accelerate your journey and limit mistakes. Mike also discusses the different strategies and value-add opportunities in the land business. In the multifamily space, he talks about the benefits of passive investing and the active role of being a general partner. He shares his plans for the future, including exploring other asset classes like self-storage and business acquisitions.

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What’s Covered In This Episode

  • In this episode we’ll cover:
    • Finding a coach or mentor can accelerate your journey and limit mistakes in real estate investing.
    • Land flipping offers the opportunity for high returns and cash flow, especially when properties are bought at a discount.
    • Marketing land can be done through various channels, including Zillow, Facebook, Craigslist, and specialized land marketing websites.
    • In multifamily investing, passive investing allows for cash flow and wealth building, while being a general partner involves more active involvement and responsibilities.
    • Exploring other asset classes like self-storage and business acquisitions can provide additional investment opportunities.

Connect with Mike: 

www.flippingdirt.us/freedom www.deatonequitypartners.com www.cashflowfightclub.com

LinkedIn:   / michaelbdeaton  

YouTube: @mike_and_ligia

FB:   / mikeandligia  

Resources 

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Read The Transcript Here

Trevor Oldham (00:02.798)
Hey everyone, welcome back to the REIMarketingSecrets podcast. Today on the show we have Mike Deaton. And Mike for our audience out there who is just learning about yourself for the very first time. Do you mind just going into a little bit about your background and what you do?

Mike Deaton (00:17.752)
Yeah, you bet. So I spent decades in corporate America working in tech and supply chain. 2016 pivoted, got out of the corporate life and went more in an entrepreneurial direction. That direction in 2017 was land and land investing, or as I call it, land flipping. And really, I had heard a few people on podcasts just like this talking about different investment types and

What intrigued me was they were making triple digit returns on their investments. And, you know, the first podcast I heard, I was like, okay, this is an outlier. Somebody’s kind of done something different. But then I heard another guest very soon after that podcast talk about the same thing. And so I got intrigued. I started exploring, ultimately took the plunge, my wife and I both. And so we started running it as a full time business in 2017.

We built it up into a really tremendous cash flowing business. And in 2020, I guess, we found ourselves paying what we thought was too much in taxes. And so we got into commercial real estate. And for us, that’s multifamily investing, larger syndication styles, 100 plus units, pooling together investments as a team. And so.

That’s a way to diversify our income, get into some other asset classes, but most importantly to enjoy the depreciation that comes along with it. We’re both real estate professionals, so we take near unlimited paper losses or depreciation. Now we pay virtually no taxes. As I mentioned, we’re looking at a few different asset classes, but for now,

I mean, it’s bread and butter. We earn just outrageous returns in cash flow and land, and we offset it with multifamily losses, as well as wealth building, just through the multifamily assets. And so that’s kind of where we find ourselves now. Last year, we started a coaching program where we teach others how to do the land investing, and it’s been super successful. It’s been really rewarding just giving back. I mean, it transformed our lives, and so we’re having a good time giving back and watching it transform other people’s.

Mike Deaton (02:35.416)
It’s just, it’s kind of a fun thing, but nutshell, that’s where I am.

Trevor Oldham (02:39.502)
Yeah, I like those two classes between the land and the multifamily. And we were talking off air a little bit, getting those depreciation, getting that off. It’s nice getting those K1s a couple months back and seeing like, I don’t have to pay anything. Maybe you have to have the depreciation recapture, but at least in this time being, it is nice not having to pay any taxes on that. But curious, when you started to build your land business, your land flipping business, how did you go about finding the different…

land, the different parcels, was it just, you know, was it a course? Did you work with another coach or was it just, you know, listening to these podcasts, self -educating yourself? How did you go about it? Because I mean, in my town, I live in the countryside and pretty much you drive down the street, you’re going to see a piece of land for sale. You know, there’s always acreage and, you know, it usually sits there for quite a while. I mean, I know there’s a neighborhood, my wife and I walk in and I think it’s been on, the piece of land has been for sale like five years now.

And it’s in a really nice development, but no one’s no one’s bought it. So I guess how do you go out and find the parcels of land? Like in my area, I probably wouldn’t want to buy just because we’re from what I see. There’s just it sits for quite a while. But how did you go about like starting the business and really building it?

Mike Deaton (03:53.24)
Yeah, it’s a great question. And so just to touch on something you mentioned, when we decided we were going to go all in in entrepreneurship, and then we settled on this as our business model, we took the approach that we wanted to find a coach and a mentor to accelerate our journey, to limit any mistakes that we might make, and to get us going faster than we would if we were to DIY it. It’s certainly possible to do.

But we’ve coached a few people who have been doing that and they’re struggling. And so when you have somebody that can guide you along the way, it definitely accelerates your journey. We did the same thing when we got in multifamily. We found a group and we found partnerships and things like that. And so I encourage listeners any time, especially if it’s something that has the potential to earn money. I mean, lost opportunity is a real thing, right? I mean, if you’re

doing a DIY approach and you’re not yielding the results that you would with a coach, it’s so worth the investment to find a good coach and mentor that’s going to accelerate your journey. So upfront, we went into it with this mindset of, you know, we really want to play this game for real. And so we found a coach and we got into it. The way we do the land investing and the way a lot of people do it is there’s a formula.

and a process to go out and find land. We only buy land if we can get it for, let’s say, half of retail value or less. And so we go, the great thing about land is there’s millions of parcels all over the nation. As you mentioned, everybody drives by vacant lot. You go out into the country, there’s even more. You see billboards and signs, land for sale. And so there’s all this land available. You can do this business.

We live in Colorado. We do a lot of our business in Colorado just because we love trees and mountains and these types of things. But we have bought and sold land all across the Southwest primarily from Texas to Southern California and up. And so you can do this pretty much anywhere. But the way we go about finding it is we usually go through a process to pick a market.

Mike Deaton (06:13.848)
And there are ways to go about doing that. And there’s a variety of ways in which you can do it. So but anyway, we pick a market, which is usually a county, if not a sub region of a county. And so for instance, in Dallas, Dallas is probably a bad example, but maybe Tarrant County next to it, you’re going to have a combination of urban land as well as rural land. Well, a lot of counties are very similar. You have pockets of really remote.

land, you have agriculture, you have maybe some subdivisions where you have small parcels of land for homes. And so it’s really up to you and what you want to go after. We do a lot of rural land. We do five to 10 acres. Now that we’ve been in a few years, we go up to a hundred acres or more. I mean, we play a little bigger, but the way we go about doing it is we’ll get a list of property owners and realtors do this. Home flippers do this. It’s no different in the land business.

And there are several ways to go about it. You can go to the county directly. A lot of times they’ll have a database and they are the ultimate record keepers, right? Because they’re sending out tax bills every year to the property owners. And so they have the list of the most current record of who owns the properties. But there’s a lot of service providers around it that will gather that data and you can purchase ready -made lists that are already formatted or you can filter them.

by people that owe taxes or people that live out of state or other means, right? And so essentially you go about getting a list of those property owners and you do a direct marketing campaign. There’s various ways to do it. You can mail out letters, you can mail out postcards, you can make a direct offer, you can not make an offer. There’s people that do text messaging and phoning directly. I mean, it’s not dissimilar to other real estate.

ventures, it’s just essentially getting the contact information and then doing an outreach. And then, like I said, we only buy properties when we can get them at pennies on the dollar. And then we know right away we can essentially flip it and make a profit. We don’t have to wait on the market to appreciate or worry about it depreciating. All of those factors that kind of complicate some of the other asset classes. This is really purely buying low, selling high.

Mike Deaton (08:39.448)
And then when we sell properties, we do it one of two ways generally. We sell it for cash if people want to buy up front. Or we do probably 90 % of our business we own or finance ourselves. And so if you buy a $20 ,000 piece of land from us, we’ll give you a $500 monthly payment for the next however long that needs to be. We don’t typically charge interest directly. Like we don’t put a

7 % interest rate on top of it. We’ll usually just mark the land up or down and we’ll come at it like if you want to pay me cash for the land, I’ll give you a big discount today because I’m getting your money upfront in that way. But you know, this is really what we have built up today is just a passive income monthly book of what we call notes. They’re promissory notes that people pay us. And so we have an income stream for years to come that we know pretty much is guaranteed. There’s

some amount of maybe defaults. Some people pay off early, which is great. But yeah, in a nutshell, that’s kind of the business model and more directly how we go about finding our land deals.

Trevor Oldham (09:48.942)
And when it comes to you going out there and buying the land itself, let’s just say hypothetically, found an acre 10 ,000 bucks. When it comes to you buying it, are you just buying it with cash and then you’re going out there and then find the next buyer and doing that sort of seller financing? Or are you going through like a private lender? What does that sort of look like when it comes to like you financing and then before you’re, you know, sort of turning it over to the buyer.

Mike Deaton (10:08.92)
Yeah, we personally outright buy our properties with our own money. But it is a great business model to use leverage. If you can get it, like if you can find a partner, banks are sometimes tricky with land. When we first started our business, we had a brand new business. And so we really didn’t qualify for business lines of credit or things like that. Now we could get it if we wanted it. Because the margins are so ridiculous, like, I mean, it literally

we average 125 % annualized ROI on our investments. We get our money back on our investment in about 10 months, typically, and then we’re making profit after it. And so you can afford to pay 10%, even 20 % interest rate if you wanted to, and still be making a really hefty profit. So leverage is a great way to do it. We just keep things clean. I don’t typically like a lot of debt or any debt.

other than on bigger assets. Now, we’ve done some six figure plus deals and it makes sense. I don’t want to tie up my capital in that way, similar to a multifamily or whatever. It’s a large investment. It really pays to use the leverage. There’s different strategies, but we, for the most part, use our own capital these days.

Trevor Oldham (11:27.694)
Yeah, I’d like to hear that. I’m curious when it comes to the parcel within itself, when you’re out there and finding it and you’re going through the list, how do you know? I mean, I know you much like you might be able to get the parcel, say 40, 60 cents on the dollar, maybe sometimes even cheaper than that. But is there a way you go about finding even besides that, like, hey, like, this is a good parcel to, you know, to bring out and to sell and maybe do that seller financing to someone like, let’s say you get something and you just can’t build on it, you know, and that’s why it’s been for sale or.

You know, there’s a lot of headaches. Like if someone wants to build on it, they have to go through this whole process to get permits within the county. Like how do you go about finding these parcels where you know, like, yeah, even though I’m getting a great deal on it, I’m going to make money on it. I’m not just buying say this parcel. I think I’m going to get a deal because I’m buying it 20 cents on the dollar, but actually I just, we’re going to become a nightmare because I can’t do anything with it. So this piece of land in a county or a state where I’m not going to go and it’s just going to be sitting there.

Mike Deaton (12:24.024)
Yeah. So when we started out, we had very much these concerns and we were very picky about, this has a little bit of a slope or, too many trees, not enough trees. all these different things came into play. You know, since we’ve done this for, for seven plus years, we have never been stuck with a property. and we’ve, we’ve bought some properties that, that we personally thought were just dogs and nobody was going to buy. There’s a saying, that,

that we hear in the land business, there’s a pig for every barn. And so if you find it, there’s a buyer for it. You can buy Swampland and there’s somebody that has a vision and an idea and just wants Swampland. They have a dirt bike and they wanna ride their ATVs or whatever. And so it really comes down to marketing and getting in front of enough people to be able to sell something even.

We live here in the mountains of Colorado. Well, our property, it slopes. Well, we love it because it slopes, because we have beautiful views out the back. And so, you know, there’s really just a way to go about marketing it. And so we do still do due diligence upfront. I mean, there are red flags, right? You can have liens on a property. And so you want to make sure that you’re avoiding things like that. But they really come down to the title and how clean the chain of title is.

There are systems that you can, I mean, title companies, they use systems to go about finding that stuff out. Well, you can do the same thing. You can also use title companies, and we have done that on occasion to do that. And some buyers want property title insurance and things like that. So there’s ways to go about it. But as far as the property themselves, as long as you get a property and you’re aware of those things, like let’s say you buy a property and the county says, hey, property is less than a quarter acre. We don’t let you build on.

And as long as you know that, you can market it. And if you’re upfront with your, I mean, we don’t want to be tricky or misleading with anybody. We, as much as we can, we’re upfront. We also used to do a lot of homework on the front end. We used to try to find out everything that you could do. What are all the restrictions and regulations? Now we put a lot of that back on the potential buyer because they know what they want to do. And so we’ll just direct them to the county and say, Hey, our understanding is…

Mike Deaton (14:45.304)
that you may or may not be able to build on this, but just go check with planning and zoning before you commit to a purchase. Or a lot of people want to camp on their properties. Well, typically counties will let you do it, but not forever. They’ll say, you know, hey, you can do it for three months and then you need to be away for a little bit of time and then you can come back. Cause I just don’t want people, you know, living in a tent or an RV and not having a septic system or whatever. And so I have yet to really hear about,

a property that can’t be sold. The one caveat I will ask on that, or I will say on that is we do encounter landlocked properties now and again where there is no right of way legally to get on something and we will stay away from things like that because it does become tricky. Even if there’s an easement through someone else’s property, I just really don’t want to deal with it and market it and all that. So that’s really the one thing that we’ll stay away from. But anything else, I mean, like I said, there’s a buyer.

out there who wants that property. And obviously we’ll scale our offer a little bit. Like, you know, if it’s a primo piece of property, okay, well, we might, you know, hold firm on our offer or even increase it a bit. But if it’s next to a dump or something, then, you know, we’ll tell somebody, hey, we’d still be open to buy your property, but we’re gonna scale our offer down to something else.

Trevor Oldham (16:00.462)
Yeah.

Trevor Oldham (16:09.262)
Yeah, I think that’s super helpful for our audience to know just taking a look at the different parcels and the properties and just making sure you’re doing that extra little step of due diligence. But what I’m curious when it comes to marketing the parcels. So like, let’s say you’ve gone, you got under contract, you bought the parcel, you bought the piece of land. How do you go about finding the buyer at that point? Is it similar to like if I want to sell my house where you contact a broker or agent, is there like an MLS for land? What does that sort of look like for you to find, go out there and find buyers or?

Mike Deaton (16:18.58)
Mm -hmm.

Trevor Oldham (16:38.574)
you know, for the piece of the land that you have.

Mike Deaton (16:40.76)
Yeah, no, it’s great. So everything that works for other properties works for land and more. And so we like the free channels. Zillow is great. You can market raw land on Zillow, Facebook, Craigslist. They all have forums and groups that you can plug into and offer things for sale. We do most of our selling off of social media.

Now that we’ve been in business for a while, we have a really large email list of people that have been interested in properties. And so we will also use that as a, a lot of times we’ll give preferred notice to people on our email list, just first dibs on something. But beyond that, we don’t do it too often, but in some cases we’ll partner with realtors. They’ll do a lot of the legwork. They’ll put it on the MLS, they’ll take photos, they’ll…

put a sign in the dirt, especially if it’s in a certain area like a gated community or maybe it’s in an area where you can’t really clearly differentiate where the property is. It’s helpful to have somebody that will go out with potential clients and buyers and show them the actual property such that you don’t have to do it. But it’s pretty rare that we do that. It’s…

You know, it’s a matter of preference. We use online and digital channels and we have really good success. There’s also paid sites. There’s like lands .com, landandfarm .com. They’re purely marketing sites where people go to look for land and they will allow you to advertise your land there for a cost. And then they’ll have typically tiered packages. Like they have an entry level where you can post one or two ads per month.

If you buy their platinum package, they’ll bump your ad to the top of the list and give you preferred visuals, or not visuals, but give you preferred putting you in front of people’s eyes, just like they do on Google or Facebook or whatever. You can pay for clicks. We don’t use too much of those because we have so much luck on other platforms. But every now and again, we’ll sign up and market our properties on the paid sites. And they’re pretty good for what they are.

Trevor Oldham (19:05.87)
Yeah, that’s that’s definitely good to hear because I was always my my thought process was like, okay, now I got the land. I got a good deal. How do I go and find find the buyer? But no, it sounds like there’s a couple of different sources that you can use. I’m curious. I know some people have used this strategy in the past. And I know we’re talking, let’s just say you have 100 acres per se and you go out and you buy the 100 acres. Let’s just say 100 ,000 bucks. Just keep it simple. Then you go out and you subdivide the 100 acres into

say 10 different parcels, so 10 acres each, and then you sell those for 20 ,000 a piece. So then your profit would be 100 ,000, you bought it for 100 ,000, you sell all the land for 200 ,000. Is there ever a strategy like that where you go out and you subdivide the land, or is it more you’ll go out and buy five acres, 100 acres, and then sell it all as one sort of package, or is it sometimes subdividing, maybe there’s a developer or someone in the area that just wants access to the land, what does that sort of look like?

Mike Deaton (20:04.344)
Yeah, it’s a great strategy. And so with land, this is one of the great things. So our business model, 98 % of the time, is just flipping. So we buy it inexpensively. We don’t want to do any value add. We just want to turn it around and sell it and get some speed and momentum with it. We typically double our money or more, depending on how we’re selling it in the market. And so we make enough not to mess with other value add things. But just exactly to your point.

With land, there are a lot of vertical layers that you can then add value. So you can rezone it and move it from one category to another. That’s a little more advantageous. Like you mentioned, a developer may want to get it. You can do some infrastructure work. You can subdivide it. You can rough in concrete or plumbing. You can build on it.

And so, you can really stack it up and there are people that do that purely as a business model. We keep it a little cleaner. We are looking at things like that, however, just as we get a little more systemized in our business, we have time to look at other aspects and go bigger in terms of our investment and our net dollar returns. But those are great value -add strategies. There’s other things. I mean, you can…

just rough a driveway in or put a fence around something or a lot of preppers love land. So there’s a lot of things that you can do in that regard with underground bunkers or different things. But yeah, there’s so much flexibility in the land space.

Trevor Oldham (21:48.174)
Yeah, definitely seems like there’s a lot of possibilities. I’ve just driven by parcels where, you know, they put in the driveway or they have the septic in it. Just simple things like that. Maybe just boost up the value. And then you have like the ones where, you know, they haven’t done anything to it. Or you have the ones where like the one I’m thinking of the neighborhood, they haven’t done anything to you. You have all the trees there and then you drive past somewhere, they knocked down all the trees and they just make it nice and flat where it’s, you know, it’s readily available to build. So I think there’s so many different layers when it comes to land, which is pretty, pretty interesting, but.

Mike Deaton (21:53.368)
Yeah.

Trevor Oldham (22:17.486)
I already talked about the acreage, say a deal from four to five acres up to a hundred acres. Is there like a price points that you stick with then? Or is it, you know, you say 20 ,000, a hundred thousand anywhere in between. If the deal makes sense, is there, I guess I’m going for, is there ever like a deal that’s like, Hey, this parcel is only a thousand bucks. Yeah, I can get it for, you know, 300 bucks. I might make a little bit of money or is it more, Hey, I want to, my minimum parcel, I want to buy at least.

to be 20 ,000 so I know it’s gonna be worth my while to go through the whole process just to make a decent return. What does that sort of look like when it comes to your strategy?

Mike Deaton (22:54.104)
So we do have a strategy and it’s evolved over time. When we started, we were a little on the lower side of things. And then we quickly figured out that it takes the same amount of work to find, buy, market, and sell a property, whether you bought it for $100 or 10 ,000 or 20 ,000. And so we typically try to stay in…

I mentioned get our money back in less than 12 months. And so what we like to do is, for instance, the majority of people, if you think about it, we kind of keep our land payments around a car payment. And we’re actually a little lower. I mean, car payments today are a bit crazy. We’re pushing four figures. But we like to keep our land between, let’s say, $350 and $750. And so Simple Math says, we try not to pay more than $10 ,000 for the bulk of our properties.

so that we can then turn around, offer a monthly payment that’s affordable, that reaches a lot of people, and then we can really get great margins on that. But we coach a lot of students that come with different resources. And one of the biggest resources that we focus on is their budget. And so some people just can’t really afford that right now. They only have a little bit of money. And so they’ll traffic. It’s easy to double and triple your money really quickly in the space. And so.

You know, if you’re buying properties for three, four, $500, then after six months or so, if you’re reinvesting that money into your business, then you can step up and go more into a sweet spot zone. I think I mentioned earlier that, you know, we personally are stepping up into larger deals just because, you know, if you double your money on a $10 ,000 property, okay, you’re going to net $10 ,000. We’d kind of rather go the approach of buying a 50 ,000 or a hundred thousand dollar property.

Maybe you don’t make 100 % margin on it, but your net profit in terms of dollar amount is a lot larger for that one deal. They can just be a little slower to work because you’re buying pools a bit smaller and you have to do a little bit more work. Those are deals where we partner a bit more. We’ll have a title company on both the buy and the sell. We’ll use a realtor so they can use their network and they can get out there and work their systems. And there’s…

Mike Deaton (25:17.656)
But there’s more opportunity for it because the margins are heftier and you can afford to pay out versus if you’re buying a thousand dollar property and you’re going to make two or three or four thousand dollars, it really starts to eat into the margin if you’re paying a title company and you’re paying a commission to a realtor and you’re doing things like that. But yeah, I mean, there really is kind of a sweet spot, but it’s open to your budget and your resources.

Trevor Oldham (25:41.614)
That’s perfect to hear and I think that’s great where you start off smaller, just got the couple of deals under your belt and then as you over time over the last six, seven years, you sort of have grown it from there. And what I really like about the land opportunity more so than some of these other investments out there, just getting that return of principal back, like you mentioned, getting that return of capital back within 10 months. I mean, I’m in a self -storage deal right now and I think getting my, I’m sure get my return of capital back some point next year.

and it’ll be about three years of my capital locked up. And for me, I’m like, I’m excited about that. So I’ve been trying to find deals where I could get my return of capital back within a year, 18 months. And it’s definitely been harder when it comes to your more standard investments where it sounds like land. You can, like you mentioned, average, get it back in 10 months. I mean, that’s, that’s nice because then you can take that money to fund your next deal. We’re also earning that cashflow coming in from that one deal. And it’s almost like that velocity of money where, yeah, it might not be a lot in the first year, but then.

You go four or five years out and all of a sudden you have all these seller finance deals, you have all your capital back. It’s almost like a snowball effect.

Mike Deaton (26:45.752)
It’s a great point and well said. I mean, it’s exactly that. In the early months, you can be tying up some capital. You can leverage things, and you can get things going in that way. But…

Yeah, once you’ve built it up and the momentum grows, then it really grows quickly. And as I mentioned, that’s kind of where we found ourselves a couple of years into our business. We were earning great money. We replaced our W -2 salaries and had some good money coming in, but a big tax bill came with that. So we looked for ways to offset that pretty quickly. And that’s where the commercial side of things came in. But our experience in the commercial business was, you know, in early 2020, we got into some home run deals.

that cashed out in 12 or 18 months and we got big returns. But as we got deeper into COVID and then interest rates started going up, it’s quite the opposite, right? We have money that deals that just aren’t paying out any of the cashflow in principle and just kind of holding on to hope that cap rates change and the interest rates change. And so, yeah, our capital’s tied up and a lot of what we’ve done in our…

commercial real estate journey is really fund things through an SDIRA. And so it’s okay. We’re not depending on that cashflow to come in. Thankfully we have land pays all our bills and we have things coming in. So it’s a great combo for us. I mean, it really is. We see multifamily in the commercial side as a way to build longer term wealth. And then the land is cashflow today, but also is building let’s call it a midterm, medium term stream.

Trevor Oldham (28:24.526)
Yeah, like those two different avenues and I like they mentioned the self -directed IRA. I’m reading the self -directed IRA handbook right now just to learn more about it. It’s a good book. It’s a little dry at times, but it’s one of those things where it’s like, I want to just learn as much as I can about it because I’ve always, because I’ve been thinking about converting my Roth over to the self -directed IRA. So I wanted to learn more about the fee structure. What exactly can I invest in? What can I not invest in?

I wish I could set up so I could have put my business in there, but I know they’ve gone over many times in the book that that’s prohibited and I cannot put my business being the key principle in it. But it’s a nice avenue where you can put and you can create and build your wealth around it. But when it comes to the multifamily space and going a little bit away from land, have you been more on the GP side as a co -GP? Have you been investing as an LP? What does that look like?

from your standpoint when it comes into more of the commercial and the multifamily side of the business.

Mike Deaton (29:23.992)
Yeah, we’ve worked our way across the spectrum really. So when we got involved first, we had some capital to deploy. And so we entered into deals as LPs. And it got us a taste and to learn the language. And we got a peek behind some of the deals. And then we worked our way through different roles within the general partnership. We have raised capital. We’ve done investor communications.

We’ve co -GP’d on some deals and been lead sponsors on a couple of deals. So we’ve kind of run the spectrum and it’s a great way to get involved in deals using Swat Equity and getting in and helping as a GP. It is, I would say looking back, it’s a huge time investment. Like it really takes…

especially if you’re a lead sponsor or you’re really active in the deal, there’s just almost a never -ending amount of attention and work. People talk about even you have a property manager. Well, property managers need to be checked and looked into and you meet with them and maybe there’s issues happening, so you have to help problem solve and do things like that. It’s been a very active pursuit and I’m glad we have the opportunity to do it and learn it.

I would say if you can do it, passive investing is probably the way to go in terms of doing that and getting the benefits and things like that. But if you don’t necessarily have the funds to invest, sweat equity is a great way to get involved, both in land and in the commercial side to help do things like that.

Trevor Oldham (31:05.998)
Yeah, and I can’t agree more with that. I know I got into a couple of deals myself right now as an LP and I thought about how to go about being a GP, but I don’t want to, well, I know I can’t go out. I don’t want to like find the property and do all that. So I was like, what, what could I do? So I partnered with a real estate investor where I help, I book them on podcasts and normally charge as a fee. So I don’t charge them anything. And then I also run Google ads for them to bring investors to them. And then I get a percentage of the investors that invest their money with them. So I’m sort of thinking potentially changing.

I don’t know if I would do it all the time because I like getting the cash flow from my current client. So I don’t know if I would change our whole business model, but it’s that sweat equity where the client doesn’t pay anything. I just go, I’m the only thing I’m paying is my time, but testing that model out where I could become, I could be on that GP team. Cause my goal right now is I don’t have that tax professionals or the real estate professional status, which is where I eventually want to be. Because as sure as you know, once you get that, then you can really start to offset your income. Where right now I can only drop it down to.

you know, even though I see like a $20 ,000 loss, I can only, I can only zero it out. I can’t, I can’t claim that $20 ,000 loss without having that tax status. So for me, it’s like getting on more of those GP deals where like you mentioned, maybe not the one going out and finding the property. Maybe you’re helping them raise the capital. Maybe you’re doing those investor communications, just being that asset. And I think it just comes with networking with the different sponsors and GPs that are out there figuring out what they want. I mean,

I love the real estate community. I find people are very friendly. They’re very open to just networking and communicating. So there’s no shortage of, I mean, there’s definitely no shortage of real estate companies that could use help, you know, if you go out and any position it in the right way. So I definitely, I definitely like that. And in the future, do you have any deals coming up or you just sort of just sitting on the sideline, just waiting to see how it plays out? I know the multifamily space, I mean, no one could have expected the interest rates to rise as quickly as they did. I know I’m in one multifamily deal, luckily.

I’m still getting cash flow distributions. It’s like 5%. It’s not, it’s fine. It’s, you know, I’m not going to kill it on a 5 % distribution right now, but it’s better than nothing. It’s better than pause distributions, but curious what it looks like for the future for you when it comes to the commercial space.

Mike Deaton (33:14.84)
Yeah, so similar to a lot of people, we kind of stepped back late 22, early 23 and took a wait and see approach just to wait for things to calm down. It seems like they have at least flattened. It’s still hard to really make a deal work these days. We try to stay away from any deal that is underwritten, that’s not cash flowing today.

that is banking on some kind of value add or something in the future just because it is so uncertain. And so we are right now still on the sidelines. I’m not even underwriting or working actively with any partners. But I would say in the second half of this year, I still love multifamily. I am interested to maybe step down in size a little bit and hit this 50 to 100 unit, maybe even a little smaller.

The syndication model is a lot like flipping, right? I mean, there’s a finite amount of time and you have to keep chasing and re -upping your investment or essentially you’re flipping. And our vision is longer term cash flowing assets. And so we’d like to either outright own something ourselves or maybe have a small JV where we’ve partnered with a few people and we’ve purchased something and then we just keep it for 2030 or.

however long we want to keep it. We’re looking at a few other ideas. I really like storage as an asset class. Buying a business is also kind of hitting the mainstream these days. I think statistics are such that there’s a lot of retiring people or a lot of people that need to cash out of their business for retirement. And so there’s some opportunities there, but that also can be really, really active. And you can be stepping into something that you have no.

know you’re not familiar with or things like that. So it comes with its own set of problems. But we love the housing space. It’s not going anywhere anytime soon. There’s just a shortage. And for the next five to 10 years, it feels like there’s really no out to that shortage. And so I think that’s dollar for dollar. One of the best places is to put yourself into real estate.

Mike Deaton (35:41.176)
But there are a few asset classes out there. So we’ll see in the second half. We’re talking to other, as you mentioned, real estate’s a great area to network. There’s no shortage of events and people, and everybody’s super friendly. And it’s easy to find complementary partners that help your skill set and can balance out. And so that’s what I really love about.

real estate and syndications in general and partnerships. So yeah, we’ll see what second half of this year in 25 holds, but that’s the initial direction.

Trevor Oldham (36:19.854)
and looking at the other asset class out there, I know at least the self storage deal that I’m in. It seems like there’s a lot of mom and pop owners out there. At least the deal I’m in. It’s a fun model, so there’s three different facilities. They were like 250 % below market rent of what they should be for the… It seems to almost be a common theme within the self storage race. You have the people that go out and they’ll take maybe an old Kmart or store and they’ll build in the storage units. That’s an option. But…

Mike Deaton (36:37.928)
wow.

Trevor Oldham (36:49.71)
I find that there’s a lot of just mom and pops where they have the self storage facility, but they don’t even have like a website. They don’t have technology, just things like that. And there’s a lot of opportunities within the self store, self storage space. I know again, I’m just an LP and if in the company I invested with, they seem to be doing good, but it seems to be a common theme in the self storage space. And just looking at other sponsors where I just mom and pop owners that just haven’t updated the pricing, haven’t added in any technology ever. So.

If you’re looking at that asset class, it seems like there’s a lot of opportunity there where I mean, I know going into this deal, like, yeah, I’m not going to get my money back for three years. It’s a development deal because they’re adding more units onto the facility. So don’t get distributions two years in, but the rents were 250 % below market value. So I can go through and I can already see they, they raised rents to what they should be. And it’s already cash flowing. I just haven’t received distributions because it is a development deal, but I know going in like,

even if we didn’t even rent out the new units, it’s probably going to break even just based on how below market the rents were already on the property. So I definitely like that asset class. And I think it’s a good one. If you’re, if you’re looking into it, there’s a lot of opportunity within it. But like I wanted to say, I really enjoyed this interview today and if our audience is listening, where can they go to learn more about you and find out more about, you know, investing in your company or investing, you know, through us coaching.

Mike Deaton (38:14.936)
Yeah, likewise enjoyed. I always enjoy talking real estate and getting different deals and looks and understanding the market a bit better. So appreciate you for having me on. For anybody that wants to get in touch with me, the probably the best way is to go to flipping dirt dot US and we have a landing page there flipping dirt dot US slash freedom. And I’ve tried to make that really a one stop shop. So we have a couple of little ebooks that’ll

You can download and it’ll teach you about the ins and outs of land. My contact information is there. There’s a Calendly link. You can make an appointment if you want to chat more, love to talk to anybody about land or multifamily or any real estate asset classes. But that’s probably the best thing. I’m pretty active on LinkedIn. You can drop that in the show notes, but I think it’s Michael B. Deaton. So it’s a bit of a mouthful. But yeah, you can find me there. And those are probably the two best platforms.

Trevor Oldham (39:11.31)
Awesome. I’ll make sure to include that in the show notes of today’s episode. And again, thanks so much for coming on to the show today.

Mike Deaton (39:16.696)
Thank you, Trevor.