Many of us were tricked into thinking good grades and a good job leads to happiness. While there are many valuable business lessons you can learn in the corporate world, many people feel like it sucks their soul dry.
Then, of course, there’s always a possibility of getting laid off.
Well, that story played out for today’s guest, real estate investor, Mike Deaton. Both he and his wife got laid off at the exact time — but instead of jumping back into the corporate rat race, they reflected and decided to jump into real estate investing.
In this episode, you’ll discover how having a corporate background simplifies your success in real estate investing. And Mike shares how to tell, with certainty, if it’s time to leave your corporate job for entrepreneurship.
Show highlights include:
Want help diving into the world of land and multifamily investing? Check out Mike’s website at: https://deatonequitypartners.com/freedom.
To get the latest updates directly from Dan and discuss business with other real estate investors, join the REI marketing nerds Facebook group here: https://adwordsnerds.com/group
Need help with your online marketing? Jump on a FREE strategy session with our team. We’ll dive deep into your market and help you build a custom strategy for finding motivated seller leads online. Schedule for free here: https://adwordsnerds.com/strategy
You're listening to the REI Marketing Nerds Podcast, the leading resource for real estate investors who want to dominate their market online. Dan Barrett is the founder of AdWords Nerds, a high tech digital agency, focusing exclusively on helping real estate investors like you, get more leads and deals online. Outsmart your competition and live a freer, more awesome life. And now, your host, Dan Barrett.
(00:40): Hello everybody, and welcome to this week's episode of the REI Marketing Nerds podcast. As always, this is Daniel Barrett here from AdWords nerds.com. And look, if you need more leads and deals for your real estate investing business and getting 'em online, you know where to go. It's AdWords nerds.com. You can jump on a phone call with our team for free. We will help you put together a strategy for your market and your business this week. I've got a great interview for you. I'm talking to Mike Deaton from deaton equity partners.com. And if you don't know Mike, he is this really fun, really intelligent, really, really, like, well spoken, well thought through guy who transitioned from really big corporate work. I mean, you're thinking about working with Nok, working with Microsoft, these giant companies into investing in land and then doing apartments indication, working with investors, helping them find passive cash flow for the rest of their lives. Mike is an incredibly insightful person with a really fun story. I know you're gonna get a bunch out of our interview, so without any further ado, let's jump into my interview with Mike Deaton. All right, everybody, what's up? I'm here with Mike Deaton from Deaton Equity Partners. What is up? Mike, thank you so much for coming on the show, man. I really appreciate it.
(02:01): Yeah, thanks for having me on, Dan. It's great. I, uh, love coming on and sharing a little message. Yeah. Well, I wanna, I wanna make sure to shout out before we even get into things. So if you are listening to this, you definitely are gonna wanna check out the stuff that Mike is doing. I'm just gonna go ahead and like, spoiler alert, you're gonna wanna go ahead and check it out. You can go to dea equity partners.com/freedom. So that's D E A T O n equity partners.com/freedom. That's the landing page for your podcast, you were saying. Yeah, We, we tried to make that like a one stop shop, right? So instead of giving out social links, email contacts, lead magnets, all that stuff, it's really, it's all right there. So, you know, we'll talk about a little bit of stuff today, kind of what we do. We have, uh, links to various aspects of how we generate cash flow and some things we're interested in. So it's just makes it easier for people to, to go and, and figure out what, uh, exactly they wanna dive into.
(02:58): All right. Well this is really good. So just keep that in mind deep and equity partners.com/freedom, because you are involved in a lot of things. I was actually like trolling through your LinkedIn and I have like other stuff I wanna ask you about too. It's not even real estate related. So we're gonna, we're gonna see if we get there, We are gonna see if we get there. But let's start with you and a little bit of your backstory. So obviously Deep and Equity Partners is the company that you run, that's your connection to real estate, real estate investing, all that good stuff. Tell me what got you into real estate, Right? We talked a little bit before, I know your, your background was primarily sort of the corporate world, right? So what, what was your sort of on ramp into real estate?
(03:40): Yeah, it's a, I mean, it's a great story and I think everybody in real estate that I talked to has one. And there are some common themes, but, uh, you know, for me, just, I grew up fairly Middle America normal. My dad was actually a home builder. He was a general contractor. So I had an early taste of real estate. There was good and bad in that, you know, he started building during the eighties. We got into the savings and loan crisis. Big box home builders really started taking off around then. Yeah. And he was building a little different, like, he liked to customize his homes, woodwork, uh, different stuff. So he got out at that point. But I grew up, like my teenage years working for him, essentially, I was, you know, uh, cleaning houses, masonry, roofing, whatever needed doing, right? It was, Hey, go do this. So, you know, I had an early taste of it. I don't think until I really started doing some interviews like this that it resonated that, that may have had some draw for me later, but yeah. How Old were you when you were doing that work with him?
Uh, I was like 13 to 17, you know, I mean, as, as, as early as he felt comfortable, he would, Right? He put me behind a lawnmower and say, Hey, Not the prime age for thinking that anything your dad does is cool, right? That's not like the, that's not the age where you're like, Yeah, the old man really knows some things just like that.
(05:03): Yeah. My, my, um, my ideologies, or my imprints really, my dad was always an entrepreneur of various sorts, and it was really interesting. But I, I, for whatever reason followed the path of, you know, get good grades in high school, get into university, get a degree, get a W2 job, climb the corporate ladder, or do something of that nature, have a retirement plan. And, and that, that was really my model of the world. And I don't know, you know, exactly why or how that came to be, but just my influences on that path were stronger. Yeah. And so I graduated and was really a bit lost, and I just got into the world of tech. Um, I happened to get in with Motorola when Motorola was big. Uh, we were in manufacturing. Uh, it was a huge playground for me. Like the, the management team there was very open to allowing you to do whatever you wanted to do.
(06:02): We had a lot of training and mentoring and capabilities, and I rolled from there in the Nokia mobile phones when they were kind of big of the mobile phone world. Yeah. Um, spent a long time with Nokia. They were amazing company to work for. Uh, and then, uh, Microsoft bought a portion of Nokia, and I went to Microsoft as part of that acquisition and spent many years working, um, there. And most of my career was either in operations or more broadly in supply chain. And so I just, you know, that was, that was it for me. Um, and, and I had a lot of success. Like, I was able to stay interested in different jobs and learn different disciplines of that world. Um, a lot of promotions, a lot of stock options. I mean, all the carrots were there to keep me plugging down that path.
(06:53): Until about 2016, I was living in Dallas, Fort Worth, Microsoft based outta Washington. Um, my career were to continue, really needed to be in Washington if I was gonna stay with Microsoft. Mm-hmm.
(07:54): And so, you know, I had recently read, uh, Kiyosaki's Rich Dead Poor Dad Again. Um, I had cash flow lodged in the back of my mind in terms of, Hey, what can we do to generate some cash flow? Yeah. I had also purchased a, um, land investing toolkit of sorts that, uh, was teaching how, how to, you know, essentially flip land by low sell high. I hadn't looked at it because I've been working a W2 job. And, you know, it was one of those things like, I'll get around to it later. Um, and so we took that moment to really dig in instead of jumping right back into the rat race to take a moment and reflect on, you know, what, what resources do we have at our disposal? What do we really want out of the rest of our lives? Uh, what kind of lifestyle do we wanna live?
(08:44): What values resonate with us? And how do we live those? And, and so in that moment, we were able to conceptualize a different lifestyle. We gave ourselves, uh, a chunk of money, which thankfully we had, um, you know, some disposable income. So we said, Hey, let's, let's take some seed money. Let's put it in this land investing business, and let's give ourselves six or 12 months to give this a go. And so we, we kind of dove in there. Um, you know, I'll fast forward a little bit, but, uh, after like three years of building that business into a very successful income generator, we were looking for tax breaks. And so we expanded into commercial real estate and, um, uh, decided multifamily was the lane that we wanted to go to start in and in the commercial real estate, uh, space for diversification, but also for tax advantages, right?
(09:37): So to be able to write off, um, depreciation and offset our other income, which was real estate related. And so we were able to really leverage, um, real estate professional status, take a lot of depreciation and, and amplify, or at least keep more of what we were earning in our pocket rather than pay it out on taxes. But, you know, so I would say a combination of factors. Circling back to your question is really just Robert Kiyosaki, which so many people I talk to have that as an impetus in their background in terms of, you know, jumping into real estate. So that seed of getting on the entrepreneurial side of the equation, ideally in real estate, um, as well as just, I had been exploring, right? I listened to a couple of podcasts. I had heard some people that were investing in land. They were making crazy returns on their investments.
(10:26): Um, and it piqued my interest. And, you know, those, those seeds together with the, I would say push of not having a job, really. I'm a, I'm a, my personality is such that I'm, I'm really an all in type of person. Like when I'm working with two worlds, I am all into that world, right? I mean, I'm giving them everything I have, and I really needed to, you know, burn the boats, as they say to, I don't know that I would've been as successful had I tried to straddle both worlds and start a side hustle while I was working a main hustle. It's just not, um, it, it would've been harder for me. For a lot of people, that's a very, uh, workable strategy and one that I would encourage, quite frankly, you know, unless you have, uh, certain ingredients set up. But, you know, for me it was really, it was having that time, the motivation and, um, you know, the hunger to make something really, really work.
(11:27): And, and I think that that helped contribute to, you know, us digging in. I will also say like, you know, I, I'm a person that believes all of your life experiences leading up to this moment have served you. And so, I mean, I'm super thankful for my time in corporate America. It gave me the capabilities to really be strong in operations and business management, such that we run our businesses today very much with that discipline. So we're able to look at, you know, what our key metrics, um, looking at our, our finances, uh, setting strategies, following different execution plans and all that kind of stuff really, I think helps, uh, accelerate us. But yeah, I mean, for us, it, there was a little bit of luck, a little bit of, uh, planning, um, different things that pushed us into real estate. And it's, it's Serenity too, right? I mean, it, it, so there's like so many things I wanna talk about, but you, you just kind of hit on one. So I'm, I'm gonna come to this cuz this is like a pet interest of mine, and I'm gonna selfishly commenter the podcast and ask about this God, yours, man.
(12:33): I'll bring it back to real estate investing. So one of the things, well, I, uh, I got a bunch of questions. I actually wanna go back to you and your wife sitting down and asking yourselves, What do you really want? Right? Like, ha, being in that moment where you both got laid off at the same time, which is wild, right? Yeah. It happens, I know all the time. But it's, it's weird to think about, right? And then really taking the, the, the presence, having the presence of mind to sit down and do that. So when you sat down to think through that problem, like how did you guys do that? Like, did you literally sit down on a piece of paper and say, Let's write out like our dreams? Do you have like a bucket list? Like what does that process look like in that moment for you guys? Or if you wanted to attack it a different way, if you were gonna do that again today, how would you
(13:22): Do that? Yeah, I would probably have a more refined process today, just having been through it and also some of life experience in that last five years. But yeah, for us in that moment, there was, um, obviously, and I, I have, I've had the unfortunate experience of being on the other side of that equation, having worked in the corporate world for 20, 25 years, where I have had to lay people off, um, many times. And I, I know that story and that routine, and regardless of how prepared you are for it, it's a gut punch, you know, when it comes. Um, and so there is some amount of time, you know, shorter, longer for others where you were just, you know, the winds knocked out of you and you're like, Holy shit, what am I gonna do? And so, you know, there was that processing and, and in my case, I had had some dialogue with my boss and it was somehow mutual type of understanding.
(14:17): But, but still the realization comes that, all right, I have no more money coming in. Which, you know, is, is honestly one of the fantastic elements of my life today is I do have a cash flow stream that is going to come in regardless for some amount of time, whether I'm working in any given moment or not, if I get sick or if something happens. My wife and I went to Europe for a month earlier this month and or early this year and, you know, things like that. But yeah, in that moment, I mean, we processed a little bit. My immediate reaction, like I said, was, All right, resume, polish it up, get out there, network, shake the trees, who do I know who's working? And so, you know, I was able to get some interviews very quickly, but, um, you know, for me it was really, it was listening to my inner voice that was just sick.
(15:08): It was like, I, you know, uh, you know, some of these, some of these large companies are just, um, a little soulless, you know? I mean, they, they, they get you in and they're just, um, you know, you're a tool. You know, I, like I said, I've had the fortune to work at some great companies where I was supported, I was developed, I had opportunities, a lot of great things, but I've also worked in some really grinding out environments. And so, you know, it was, it was in that moment, and I'll credit my wife for, you know, listening and hearing a lot of what I was saying and, and having the, the ability and the desire to support trying something different. And my wife's Romanian, she grew up, uh, under communism. She has an incredible story herself, but you know, she's coming from a totally different place where she has a lot more comfort in the unknown or in, you know, giving things a chance and trying certain things.
(16:09): And so, you know, that support really helped a lot. But as far as the process, yeah, I mean, we did some exercises. We sat down and we said, one of, one of the exercises I like to do is looking back from forward in your life, whether it's end of life or it's late in life, or, you know, taking a long term view of perspective on what kind of, what do I wanna be remembered for? What kind of person do I wanna be? What accomplishments do I want to have made? And they're generally not, I want to have worked, uh, you know, a 60 hour work week and, you know, worked for somebody else. And so those, the coming at it from that angle, um, as well as we did some, some values exercises where we brainstormed, you know, what values resonate with us. We did some rank choice to find out which ones were, um, top of mind for us and more important than others.
(16:59): Um, so there were some tangible, actual, um, exercises that we sat down and tried to do that really all pointed towards entrepreneurship and being our own boss and really set in our own course and, and, and not being, you know, I, I grew up with a mindset that, um, having working for an employer was safety and Right. Um, you know, it's just, it's not so much the case anymore. Now, I do think I probably got a lot of my, uh, my, from like my grandfather, he worked for General Dynamics for I know, 50 years, retired with a pension. My other grandfather worked for the airlines, same thing, uh, worked for decades, retired with a pension. Um, my maternal grandmother, she was a, she worked in a bank and she rose to a senior vice president and, you know, retired with, and, and she was always drilling in savings accounts and, uh, CDs and, and different things.
(17:56): And so it's just not so much the case in today's world, right? I mean, there are, um, quarterly shareholder reports and we've gotta do layoffs and, uh, in those kind of things. And so all of those things really pushed us into let's try something. Life also allowed us to do that, right? We had some money in the bank. I got a payout from being laid off college for my daughters was set aside. Uh, we were empty nesting. Um, there were a lot of, uh, of factors that presented themselves that gave us a little more security in saying, Okay, let's give this a try. Worst case it doesn't work, We go back and we get jobs, Um, or, or we try something out. So we had a runway to work with. But yeah, I mean, there was, there were, there were days of active exercises and just trying to explore that.
(18:42): And, like I said, in addition, I had this, already had this toolkit that I'd explored and it had piqued my interest. And, um, there was an ecosystem built around that. So it's a guy, Mark Polski, he has a program called The Land Geek. And it's, you know, it's, it's an educational environment where they have workshops and coaching and, and different things. And so, you know, we were able to, to, uh, plot a course to, to give something a go. But, um, yeah, there was, there were a lot of factors that came in, but, but there was also a lot of giving ourselves room to even conceptualize something different because, you know, like I said, my immediate reaction was, Wow, I gotta get right back on the horse, um, and get going. And yeah, I think for so many people that's, that's what, you know, so you just, you just get back in and, um, it's a big part of, you know, today why we really wanna share our message, um, you know, allow others the opportunity to create their own financial freedom and, and plot their own course. Should that be what they wanna do. Yeah.
(19:47): I love how, you know, you're talking about really projecting yourself into the future and kind of looking backwards and basically asking yourself like, where do I wanna end up? Yeah. Right. And I think I, I, it reminds me of, you know, Dan Kennedy is sort of the classic direct marketing old crotchety guy, but amazing, uh, just amazing teacher in terms of teaching that kind of marketing. I remember him saying once, he said, The way that entrepreneurs fail themselves is they build a house they don't like
(20:47): Very specific environment. You transitioned into this entrepreneurial environment, but you have this skill set that kind of transferred over, like I saw in your background, I think you have six Sigma in your background, right? You have supply chain stuff, which is like, I was, I was referencing like that's like my pet interest. Like I'm fascinated by supply chain stuff. I'm might actually scheduled to take a theory of constraints, supply chain. Oh yeah. This supposed be like a two week course. My wife was like, Why are you signed up for this? And I was like, I honestly don't know. I couldn't tell you, but like, I just think it's cool. Yeah. Like, you're gonna show me how to get the coke to the gas station from the warehouse. And she just, she was like, This is literally the most boring thing you've ever done. Yeah. But, but I, I love that stuff because to me it feels like a really valuable set of mental models that you can apply to a lot of different things, right? So I'm curious, when you started shifted environments to this really entrepreneurial environment, what did you find really served you or helped you from your past sort of experiences with these larger companies or these sort of different skill sets? Like what was really useful to you in this kind of real estate world that you're in now?
(21:54): Yeah, that's a great question. And, and, um, as I touched on earlier, for me, I had risen to upper management levels in, in these different disciplines. And as part of that, you know, a lot of the responsibility is going through a regular cycle of strategy, taking that strategy and matriculating it down into actual projects and actions, and then into the measures to make sure you're on the right track to get there. And then just iterating that quarterly, annually, whatever. And so for me it was really, it was a place of comfort to be able to look at, you know, where we wanted to be as a business and take that from a conceptual level all the way into tangible activities. And so, you know, we, we do that we'll, we'll have, uh, an annual planning cycle, will review it and renew it quarterly. We'll translate that into, there's a book that we read early on called the 13 Week year.
(22:56): And it's essentially running your business in quarters. You know, taking, taking what most people will look at on an annual cycle and truncating that down into a 13 week cycle, such that you don't get 11 months into the year and then go, Wow, I'm
(24:18): You're gonna get huge in the biology industry, which is Yeah. You're, you're a lab or You're, Yeah, I was a generation too early, maybe now that we have biotech and, and, uh, a lot of different things there. But, um, yeah, I, I was a bit lost and like I said, I found my way into manufacturing and operations just by happenstance and some networking. And, and so all of that. And like I said, I worked for some great companies and they instilled a lot of, um, a lot of, uh, really solid business practices. I did go back and get my master's in business. Um, and so I also had that to leverage. But yeah, I mean, it was, uh, just coming at, running a business from that angle, um, has, has allowed us to, I think, accelerate our, our growth and where we are today. Yeah.
(25:01): I mean, it strikes me, right? It's like so much of businesses process. It's not so much content as it is process. Mm-hmm.
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