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Leaving Your W2 To Chase Passive Income With Mike DeHaan
Joining us now is Mike DeHaan. Mike quit his W-2 a few years ago with no plan. He tried a bunch of businesses, then got into flipping houses and rental properties to chase passive income. He started a wholesaling business at the beginning of 2020 to buy better deals. Now he owns 50 rental units valuing about $10 million in real estate. He makes more passive income now than he did at his W-2 job as a Boeing engineer. Welcome, Mike. Thanks for joining us. Something that resonated with me when I was looking at your bio is that 2020 wasn’t that long ago. As we talked about a little bit earlier, it’s a great time to start or maybe it’s not a great time to start. Can you talk about what went on when you left? Why did you leave your W-2? We will start there. That is always the key focal point in my story. I did things backward from how most people view it or expect to do it themselves. I grew up traditionally. I went to high school and college. When I was in college, I didn’t know what I wanted to do. I went into Engineering mostly because I started college in 2009. The economy was terrible. I went to Gonzaga University here in Spokane. They have a high recruiting rate with jobs. It’s a pretty decent school. I went to my first job fair. There were seven companies there and they were all looking for engineers. I was like, “I guess I’m going to be an engineer then.” I was good at math and science and I wanted to be able to get employed. I struggled through school and hated it. I was always led with, “When I start working, I will get better.” It’s not how it works. I went into the workforce. I first started at a consulting company while I was there for a short span, and then I got a job at Boeing, which was the dream job. Very high pay and super cushy. You have all the good benefits. They have a two-week Christmas break and everything you could possibly want from a traditional corporate job. I will always remember the first day I walked into the facility I was working in. I was so excited. I pulled up and parked. I walked through the huge composite manufacturing facility I was working in. I went up to the office and it is dead silent. It’s like cubicle farms as far as the eye can see. I was like, “This is not for me at all.” I just signed a general contract for this job, so I was stuck there for a little bit. While I was there, I hated every second of it. I never had anything that I enjoyed. The one thing that I did enjoy about it was seeing the airplane manufacturing process. It is very fascinating, but the actual day-to-day work was terrible. While I was there, I started getting into financial independence and passive income. I started listening to podcasts and reading blogs. After a few years of that, I said, “I want to pursue this.” My Boeing job was draining me. I do not have the bandwidth to try to pursue it on the side. I decided I’m done with this. I had been saving money to pursue lean FIRE or whatever. I decided to jump and figure out what would happen next. There are a couple of other steps that went on in the middle there, but I will cut to it. In January 2018, I quit engineering and decided that I was going to do anything else. From there, there was a bunch of other stuff before I started buying houses. I can go into more detail with all of that. I would love to see what went in between you quitting and your starting to buy houses. What was that period filled with? When I first left, my thought was I wanted to go back to school and get into physical therapy. I have always had an interest in health and fitness. I competed at a high level in Olympic weightlifting recreationally for years. I was coaching that as a moonlighting job while I was at Boeing. I said, “I would like to make that full-time.” I went and got a job at a PT clinic and did that for a month. I was like, “This is even worse than engineering.” It’s like an insurance farm where you are churning people to it and you are not helping people. What I did is I spent the next year working at a gym as a coach and I drove for Uber. That was what I did. I dabbled in different things and started reading a lot of business books. I and my wife decided to take a little bit of a dip into the savings that we had set aside for our emergency fund and we went to New Zealand. We traveled around for a month to find myself or whatever. That helped me solidify that I wanted to have a lifestyle where I could take trips like that more often. What became the goal was how I can create a business that would allow me to have that freedom of time and the ability to travel and do what I wanted. I read a lot of books about wealth generation and passive income generation. Real estate comes up in everything that I read. I was like, “How do I make real estate the thing?” I didn’t have a real estate background. I didn’t want to do renovations on properties. That’s what led to it a little bit. You didn’t go directly from quitting your job to real estate. It took from that and something people who are maybe exiting college or looking for their first job, intern, or job shadow someone to see. You think you want to do something like, “If I’m an engineer, it will be better once I’m out of engineering school.” I wanted to go be an attorney when I first started. Luckily, I went through the LSAT class and I was like, “I would love law school but I would hate being an attorney.” I love what you did going for PT saying, “This is not what I thought of when I thought that I’m going to do what my passion is.” I feel like there are a couple of themes. Something you said in the beginning was, “This isn’t the way most people do it,” but I would disagree. I feel like there are two types of people and it all depends on the responsibilities that you have and your personality type. There are people that will leave it all and have to do that in order to commit and not feel like they have this safety net to fall back on, and are super committed to whatever that next play is, and then there are people that can build both. I am the former, so I resonate with you, but there are people who can do both. You went into real estate. You read all the books and did all the things, how did you decide to go into flipping, wholesaling, and all of that? What was your first step and how did you decide that? Originally, all I knew was that I did not want to do renovations. That’s what I said to myself. I was like, “I have never used a power tool. I had never swung a hammer at the time.” I was uneducated so I didn’t understand that you hire a contractor for that. I was like, “If I’m going to flip a house, I got to learn how to make kitchen cabinets. I don’t want to do that.” I was like, “I want passive income. That was my goal.” I started looking at rental properties that were nearby and I wanted to find stuff that was easy. It was in the neighborhood. It’s very nearby where my wife and I lived. There were these new construction homes that were going up. I started doing the math and I was like, “This is a great neighborhood. If I buy these for the price that they want, the mortgage expense is going to be $1,100. I will probably be able to rent them for $1,600 or $1,700. I’m going to make $1,500, $1,000, or $1,100 a month just like that. It’s going to be so easy.” I liquidated my corporate 401(k) from Boeing. I am similar to you. Maybe because my parents were self-employed, the whole company 401(k) was a very new concept to me when I worked in tech. I liquidated mine and I feel like it was very much the unpopular opinion. Today, that investment has paid dividends in the valuation of the property. It’s interesting and another not super popular thing to do. For the audience, your 401(k) is a great investment. To each their own but I always look at it as something like, “Is there something that it can do more? If I’m pulling it out, is there a better investment that I’m making and putting it into?” I’m not saying pull it out because you want to go on a trip. If you can pull it out and have a good reason for why, it makes sense. That’s valid and you are right. It was a very unpopular opinion when I did it. I talked to many people that were like, “The taxes and penalties.” For me, it was a middle finger to the corporate world because I hated it so much. It was the last remaining thing, especially because of how the Boeing corporate 401(k) was structured, I couldn’t transfer it to another IRA provider. I had to keep it there. I would always get these correspondences from Boeing in my inbox and I would always get these letters and I was so salty with it. I wanted that to stop. I made a rash decision, but I also wanted to get into these properties and I couldn’t sacrifice the safety net that my wife and I put together because, at that point, I wasn’t making money. In 2017, I made $130,000 with my wife’s salary and mine on top of that. In 2018, when I was working for Uber and I was a coach, I made $17,000. My salary was reduced by 90%. I could not take my safety net and put it into these properties. I had this 401(k) and I said, “This is where that money needs to come from.” I asked it. I got into these rental properties. The mortgage payment was about what I expected. I threw them up on the market for $7,000. Nobody wants them because the prices are too high. It was a pipe dream. I ended up leasing them for a few hundred dollars less than that, and then I realized I would have to have property management if I want to do that. I have vacancies so I have these months when it’s not getting filled. I learned that you are supposed to have reserves for these things. It wasn’t even on my radar because I was taking massive action and trying to figure it out afterward. That ate a huge chunk of my capital but I was still having a little bit of money coming in. It started giving me the bug. I was like, “How can I use this model to produce more income?” I hear about people flipping houses. How could I potentially do this where I’m going to partner with people? At this point, I was bought into real estate. I’m like, “I have never swung a hammer.” I started going to meetups. If you go to meetups long enough, you become a face that people recognize. You talk about having goals and ambitions. I connected with somebody who was equally ignorant of the process. They had money and I had time. I was like, “Let’s start flipping some houses,” so we started flipping houses together. If you go to meetups long enough, you become a face that people recognize. Share on X They would bring the cash. It’s like the definition of using other people’s money. We would get a hard money loan together. I would do the project, and then we split the deal 50/50. That was ultimately how I got started in the off-market real estate process. That was in the late-2018 to the early-2019 range. In 2019, we flipped four properties. The first property took us four months and I made $4,500. Lots of lessons learned there on what not to do. It was a very low-income per-hour education. With each one, we got a little bit better. By the end of 2019, I had become a regular buyer or I was regularly inquiring about properties from wholesalers. There was the larger wholesaler in town who decided he was going to have a meetup for the cool kids. He brought all of the more serious folks out to do a meetup. It was mostly to build this buyer’s list and all sorts of those things. I met all the people that I had been buying from or inquiring from in person. I was like, “These guys aren’t that much smarter than me. I’m pretty sure that I could do what they do.” In November 2019, I decided I was going to be a wholesaler and I started getting into the off-market game at that point. You entered wholesaling right before COVID. Let’s talk about that. Prior to us starting the interview, I was like, “It’s probably the best time to get into it,” and you are like, “Or not.” Tell me about some of the pros and cons of starting your wholesaling business and then 3 to 4 months later, the world drastically shifted and property values skyrocketed. They skyrocketed. In 2021 was when stuff started to get weird. We’d already been operating going into 2020. When I decided that I was going to do this, it was about Thanksgiving. I had my business partner who was my best friend from college. He had a strong interest in real estate. He owned a couple of rentals. He had money and I did not. The arrangement was like, “I will figure out how to do this thing if you can help seed fund it.” We decided to go into this endeavor together. We joined a mastermind that helped us build the foundation of our business. That is still the core of what we run now. We are still actively involved in that group. That has been the best dollar-for-dollar investment that we have ever made. We joined that and start getting the momentum going. Do you mind mentioning whose mastermind? It was Ryan Dossey. He has a group called Create Cash Flow. He’s big on Instagram and those things. He’s one of the few folks out there who legitimately practices what he preaches. It has been a great program. I would recommend this to people that are interested in getting into this. We built up the foundation for it. We started marketing off-market in February 2020. I will always remember the first day that our mail and stuff started hitting. We didn’t have our system tracked and set up fully to receive phone calls. Ryan Dossey of Create Cash Flow is one of the few who legitimately practice what they preach. Share on X My phone was blowing up every hour or every couple of hours from people that were so pissed off that we are marketing. No one wanted anything to do with us like, “F you” and all this stuff you normally get. Anyone that has done off-market real estate knows what I’m talking about. The crazy thing was I remember my business partner and I were so excited. We are like, “It works.” People are calling us. There has to be somebody in here that wants to sell their deal. That was February. In March, we sent out our next batch of mail. We spent $5,000. It was on March 12th, 2020 right before the world shut down. We sent $5,000 and went out. We didn’t get a single call to flush that down the toilet. That was a big issue. At that point, I remember me and my business partner sitting in a coffee shop. It was right before everything fully closed. It was the last day before all restaurants and everything are closed. He was like, “I think we are done.” I’m like, “Just keep putting the money in and we will figure it out.” We decided to go all in. With COVID, it was always an interesting situation because you couldn’t meet people in person. You build rapport like that. It was a lot of stuff over the phone. It was a lot of learning how to do due diligence from your house. It was very challenging to learn because there weren’t a lot of people that were teaching that yet. It was extremely beneficial in the long term because it allowed us to build the fully virtual business that we have now because we were forced to. We did that. It took us about 4 months and $30,000 worth of spend before we finally got our first deal. We were in the hole pretty big. That’s super important to note too. Going back, you mentioned, “I only made $17,000. I wasn’t quitting my job and breaking cash immediately.” I think that’s important to say you put a lot of cash into it before you started seeing a potential deal come through. For a timeline on this, from when I left my corporate job at Boeing to when I signed my first wholesale deal was two and a half years. It’s a very long period of time. It was from early-2019 to the middle of 2020. We were $30,000 in the hole. We got our first deal. We had a buyer that we had been expecting to sell stuff. We were trying to get a $15,000 fee. The guy beat us down and said, “I can only do $7,500.” We are like, “That’s fine. We will take it. Here’s the deal.” The guy proceeded to vacuum the carpet, throw it on the market, and made $85,000. We had a big lesson learned there of making sure there were analyzing opportunities. We went through it over the next couple of months. That was in June. In the next couple of months, we did a few more deals. In October, we had our first six-figure month all for wholesale deals. October 31st is my birthday and I turned 30. My parents were out for my 30th birthday. I was hanging out with them. I remember sitting with them and I was like, “I think my life has officially changed.” We made $114,000 in a month. That’s what I used to make as an engineer in a year. There’s no way that I can explain that to anyone because it was such a surreal feeling. We took that money and piled it into the business. We have scaled significantly since then. There are two things that come into play with real estate. You need deals and you need capital. There are people out there who are the deal bringers and the work behind it, and there are the people who are the capital, and then you have a combo of both and some people. I love that you partnered with someone and you have that strategic partnership that benefited you both. He had the capital. You had the knowledge to make this work. That is something that when people are looking to get into it, you don’t have to do it all alone. You are probably not going to be able to do it all alone. You are better if you can find a good counterpart to work with you. It was actually a she that I partnered with at the start. I like to give credit there because it’s such a male-dominated world. She was awesome. I want her on the show. It’s like, “How do I explain this to people?” You did all the hard work and everything, that’s how it happens. When something like that happens and you have that record-breaking month, it’s like you’re a-ha moment like, “I can’t go back.” You were two and a half years committed to getting your first deal. Once you have that moment of, “This will change my life,” how do you explain that to people? It’s weird. When it has only happened once, you don’t know if it’s a fluke or not. We were very intentional. When we made that money, we were going to be disciplined about not taking draws because we had a bigger picture. Our goals were always to buy as many doors. Wealth generation was the ultimate goal of this thing. We already recognized that you can produce a bunch of revenue from wholesaling and flipping. You are going to get wrecked by taxes. That’s not going to lead to the freedom that we both wanted.
Passive Income: You can produce a bunch of revenue from wholesaling and flipping. You are going to get wrecked by taxes. That’s not going to lead to freedom.

Passive Income: We spend an incredible amount of time helping people with their dirty laundry. In the beginning, we didn’t approach stuff with that mentality. When we made that shift, a lot started to change.
Important Links
- Mike DeHaan
- Create Cash Flow
- Collecting Keys Podcast
- @Mike_Invests – Mike DeHaan
About Mike DeHaan

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