In this conversation, I sit down with Mike Deaton, known in the real estate world as the land guy, who spent ten years building a vacant land flipping business that now funds his entire portfolio and supports a life of full location freedom. Mike and his wife Lydia left corporate careers in 2016 after simultaneous layoffs, with no real estate income, no side hustle, and no backup plan. What they chose to do instead is what makes this conversation worth your time. We cover how they structured their business to run without them in the weeds, the eliminate-automate-delegate framework Mike carried over from 25 years in corporate operations, how they think about deploying capital across land, multifamily, and other asset classes, and why the vision behind the business matters more than the strategy. If you are a real estate investor who is still doing most of the work yourself, this conversation will give you a clearer picture of what it actually looks like to build a business that supports your life.
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Hello everyone, welcome back. I’m Adrienne Green, and today we’re here with Mike Deaton. We always focus on how real estate entrepreneurs break free of the grind and create the freedom that they wanted at the start, and Mike is a perfect example. So let’s jump in here. Mike, for listeners who are just meeting you, can you give us the 60-second version of what your real estate portfolio looks like today?
Yeah, happy to. Thanks for having me on the show. So most people know me as the land guy. I’ve been for 10 years building a vacant land flipping business. And that is, I would say, 90% of what my wife and I do in terms of an income level. And that’s what we started with. But over the years, we have diversified into other asset classes, largely multifamily syndications, where we have been both passive investors and we’ve been active deal participants. We’ve partnered in over a thousand doors, around twelve hundred doors. Several of those deals have gone full cycle. So for people not familiar with syndications, a lot of time there’s a fixed value add window where you force appreciation and then there’s an exit. And so we’ve done some full cycle deals.
We have less intensely gotten into single families as well, but land for us is so stress free and the returns are just better than any of the other forms of real estate that we stay primarily in our land lane. Where we like to diversify is to get tax benefits out of depreciable assets. And so we do a little bit of both still in that way. But that’s kind of what the portfolio looks like today.
I love that. I love your summary of it because it and that’s why I feel like when somebody thinking of the life cycle of a real estate investor, right? Versus when somebody starts and as they mature there, you start with one thing, you get shiny object syndrome and try a lot of different things, and then you realize kind of typically you’re two or maybe three things, right? Because you’re going to optimize for either net worth or cash flow or tax benefits and you might have some different strategies for those different pieces. And that sounds like what you’ve really done.
It is, yeah. Yeah. It’s been really good to us.
Now I understand that you guys left corporate careers in 2016 and went full time into real estate together. Now there’s a lot I want to talk about there. The first is let’s talk about leaving corporate and what that was like for you.
Yeah, my identity, if you will, was really being a corporate warrior. Out of college I joined the workforce. I was with big tech companies, three big tech companies over a 25 year span. And I focused primarily in operations and running supply chains for Microsoft and Nokia mobile phones when Nokia was one of the biggest phone makers. And that was really what I saw my professional career was and was going to be. And so it was all about climbing the ladder, getting promotions, all the stuff, the political infighting, different things that go along with running a career out of big corporations. And in 2016, I was let go. I mean, I had been on the giving side of the table of many, many layoffs across my career.
And it finally kind of caught up with me for various reasons. Microsoft was consolidating operations. I was living in Dallas Fort Worth. It was kind of a small satellite office for them. And I was really disenchanted in that moment as well. I was traveling 50% of the month. I had an international team, and so I was gone from home. My wife and I met each other in the workplace.
And there was a period of about three years where we commuted to work together, we had lunch together, we spent time pretty much in an open office environment together. And then that passed, and we both kind of found ourselves in different companies. And when the layoff came, Lydia, my wife, also got laid off within days from her healthcare company. And so…
My goodness.
That was all the income we had. We didn’t have real estate at that time and we didn’t have a side hustle. And so our income stopped. Our savings account started going in reverse because we were dipping into savings. And fortunately we had a safety net underneath us. And my knee-jerk reaction really was to get back into the workforce. And so I started interviewing with Amazon and Tesla and Apple and other big tech companies. But they’re all West Coast based. They all have their own company culture. And so all of those thoughts just started really nagging and my anxiety was building about what was that going to be like starting over essentially at a new company. And we both took the time to consciously pause and think about was there an alternative path for us?
And in that process, we dug into our core values. What did we want out of our future? We did some exercises like what is our future life? What was our perfect day? Those kind of things. And none of it was corporate America tied or W-2 salary tied. And so that set us on a journey of looking at what type of business could we start or how could we generate income outside of a salary? And that led us into land and these other forms of real estate and we can get into that. But that was really the off-ramp for us to get into an entrepreneurial business. And we wanted to do it together. That was very much a part of what we wanted our journey to be, spending time together, traveling, working, having shared goals and those kinds of things. And so that was our pivotal moment and we fought the urge to just get back on the hamster wheel and chart a different path.
That’s really impressive. Now, because it’s what I hear most of the time, I thought you guys had probably already been in real estate investing and then you had enough alternative income built up that you could leave the W-2s, because that’s what I hear ninety-nine times out of a hundred. But no, you guys, it’s crazy both getting laid off within a week of each other and then not just running back to find another W-2. That is a bold move, I am impressed.
Like kudos to both of you.
Okay. I don’t advise people to do it that way. When people talk to me, I don’t recommend what we did. A lot of things lined up for us. Like I said, we had a safety net, we had our financial house in order, if you will. And so it afforded us that opportunity. But at the same time, we engineered it. We had a home in Dallas that we sold and we took the equity out of it. We rented for three years while we built our business and we downsized. We moved to Colorado, so our cost of living went up a little bit, but we rented a townhome. Two adult daughters were off into college or just about to go. And so that was all taken care of. And so there were a lot of things that made it more approachable for me personally. The risk that I felt came along with starting something new, there was a lot less.
Lydia and I were in it together. And so there were a lot of factors that kind of opened the door for us, but we stepped into it. And so that was, but yeah, it’s not, I mean, I definitely advise people to leverage your W-2, leverage your nine to five to work your five to nine, as they say, kind of a situation.
I know everybody who’s had a layoff I think is really on fire for those people who are still in the W-2 to be like, use it, leverage it and build that side business while you’ve got it, right? Because you never know what’s going to happen. So
Totally.
Now, I would love to hear as you guys got started, what was it like for the two of you working together? Because there are a lot of husband, wife, spouse duos in the real estate entrepreneur space, right? As investors, as agents, etc. Some do it really intentionally, some fall into it and just kind of go along. It is how it is. You guys seem like you were intentional in how you set things up. Just guessing.
Yeah, we were very intentional. We had experienced working together before. Fortunately, we love each other and we like each other. And so spending a lot of time together was something that we intentionally wanted to do. We also, I would say, have a natural, I worked in senior executive positions. And so used to delegating, seeing big pictures, forming strategies, but also being down in the details and setting up processes and systems and automation. Lydia’s proclivities are more task-oriented, getting things done, really digging into actions. And so we found a very natural way of working that kind of set us up for some harmonious success, if you will. We talk to a lot of people who can’t believe they could never work with their husband or wife, those kind of things. But for us, it came very naturally. I think a big part of it also is just having this shared vision and goal. And when you have a big why or an overarching purpose, it’s a lot easier to work through disagreements or to be aligned in certain paths. When we started our land business, we also naturally segmented the business a little bit. Land is largely about acquisitions and sales, as you know, a lot of real estate is. And so we kind of found our own lanes to give us some individual focus, but then also be able to come together and work together to make the whole business work. And so there were some things that we intentionally designed and orchestrated, but it was an intentional pursuit, but we had very natural domains that we kind of found ourselves in and still do today.
Mm-hmm.
Yeah, I think one of the prevailing wisdoms from couples who are working together well in the real estate space is that the division there, right? That each partner has their areas that they are the leader on, and the other person doesn’t step on those toes. But what I’d love to hear from you is about your vision setting process. You’ve mentioned that a couple times, you know, when you guys first decided to go into this real estate space after the layoffs, and then you also mentioned it here with working together. I find real estate investors again and again when I’m speaking to newbies or people getting started, it’s not the strategy, it’s why are you in real estate in the first place? What is your vision? What are those values as well? And so what did that process of figuring out the vision values look like for you guys? And what did you decide was most important?
It’s a great question and it is fundamental, I would say. So many of us in our society here in the US anyway, right? We go to school and the agenda is set. There’s a curriculum, you follow it, you get into the workforce, you work for someone, and while you may have a little bit of agency within your discipline, the goals and the mission are largely set and you need to conform and drive that mission forward.
That was one of the biggest challenges for us when we shifted out of the workforce into entrepreneurship. You’re setting the tone, right? It’s your goals, it’s your discipline, your ethic. And Lydia and I both really like personal development and are deep into that. And so we already had the foundations of the importance of a why and a mission and a purpose and those kind of things. And I also come from operations where we went through regular strategy cycles and setting of goals. And so running the business came fairly naturally from that standpoint. But we work with a lot of clients today to help them start up their land businesses. And it’s the very first thing we do with people. It’s sit down, that’s our intake with new clients, to understand what is your why? What is your overarching purpose? It was essential for us in that first six months of starting our business, and still is today, but really in that period because you face hardships and obstacles and doubts. And if you don’t have the big why and purpose in front of you, it’s easy to stop and just say, well, I’ll just go back and get a job, this isn’t working, or those kind of things. But
We had that vision of wanting a life of freedom. Lydia’s from Europe. Her family all still lives in Europe. We like to go once a month where we can spend four to six weeks on a long visit where she can catch up and see people and make the long trip worth it. And so all of those things are difficult to do when you’re working for an employer.
Those kind of things really drove us in those early days. And they still do today. I mean, over here on the wall, we have a poster board with our whys on it. And it’s about family and experiences and being able to give back and do things. And ten years into our journey as entrepreneurs, it would be really, really hard, I never say never, but it would be really hard to go back and work for someone else and drive their agenda and just kind of have that sense of freedom constrained. But it is, I would say, probably the most important thing you can do as a business owner or an entrepreneur, or even just a person and a couple in life. I think it’s essential to a harmonious, healthy marital relationship to be able to have these shared goals and visions.
Right, it really is. And everybody has their own specifics, right? And yet I would say the themes I see a lot are the time freedom and location freedom, right? Like you guys wanting to go back to Europe to see Lydia’s family. I travel internationally full time with my family and it’s really cool to be able to say my kids have been to six continents and I don’t know how many countries and things like that. Everybody has their own thing and yet I feel like time and location freedom are what I see a lot. I’m kind of curious though, when you sit down and do these exercises with people who are coming to work with you on this land investing and you’re going to help them, what do you see or what do you often have to counsel or advise them on?
Well, everybody’s as unique as you mentioned. There are themes, but their flavor is a bit different. The common themes that I see are really about perspective. Just having a vision is one thing. The time and the runway to get there is another. And so that’s where we bring in some experience as it pertains to land, more on timing. I’m also not a believer that, I mean, we’ve had clients who come in and go faster and further than we have just because of their nature. And then the flip side of that is there are others. Spousal or partner relationships is another because a lot of times one person has a vision or dream and it’s good to have your partner at least aligned on where you want to go. And so there’s some checking there in terms of is everybody on board? Because that can cause some disharmony on the opposite side of things. Those are probably a couple of the most common checkpoints that we have when people come in. But I would also add maybe an element of richness. I mean, it’s really good to build out your dreams in vivid detail, the textures and all the different things because it’s the emotion that is really going to pull people through and drive them. So those are probably a few key factors that we key in on.
And I love that last point. It’s so funny. As somebody who’s been an investor for a long time and worked with a lot of investors in various capacities, it’s funny because investors always act or think that they are super logical, right? That it’s all about the numbers or it’s all quantitative. And yet when you see an investor taking action, right, or if you can be self aware enough to see it in yourself, there’s so much emotion that comes into play, right? And the emotion is really what drives us to do the hard things. So I love how you hit on that with the vision.
Thanks. Yeah, it’s very true. It’s a little less so in land, but in the other commercial real estate ventures that we’ve been in, and even land, there can be these desires just to get the deal, to make it a good deal, but there’s also the doubts that come along with it. Is it going to be a good deal? What’s going to happen? And those kind of things. And that’s where I think if you have a more powerful lever to push through those obstacles, it really helps drive things forward rather than getting paralyzed by some of the negative aspects of the emotions that can arise.
I love that.
Now I’d like to pivot a little bit, Mike, to something we touched on at the beginning, and that’s your investing strategies and the strategy behind choosing these strategies, right? Like we kind of talked about the multifamilies for the tax benefits and everything. So I realize you’re focused on some land investing with multifamily for its own benefits. Can we talk about the role each one plays in your overall portfolio and how you decide where to deploy cash? Capital.
Yeah, it’s great. So when we started our journey, it was land and obviously you don’t want to diffuse yourself too much over one pursuit. And so across the different journeys that we’ve had in real estate, we follow a similar approach. Like we invest in coaching or mentorship groups.
And so when we started our land journey, we invested in a coach, we joined a community so that we would go faster, make fewer mistakes. But very quickly, within, I think by our third tax year, which was our second year in business, we started making a lot of money. And that first tax bill that came was shocking. Our first year was a growth year. We were investing into the business, took a natural business loss because the revenue wasn’t caught up. But then once that tax bill came, it was shocking and it was something that I did not want to do again. And so we started looking at how can we mitigate this? And we went on another journey. And that led us into multifamily. There are obviously many different ways to enjoy tax benefits. There’s energy sector, different commercial assets, even storage and different things like that. But we took multifamily just because it’s an essential need in our society, right? Housing. And we did the same thing. We joined a community and found a coach and ramped up in multifamily. Today I would say we have kind of started thinking more future forward. And so land is still our core. It’s a huge cash cow, we’re able to deploy capital and get large returns. It funds our, we have our own self-directed IRA, which we use to invest in other forms passively. But in terms of now we start to look forward, land our land business is a flipping business. And so we are constantly looking at and doing deals. A big portion of our sales strategy is we do owner financing. And so we have like five or six years with clients and we’ve built up a passive income book, if you will, but it’s a monthly recurring revenue that comes in, but it’s also finite. They’re going to pay off their loan and we’ll transfer the title. And so we’ve started looking at longer term assets that we fully control. I didn’t like the syndication experience from the aspect of so many partners involved in a deal. And so we are looking at things that we either fully control or maybe have a small joint venture that we’re working with so that we have a lot more decision-making ability if we want to hold something forever or if we want to exit, we can do those things. And that’s smaller multifamily units. I like the light industrial and business spaces in real estate as well, but it’s very cyclical and market-to-market dependent. So it’s a little trickier in that way. But today we’re probably 90% of our capital gets deployed back into land. And we start looking at another 10 to 20 to do one or two deals a year, really with this intention of building a longer-term base that when we want to stop, if we want to stop, we have the passive income that’s coming in that supports, you know, most of your viewers might know, but once you get a certain level of income coming in that covers your essential needs, it really opens up the possibilities to be able to explore other asset classes or personal pursuits or things like that. And so that’s what we’re looking to have secure for the long term.
But that’s kind of the way the portfolio mix, at least today, is that we go about thinking about it.
I resonate and it makes sense to me. So I hope that helps our viewers as well. And then one of the last things I want to touch on as we near the end here is the operations. You and your wife, you guys are obviously very capable and organized people. I can see all of that. And yet you’re doing your land flipping. Flipping is intense. You guys are helping other people. So you’ve got your coaching program and then you also are looking at this other leg of more long term investments and vetting that, managing it, all of those things. What does that operations look like on the back end? What pro tips or wisdom would you give to viewers who often real estate investors struggle with how to organize all that?
It is systemic in real estate. I talk with a lot of people that are already in real estate in some fashion or another and they add land to their discipline or their asset class. But I don’t know, 80% of people that I talk to have created a job, right? They’re the hustler. They’re the one out there doing the things. Having an operations background really has helped me in this sense in that the top line is certainly a focus, the revenue that’s coming in, but there’s really a sharp focus, and there always has been for us, on the bottom line, the expenses, putting in systems. And one of the things that we’ve done since we started our business is we continue to update essentially a process flow chart of the activities that are happening.
And if people are familiar with the swim lane concept where you have these are things that I do, these are things that can be automated, these are things that are delegated to a human, now we have AI, it’s a great way for me to visualize the processes and where the opportunities are to move things out of my lane. And so it’s something that has helped us in the short term, but then also down the road, you can say, okay, my next piece that I want to work on moving would be this.
Mm-hmm.
In the land business, it’s really pretty simple in terms of the end-to-end process flow. There are also, as with most real estate asset classes, a lot of land specific systems. And so we do a lot of direct mailing outreach. Well, there are systems where you can do that kind of one time, set it and forget it, and let it meter out over months or weeks or however you want to do it. And so we leverage a lot of systems like that. We also leverage humans. Easy things are realtors. They’re commission-based. We can use that without any upfront out-of-pocket expense. Title companies, very similar, right? They do a lot of the heavy lifting in terms of due diligence, title insurance, escrow type services. It’s well worth paying them to take a big chunk of the process out. There are land-specific virtual assistant groups or businesses that know the land business and will take pieces or all of it. It kind of depends on your budget. We’ve leveraged virtual assistants now and again to do certain things. I come from one that has a mantra of eliminate, automate, and delegate and in that order, right? So first you look to can I eliminate certain processes? Is it essential? Beyond that, can I automate it with a system somehow that’s more cost effective? And then as a third category, it’s more delegation. Do I need to find a team member or pay a contractor or something in that nature?
Right.
On the multifamily side of things, it’s a little more self-contained. There’s not a whole lot of activities. If we do a lot of marketing, we might leverage graphic designers or people to be hands-on in our social accounts or things like that that are more tedious or repetitive type tasks. Those are easy targets. A lot of people are probably familiar with Dan Martell and the buy back your time concept. There’s variations of all of that, but it’s essentially where is my time best suited? What are my high value add activities? Is it sales? Is it some type of strategic analysis or things like that? And then other things find an outlet for something or someone that’s got more passion even about a certain task. And that’s been our philosophy. It’s still, if I’m honest, it’s something that I struggle a lot with. I like to have my hands on a lot of things, even if I know I’m not the best person to do it. It’s just something that I have, you know, we’ve hired a contractor, a few people, and you don’t have a good experience. And so it is a hard hurdle for a lot of us to get over. And it’s something that I have to intentionally work on. But I like to do things with my time. We live in the mountains here in Colorado. I like to go for hikes or trail runs. We travel. And so in order to do that, you have to let go and allow other people to pick up tasks. It’s also, if you’re going to grow, you’re going to hit a plateau if you’re doing everything in your business yourself.
In that same way, financial leverage is another aspect of things, right? I mean, you can only grow so far with your own capital. And so that’s one of the beautiful things about real estate, you can leverage private money, institutional capital. There’s so many different ways to apply leverage in the business in a healthy way. And so that’s just another great reason that I love and stay in real estate. There’s kind of in both those domains.
Right.
Yeah, that reminds me, one of the things we have, we travel and it’s always like, would we want a place here? And yet in a lot of other countries they don’t have mortgages or you can’t get them easily as a foreigner or things like this. And when I look at the mortgage options or the lending options we have in the US, I’m like, it’s just hard to even imagine putting all cash down on one of these places elsewhere. I’m just like then my appreciation is only one X. I don’t get that multiple of the fact that I’m leveraged along, so that’s where we are. But last question I’d like for you, Mike, before we wrap up, kind of along those same lines of your operations, you seem like the type, you mentioned AI. I love to hear where are you loving to leverage AI in your investing right now.
Gosh. Well, like most people, the start of the journey is in task. A lot of us leverage AI to help us do things, right? So we’re creating content or even graphics these days. There’s this collaborative type level. And that was our starting point, was doing a lot of that. Now lately though, I’m getting more comfortable with leveraging AI to do some analysis on the comparative analysis and look at things. It is so powerful statistically. In fact, I just published in our coaching group, we have a course AI for land flippers, where I’m building out kind of this end-to-end suite of tools where AI can help with market research, comp analysis, as well as some of the other marketing and sales type activities, sales coaching, to give you feedback on whether it’s a DM conversation or a transcript from a sales call. There’s so many different ways, but lately I’ve been leaning into the power of statistical analysis, but it’s one of those where you don’t want to outsource your thinking to AI just yet. I don’t have the confidence in its reasoning and its logic. And so there’s a fundamental knowledge that I try to teach our clients to have before they leverage so that they can double check and check things out. But yeah, AI is definitely a powerful thing, and it’s here to stay.
But really across the board, there’s very little that it’s unable to do. It’s just, I can remember twenty-five years ago when I started my corporate career, there were certain concepts. Things were starting to be outsourced, other people were allowed to do things, but there are some strategically competitive advantages that each company has, and it’s a little bit different for each, but it largely is around the thinking and the strategy that you set for your company. And so those are things that I try to hold on to. But we leverage AI daily, end to end. In land specifically, not so much. We do a little bit of market research. It’s nice to strategize with it as a partner in terms of what asset classes might be better suited, given the different variables that we want to put in. It’ll help point in a certain direction. But for now it’s kind of at that level, not really full advisory, but just some starting out guidance.
Right, that makes sense. Thank you for sharing that. And now Mike, if people would like to connect with you further or learn about working with you, what’s the best way for them to reach out?
Yeah, if anybody wants to hear more about land or just reach out personally, I would say LinkedIn is where I’m most active. It’s Michael B. Deaton on LinkedIn. But Instagram is also a great one because you can have good DM conversations and I’m happy to share some free resources on land. Those are probably the two best sites for people to come and connect with me.
Perfect. And guys, we of course have those links in the show notes below. So thank you so much, Mike, for joining us. That’s a wrap on today’s episode. And if you got value from this conversation, it would really help us for you to leave a review wherever you may be listening. And then join me again next week for another episode. See you then.