Ep. 9 - Better Buyers Means Better Offers, with Eli Fisher from Audantic

Jordan Fleming and Eli Fisher, Chief Sales Officer of Audantic, sit down for a dynamic conversation about data, regression analysis, and how consistently finding the right buyer means more money in your pocket. 

“The problem that we solve in the industry right now is we help our clients really hone in on who has the highest likelihood to sell off-market at a deep discount.” - Eli Fisher

Eli talks about the background of Audantic, and how regression analysis – famously applied in baseball and investment banking – needs to make its way to the real estate market. Having tons of data doesn’t help you if you’re wasting all your time time wading through the buyers who will never sell. Eli talks about the ways that real estate investors can really hone in on the right buyers instead of every buyer. 

“You can have the best data in the world, it's not going to make a difference. It's the equivalent of giving me the keys to an F1 car. Yeah, it's cool. But I didn't go to race school, what's the point?” 

Jordan and Eli break down why great process and operations can be the difference between stagnating and growing as an investor. Sometimes it’s important to convert the leads you already have, rather than hoarding new leads. 

Plus, That Real Estate Tech Guy Fast Five gets, well, real! Eli talks predictive data, who’s paying the most in the marketplace, and more! 

About Eli Fisher
As a lifelong tech evangelist, Eli currently serves as the Chief Sales Officer for Audantic. Having joined the Audantic team in 2019, Eli saw Audantic as the true intersection between artificial intelligence and real estate investing. 

As an entrepreneur and noted public speaker, Eli works with large investors from across the country to help them optimize their targeting data with respect to their acquisition and disposition process. 

On a daily basis, Eli meets with clients and provides critical insight as to where clients are losing deals within their revenue funnel via the Audantic Attribution platform LiveLoop.   

Prior to joining Audantic, Eli co-founded an online platform that united Fortune 500 companies with best-in-class talent for their hiring & human capital needs. With clients ranging from Johnson & Johnson, to KPMG, Eli helped numerous private and Fortune organizations develop and implement scalable talent strategies to accelerate their business.

A graduate of the University of Montana, Eli currently resides in Seattle with his wife & two sons. 

Find out more about Audantic: http://www.audantic.com

Find Eli on Linkedin: https://www.linkedin.com/in/elifisher

About That Real Estate Tech Guy
That Real Estate Tech Guy is the only podcast focused on helping Real Estate Investors make better technology decisions to close more deals and make more money. It is your weekly chance to explore how technology can help your real estate business explode. Informed by decades of REI and technology experience, Jordan gets into the details with seasoned tech and real estate industry leaders to bring you the lessons you need to get ahead. Learn from guest successes and failures, get the inside scoop on the next big trends, and always walk away with actionable ideas to build faster, better, and more profitably.

Interested in being a guest? Head to thatrealestatetechguy.com and let us know!

For more information about smrtPhone, the only all-in-one CRM phone system. check out https://www.smrtphone.io

Transcript

Jordan Fleming: 0:01

I can tell you one thing. Technology is the single most important aspect of every business that has successfully scaled.

Narrator: 0:10

It's time for That Real Estate Tech Guy. It's your weekly chance to explore how technology can help your real estate business explode. Each week, you'll hear from real estate investors who have been there and done that and find out their favorite technology tips. Listen in as Jordan speaks with tech companies and learns about new technologies and new ideas that will help you scale your business. And now join your host Jordan Samuel Fleming, CEO of smrtPhone for this week's episode.

Jordan Fleming: 0:42

Hey, everybody, it's Jordan Fleming here with another That Real Estate Tech Guy podcast. And I am delighted to have another technology podcast and welcome Eli, from Audantic as my co pilot for the episode, Eli, welcome to the podcast, why don't you give a little bit of an intro to yourself and to the company?

Eli Fisher: 1:02

Yeah, absolutely. So I'm the Chief Sales Officer for Audantic. We're a data science company. The problem that we solve in the industry right now is we help our clients really hone in on who has the highest likelihood to sell off market at a deep discount. And by that we are able to really efficiently help people's marketing focus on the best class of target in the marketing, as opposed to, and we hear it every day, people are like, yeah, marketing, all these people, they check all the boxes on surface, and yet, they're never gonna sell to me. So that's really a problem that we solve here.

Jordan Fleming: 1:35

Absolutely. And there's nothing -- I couldn't wait to have you on the podcast. Because as a former marketing guy, like back in the day before I started smrtPhone, and before I built CRMs, I was in marketing, and there's nothing I hate more than the spray and pray mentality, of just buy a big ass thing, and throw, you know, throw it at the wall and hope something sticks versus the targeted approach. That's going to mean that you maximize what you spend, and you maximize your time. And that's why I'm delighted. You know, let's dive into a bit more about the different you know, about what about why your approach is better? Because I can't wait for people to hear it.

Eli Fisher: 2:18

Yeah, I think, you know, one of the easiest ways that I was explained to people what it is we do without getting overly technical. I just ask people, have you seen the movie Moneyball? And some people say, Well, yeah, the Brad Pitt movie. I'm like, Yeah, Billy Beane in the 80s. What did Billy do? Billy, just basically use math or statistical regression analysis to really optimize which player should go in what spot or if you're maybe a fan of Ray Dalio and the work that he's done on Wall Street Bridgewater capital, Ray really distinguished himself in the early 80s by doing regression analysis, and that's how Ray was able to effectively beat the market. Well, we're no different. We take regression analysis, and we apply it to the real estate market. And it offers a couple real fundamental differences than the conventional approach. So every day, I talk with investors across the country, large, small investors, and I hear the same frustrations because everybody has access to pretty much the same data. And so if everybody has access to the same data, well, how do you you know, delineate what a good target versus a bad target is, and for the longest time, people would deploy what is known as a stacking approach. And so typically, what I will see people do is they'll buy an equity list, and they'll stack it against a non owner occupied list. And maybe we'll put in some zip code exclusions, if you want to get fancy, maybe you're putting like an age barrier, 65. And up. And the thing is, it works. But the downside of that is, is you also spend a lot of money marketing to people that check all the boxes on the service that are never gonna sell to an investor. And the reason that that happens is because of the stacking approach, you assume all things are equal. Now we talk to real life operators here. And they're saying like, well, I have a set of 20,000 people target 5000 is an awesome Target, target 10,000 is absolute trash. But the stacking approach, you treat it all equal, and so it's very, very problematic. And so what we do, is we look at every single real estate transaction in the market, we monitor that daily, we ingest that daily, daily, and we feed it to an algorithm. And really what the algorithm does is it says, okay, in a given market, these are all the transactions that occurred, here's all the properties that sold conventional. Here's all the ones that sold distress to an investor, what type of person and product sells to an investor. But then you have to go a lot deeper than that, because not all investors are the same. If you're a fix and flip guy, you probably need CapEx in the product. That's fundamentally different than how a hedge fund or an iBuyer that acquisitions at 98 cents on the dollar will review a product in a transaction. And so there's a real important part of the nuance there. Yes, they're both investors, but they're playing fundamentally different games. And so the algorithm really decides and looks at it based on the, these are the people that are most likely to sell off market at a deep discount to a wholesaler, or a fix and flip guy, as opposed to a fund, and then we give that data to our clients for their marketing purposes.

Jordan Fleming: 5:22

Fantastic. And, I mean, you know, the, if you're, my view, it is of it is, you know, there are, there are a couple things that are going to really help you be successful. One is that you have a robust system to deal with the leads that you've got on right you that you're you're working things properly, that you're doing the right follow ups, you're you're tracking the communications, you're getting the steps and all that that's absolutely critical. But if you can stack the deck with the good data to start it, then those two things combined, you know, great data, and a robust system that you can work that data through, you're setting yourself so much further ahead, then that kind of let me just get some cheap data and start, you know, start throwing shit at the wall, so to speak. I mean, you're putting yourself a mile ahead of the race, without even doing anything. And, and that has an impact on everything, your success, your your return, and the amount of money you're investing, as you pointed out, how much if you're going to invest in marketing to 80,000 people, or because you just bought a big ass list, and you're gonna try and pray, or you're going to target that marketing down to 8000 people and really run the table. And that's, that's a conversation that if you're not having with yourself, you really should. So that's, that's phenomenal.

Eli Fisher: 6:58

Yeah, I think, you know, it's really kind of its two sides, right? You have to have best in class data. But best in class data is only so good. It's really incumbent upon the operator, you have to have great systems and processes. Because if you don't, you can have the best data in the world. And it's not going to make a difference. I mean, I tell people, look, it's the equivalent of giving me the keys to an f1 car. Yeah, it's cool. But I didn't go to race school. So kind of what's the point? And I think there's a lot of similarities there. One of the things that I think is really exciting, as we see technology come in and start to influence the industry is, how can we become more efficient in our operations, because you look at any market as it progresses over time. And efficiency is always at the forefront. And one of the things that we do to really help our operators understand and become better at what they do is we're the only people in the industry that publish attribution. Now as a marketing guy, I know you can appreciate this. So what I mean for that, for those of you that aren't familiar with attribution is we generate a data set and we say, Hey, these are the people that are most likely to sell off market at a deep discount in your market. After one quarter, we publish those results to an online portal, it says, Okay, we predicted these 3000 transactions would occur in your market. How many of them did you get? And what it allows the client to do is really understand the relationship of conversion to their revenue funnel. Because all of a sudden, people will say, Okay, well, nobody called me this month like, Well, sounds like you have a marketing conversion problem, as opposed to a data problem. Because this product traded in the market, it just didn't trade to you, but it also allows them to understand the downstream relationship of okay, we talked to this many people, but we didn't win the deal. It went to this competitor. And it gives them the ability to ask why. Okay, did my competitor pay more? Or was it a follow up issue? Did the acquisition guys just not follow the process? Or maybe the process itself is flawed from a follow up standpoint? And that I think is really kind of the future of where this industry is going. How do we leverage data and analytics to get better at what we do?

Jordan Fleming: 9:21

I yeah, I I couldn't agree more. And it's funny, I had a conversation I had a a podcast conversation go figure, just the other day and with one of the CRM companies and we were talking about, you know how much we wished more people would not just track the ultimate cash they made from each lead source or, you know, from from from a data set they've got but also track the steps you know, because it's yeah, of course the money is important and if you're making money and you're making profit, you're a happy guy. But if the market tightens or the economy turns, efficiency becomes more important when when money's flowing. And nobody cares about what they spend it on, right? They're just, they're pushing it out because the money's flowing around, fine. But if everything tightens efficiency of working those leads is important. And if you know that, man, this lead list is giving me this results, but it's costing me this effort versus this one, you can make much better decisions, and people are starting to move that way. I think I agree with you 100% on that.

Eli Fisher: 10:32

Yeah, you know, one of the things that that happens is we're talking about operations at the end of the day, operations wins. But operations is not sexy. I talk to people every day. And they're like, Well, I want more deals, and they equate that with more data, more leads, but really, what they're failing to understand is okay, well, what about all the stuff that you get in front of right now? What happens if you just improve conversion on that? So that's a better question to ask. Because if you spend more money, buying more data, it doesn't necessarily mean more leads, okay? You're literally spending the same, you're spending more money to accomplish the same thing, which is just compounding the inefficiencies. And it's not a sustainable system. And so what happens when we look at you know, when clients, we start working with them, I ask them a couple basic questions, say, Okay, this last, say, 90 days, how many people did you market to that sold to a competitor that never contacted you? And nobody knows the answer to that question. Because all they do is they just look at, okay, well, this came into my funnel, this is what I converted on. But that's called House conversion. Okay. And that's a flawed metric. Because what really matters is what happened in the marketplace. It'd be like, if you and I are stockbrokers. And let's just say this last month, we got a 10% return, Feeling good about ourselves, right? Meanwhile, without knowing it, the market went up. All of a sudden, we didn't do so hot. And so I just let people know, look, ignorance is bliss, unless it's your money. This is why we need to pay attention to this. And if you start to understand your relationship of conversion tools, the total market of all the stuff you've touched, but you're failing to convert on, then you can take the steps to become better and improving conversion on both marketing. And then on acquisition, because if you just make a 1% improvement and conversion at the top of your marketing funnel, what is the downstream effect of that? We talking hundreds of 1000s of dollars, potentially millions of dollars, depending on the size of your operation?

Jordan Fleming: 12:52

Absolutely, absolutely. So let me ask you, you know, let me bring this kind of back a step because I, you know, I love it. I love all of this. And I think it's enormously valuable. But I also know that there's, I view the real estate investment market as, as a game of a different of a couple different sides. And, you know, everybody's got an investor journey, some people are at the start of the journey. And some people are at the more mature end of their journey, and they've got operations that are that they are building and scaling into a genuine, you know, business, that's an asset that is going to be worth a decent amount of money. But there are a lot of people who start out. So you know, in your opinion, just that again, this is just opinion. But what is there a level they should get to before they start looking in your direction? Or can they come relatively, if they're serious about their business? And they want to really, is this something that someone who is relatively new but has got a, a hunger to do it right, can can bring on board?

Eli Fisher: 13:57

Yeah, so right now we service the top 1% of investors in the country. Now, that being said, for that individual that you're talking about, that is dialed in, and they're focused on success. I'm going to present a different dynamic to that individual. So one of the things that happens when an investor starts out, they'll typically buy niche lists, whether it's your code bios, BK, probate, you name it, right. And that stuff's great. But the one thing being is at the end of the day, we want to buy low sell high, right? And so one of the things when people start off that gets overlooked oftentimes, is who is the end user of this product that I'm gonna unload to right? And there's usually not a cohesive focus on establishing robust buyers out of the gate. And I think that's fundamentally flawed. And the reason I say that is, people get hung up on I have to get this at a deep discount. Well, there's only so many deep discount deals that are available in the marketplace. But what if you have buyers that will pay you more, if you look at the largest wholesalers in the country, they operate different, why they operate different because their focus is on buyers. Because if you can only pay 60 cents on the dollar, and I can pay 80 cents or 90 cents on the dollar, because I have better buyers, I win all day long. So where I'm going with this is that we have a platform, it's called Buyer Sonar. And what it does is it shows all of the investor transactions in any MSA in the country, we show you who is buying who's paying a premium. And so what I would challenge that person just starting out, yes, you have to get the deal. But your life will become so much easier if you already have a better class of buyer. Because then that empowers you, instead of fighting it out with all these other people worry about man, I gotta get this at 50 cents on the dollar, 65 cents, whatever I could come in, and I can offer at maybe offer 85 Because I have a better class of buyer. And our platform allows people to do that. So I think if you want to build a sustainable machine that continues going on, there needs to be a heavy emphasis on buyers right out of the gate.

Jordan Fleming: 16:22

I think that's a really interesting insight. Because, you know, I I'm not an investor, you know, but having been having been building CRMs for them for years. And then now working with so many investors at smrtPhone, I see a lot of them. And one thing I have noticed, and I you know is that there are an awful lot of people whose buyer lists are almost, it's like, I'm just gonna put anybody in here. And I'm going to spray out and pray and it's exact same spray and pray that they're doing at the buy a cheap list and just, you know, get someone to keep calling, it's the same on the other end. And I don't think they ever reach that conclusion that you just reached, which is, man, if you've got better buyers, then you don't have to worry nearly as much about this side of things, the end. And if you know who your buyers are and what they're interested in, you can be strategic in how you look at deals, and what you're putting in front of the right people. And that will allow you to get that premium, which as you say, if I can pay top more than you can, then I'm winning. I'm gonna win those deals.

Eli Fisher: 17:34

And so here's the data case behind that. Because we're a data company, we see every transaction, every investor in the country. And I can literally go into almost any MSA in the country. And it's interesting, you plot the transactions of who buys the most, and who pays the highest, right? And it's always a U shaped graph. Okay, so on the left hand side, here, you have people that have done one to two investor transactions. One of our clients affectionately named them the HGTV buyer, okay, this is an individual that on a rolling 16 month basis has typically done one to two transactions, they don't put it in an LLC, because they don't know any better. And they typically pay 90 cents and up on the dollar. Now, on the other end of the spectrum, are your funds, your ibuyers, your prop tech companies, and in the middle that bottom of the U, that is where established investors are at. So if you think about it from a market standpoint, where does the opportunity lie? Well, because we're in a contracting economy, the funds, the ibuyers, that is not a viable exit path for most wholesalers anymore. But here's the thing, those onesie twosies, those HGTV buyers, they have not slowed down. Three weeks ago, there was an article in the Wall Street Journal talking about they call them laptop landlords, these are people that are looking to buy properties. And why do they want to do that? Well, there's a fundamental distrust of the stock market. So they want to put their money into something that is a tangible hard asset. Now the great irony in that is guess what Wall Street's doing? They're buying up as much single family properties as possible. So where does the opportunity live? Well, these people on the far end of the spectrum your HGTV buyers have not slowed down, they continue to pay the premium, then it becomes incumbent on the operator to target those individuals. And that is how you will make a lot of money but also afford yourself the flexibility of not having to worry about I gotta get this at 45 cents on the dollar.

Jordan Fleming: 19:40

Yeah, that's, I mean, that is a I think that is a mindset that is going you know, I don't think everybody's there yet at all. But I think is really good insight for how particularly as you say, if we are you know, in a state you know if we are going Through contraction, you've got to be smart about these things. And, you know, you've got to, you've got to, you've got to adjust how you do things to play the game you can win. Right? If you're only ever going to keep just playing the same game over and over and over and over again, without paying attention to the variables that happen in life, you're gonna find yourself swinging when there's no ball coming anywhere near you. And I think that's a that is a, that's a really interesting insight. i It's funny, I had, you know, you know, Paul over at TwnSqr. I was talking to him the other day, and we were talking just about the, you know, this concept of valuing buyers, and, and, you know, and how much that is a critical part of a successful business growth for whether you're wholesale, a, you know, whatever you're doing. And, you know, I think you're backing up right there.

Eli Fisher: 20:59

Now, without a doubt, and one of the things you know, when we talk about companies that are helping to move the ball forward, with respect to technology, you know, selfishly, I placed us in that category. But I really respect Paul and the guys at TwnSqr, because one of the things that they've done is they've built a platform that is very focused on data integrity and security. They do not share people's data. And that's really, really important. And it becomes even more important moving forward. But because I would say this industry hasn't historically focused on data and tech, I'd say it's lagging behind what we see from a lot of stuff coming out of the valley, there hasn't been that focus. And if I was to say, a group that is doing it right, I would definitely point to them. And I think you can relate as well, because you, you built the tech company here, you deal with a large amounts of data. And I would almost challenge you. I mean, maybe you could share with the audience some of your thoughts on that, because that is something that gets overlooked. We look at it because there's a right way to do it from you know, data and privacy laws. But again, it's one of those things that I think oftentimes goes overlooked. That can be very, very critical.

Jordan Fleming: 22:15

I absolutely. And, you know, as a final bit I, I will say, Paul from TwnSqr is on an episode. He has been on this podcast, and I definitely recommend people listen to it, I think it dovetails really nicely with with you actually, because you're both saying really smart thing about buyers, I mean data. I mean, I would go further for me personally, as a smrtPhone owner, you know, as a guy who runs smrtPhone. Data is of course, data integrity is maximal, our CTO focuses on that, you know, more than he does eating, I suggest most times, the other part from our perspective is also making sure that we are promoting best practice in terms of behavior, that from our point of view, because, you know, they're and behavior is, is, of course, in terms of getting your most success, but it's also legal, right, there's the FCC, is, it ain't subtle about what they do. And, and there are a lot of rules and regulations around cold calling cold doing this, consent and do not calls. And so a lot of our thinking as a platform is around data integrity, security, and compliance, and making sure that we are always promoting best practice, which historically in our industry is not always necessary. I'm not going to name any names. But I would say that not always been at the top of everybody's list. And it is starting to become, I can tell you, and I will definitely not name names this. But you might you're probably familiar that in the phone industry of the text messaging, they've got new rules around text messaging in the US called ATP 10 DLC. And we've we've started to see people's text messages being shut off, if they're not being compliant. So you know, these things come in and the and the hammer comes down. Absolutely, as it should, as it should, because they're there to promote best practice and ensure that when you do reach someone, they're not sick of talking to people because it's a bunch of cowboys blasting them at three in the morning. You know, and just just go going all over the place, which is what that landscape was about.

Eli Fisher: 24:41

I mean, the shining light in all that though, is it's really a forcing function, because it forces people to up their game and then the people that are unable to do that they get weeded out. So like I kind of started a conversation with all markets become proficient over time. And this is just one of those steps. Now this mark is becoming more efficient in this case with technology.

Jordan Fleming: 25:07

Absolutely. Listen, I'm going to, I'm going to take you through the Fast Five questions that I get, do I get to everybody who comes on the podcast about Fast Five questions, I'm going to fire them at you and you can give me you know, off the cuff best answers you can. I think I can guess some of the answers, but I'm putting in your spot now. So question number one, what feature of your system do you think has the biggest impact on on your customers business? You could narrow down to one.

Eli Fisher: 25:42

Right now, in this marketplace, buyers. We allow them to see who's going to pay the most

Jordan Fleming: 25:48

awesome. Question number two, what is the biggest mistake people make within your technology area? IE data and, you know, data processing? I'm gonna guess I know that answer too but I'm gonna let you answer it.

Eli Fisher: 26:02

you don't take the time to actually look at the results.

Jordan Fleming: 26:06

What is so which I would guess would dovetail into question three, which is your best advice on someone new to the real estate investing business? How to get involved in you know, that sort of data and, and data analysis?

Eli Fisher: 26:20

Yeah, from the very beginning, start to look at your conversion, and understand why marketing isn't working, or why acquisition, you're losing that deal. And we can help people with that.

Jordan Fleming: 26:33

Is there one thing across all the Audantic products, which you've got that you wish everyone knew about Audantic?

Eli Fisher: 26:42

Yeah, I would just say our predictive data, there's a better way to target people. And it would help people just not waste the amount of money that they're doing buying lists from all these other aggregators and just doing the same thing as everyone else.

Jordan Fleming: 26:55

Awesome. And final question of fast, five, if someone was just starting out, I am Joe Bloggs, just getting into my real estate investing game, if there were three bits of technology would recommend that they bring on first to help them get started? What would they be?

Eli Fisher: 27:11

You're gonna need a calling platform, dialing platform, texting platform, number one, invest in a decent CRM, and then find a tool, whether it's ours or whatever, that helps you identify buyers.

Jordan Fleming: 27:25

I will take that. Absolutely. Eli, it's been an absolute fun, phenomenal conversation. I'm, I'm I'm loving the insights. And I'm hoping, you know, I was planning on doing a group podcast at some point around data around, maybe even buyers. And maybe we can do a group podcast with Paul from TwnSquare yourself where we can talk more about those issues. I think it'll really help. And I think it'll be nice to get kind of a group discussion going. If you'd be up to that at some point. And I'll give you the final word. Tell people you know how they can find you what you know, how they can start getting engaged with you.

Eli Fisher: 28:02

Yeah, that's really simple. You can just go to Audantic.com, Just visit the site, you can submit your info there. I'm always available to help people out similar ease if you'd want to email me directly. It's very simple. It's just Eli@audantic.com.

Jordan Fleming: 28:18

Thanks everybody for listening, do me a favor and do the whole like, subscribe review thing. You know what every podcast person says in their episode. It really does help to make sure more people see it. And please do go ahead and head over to thatrealestatetechguy.com where you can find out more information on Audantic and you've got links to contact Eli right there. And thank you everybody for listening and have a great week.

Narrator: 28:44

Thanks for listening to another amazing episode of That Real Estate Tech Guy. Head over to ThatRealEstateTechGuy.com to check out all episodes and get special discounts on tons of awesome real estate technology platforms.