Agents Building Cashflow

EP168: Proptech Innovations Presented at Blueprint 2024

• Randal McLeaird

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In this episode of Agents Building Cashflow, Randal McLeaird shares his insights from attending Blueprint 2024 in Las Vegas, the premier event for industry executives, real estate/construction tech startups and VCs leading change in the built world. Randal dives into the latest tech solutions presented, particularly those aimed at addressing challenges in multifamily and residential real estate operations.

He highlights promising startups that offer cutting-edge tools to help real estate agents increase their income streams and streamline management tasks, from self-guided tours to utility cost reduction and AI-powered property inspections. Tune in to discover how these innovations can transform your real estate business!

Key takeaways to listen to:

  • Exploring innovative proptech and fintech solutions for multifamily operators.
  • Discovering AI-powered tools that simplify property inspections and maintenance.
  • Enhancing real estate agents' income with new mortgage origination tech.
  • Learning how smart utility management can reduce operating costs significantly.
  • Unveiling self-guided tour technology for smaller multifamily properties.

Resources:

To connect with Randal and learn more about passive investing, visit www.ridgelineig.com and follow our social media pages below!

[00:00:00] If you're a real estate agent earning 200, 000 a year and you want to grow your passive income, this show is for you. Learn secrets other agents use and hear from experts in our field who will guide you on your journey to investing in assets like apartment communities. So you can take your commissions and turn them into cashflow.

[00:00:20] Here's your host, Randall. Let's dive in.

[00:00:27] All right. Good morning. I'm coming to you live from Las Vegas. We're down here in past Strat for a little morning run, checking out Vegas is like in the morning. I'm here at the blueprint conference, 2024. If you're a prop tech FinTech with a property tech adjacent a startup and you're looking to raise capital, this is definitely a conference that you should check out and come to.

[00:00:55] And there are a lot of venture capitalists here that have listened to pitches [00:01:00] or already invested in some of the companies that we're here pitching. So it's cool to see some of the new tech and new things that are coming out in the industry. It is definitely geared more toward institutional sell through.

[00:01:14] So if you are targeting, large scale built to rent operators who have multiple thousands of doors, then this is the time. you can get in front of those people. And if you're targeting large scale operators for multifamily or it's really, I haven't seen a lot of office or storage or any of those types of companies been mainly geared towards multifamily and residential real estate, solving some of the problems or at least trying to solve some of the problems that operators find in those spaces.

[00:01:47] I came one to see what the new tech is and to see what's happening in the space, but also to see if there were some solutions already out there for some of the problems that I'm seeing on [00:02:00] the small scale multifamily that a lot of the operators that I talked to avoid that space because there are challenges with the management.

[00:02:07] And coming here to see what is available and what people have put together. There are some solutions and I'm going to roll some of those things out. Or bring on the owners and the operators of those startups so we can talk about it. Just a high level, a couple that I saw there is a startup that pitched three VCs and their business model is get agents to originate their own loans.

[00:02:31] And, we'll see how that progresses, but their value prop for real estate agents is you're already talking to the buyer, so you may as well simply introduce them to our platform. The loan is gonna actually be less, the originations fees are gonna be lower cause it's all built around technology.

[00:02:52] It takes three minutes to get a pre-approval or to actually submit the application. And you get pre-approval within 24 hours. And then once you have [00:03:00] that the company that is allowing the agents to go do that you don't do any of the processing. So if you've ever. If you've ever done a loan, if you've ever been in the mortgage business, a lot of the originators, they will go win the business.

[00:03:12] They're really like business development people. They understand high level, most of the products and then they will end up giving all the paperwork to the processor. So that is one business that if an agent wanted to go get the loan officer license, you could actually add to your cashflow simply by doing the same number of transactions

[00:03:33] but getting two to 5, 000 on a per loan basis for clients. So stuff like that is, is what's been presented and there were a number of other ones and I want to talk about each of them that I think would be helpful to real estate professionals like yourself to increase your active income and then turn those commissions back into cashflow.

[00:03:55] So again, invest in multifamily, invest in storage homes. Any number [00:04:00] of things that we've talked about and discussed on the show. So I'm excited to roll those things out in the next couple of weeks and talk to some of those founders and talk to some other, startups in the business and see what kind of cool tech there is that we can start implementing in our business.

[00:04:15] So I'm off to see the property brothers and have breakfast with those guys to see what they have to say about the real estate industry. I'm back and I have my nose. I'm right here in It's been a good conference. The main push with this conference and blueprint is to get startups and real estate prop tech and that sort of thing in front of a handful of VCs and venture capitalists.

[00:04:37] That's the gist that at least that's a story that I heard when the founders talk about how they started, I think it was in Miami and they just had a few startups come and pitch them. And then it's grown into this large 2 to 3, 4000 person event. At the Venetian in Las Vegas, really good events, all the people that I've met there, a lot of robotics, things that are happening in the space and fintech prop tech, trying to solve [00:05:00] the property management issue and a number of solutions on that front.

[00:05:04] So I'm just going to run through quickly and discuss some of the things that I have seen and noticed. I sat in on a talk about multifamily operators, increasing NOI in this market. And one of the things that I took away from it was that everybody's here, it's a tech conference, everybody's talking and one of the guys just said, look, I don't care how cool the software is.

[00:05:24] I don't care how cool the tech is. If the user doesn't use it, then you're getting caught up in this world of just adding more cost. Because one, you're paying for the software, you're paying for this tech, and two, they're not using it, and so it's double work. You're going to try to use this tech, and then they go back and they revert to the means.

[00:05:42] I just thought it was an interesting comment, because it is true. If you're not using the tech, you're not using these things, you could go out and you could manage a property on A pad of paper if you really wanted to, but you just have to manage it. And so that was the point. So one of the other main topics that kept recurring over and over again was the [00:06:00] maintenance issue.

[00:06:00] A lot of maintenance techs, and I experienced this a lot on the single family side as well, guys who are going to repair a property or are going to do remodeling and construction in general, they're not typically tech forward. And so then you give them a new task or you give them a new App on their phone that they have to log everything in their slow adoption and there's a challenge on that front still and so solving that problem and getting these contractors on site to use the tech that everyone is creating is also still a challenge that everybody's seeing in space.

[00:06:35] 1 thing that 1 of the guys said that I'm definitely going to look into so that at apartment complexes. And in general, water utility companies are billing you for even the air bubbles in water, going through the meter back and forth. And he mentioned that in his properties, they have reduced, and they have a number of properties, but they have reduced their [00:07:00] utility bill by 80, 000 a year.

[00:07:02] That's. Significant, so it wasn't like some small amount across all these properties that they had. It was a significant increase to their net operating income simply by going to the utility company disputing how many water bubbles we're getting through their pipes. Anyway, that's a, Low hanging fruit value add.

[00:07:19] I don't know exactly how much that cost him to dispute that or to test for how much. I don't know what the device was that they may have had to put on to the meter, but we can certainly look into that and report back once we find out what that was. Another thing that larger operators who have on site security are doing, they, there's a grocery store chain in San Antonio that, and across Texas, it's called H E B, and I've seen their security guards go around and scan A barcode on a certain point.

[00:07:52] One, it checks them into to the location and lets whoever's centrally located running that company know that security guard [00:08:00] was at that location at that time. But two, and this is what the apartment guys were talking about. It's building a database and it's building data. Across time, and that data becomes valuable that you can now feed into these models, and it will allow them to have better insights to what's happening around their properties.

[00:08:24] And if you have security guards on site, that is a simple. Add on that you can have them do is to scan and to fill out the notes and everything in a centralized location, then you can feed that information into one of these AI platforms that will allow you to then use that data to make better decisions about what's happening at your property.

[00:08:43] And one more thing on the front insurance has become a massive expense and has doubled on many properties around the country, depending on where you are located and in the risk. Some of the guys that were speaking on this panel. Talked about how they have [00:09:00] re, I think it's rezoned their flood zoning. If a property is in a flood zone, but it hasn't flooded within a hundred years, then you can hire a company to go and get it pulled out.

[00:09:12] Let me see if I have the name of it. If it's zoned AE and hasn't flooded within 100 years, then they can go out and change it. National Flood, I think is the name of the company. So they can reevaluate the flood zone for you. Again, for smaller properties, probably not a, I don't know, maybe it's not cost prohibitive, but it's worth looking into, especially if you can reduce your insurance bill by a significant amount, getting it out of a flood zone because it hasn't flooded in so long.

[00:09:37] That's it on the NOI front. I'm going to dig into some of these other topics that we have that I've looked at and I've covered one reason that I came to this conference, not only to report on this, but selfishly, I want to know what kind of technology there is for smaller multifamilies in order to allow for self guided tours.

[00:09:57] To eliminate the need for a leasing [00:10:00] agent so that my expense ratio or my expenses on each property can be reduced. Therefore, it increases my NLI. I bring this up, even though I just said I'm done with NLI, but I bring it up because many of the solutions that I saw. We're geared and tailored to class a properties that have multiple access points to the property and each door specifically may have one of these locks.

[00:10:25] And so being a small operator being here at this conference, there weren't really any solutions that were geared toward having. Multiple 20 to 50 unit properties where you could go set up a lock on the door and give verification to a tenant. They have to verify who they are, give them an access code one time that lets them get into that door so they can tour the property themselves.

[00:10:52] And then they could tell you yes or no, right? I looked around for a number of them. There was be home 24 7 is 1, [00:11:00] but again, their break even is like 300 units. So you need to have at least 300 units across your portfolio in order for it to make sense. But even then you're buying these very expensive locks on a per door basis, 6, 700 dollars.

[00:11:12] To get the lock, the smart thermostat, some other things. So it's an investment, but again, on these smaller deals, maybe class C class plus B minus, you may not want to have that expense. So you have to take a look at that and what that looks like. But again, longterm, if you are spending 600 a door. On that, and you're able to reduce over the year, all your expenses that you're paying towards having a leasing agent commissions that you're paying because you're able to manage that in house or your property manager is able to do it without having a leasing agent that you're paying commissions to that makes it.

[00:11:46] That's a big expense as well. There are some solutions. I would say I'm going to dig deeper into them because that is 1 of the main things that I'm interested in having the access control not only for that, but for another application for pickable courts and some things that we're working on. [00:12:00] But I'll keep you guys posted on that.

[00:12:01] Be home 24 7 was the 1 that seemed to have. Not only the property management software, like a whole backend software solution, but also the access control platform and technology that speaks to not just their, I don't think they had any hardware. It was all third party hardware that they would link into their software.

[00:12:18] We're linking to check them out. I'll leave the link in the show notes for all of you property managers or owners out there. I sat in on a session that was all Pitches to VCs and so there were a few that really spoke to me just because where I am, but there was one Jenia design. There's another one matter board and I'll put a link in that and real affinity I think is the one that I spoke about where the you can as an agent you can.

[00:12:47] Also do mortgages, you have to get your mortgage license. And then you basically just in the website will qualify them to all this stuff, get them through the loan process. And then you get a commission for doing the loan. But there was another one called [00:13:00] rent butter and the guy stood up there and he was trying to solve the problem for tenants who have a sub.

[00:13:06] 600 credit score to get them into more properties that would therefore translate into having more, a wider tenant base that you could actually lease to because what a lot of property managers are doing, they are simply looking at a credit score as one of the first check marks. If you don't have at least a minimum of 620, 640, whatever that number is, then it's a no.

[00:13:28] And so his value proposition is that. Look, these tenants may have a bad credit score because something that happened four or five years ago and they've been paying all of their bills on time. So he takes into account a more holistic approach to the underwrite of a tenant and says they may not have been a good tenant four or five years ago, but today they are.

[00:13:45] And this is why it's worth looking into. If you are leasing properties and you want a different qualification source, send them there and then they could qualify them in a different way for you. So I thought that was interesting. Another one that was pitching there was jet dot build, and [00:14:00] they class themselves as the AI owner's rep.

[00:14:03] If you don't know what an owner's rep is, essentially, when you are going to build or do some construction, the owner rep will represent you as the owner to. Get the best contractors walk you all the way through from plans design all the way through to fully built. And so jet dot build was there's another one that curious about myself, but it's called Paris spot and it's an AI empowered property inspection.

[00:14:29] So this is how it works. You walk into a property. And you have your phone with you, you take pictures or you scan the room in some form or fashion. I am guessing through their app. And then when the tenant moves out, the tenant does the same thing. So instead of you as a landlord going through and you scanning everything, the tenant scans everything and it compares the 2 photos and it will create a cost.

[00:14:56] Or that hole in the wall that they left or for whatever it [00:15:00] is. And my understanding is that it will also coordinate with contractors. That either you have self vetted and on your system, but it will give them a scope of work and it'll say, okay, you need to do X, Y, and Z. And again, my understanding based on what I heard is that it's tied to the security deposit as well.

[00:15:18] So it will auto deduct from their security deposit, pay the contractors. And then give the tenant their balance whenever that's all done. If it does all of those things, it's a fantastic way to reduce your time on site and just dealing with all the paperwork on the back end of security deposits, getting those paid to contractors and all of that good stuff.

[00:15:36] I thought that was an interesting one as well. And then finally on the pitch stage, what I saw was another company called features. And as a developer and as a land guy, if you're looking at any partials, any infill, anything, right? These guys, Have a pretty awesome tool. So you can type in on their site, any parcel.

[00:15:59] And you can ask [00:16:00] the AI for project is going to work there and what types of incentives might be available for that type of construction and on that site. That is a very cool tool that can save a ton of time. If you were looking at a parcel or new construction of any kind. Okay. So those are some of the cool things that I have seen so far.

[00:16:20] We got one more day. I'm about to run over to the conference right now. The property brothers talking right now. And and then we will jet and be back. But cool conference overall. Again, if you're looking at prop tech fintech, that's, real estate adjacent, then I would say this is something that you'd want to check out.

[00:16:35] The The people here are definitely, like I said, geared towards institutional sell through. If you have a product that you were building or creating or anything like that, I would that's targeting that in customer, the institutional owners, then also a great opportunity for you to come to this conference to be in front of those operators.

[00:16:54] That's all I got. I will catch you guys on the next episode. Bye bye. Did you know that 80 percent of the agents we speak with [00:17:00] got into real estate in order to gain passive income so they could obtain financial freedom and become work optional? If you want to stay up to date, the best way is to make sure you're subscribed.

[00:17:09] So if you haven't done that, go ahead and do it now. We'll catch you on the next episode. 

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Randal McLeaird

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