Latest / Real Investor Radio Podcast / Ep34 | Eli Fisher - REI Market Shifts & Identifying Better Buyers

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Ep34 | Eli Fisher - REI Market Shifts & Identifying Better Buyers · Real Investor Radio Podcast

• Craig Fuhr (00:18) Hey everyone, welcome back to real investor radio the podcast for advanced investors. I'm joined again by Jack Bavier. Jack, good to see you. Jack BeVier (00:26) Absolutely. Good to see you, sir. Craig Fuhr (00:28) We have been having an awesome conversation with Eli Fisher from Audantic, a really awesome company that has been using data for real estate investors for many years now, but they've gotten it down to quite a science. And I would encourage everyone who hasn't taken a listen to the previous episode to go back and check that out and then come back to this one. Eli, welcome back to the show. Eli Fisher (00:54) Thank you guys. Craig Fuhr (00:55) good to have you man. So great conversation previously, we're going to touch on some more features of the product, as well as sort of how the industry is changing, and things that investors should be looking out for right now who may have been marketing with other things like text or PPL. So let's go ahead and jump in. Jack, why don't you start us off? Jack BeVier (01:22) Yeah, I, um, uh, and thanks Eli for, for joining us been really enjoying the conversation, uh, data's a, uh, near and dear to my heart. And, uh, I've always been a huge fan of the company, followed you guys super closely and, um, consider you guys good friends. So, um, by the way, like there's no affiliation just for the, those who are listening, there's no affiliation here. This isn't a commercial. I just really think this is like a really cool data product and And I think that it's under utilized by a lot of the industry. Uh, I think that people though, you know, with chat GPT are coming around more to like, Hey, data is really powerful and how might I use it in my business? There's also a lot of young people who like just grew up with these ideas and it's, that's just, you know, this part and parcel for them. Um, so I think that, you know, I think six years ago, Chris would be like, I go to, you know, I go give a presentation and I get a bunch of blank stares and a bunch of guys who are like, I don't really get it. Wait, it's like an expel spreadsheet and like it's, you know, it's expensive and it's an Excel spreadsheet and they just didn't get it. And and he gets super frustrated right with that, you know, understandably, because I thought it was the coolest thing ever and still do. And then you guys have just added features on top of it that I think have made the product even more and more powerful. So we We touched on a bunch of stuff, the core product in terms of like list building for lead generation in the last episode. And we talked about attribution and how powerful that is to, I really think professionalizing your acquisition process, um, by making sure that you can see what's happening in your market. See, see, see actually what's happening in your market and then see how you did versus the rest of the market. There's a scorecard every, you know, every, every quarter on that. Um, And those are two super powerful features. Another one that you guys added more recently even is what you guys are calling buyer sonar. And so Eli, could you tell us what that does? What that is? Eli Fisher (03:26) Yeah, so buyer's owner is a market intelligence tool that basically at the MSA level will tell you how many investor transactions occurred. So how many deals and then the distribution of the investors that made up those deals. And so if you are looking to basically identify a better class of buyers, it's really important that you understand who pays the most for what type of product. And that's exactly what the system allows you to do is drill down and say, okay, I have this specific product. This is the buy box. These are all the buyers that buy that type of product. Here's what they pay. And if you understand who pays the most for that type of product, there's a whole host of downstream effects. You can increase your wholesale assignment fee, but more important from that is that if you think about it from the front end acquisition, how do you get a competitive advantage? Because the reality of it is the market has shifted. There's only so many properties that are gonna sell at 40, 50 cents on the dollar. And if you can only pay 40 or 50 cents on the dollar, and yet the market dictates your competitors are paying 70 cents on the dollar, that's not gonna happen. So how do you fix that? Well, you get a better class of buyer. And so if you have a better class of buyers, no longer a combat for you to get that stuff deep. I mean, I'm not saying you can't. I mean, blind squirrel finds a nut every now and then, but the reality of it is, that's not how you're gonna scale a business. So I think looking forward here, buyers are a cr- critical aspect and it's really interesting because I haven't really seen a lot of organizations taking buyer-centric focus and just run with it. The irony of that is, I look at the largest wholesaler in the country that does close to 30,000 transactions a year, they have been intentional from the start and they have always just curated new buyers. We can talk about who those types of buyers are and why that organization does 30,000 transactions. And I think it's a better business model because if you have people that pay more, you can win on the front end and then you can maximize your spread. Jack BeVier (05:29) You talking about New Res? Eli Fisher (05:32) Uh, no. Um, well, New Westminster. Jack BeVier (05:36) Oh, new Western. Sorry. I said new Rez. Sorry. New Western. Yeah. Um, yeah, they've always been, they, I, we encountered them when we started buying in Atlanta, they were said, started in like, I think they started in Texas, but they were like, they've been, you know, dominated in the South and then they really expanded nationally from there. And they were always the most frustrating people to go up against because like they pay this, what I considered this stupid number and then they'd get out, they'd get out to 15 grand up. And I'm like, where the hell are they finding these people to buy these houses? But they, Eli Fisher (05:39) Yeah. Mm-hmm. Yeah. Jack BeVier (06:05) That's like you said, they built a machine around that and it's been tremendously successful for them. So hey, you know, God bless. Something that you pointed on. Yeah, go ahead. Craig Fuhr (06:13) So buyer sonar, go ahead Jack. So buyer sonar is, we're talking about the disposition here. You've found a deal. Exactly. Jack BeVier (06:22) Like wholesale dispositions really, wholesale dispositions, not homeowners, but investor wholesale, yeah. Craig Fuhr (06:27) And in a nutshell, it allows you to see what your competitors have been able to, you know, basically sell the house for on the backend to make their spread. Jack BeVier (06:39) Yeah, either there, the like the LLC was, you know, cause maybe there's like a, just a, somebody who pays more than you do, right? They're a flipper, you know, a wholesaler competing with a flipper, for example, right? Like maybe there's a flipper who's just able to pay more than you because they've, you know, there's no middleman for them, right? They've just decided to bring it in house. That's, that's a customer. Maybe there's some newer money that's coming, you know, that's coming into the business or somebody who's just, you know, placing 10 31 funds or has a million bucks to deploy, but like, Craig Fuhr (06:51) Mm. Jack BeVier (07:09) You know, you want to sell to those folks while the getting is good, so to speak. Right. Um, and that's, I, this, this issue is one that's near and dear to my heart, right? Cause you know, we'll put a property under contract and then we wholesale it and we make 10 grand on it. And you know, and I, and my guy Brian in acquisitions is freaking awesome. He's, he's the man. So this is no, no dig on him, but we, we always, we let, we love this bar. So he's like, Hey, I sold it to so and so. Eli Fisher (07:13) Mm-hmm. Craig Fuhr (07:13) Brilliant. Jack BeVier (07:37) And if I know so-and-so's name, I'm super skeptical that we didn't leave money on the table, right? Like, tell me we sold it to somebody whose name I don't know, who I've never heard of, right? Because if I know their name, then like, then that's the shark. So you sold it to a shark. Like, don't sell it to the shark, sell it to the fish. Like, we're supposed to be the shark, sell it to the fish. Like, that's, and get the maximum spread. And buyer sonar is an amazing tool for that because it shows, you can really kind of like... It's even get you guys have set it up where you can even really kind of see who the sharks are and who the fish are, you know, who's paying the highest percentage of value, like on a particular deal, you can't, you know, can't exactly tell. But when you aggregate someone's activity, you get a decent sense of like, of rankings, so to speak as to who's paying the most. Eli Fisher (08:10) Oh yeah. and so Jack, I think you touched on, let's talk about the fish for a minute. So, oh, still there, Craig? So, let's talk about the fish for a minute, okay? I ask people a question, it's like, in your market, who do you think makes up the majority of investor transactions? And a common answer that I hear is like, oh, this institutional player, oh, this eye buyer. Craig Fuhr (08:27) Do we lose? Go ahead, Eli, please. Eli Fisher (08:51) And while they do a good amount of volume, that's not who actually makes up the majority of transactions. The majority of transactions are actually made up in every MSA across the country of the small mom and pop. Let's just call them the HGTV investor. Okay. So when we think about that specific persona, this is an individual that are enrolling six to eight month basis does between one to three deals on a national average. They pay 86 cents and up on the dollar. So if we happen to know. from a total addressable market standpoint, these people represent the largest buying class and they just so happen to pay the most and we have this data available at our disposal, I would argue that we should probably focus on those people for our disposition. And that's why I use New Western as a business case, because they, from the very beginning, have focused on those individuals. This is the type of guy that is not recording in an LLC. This is the type of guy that probably thinks a kitchen rental costs five grand. God bless you, brother. We love you anyway. But those are the type of people that are wanting to get into the game. Those are the type of people that if you truly want to maximize your spread, you should be aggregating those people on a daily basis. Because if you think about it, if you constantly bring in buyers that pay a premium, what happens on the acquisition side? Well, acquisition should really be a fulfillment arm. for disposition. And that's why I look historically how businesses have operated in our space, and it's always acquisition gets deal, disposition moves it out. I think there's a fundamental flaw in that, in that really, if you're constantly bringing buyers in, acquisition should just be a fulfillment arm for that. And it's just a different way of looking at it. Craig Fuhr (10:36) Yeah, and they should be speaking to one another, basically saying, Hey, look, we have fish, we're willing to pay more so that we can pay more on the front end on the acquisition side. Eli Fisher (10:47) Yeah. Craig Fuhr (10:48) You know, it's funny, Jack, like, the easy call would probably be to if you've got a buyer like New Western in your back pocket, and you know, they're always looking for deals, they're flush with capital. That's an easy call to make. If it's their box, I'm going to get I'll make my five to seven grand, I'm selling a Walmart, you know, the better call, maybe not as easy. You know, you might have to coax some of the newer some of the newer buyers through the process and but you're always going to make better money, better margin with guys like that. Jack BeVier (11:22) And if you're not, and I would say like, as the market gets more and more competitive, as particularly in a low inventory environment, if you were not doing that, you're going to get beat by somebody who is right. They're going to out, they're just going to outbid you, right? Like personality goes a certain level, but like the end of the day, if you're outbid at the kitchen table, the, and the other person is believable, but they'll close the seller is going to probably go with that other person. So, um, if you leave that margin on the table, that's, you know, shame on you, you know? Eli Fisher (11:53) Yeah, I mean, if you can pay 40 cents and I can pay 80 cents, I can literally write my offer on a napkin and I'm going to win every time. And I think it's so critical that, you know, when people initially usually come to us for buyers, they'll see these buyers is like, well, I want, you know, the guy's doing 50 some odd deals. It's like, why? You're going to take a haircut on that. That makes no sense. I understand they're going to close, but there's no margin in it for you. Craig Fuhr (11:53) Sure, that happens. Eli Fisher (12:23) That'd be like, you go to one of these HGTV investors and say, hey man, I can get you something off market for 10 grand under retail. That person gets excited about that. If I go to Jack and say, hey Jack, I can get you this off market deal for 10 grand under retail, Jack's gonna laugh and say, Eli, put a one in front of that and we'll talk. Jack BeVier (12:43) Yeah, a lot of those folks, you know, they want to do a deal, right? They want to get into it. They just want to get their feet wet. They don't really care if they almost don't even care if they make money on the first one. They just want to like go through and like, you know, they don't they don't want to lose money obviously, but they just want to like, you know, figure out their processes, figure out, try this contractor out, you know, like do one so that, you know, do and it's part of, you know, part of the experience is just getting one under their belt and they don't want to. Craig Fuhr (12:54) Get the experience. Eli Fisher (12:59) game. Jack BeVier (13:07) They don't want to sit around and wait for six months to find one that's the, you know, appropriately priced for them, um, appropriately priced at all. Right. And they've got no acquisitions team. So it's not like, you know, just, just because they're new, doesn't mean they're dumb. They'd made, they may just have different motivations. Right. So why wouldn't you want to sell to that guy? Craig Fuhr (13:25) Eli talk about talk about what does the user like a jack or whoever is using your product? What do they get in terms of the report on the buyer side? That are they getting an L the name of the LLC and then they've got to skip trace who the owner of that is hashtag corporate transparency act jack Hey, by the way, those of you who haven't listened to our episode that Jack and I recorded with Doug Stein, where we talk about the Corporate Transparency Act, I would highly encourage everybody to go back and check out that episode because it affects anybody essentially with an L, everybody that we're speaking to right now who owns an LLC or multiple LLCs, you better check out that episode. But Eli, what do folks get in terms of the report from you all? I want to know who my who my buyers are. Jack BeVier (14:03) literally everybody. Yeah. Craig Fuhr (14:19) I see an LLC. Are we getting email addresses? Are we getting phone numbers, names of the folks that are members of the LLC? What are we getting? Eli Fisher (14:28) Yeah, so the goal is to give you a very robust snapshot of what that organization does. So you go into the system and you see a dashboard of all the available buyers within the market and what they actually did. So if you actually click on the buyer, we give you their whole dynamics of, okay, this is their average spread that they buy on. This is how many properties they've entered, how many have they sold, how many do they do locally in the MSA and how many they're doing outside of the MSA. So you also understand like how big an organization this truly is. Then when you look at their individual transactions, we'll show you basically on the transaction, here's the discount relative to the estimated value. So you get a real good idea of, okay, the potential spread that these guys are willing to do. We show you if they're using agents to source deals. Then, you know, for lenders like you guys, We show you who's financing them, underwriting the deal. We can show you if this was a cash transaction that they did, or if they were using hard money in that type of transaction. And so you start to really understand. Craig Fuhr (15:27) Jack, we're using that data for DFS, aren't we? Yes, no? Jack BeVier (15:28) Yeah, it's really cool. Uh, no, not on the DFS side. We use some different stuff for that, but it's a really cool tool though. It's a, it's a really cool feature that helps you when you're talking about that buyer, you know, profile, who you want to call, right? Eli Fisher (15:43) Yeah. And so then once, you know. Craig Fuhr (15:44) Absolutely. Does it does it? I'm sorry, Eli, does it tell you like the number of transactions these folks have done or are doing? Eli Fisher (15:53) It does. And you can drill down to each individual transaction. And so the idea being is that, you can enter any type of set criteria. You may say, look, I want only in Baltimore city to see anyone that paid like 90 cents and up on the dollar. And then in addition to that has done between two to four transactions or whatever the criteria that you enter in. Once you've drilled down on that, you can plot it. on a map within the system so you see exactly where their transactions are occurring. You can drill down further and then you can export it. We've built an LLC skip trace, the APIs into five different databases. I mean the entity resolution layer is very robust and so we'll show you the registered agent, we'll show you the emails and phone numbers that are associated with that organization and at that point, you know, the organization should just pick up the phone and call those people. And I've tested this personally. I've done a number of case studies on it. And it's not really a difficult conversation. And I can give you a couple of examples, because if I saw Jack picked up 555 Baker Street, my first conversation to Jack's like, Hey Jack, this is Eli. I saw you picked up 555 Baker Street. Was that your deal? Yeah. Okay. Cool. Also see you did 62 ad-ups. Jack, let me ask you a question right here. Um, are you looking for off-market product? That's how you start the conversation. Jack BeVier (17:12) Of course you are. Eli Fisher (17:14) You know, and then you can take it a step further. You know, you build upon this. Like how do we curate this interest? Well, because you have the emails of these individuals, you take their most recent transaction. If you're gonna send them an email, you put that as a subject line question mark. So Jack, if I send you an email that says 62 Adams question mark, and that was your most recent transaction, are you gonna open that email? Jack BeVier (17:37) super high open rate I'm sure. Craig Fuhr (17:38) I would probably put you just bought 62 Adams Jack and then I know he would open it at that point. Yeah. Eli Fisher (17:44) Oh yeah, yeah. And so this is how, you know, it's not necessarily difficult to reach out and engage these individuals. You just have to have the validity of having the data because if you know their business inside out, you understand their buy blocks, they're gonna take your conversation pretty serious because it's like, oh, this guy, he seems to know more about my business. I don't know how he knows this, but whatever he's doing, he's probably dialed in right here and it's probably worth my time to have a conversation with him. Craig Fuhr (18:15) I've always thought that the best wholesalers know their buyers business better than they do. And I actually have friends around the country who they call it reverse wholesaling where you basically go out and find the buyer first, you find out what their buy boxes, and then you just go out and target the crap out of that buy box and you've got a ready buyer right there. Right? Brilliant. Yeah, that's great stuff. So is buyer sonar sort of part of the standard suite that you know a user like Jack at Dominion gets or is that sort of an add-on product for you guys? Eli Fisher (18:51) No, it's included. I always let people know, think of us as a holistic solution in that we give you best in class data on the front end from the acquisition standpoint. So you can pick up that deal. But then how can I help maximize your spread? Well, I can do that in two ways. One, the attribution aspect of it to help you improve your conversion at the marketing stage, as well as the acquisition stage to understand where the fallout happens in that. Then on the back end right here with the disposition, if I can empower you to connect with a best in class buyer that will pay the premium, these are the three steps that we can utilize to help you maximize your spread on a deal. And so it's actually included and it's a part of the system. Craig Fuhr (19:34) Great. Jack BeVier (19:34) Yeah, super cool. All right, you want to there was one other topic we wanted to jump into that I was a little that I was ignorant on and I was you're you and Craig were talking prior to the prior to us getting started. I'm really interested in that. Could you explain to us what the changes in the industry are? I guess we're you know, rewind a year or so in terms of like, you know, the texting and the FCC's actions on that stuff and then and bring us up to date and what's about to happen, which was I was really I was I was unaware so excited to share this information. Eli Fisher (20:08) Yeah. So for the people that are listening to this podcast, I see the unique opportunity that's currently available within the market to gain more market share. The reason I say that is because there's a whole host of competitors and let's call them what they are. You're small, not sophisticated wholesaler. You know, the guy that watched a YouTube video that thinks he's going to be sitting on a beach and getting checks in his mailbox. It's not reality, but that dream is sold on a daily basis. So if we think about those types of individuals, there's probably two channels that were very prevalent for them. And the first was texting. So we saw, you know, up until about August of this last year, guys were just blasting out text messages. Now there had been what was called the 10 DLC regulations. And a lot of people think that was actually like a lot. It wasn't. 10 DLC was basically a industry standard that was put in place by the large wireless carriers. And the reason why that was put in place is if you understand what TendLC was in TendLC.org, that's actually a lobbying function for the wireless carriers to prevent federal regulations saying that, okay, we're going to regulate ourselves. And these are the standards of how we're going to regulate texting. Most people never even bothered to go to TendLC.org and actually read what the regulations stated around texting. In particular, it basically stated that you can't really be doing cold texting. People have to opt in to be receiving these types of texts. And you also have to include language to allow people to opt out. So for the last couple of years, nobody was adhering to that. So you'd have these providers and these wholesale users were just blasting out text. Well, something interesting happened in August. Carriers just started putting strict enforcement into place and you literally saw texting almost die overnight. because all of a sudden there was a compliance layer that needed to be occurring within the industry. And I'll tell you a funny story about that of why this happened. So I live out in Redmond, Washington, right next to T-Mobile's US headquarters. So we do a barbecue bus stop the beginning of the school year. And one of the individuals that lives in my neighborhood is an executive at T-Mobile. we start talking about texting. And he doesn't know that I work in the real estate industry, but he talks about, you know, they've qualified a certain group of users that are sending texts, and what they call them is nuisance industries, meaning they're just a headache. We don't make any money off of them, and they are a pain for a user experience. So we're taking steps to eliminate that pain. And now you see the strict enforcement. And so now... Texting is not really a viable channel for people that are trying to do cold outreach. So that pretty much died up overnight. And so then that opened a gap in the market. Because if you think about, there was all this noise that was in the system, people sending all these texts. Well, that kind of disappeared overnight. So... Jack BeVier (23:07) 2021 was crazy. I just got blasted all year long, right? Craig Fuhr (23:11) Mm. Eli Fisher (23:12) Yeah. So now that market share has opened up, well, what happened with those wholesalers that were using as their primary channel of marketing? Well, they didn't ever have the capital to direct mail and they didn't have the ability to set up robust cold calling. So what we saw in the data is there's this actually big shift over to PPL, pay per lead. And so the effect of that was all of a sudden these PPL leads, they started getting really bit up. So they're almost accelerating their own demise because they're just bidding up the cost of PPL. and getting a diminished return on that. But something really. Jack BeVier (23:45) What are some examples of PPL that the listener can relate to? Eli Fisher (23:51) Yeah, so think of it like a website, like a need to sell my home fast for cash. So these guys are constantly running ads online. And if somebody types into Google, you know, sell my home for cash, you know, they're ranking at the top, the person submits their information to PPL provider. PPL provider then settles that to whoever is bidding up on that specific area. But then they also are selling it over and over and over again. Okay. Now, why this is so interesting here is that. Jack BeVier (24:15) Mm-hmm. Eli Fisher (24:20) Right around Christmas, the FCC stepped in and said, hey, we're gonna put some regulations in place here that are gonna have profound impact on PPL selling, not just for our side, but also for the mortgage industry and a whole host of other industries. What the federal guidance said was that, first of all, for people's information, if somebody is going to submit their information, the consumer now gets to choose who my information goes to. So I can pick, you know, this company, this company, but it's not going to everybody. In addition to that, if you really understand how these PPL guys were making a lot of their money, they were reselling leads over and over and over again. It was really a cash cow, right? The federal guidance also said, guess what? You can no longer resell leads. So what's gonna happen? Well, strict enforcement from the government is going to start taking place in April and May. So for all these people that are buying PPL, that cost per lead is going to skyrocket and go through the roof to the point where they're not gonna be able to afford it. Now you could argue that the quality of those leads is probably gonna go up, but that industry is gonna fundamentally change. And so if we follow kind of the path that I've laid out here, texting went away. We saw a drop in wholesalers. The people that remained that did not have a robust business have dumped a ton of resources into PPL. Those people are going away. Craig Fuhr (25:28) Hmm. Eli Fisher (25:46) And unfortunately, most of the people that utilize that resource have no clue in hell what I am talking about right now, because they don't bother to read these regulations, they don't stay up on this stuff. So, so there's going to be a window of time for an opportunity for guys like yourself to gobble up that market share because less noise is leaving and going out of the system. Craig Fuhr (26:04) Eli, what are you seeing in terms of cold calling and the regulations surrounding that? I mean, I know guys that are still doing quite a bit of cold calling, and to the best of my knowledge, a lot of it feels illegal, but what are you seeing with that? Eli Fisher (26:13) Mm-hmm. Yeah, it probably is illegal. So if you understand from a regulatory standpoint, we've gotten to a point where we are, there's a lot of consumer rights advocacy going on. We look at 10 DLC, even if something may not be federally illegal, there's a lot of industry regulation that is being applied. 10 DLC is the perfect example of that, of where the wireless carrier said, we will regulate ourselves so that the feds don't step in. So I think you're gonna continue to see an acceleration to more of a consumer centric approach from regulation. That will have impacts downstream on that as well. So I would not be surprised to see that there's continued scrutiny when it comes to cold calling of who you can cold call, what you can say, and it just becomes incumbent upon the organization to make sure that they're aware of what changes are current in the market, what is on the horizon. and then really future-proof your business. Because there's gonna be an opportunity, but you don't wanna be left holding the bag like a lot of these people that we just talked about. Jack BeVier (27:30) So lead reselling is going to be just straight up outlawed. Eli Fisher (27:36) Yeah. Jack BeVier (27:37) wild. And that's April where that enforcement supposed to take effect. Eli Fisher (27:42) Yeah, you can go and read the FCC's decision if you want to go and read on a government website. So they're planning strict enforcement again the April May timeframe. Jack BeVier (27:51) And then when, when a consumer goes into a mortgage website or a sell my house fast website and they input their information, they're what they're going to like, there's going to be a little dropdown and be like, you can share my information with bank of America and rocket mortgage. But, but that's it. Like there's going to be 10 choices and you can select the two that you're interested in sharing that information with like affirmatively choosing. Interesting. Craig Fuhr (28:01) Hmm. Eli Fisher (28:11) Yeah. And so you think about who gets to play in that game. Not the small to medium-sized guy. Craig Fuhr (28:20) My sense is that, yeah, I mean, if it's going to be that granular where I go into a mortgage website, and you know, maybe it's a big lead gen type website, that's so many of them out there. And I only want to share my data with two providers. I saw it more as I don't want to share my data with anyone. Or yes, you can share my data with everyone. Maybe it will become at some point more granular. But yeah. Jack BeVier (28:21) No. Yes, I mean. So many, yeah, so many of the consumers that go into those things, they think that they're talking to a lender, right? They think they're talking to a lender and getting a quote. They have no idea that they're just giving information that's then going to be brokered out. That's the issue, right? Cause then they get bumped, you know, especially particularly in the mortgage business, they get bombarded. You know, you, you request a mortgage quote and then you, and then you can't get off and can't get rid of calls for like 90 days because these guys are just blasting you with, with outreach because you've shared your information. Craig Fuhr (29:05) Oh yeah. Jack BeVier (29:18) That's where like this is, that's where the crackdown is coming from. Right. Eli Fisher (29:21) Yeah, you know, give you an example. When my wife and I first bought our home, I went on to, I won't say the company's name, but basically you would go, you'd enter your home and it's like there's home services. Like I need, you know, some, you know, handy work done, right? Maybe I need some gutters or something like that put up. So I entered my name and it's like, oh, we're gonna help connect you with some curated partners that are vetted investing class partners. That was not the case. To Jack's point, my wife and I got hounded, you know, texts, calls. and I only needed to talk to maybe one or two guys, but I got everybody in their dog. You know, some were good, the vast majority were not. And for six months, this was just like a one-day project and I'm still being inundated for six months after the fact. So this is where this type of regulation starts to come into place because of those types of experience from a consumer standpoint. Craig Fuhr (30:00) Sure. Jack BeVier (30:15) That's super interesting. Yeah. So to your point, it's going to, it's going to, to your point, it's going to make it so that the, the a la carte lead buyer, right? Is just not, that just disappears. And so you're going to, it's, it's going to be much more of a you run your own direct mail campaign or you don't get to play or you run your own, well, you run your own direct mail campaign, right? Or you're on television or you're in, like, kind of like more classical media media. Um, Craig Fuhr (30:18) How about. Jack BeVier (30:41) or you're just not going to be able to get leads. And yeah, that's definitely got a barrier to entry that is going to make it difficult for, for smaller, smaller competitors. Interesting. Eli Fisher (30:49) Mm-hmm. Yeah. Craig Fuhr (30:52) So Eli, one more question I wanted to ask you before we let you go. When you read the news and you're trying to find that niche market, that niche list that you feel like, oh, there's a real opportunity that's growing in this sort of niche, I'm just wondering how, how Audantic. sort of caters to that. So lately, you know, Jack and I were talking several episodes ago about sort of the Airbnb and bust that everyone has that, you know, felt like earlier, maybe about four months ago, it's kind of heavy in the news where there's certain markets around the country where, you know, you got relatively inexperienced operators who thought they would like the real estate business discovered that they were in the hotel business. And maybe their, their houses aren't doing as well as they had hoped. So I saw that as a real opportunity that may have been emerging for targeting folks that are in that particular segment of real estate investing. Is that something that if you know, I'm a guy I want to I want to get right out on the forefront of that. Is that something that you help your users with or no? Eli Fisher (32:09) Not specific for that instance. Well, I do think there is a large opportunity for that because you had a lot of people that just, oh, I'm gonna do this and this is really simple. Unfortunately, that's not how life is. So I would say, yeah, Craig, there's a massive opportunity right there for people that had purchased that type of product that don't know what they're doing, that are playing the game faces a pain on a daily basis. I certainly think there's a large opportunity there. Craig Fuhr (32:33) Mm-hmm. Eli Fisher (32:36) I think the other thing that's really interesting here is, you know, where does the opportunity lie moving forward? And if we look at the market right here, you know, Fed's forward guidance here is probably three rate cuts within the year. If you look at NARS numbers, for 100 basis points drops, you have 5 million more available buyers that come into the market. So, you know, historically from an economic standpoint, when you would have rates come up, prices would come down. That didn't really happen. and were supply side constrained. So if there's not a lot of product currently in the marketplace, you may be able to say that when those rates come down, the guy that was locked in at that lower mortgage rate that did not wanna move to an inferior class of product because he's gonna be paying 7%, well now maybe he might move. So there's a hope that there will be some inventory that comes to market, but. is it going to be, are you going to be able to get much of a discount on that? I don't think that's the case. Now, that's why I think it becomes even more incumbent for an operator to be constantly curating new buyers, because there's always opportunity in any market, but you have to understand what the market is telling you. If the market says, this product trades at this, you have to have buyers that will empower you to buy it at that. Craig Fuhr (33:40) Hmm. Eli Fisher (33:53) So I do think there is opportunity moving forward, but you have to recognize what that opportunity is and be strategic about how you structure your business to cater to that opportunity. Craig Fuhr (34:03) Yeah, you mentioned Richmond, Virginia earlier, and I think we have a mutual friend down there who has been targeting owners of basically landlords who own newer landlords who own say 10 houses, and are now experiencing the joys of landlording and discovering that it's not very joyful for them. And so this particular investor in that area was targeting that list of folks and I would assume that you might know who I'm talking about. But is that something that you would you guys would like is that the way audant to can work for a guy who's very specialized and trying to get out on the forefront of maybe an opportunity? Eli Fisher (34:51) Yeah, in some instances, I would say yes. The reason being is you always have to look at what is the total address of the market for that specific type of product and the people that hold that product. So I'll give you an example. In that case, as well as another large investor who's a friend of Jack Nice out in Portland, he actually lives in Phoenix now, but he came to us and said, look, I want to see anybody that's holding, you know, 10 plus units in a specific area. generate that data set. He's like, this is awesome. So you guys should sell this. And I'm like, here's the thing, man. Talk to me in five years, because that doesn't turn over very much. I can't really productize that. I can generate that set, because you're a buddy, you've been with us a long time, but you know, there is opportunity in that stuff, but it's not really something that we can productize. And it's just more of something like, you know, if Jack comes to us and says, hey, could you probably do this? We probably could do that. But... Craig Fuhr (35:28) Mm. Sure. Eli Fisher (35:46) Those are very unique instances and it's not something that's really, you know, we do at scale for everybody. Craig Fuhr (35:52) What are you laughing about, Jack? Jack BeVier (35:52) I've, uh, I've correct. Craig. I've tried over the years. I I've been in CRE been in Chris's ear. Like I used to be in Chris's ear on every like four months with a new hair brain scheme based off of like some interesting opportunity. And I think that the ideas were valid, but he was like, yeah, no, that's he's like, he'd like he, and I'd get him right. Like Chris has got a little bit of shiny object syndrome to him. So I would, I might, you know, I could, I could get them sometimes I'd rope them in and I'd be like, nah, man, this is a great idea. This is like, this is the future. And then. Eli Fisher (36:15) Hahaha Craig Fuhr (36:18) Ha ha! Jack BeVier (36:22) He would eventually like, you know, calm down and realize that and come back, you know, realize that he was trying to run a business here and I was just trying to like, you know, toss shiny objects at him and, uh, something that I think Audantic has done extremely well over the years is sticking to their, sticking to their core product, their core knitting, and then expanding. I think that the, you know, the, the addition of attribution and the addition of buyer sonar to the core data product. Craig Fuhr (36:47) Yes. Jack BeVier (36:51) really kind of completes the life cycle as Eli pointed out and they've been really impressively disciplined about not getting distracted with chasing a bunch of shiny objects which are valid in and of themselves but like Eli pointed out, you know, not really a business. Craig Fuhr (37:09) Yeah, and I guess, as you as you're talking about that, you know, we, we all wake up at night going, oh, there's this, you know, I've got a great new idea about motivated, you know, this motivated part of the market, right. And my sense is that you guys are probably already capturing that, you know, in the list that you provide to your end users. Eli Fisher (37:33) Yeah. Craig Fuhr (37:34) whether it be, you know, hey, I've got it, I've got it, guys, I'm thinking of targeting Airbnb guys, or I'm thinking of targeting and tired landlords. My sense is that if it's a real estate investment in a single family asset class, that fits the attribution model that you've put in place, that you're probably capturing a lot of those owners in that data set, correct? Eli Fisher (37:57) Yeah, and that's why you can never necessarily speak in absolutes, because we may have an Airbnb guy that is struggling, that will sell a product to an investor at a discount. Mr. Airbnb guy looks fundamentally different than our drywaller guy example earlier. Both are good targets. And that's why in some instances, people really struggle when I explain this to them, because they always want to whittle it down and say, okay, he like... Craig Fuhr (38:10) Mm-hmm. Mm. Eli Fisher (38:26) I got what you're saying. What are the top five things that make somebody a good target? I'm like, it doesn't work that way. We're looking at millions of pieces of data. And the only way that we're able to glean statistical relevance, you can't do it with a person, a team of people. That is why we use machine learning models, to be able to effectively do this at scale, to glean statistical relevance, to say, Mr. Airbnb guy here, based on what's going on in his life and struggles that he's had, he will sell to an investor. Mr. Drywall over here, based on what's going on in his life, based on the data, he will sell to an investor. They look fundamentally different and yet both are good targets that will ultimately transact to an investor. And so I would love it if I could simplify it down to like, these are the top five things, but that's unfortunately, that's not how this works. Jack BeVier (39:17) So by the way, just to put a finer point on that, so the ML machine learning is going to use clustering around particular, when it finds that there's a correlation, it'll cluster, that data will cluster and then it'll essentially create a profile, right? Like the data creates a profile. So if Airbnb sellers become a thing, that will emerge. Eli Fisher (39:35) Mm-hmm. Craig Fuhr (39:41) Mm. Jack BeVier (39:43) within the data as a new cluster. And then the model will then identify, hey, here are the, and here are the other ones that you should now, and next quarter's list will now have a bunch of those, a bunch of those kinds of individuals on it. So you won't be the first guy to buy an Airbnb off a distressed Airbnb person. But as soon as that trend emerges, the data will identify that trend and then add it to your list to then go target. So it's almost like, it's like, you know, you don't have to come up with a whole hair brain schemes, You come up with an idea, you mail it and you get bubkissed because you're wrong or you're early, right? You're either wrong or you're early. Usually the two things, right? And that doesn't do you any good. This approach kind of avoids that, right? Like as soon as it becomes a thing, it'll be, it'll be in your wheelhouse. It'll be on your list. Uh, and you don't have to be the one who's coming up with the new novel theory of motivated selling. Given the economic conditions, the data will just send you to the, to that cluster. Craig Fuhr (40:20) Mm-hmm. Jack BeVier (40:43) as it emerges. Eli Fisher (40:45) And that's where, you know, if you think back to how we, we opened our conversation in the first episode, we talked about how we basically monitor every single real estate transaction on a daily basis. That's occurring within the U S by ingesting that data. That is always feeding back into the model to glean exactly what Jack just described. Craig Fuhr (41:06) Eli, how many users are on the platform right now? Eli Fisher (41:10) So we don't work with everybody. We don't wanna be a prop-starter batch. We have about 250 clients that are, we consider probably the top 1% within the marketplace, best-in-class operators. Because the thing is, you can have best-in-class data, but if you can't act upon it because you don't have good systems and processes, this is not a resource for you. Our founder, who you guys are good friends with, he's got a favorite saying, he's like, look, man, we make Jordans. That doesn't necessarily make you Jordan. Craig Fuhr (41:42) Ha ha! Jack BeVier (41:42) Yeah. Craig Fuhr (41:47) Oh, that's fantastic. I love that. So so what you're saying, so you're saying 250 users across the country, which means that in any given market or MSA, you may only have just a few users that you're that you're allowing onto the platform. Jack BeVier (41:51) He's not wrong. Eli Fisher (42:03) Mm-hmm. Craig Fuhr (42:08) Well, that's great. Well, you know, I've always said that real estate investors need data. Great real estate investors need even better data. And it's been a real pleasure to talk with you, Eli and learn more about Audantic Jack. This has been a fantastic conversation. Jack BeVier (42:24) Yeah, Eli, thanks a lot for joining. Really enjoyed it, man. Thank you. Thank you very much. Craig Fuhr (42:28) Eli, why don't you give us if folks want to learn more about Audantic, how can they find out and reach out? Eli Fisher (42:29) Appreciate you guys. Yeah, real simple. Um, they just basically can go to our website, uh, audantik.com and there's a submit, uh, get information form. And basically we'll just have a conversation, uh, basically market consult, like I usually would all show people is just like, okay, well, what, what is your business? What do you do? Okay. Cool. There's a total addressable market in your area. Here's what people pay and here's where, you know, we may be able to be a resource for you. So, um, no obligation or anything like that. I think, you know, giving people a better understanding what's actually happening in their marketplace and then saying, okay, here's where the opportunity lies. Here's how we can potentially make this optional or operational for you. And then, yeah, just visit us at the site and happy to be a resource for anybody. Jack BeVier (43:22) And it's a U D A N T I C, audantic.com. Eli Fisher (43:27) Yeah, odddiantic.com. Craig Fuhr (43:30) Well, Eli, thank you so much for taking the time. Really appreciate it. You've given us so much of your time today. Really, thank you so much. It's been a genuine pleasure to learn about what you guys are doing over there. Eli Fisher (43:43) Appreciate you guys. Thank you. Craig Fuhr (43:45) Alright guys, this has been Real Investor Radio with Craig Fuhr and Jack Bevere. Fantastic couple of episodes. Tune in for the next, we'll see you soon.