Latest / Real Investor Radio Podcast / Ep36 | Scott Fahl - Privy Empowering Real Estate Investors

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Ep36 | Scott Fahl - Privy Empowering Real Estate Investors · Real Investor Radio Podcast

• Craig Fuhr (00:25) Welcome back to real investor radio. I'm Craig Fuhr joined again by Jack Bevere, Jack, good to see you. Jack BeVier (00:31) Absolutely. Good morning, sir. Craig Fuhr (00:33) As usual, we've spent the last episode speaking with a guest. Our guest today is Scott Fahl, CEO of Privy. I'd ask everybody to go back and check out that episode where we really talked about the genesis of what is an amazing idea and an amazing platform that Scott and his team have built and how it was originally focused really towards realtors, but frankly has become one of the great. tools in the toolbox for better real estate investors. And that's what this podcast is all about. Jack, we love talking about advanced topics for advanced investors. And so welcome back to the show, Scott. Scott Fahl (01:11) You back? Sorry, you froze for a second. Jack BeVier (01:15) Yeah, go ahead. Craig Fuhr (01:17) So welcome back to the show, Scott. Scott Fahl (01:20) Thanks for having me guys. It was a fun conversation last time. I'm excited to get into some of the future of real estate investing in this episode. Craig Fuhr (01:28) Yeah, so let's take this episode in the next 40 minutes or so to really talk about how the product not only benefits fix and flip investors, which we talked a lot about in the last episode, but really buy and hold investors as well. You mentioned a couple of the tools that are currently on the platform, including comparative search love to go into that a little bit more, as well as some of the exciting things that we know is are coming down the pike for the platform. So Yeah, let's just jump in. Jack, why don't you go ahead and get us started. Jack BeVier (01:59) Yeah, so we covered a lot of the fix and flip features that Previews built out. And that was like when I was coming to it, kind of like my primary interest in the platform. But as I got in there and was playing with it and setting up my searches and researching other markets, figuring out what's going on, using the tool to figure out what other... what other successful investors are doing. So I could reverse engineer with an aim towards reverse engineering, what the other smart money is already doing. And I found it to be a great business intelligence tool for that use case. The buy and hold stuff really kind of surprised me because we have seen in a super tight market, Uh, days on market are like four, right? Like, you know, it's hard to find investor priced rentals in that context, but as things have slowed down a little bit, my eye has, at least in my, in my backyard has shifted towards, Hey, maybe we're going to see some houses that need a little bit of work or not fully renovated, but are very livable. Um, that may be, you know, great candidates for, for rental properties, especially as we're starting to see mortgage rates tick down. And a lot of the, you know, like Fannie Mae, I was reading a Fannie Mae economists are predicting mortgage rates are going to continue to slide down, maybe even get to the fives by the end of the year, which I'm, I'm skeptical, but praying for, right, but certainly rooting for. So anyway, my eye is starting to shift a little bit more back towards, hey, is it, you know, can, can I start to add some rentals again, at a little faster clip to our portfolio and Craig Fuhr (03:32) Mm-hmm. Jack BeVier (03:45) Are we going to see some sellers out there who with elongated days on market, maybe candidates to be able to make offers on, on those properties and add them to our rental portfolio. Well, of course what you want to be able to filter for if you're evaluating the MLS is, all right, what's this property listed for? What's it going to rent for and then exploit apply an expense ratio to so we can make sure that we think we're getting an appropriate cap rate. And I was, so I was really excited to see Scott in privy that you guys have a lot of features from a searching criteria point of view that allow for alerts for folks looking for either purely turnkey rentals or just you know or properties that need work that could be good candidates for rentals as well. Can you talk to us about how you guys kind of came up with that feature set and what you're aiming for? Scott Fahl (04:35) Yeah, sure. So we initially, and we talked about it last episode, a lot of the fix and flip. The fix and flip algorithm in our world is relatively easy. You know, probably that sold and resold for X amount more. Right. That's like the beginning of it. Adding in all the data and the features of, you know, pictures and timeframes and all of that stuff is just, you know, icing on the cake. Long term rentals, very different story. So you need to get data sets. And the way we do it, and I guess I should mention this again for anybody who didn't listen to the last episode, is what we use called comparative search. And comparative search is essentially tracking other investors' success and not success, and being able to use that information to allow you to duplicate the success or skip a market that isn't going to meet your needs. So trying to do that for long-term rentals was a real challenge. So you have to have specific data. to be able to say this is what a person paid for a house, this is what they're renting it for, and it becomes a comparable sort of, what do I wanna say, like treasure hunt, and trying to figure out where can I get rental comparables at scale. And it's, you know, MLS has a bunch of data, Colony Records has a bunch of data. To get a single source on rental comps is not a thing. You have to, for us, you know, hustling, making deals, you know, making a... Finding people who have access to this stuff and cobbling it together so that our users don't have to is something that took us years to accomplish. And so once we started, and I would refuse, honestly there was an option for us to do automated rental models and use rental figures into the algorithm, but I refuse to compromise on that because it's just such a different animal to say this is an estimate of what you could get. It's... For me, that's just not good enough. So we want to be able to say, this property is a good rental deal. Why? Because here's five other people within a quarter mile radius who are doing the exact same thing with the exact same house. And that philosophy and that concept makes all of this much, much easier. So long story short, getting those rental comps for us was key. And as far as I know, we're the only ones that have them at the scale that we do. So once you have. what other investors are doing, what they're renting for. For us to be able to find properties, similar square footage, similar size, similar stories, similar amenities, makes it much, much easier. So that's where we're at today. Craig Fuhr (07:08) Scott, maybe you could just drill down into the user experience quickly for us. Like, what does that look like? I'm a guy like Jack and I'm acquiring rentals in a particular market. I jump onto the platform. You know, tell us what that looks like if I'm setting up a search and I'm, you know, obviously trying to find stuff in my buy box. Scott Fahl (07:31) Yeah, so there's different parameters that everybody knows, cash rate, or cash on cash and cap rate and things like that. And you know, you just, you pick your parameter and you say, you know, I want to find where I can anywhere in whatever your area is, or if you're doing research for new areas, and you say, I want, show me all the properties I can buy and get an 8%, whatever cap rate, right? And we'll show you and we'll, and you'll say, well, how do you know I can get 8% cap rate? And that's where you go to our comparable section and we'll show you, you know, a number of other people with similar properties who are currently getting an 8% cap rate. So that's as simple as that. Craig Fuhr (08:09) Wow, and I would assume very quick as well. Scott Fahl (08:13) Oh yeah, it's instant almost. Yeah, we experimented with some things before we had rental data. The idea, and everybody knows this, is one of the ways you make money in buying rentals is you buy them under market value. The cheaper you can get these things, just the more ahead you are in the game. So we had created an algorithm that was just simply search for properties under market value. And once we built out the whole LTR, Jack BeVier (08:18) Yeah. Scott Fahl (08:42) features and functionality, we were going to remove it. And then our user base went kind of nuts about it. They're like, look, that's a great one for us to have. And it's not just rentals, but across the board. Always just show me any property that shows up 30% under market value or whatever your number is, whatever area you are, is just an option. But the LTR, we'll be putting in short-term rental too, I should mention that within the next. 60, 90 days. And that to us is sort of the holy grail to have all the residential options across the board. But long-term rentals, the key piece is, hey, 8% cap rate. And you go look at the comparables. And they're never exactly the same unless you're in a condo building, right? Then it's pretty obvious. So we built out this extensive edit model that allows you to change just about anything you can think of to get it down to the exact property you're looking at. Craig Fuhr (09:31) Mm-hmm. Scott Fahl (09:43) and then you can make an estimate. And all this, the important part about this is to make it happen very, very quickly. So you can say, hey, this is a deal, or this isn't a deal. So you're not wasting time with properties that aren't a deal, right? And you're spending all this research time to only figure out it's not. We want you to be able to decipher that in minutes. Craig Fuhr (09:50) Yeah. Jack, question for you. You've looked at other markets, most of Dominion's properties, I would assume now, are in Baltimore and the surrounding counties. But if you were looking at another market prior to Privy Jack, how hard would it be for you to find really valid rental data? You know, it's it you can go into the MLS and maybe find a few comps of properties that were listed for rent on the MLS. But if you don't have access to the MLS, Jack, what would you have done prior to a great platform like privy to really get accurate rental data? Jack BeVier (10:46) Yeah, it's a little, it's a little brutal in how manual it is, right? Like you're, you're going on, you're going on rent, rent.com or pulling up the MLS data. Um, if you like really commit to something, I guess, after you've like narrowed it down, or if you've decided, Hey, I'm going to go to this market. I want to get a little bit better. There are some companies that'll offer you, uh, that have aggregated some, some rent, uh, rent data, like, um, rentrange.com, which is an AltaSource product now, they bought that company. So that's kind of their specialty, but they're really kind of, they're not focusing that towards the retail investor, right? They're trying to sell those large data sets to the national landlords and mortgage companies to try to, you know, for their kind of asset management platforms and maybe they're feeding it into their acquisitions platforms. Some like the public, the public REITs are buying that data. But as a, you know, more retail investor though. that data is not available in an easily consumable format. And certainly pairing the rental data on a house by house basis with active listings, like as new stuff is hitting the market, it's not that useful for me to see that somebody got a great deal back in 2020, right? Like I wanna know like, where's the market today? That's all I care about is like, what's the thing I'm gonna go kill. So... It's been, it's a very manual and kind of cumbersome process right now. And that's one of the things that I really, I think it's a fantastic feature set that you guys have put together where you can say, Hey, I'm looking for a 12 gross yield. Where can I get it? Frankly, where can I get a 12 gross yield in the market still? Right? Like she's, she's just show me the 1% rule all across the country and boom, the entire country lights up and then you can zoom in and go start exploring from there and figure out like where, um, where you want to dig in and spend additional energy to research that market. But yeah, so I'm a big fan of that feature set. Scott Fahl (12:46) Yeah, that part, you know, it's constantly changing, as you know, and to keep up with it is when you're explaining how manual this is, all I'm thinking about in my head is, you know, as soon as you just you're looking at this and researching and as soon as you're done researching, it's static, you know, and it's all of a sudden what's happening six months from now, you have to continue to do that process over and over and over, or you're putting yourself at risk by saying, you know, something changed that you missed, you didn't catch it. you think it's X and it's actually Y. That's one of the big things. Again, the product as we build it out and get more data and build our team out with data scientists and developers and some very smart people, we look at how can we add more value? And that's one of the things is being able to monitor markets in an efficient manner in near real time. And we talk about... finding new markets and finding new deals and doing discovery and all that's built in. It's automatic. It's part of our heritage really. And when you look at how else would you use that, a lot of investors, especially on this podcast know what they're doing. They're saying, hey, look, here's my portfolio. Here's my experience. Here's my areas. If I can find properties similar to what I already know. then I want to buy them because there's no brain damage there. So being able to say, you can upload a portfolio into our system right now, 100,000 properties if you want, and we'll go find similar properties to your portfolio in real time. So it's this idea that you can go have discovery missions and do all the things, but don't forget about what you already know. And that's a key piece. And I want to mention that we talk a lot. and through this conversation with you guys about MLS, but we are by no means saying MLS is the only way to find deals. But we will say, if you find something that's interesting off market, we're the fastest way to get to whether that's a deal or not. Here's the comparables, here's the investor activity, here's what's happening. So we're sort of looking to add value across the board. And because we've been around long enough, it's our user base that gets back to us and says, This is cool, but what if it did that? Or I needed to do this. And once you build software, once you get into this world, that's what it is. You have an idea, you put it out there, and then you just listen to your customers. So we're big fans of getting that feedback and being able to continue to add value. Craig Fuhr (15:23) You glossed over something quickly there, Scott, where you were talking about being able to take basically your portfolio and upload it to the platform. Let's talk not about the dominions of the world that own hundreds and hundreds of houses, but I'm a guy, let's say, who owns 50 houses. Why would I, how, first of all, how easy would it be then to sort of upload those parameters to your site and why would I do that? What's the real benefit of doing that versus just saying, hey, I know what my buy box is, let me just search for that on privy. Scott Fahl (16:06) Yeah, the benefits are, well, there's two things happening. There's what you can do today and what you'll be able to do in the very near future. And what you can do today is take those 50 properties, put them in the system and we'll pull a live CMA on every single one. Our live CMAs again, will track all of the comparables in the area, all the investor activity in the area, and you can set it up for notifications. Like show me every time a property pops up that meets the parameters of this house, right? So if you have two bedroom. you know, two bathroom house and whatever area, and that's your thing. Once it's in the system, we'll show you every two bedroom, two bathroom that pops up that meets your needs for all 50 properties in real time. So you you'll stop searching for properties that match what you're interested in immediately. We'll take care of it. So that's one thing. Well, that's actually two things. One is being able to find properties that match your portfolio. And the other one is to track your current property situation in what's happening in that market. Um, to me, that is it. You know, your portfolio guy, that's a game changer to just be able to say, you know, I already know what I, what I like, what works for me. Just find me more of those. And, you know, these great that you guys are, some of you guys are going to look in other States and doing all of these things, it's just not for me. I just want, you know, instead of 50, I want a hundred, right? But I just want the ones that I already know. Um, so that that's where that is today. Um, Craig Fuhr (17:25) Mm-hmm. Scott Fahl (17:30) in the very near future, you'll be able to put any address into the system and say, find me one of those. And now the reason why that's interesting is because maybe you are in another market and you can look up who's the man in this market? Who's the person who has 50 properties in Chicago with this deal type that I like? All right, find me every property that matches this guy portfolio and send it to me. So that's where you start poaching off of this other investors activity and their experience in real time. And you know, you think about people, I mean, institutional buyers, I don't know how you guys feel about that, but I'm not a huge fan. And you know, their business model is not something I think us regular guys would want to emulate anyways. But this is you could you could say show me every property open door bought. And you know, make sure I'd never seen you those in my in my feed. Yeah. Craig Fuhr (18:23) Yeah, right. And then explain to me how they're actually making money off of it. Scott Fahl (18:27) Well, you know, if you have the entire analysis of their portfolio in our system, you could figure it out. You say they are making money, they're not making money. I mean, we kind of all we don't want to go down that rabbit hole. We all kind of know that model and that's probably not for most people on this podcast. Jack BeVier (18:46) Yeah, that's super interesting though. I'm going to, I have not set up my portfolio monitoring, but I'm going to do that as soon as we get off today. So. Craig Fuhr (18:53) Ha ha ha! Scott Fahl (18:53) Yeah, and it's as simple as CSV file. You put it in CSV, your file will give you the form of the columns that it needs to be in. You enter in your however many properties and just upload it. And in there, too, we've built in features where you can, with those properties, we have a color coding system. Like these are under contract. These are ones I'm going to sell. These are ones that my team's looking into. We have the ability to add files if you want to add. you know, your closing papers, if you want to add appraisals or take notes, if you want to share it with your team. So it's really designed for people with portfolios and teams of portfolios. You can all work together inside the system to manage that portfolio properly. Craig Fuhr (19:37) You'll forgive my ignorance because I haven't used the platform as Jack has, but this is, this is not a listing platform though. Correct? You're not, if I, if I want to sell properties, or if I want to potentially look for buyers for my properties, this is not what we're talking about here. Scott Fahl (19:56) Well, if you want to find buyers for your properties, you can pull a buyer's list. So it's very easy to whatever your parameters. We have all colony records, right? So you just filter it by a buyer's list, however you want, and you can do that. And that's... Craig Fuhr (20:10) Yeah, so we, I guess the point of my question, Scott, was we know a lot of guys in the turnkey space who are always looking for investor buyers for the product. And I'm assuming there's a way to get to that information on the site. Scott Fahl (20:27) Yep, very easy. The filter, pull a list, here's what I want. And then you do what you do with that list. There are some competitors in our space that, without the MLS data, they do sort of the typical list building, sort of skip trace, spam a bunch of people in distressed situations. We don't get into that. But you can build a list. What you do with it is up to you. So we're just. We're just not into that space. But what you touched on a little bit is similar to a marketplace. If you wanted to list all 50 of your properties, you want out, where could you do that? And we are working on the ability for you to say, list all 50 properties right here in privy. And in the very near future, we will be the source for the best of the best real estate investors out there. and you would want those eyeballs on that portfolio, people would know what they're doing to be able to move that thing. That hasn't, that was something that I thought of, you know, a long time ago, marketplace would be cool, right? But you have to sort of hit a critical mass. Otherwise that's not, that's those properties are just going to sit there or there's not enough properties to sell in there and it's kind of, you know, kind of a boring marketplace. Craig Fuhr (21:45) That makes sense. Makes sense. So, go ahead, Jack. Jack BeVier (21:49) Yeah, I was going to say, so talk to us about, so what's in the time that we have left, what's on the future of the roadmap? I'm excited to hear about what you think is fun, what you guys are working on, that we'll see in the next 12, 24 months. Craig Fuhr (22:03) Yeah, you mentioned, I'm sorry, Scott, you mentioned that you're listening to your users and they're coming, you know, smart guys, obviously, right? And they're coming to you with requests, feature requests and things like that. I'd love to hear it from that standpoint and then obviously what you guys have in the pipeline to bring to the platform. Scott Fahl (22:03) Yes, who? Mm-hmm. Yeah, so the user base is interesting, right? So everybody has, it's kind of what I mentioned in the last podcast. So if I show a property to 10 different investors, I'm gonna get 10 different answers on what to do with it. And so same thing with the software, you're gonna get 10 different feature requests. For us, it's just more data. It's more data, faster, cleaner, more efficient. And honestly, it's a lot of how do I get to the maximum benefits of using your product? the fastest, right? So what that means is when somebody gets into our software and you're kind of, there's some tool tips and you're kind of poking around a little bit, but you're a little bit on your own, especially when you talk about the best of the best investors. Well, when we talk about the best of the best investors, who this was originally designed for, we know with very little guidance that they're gonna figure this out, right? But nowadays, like the things I mentioned in this podcast, being able to upload your portfolio. Like that's something Jack didn't really know and he's been in the software, you know, messing around with it. So yeah, so the future is being able to help you get to, you know, what you, how you're going to use the system, right? So we need to be able to ask a little, a few questions. We need to be able to differentiate, you know, you Craig from Jack and how you're going to use the system. Craig Fuhr (23:25) He's already uploaded 75 as we're sitting here talking. Jack BeVier (23:28) Thank you. Scott Fahl (23:45) and help you get to efficiencies quickly. And that's where we're really focused on, sort of onboarding journeys and being able to get, because Jack might have a portfolio, Craig, you might not. So, what are we gonna show you first? What's gonna be most useful to you? So this guidance through that system in a way that's also educating you on how to be a better investor. So, this idea of... Moving to a different market is, you know, sort of brings up the scaries for people and, you know, the hesitancy and the, you know, we want to be able to show you how to do that in an efficient way very quickly. So a lot of that is onboarding journeys, getting you up to speed and getting you educated. I always find it really fascinating how when people first get into the site, they're like, well, I don't know what to do. This might not be for me. And then once they set up a couple of searches, now all of a sudden they're experts in markets that they were never even thinking about before. So that's a huge piece for us to be able to help people get onboarded and educated quickly. Jack BeVier (24:48) Yeah, so in terms of outside of the user experience, in terms of the product features that you that you guys are working on, you mentioned some stuff on the on the AI side of things. Obviously that's the buzzword these days, but certainly I would think with such large data sets, you guys have a bunch of stuff that you could be applying that. That technology to this, to this set. What are you guys thinking on that side of things? Scott Fahl (25:13) Yeah, so AI is really interesting, right? Like I'm actually convinced a lot of people don't understand the definition of it. But, you know, when we talk about it, it's about, you know, just making things faster, more efficient on the product side. It's the idea that we know Craig when he shows up, we know where he's from, every property ever purchased, every agent he ever worked with, every MLS he ever bought a deal off of, if he buys off market, on market. and being able to say, hi, Craig, here's 10 properties that match what you'd be interested in instantly. We already have the capability to do that. That is more of a user interface piece that will make that much, much easier. And when you start being able to do that, that's where we start breaking into the rest of the population. So you always say this. You could go to any room full of adults anywhere in the US and do a survey and ask them what's one of the best ways to build wealth. they'll say real estate. And 95% of them will say real estate. And that's their first answer. And then you ask them, what's your first step to go do it? And it falls apart completely. We're the first step. Yeah, they know that it's a great way to build wealth. They know what to do. And if previous to us, what you would do is you'd go maybe read a book. There's literally 10,000 plus books on Amazon right now for you to learn how to invest in real estate. Craig Fuhr (26:16) I watch HDTV a lot. Yeah, that's usually. Scott Fahl (26:34) You read a book, you get some advice from your agent, somebody you might know. We're saying we want to be the company that skips all of that. And you just get in and see what the best of the best are doing and learn how to emulate it very quickly. And we really do think we can educate the entire American population to be able to invest in real estate as almost right from now until forever. And that's an altruistic goal of this company. And we're very close to being able to pull that off. But I would say, the things that we're interested today is being able to help companies like Dominion and title companies and people who are involved in these transactions be able to offer, bring more value to them as far as their user base. So being able to connect people inside of our system. And AI works very interesting in an interesting way. So for example, let's say Dominion has 1,000 investors that they do business with. And we talk about, you know, what's the loyalty of those investors for Dominion versus somebody else. And, you know, we can debate that on a whole other podcast, but the idea is, when do you know those thousand clients? What are they doing? What are they buying? What are they up to? Having them in our system allows them to be able to be much more efficient with their purchasing, much more accurate with their comparables. Their analysis goes through the roof. And now if you can connect that with a lender in a way that you guys can be much more efficient, because speed is the name of the game, especially if you're talking about MLS deals and being able to just build in efficiencies that allows everybody to win, right? This isn't, there is no big advantage for the lender. There's no big advantage for the investor. You combine them together. That advantage becomes pretty powerful. So we're looking at B2B relationships at scale. And that's the future of, well, that's our main focus actually this year. Jack BeVier (28:32) Yeah, something I noticed just using it as, you know, as from an acquisitions tool point of view, but then it, you know, made me think about our other businesses was we, you know, got a couple of alerts. We went out and looked at it. We were like, ah, our offer is going to be about, you know, 10, 15 grand less than the list price property was under contract in two days. Right. Like it was, it was a deal, right. Because I wanted a contract in two days, you know, it was a little bit more than we wanted to pay. but certainly within striking distance, right? Like happy, happy to have gone out there and put an offer together. And I was like, man, like, I mean, there was a deal that just went under contract. That guy's next step is to get a loan request, right? That he just got a property under contract. Now he's looking for a loan. By the way, that buyer's agent is a buyer's agent that's work that that's actively working with investors and it's probably, you know, and that's from sure that the only investor that person's working with. So that person's a node of activity. And, you know, as you see the one of the failings of a lot of data resources is the timing differential, right? We're looking at and it's great. It's better than nothing. But we're looking at recorded transactions that happened three months ago. And so, like, you know, conventionally, I'm looking I'm seeing flip data out of the public record that. You know, it has to, the property has to be sold. Then the clerk at the recording office has to put it in there. Then the data has to make it from the aggregator down to the licensee. And then it has to make it into my, you know, the list that I get sent or the, you know, the, the user interface that I'm getting. And I I'm three and three months behind, whereas you're guys using the MLS data, right? Like there's no flips that are, there's lots of flips that are hap that are being purchased off market. Many that are being purchased on market, which was the surprise to me more than I expected. But every flip is selling on MLS is selling on MLS. And as soon as it sells, boom, it's on your platform three months ahead of everybody else. And that under even that under contract data is it, that's literally real time stuff. And I think that timing advantage and the, the timing advantage and the information, the additional information that you have about that transaction is, I think a material differentiator between folks who are using data, but are only using the recorded data, which certainly is a big step better than nothing. But the closer we can get this thing to real time, obviously that's gonna be a competitive advantage in doing business. Scott Fahl (31:06) Yeah, there's no doubt. It's, you know, we talk about, you know, cost to value of something like that, and you know, what you're talking about. We're way under value, under cost, that compared to the value that we bring to the table, just for what you mentioned alone, just being able to see what's happening in, you know, near real time. But that has so many benefits, and the things we're thinking about when we talk about the future is, so what do you do with a property that just sold? Like who's involved in that? Who is the lenders that did the deal or are going to do the deal? And you look at, you know, fix and flips that closed in the last 12 months. Who are the lenders who lent on those deals, right? Who are the agents that were there? Who is the title company that people are using? And being able to gather that information and say, look, if you're gonna flip in this area, here's your team right here, right? And, you know, for somebody like Dominion Lenders, when people bring you properties and they say, hey, this is a good investment, you guys, you know, hit. you do your analysis, right? We wanna get to the point where you would send that property right from our system, right to a Dominion and have you guys are working from the same CMA and being able to make decisions very, very quickly on these things. And if you have clients that you've done, let's say 10 deals with, you know that you can, this guy knows what they're doing and you know what type of properties they buy. If they bring you something similar to what they already did, it's a no brainer for you. The risk is very low. when you have that client in our system and they have 10 properties that they did with you guys, we'll show them 10 more in real time, all times. So anything that pops up is like, hey, Jack Smith, here's another deal that we would lend out for you, right? Because we already know the parameters of it. So now you're sending clients, let's say you got a thousand clients in the system, you're sending them deals in real time that you're almost guaranteed to do alone. Craig Fuhr (32:51) Mm. Scott Fahl (33:03) So you're helping them find deals, which is something lenders don't do. And we're able to be able to make that connection and help you help them. It adds a value chain across the board. Jack BeVier (33:15) Yeah, yeah, it's a really interesting idea. Craig Fuhr (33:16) that is very interesting. Yeah. Jack BeVier (33:19) Have you won? What are your thoughts? You mentioned the marketplace. What's your thoughts on the on market versus off market aspect of this, right? Like you guys focus is certainly is clearly on the more experienced investors. There's still a lot of deals happening off market from a sourcing point of view. You mentioned the marketplace. How are you guys thinking about trying to continue to close that gap where, you know, that we're, where more deals are happening. through the information that you guys are aggregating. Scott Fahl (33:51) Yeah, it's well off market versus on market is always an interesting animal in a debate because the numbers off there are more off market deals happening. But however, trying to trying to filter out right you trying to filter out like because it happened off market. What happened was an inner family transfer. Jack BeVier (34:03) day at this moment. Scott Fahl (34:12) Was it really an investor buying this deal or somebody handed a property to somebody that they know? There's a bunch. There's dozens of ways that can happen. So the numbers are a little skewed. And also, I think because of the way real estate investing has been done for decades, this idea that you can't find a deal on the MLS because nobody has access to it in the way we do now, that people were just trained to just look for only off-market property. And so that is the majority of where you spend your time. Like Jack, before we talk, that's all you did. Right. And, you know, that was, and you know what you're doing. Like you're a total pro. So the guys like you out there who think they can't find deals on the MLS and they, and honestly, you really can't unless, you know, it's like what you, the, the scenario you mentioned in the last podcast where you know your area so well, a niche area that, you know, if something pops on the MLS, you know, immediately if it's a dealer. So in those scenarios, you would buy potentially something off the MLS. But so off market has been trained and just embedded in people's head. Like this is the only way you can find a deal. Interesting, like our analysis deals that happen on versus off market, the margins, they're paper thin, like the difference. Like you're not getting a better deal off market than on market. Those deals that happen, you're making the same amount. Craig Fuhr (35:23) Mmm. Jack BeVier (35:33) That feels, yeah, it's an interesting stat. Scott shared some data with me on this and I was really taken aback by it. I guess it feels right though, I guess in terms of, from an experienced point of view, in that the off market is no longer off market, right? Like all the public record, there's so many wholesalers that you're competing with and other direct buyers that you're competing with that, trying to hit a double or a triple is like, Craig Fuhr (35:33) That's it. Jack BeVier (36:03) you know, become next to him, you know, become next to impossible. Now it's just, it's off market and that you got to it before somebody else did. Maybe you're saving a commission, you know, but there's not, uh, I don't see a whole lot of triples and home runs being hit. Um, at least not on a regular basis, you know, Scott Fahl (36:19) Yeah, that's the nature of the beast, right? So it's, you know, where's the market at? How much can we make? Are we hitting singles all day long? Are we hitting doubles? Where's my threshold? What do I need to do as a real estate investor? You see a lot of beginners, you know, thinking home run or bust, and you see a lot of pros like you guys, you know, again, we track every investor in the entire country, so it's very easy for us to pull down and say, what, you know, what's. doubles all day long. Like, why not? If you know, just doing that scale is awesome deal. If you get triples, awesome. If you get home runs, awesome. But doubles all day long, everybody will take those. So I think that part's interesting and how many doubles are actually out there. There's a lot. You know, you start looking at the number of deals that are happening across the country. It'll surprise you. People will say they'll be in a market like us in Denver, every the investors in Denver think that that's the way it is around the whole country. It's it's kind of because they don't know any better. But then when they see that that's not the way it is, I think that's where people start their eyes are open pretty wide about the possibilities of, you know, using technology to help expand your horizons, your markets, and your pocketbook. Craig Fuhr (37:29) So Scott, I'm always kind of the cost versus benefit guy and you've clearly outlined the value and the benefits. I was checking the website last night and was kind of shocked. We spoke on the previous episode to the guys from Audantic and while they are a list provider and a very good one at that, great platform, not like what you're doing. And so, but it's a cost prohibitive product. for many guys, many folks who are investing who are not doing 50 to 100 deals a year. What I found fascinating about your product is it's incredibly approachable in terms of price, especially if you factor in, hey, look, if I'm going to get MLS access, I've got to go become a realtor. I've got to hang my shingle with some broker who may ask me to do desk duty. You know, and I just want to go out there and find crappy houses. And you know, and then I've got to affiliate with a with maybe a board as well. And so the cost of that is not insignificant. And then you have to add in the cost of the MLS as well, which sometimes obviously comes as your membership with the board, your product appears to be priced less than what just standard access to any MLS around the country would be. And I don't have to jump through all the hoops to become a realtor to use it. So maybe you could just speak to that and sort of your mindset behind all of that. Scott Fahl (38:57) Yeah. So what you mentioned, you know, it's getting a license. It's interesting. So we work with a ton of agents. That's, you know, our roots are there and we will continue to work with agents forever. And, you know, we mentioned, I think it was the last podcast where, you know, the agents kind of get frowned upon sometimes with real estate investors. And sometimes, you know, I don't blame them, but the idea that agents don't have access to the right tools to really help is the problem. It's not the agent, it's the tools. Craig Fuhr (39:12) Yeah, yeah, it was. Scott Fahl (39:27) So our goal is to really change and help that. But you're right, if you're going to go to an MLS, and what you're talking about, setting up, getting a license and a board and all that, that's one MLS. OK? There's 600 plus MLSs. You add up what it would cost you to do that. I don't think you could get licensed in all of those states within the next five, 10 years. It would just take you that long to like. Craig Fuhr (39:38) Right. think of the CE alone that you would have to take Jack. I mean, it's mind boggling. I mean, I think I'd rather have my eyes poked out with needles than every three years I got to sit down for 17 hours and in 600 different markets. Jack BeVier (39:56) Oh my god. Scott Fahl (39:56) Yeah, yeah, right. Yeah. Well, the idea, and this is where this comes to play, like our philosophy of keeping agents involved, helping them become trusted advisors. And if you want to buy a property in a state that you're not normally in or normally doing deals or not licensed with an MLS there, use an agent who knows what they're talking about. And an agent who has access to a system like ours, they know what they're talking about. They can help you out in major ways. Without that, you're really, you know, what are you doing? You don't know what's happening in that market. You're guessing, you're calling agents, hopefully they can help you out. And agents without a system like ours, it's questionable. Like they have niche areas, just like you're taught as an investor to get into that area. Agents are taught the same thing. Like they get this area mastered, and then you'll know when to be able to talk intelligently, even if somebody comes to you with an investment question. Outside of their niche area, they're not very good. And that's saying it nicely. With a system like this, it changes the game. So the idea, again, cost versus value, we are way underpriced. And that's intentional. So our goal is to help change the real estate investing game and be able to make it more accessible for the masses, sort of put a dent in some institutional-level buyers sort of model. And you know, have people empower them with intelligence and data and get them to the next level. And if you're already an investor that knows what they're doing, this is like your super. Craig Fuhr (41:45) I always wonder when Jack gets that smile on his face because I can see the gears turning. Jack, what, what are you thinking? Jack BeVier (41:51) I remember my, I think it was either the first or second call I had with Scott. And we were going through the platform and the capabilities and stuff. And he was kind enough to hop on a call. Cause we wanted to talk about some stuff on the lender side of things. And we're going through the feature set and I just couldn't help myself. I was like, are you guys are undercharging for this? Yeah. I told him, I was like, Oh, that's, that's not enough. And he's like, no, I know. We were, you know, we, we real estate agents first. That's where we came from. And I was like, yeah, investors are going to get a lot of value out of this though. Like, Craig Fuhr (42:08) Hahaha Scott Fahl (42:12) Yeah. Jack BeVier (42:20) Um, and, uh, yeah, I think, I think, I think it is priced very attractively, particularly for investors who want to use the full like nationwide, you know, feature set. Craig Fuhr (42:31) I honestly think it's price attractively for a guy who's just literally working in his backyard. But then if you want to go into other markets, the value there is far exceeds the price of this. And so, you know, you know, folks can go to your website, which by which again, by the way is a robust set of articles, just how to be a better investor. But the price, maybe you could just speak to that real quick, Scott, I don't want to misstate the price if Scott Fahl (42:59) Yeah, so we have two pricing models, and one's $150 a month, right? Which, you know, we, again, cost versus value. You do one deal off this, I pay for it for 10 years. And we're hyper aware. We're not, you know, ignorant businessmen over here, don't know how to price a product. We're doing this intentionally. We do want to help people out. If you buy it for a year, you get two months for free. So, you know, that's definitely worth doing. And then, you know, getting into the product, we... Craig Fuhr (43:10) Right. Scott Fahl (43:28) because we're smaller today, we do have people you can talk to help get the system set up and weekly sort of Q&A's that you can jump on and you know, our support team is next level. Craig Fuhr (43:41) From a sales standpoint, and we'll finish up, how are you bringing new users to the platform? Is it really, are you going out to the trade shows, or how, you know, other than people finding you organically, how are people getting onto the platform and finding out about Privy? Scott Fahl (43:56) Honestly, we've been what I call flying under the radar for a very long time. We're very selective on where we spend marketing dollars. We're not trying to get everybody in the system today. We know that we have some work to do, especially when we're talking about newer people who need an education or, you know, are doing their first deal. There's some work to do there, but for the best of the best, like we really want to be able to develop partnerships B2B. Things like lenders who have clients and being able to help them support their clients and get them in the system so we can create synergies that make this thing faster and more efficient. And that is a huge benefit to us, the lenders, the investors, the agents, it works for everybody. But it also allows us to get what we call the best of the best in the system and get the feedback from them. So we can strengthen the platform, the data, then hear the needs of what's... the best investors want. So when we do go out to the rest of the market, we can be solid across the board. So you can start with maybe not ever purchasing a property before, but you can grow inside of our system. So maybe every feature is not for you today. However, as you grow and expand, there they are. And then when you're ready for hard money, here's your guys. When you're ready for you buy an Airbnb in Hermosa Beach, here's your agents. And so that's the ultimate goal. Craig Fuhr (45:23) Check. Jack BeVier (45:25) No, it's very cool. I mean, I'm obviously very impressed with the product and, um, it's been great working with Scott and I'm a big fan of what they're, what they've built and what they're going to continue to grow as their platform becomes, you know, more and more place where investors interact and more of the best deals get done. So, uh, Scott really appreciate you having on today. It was an absolute pleasure. Thanks for letting us steal so much of your morning today. Craig Fuhr (45:51) Yeah. Scott Fahl (45:51) Yeah, of course, it's always fun. This is you know, we're very passionate about this. So anytime I can sit down and talk with a couple smart guys about the future of real estate investing, I'm all about it. Craig Fuhr (46:02) Scott, tell folks how they can find out more about Privy. If they are larger investors like Dominion, how they might be able to contact folks on your team to maybe strike up partnerships. Yeah, tell folks how they can get in touch. Scott Fahl (46:15) Yeah, so the easiest thing to do is if you're interested in some of the benefits that we had in purchasing a software membership, you just go to our website, it's privy, P-R-I-V-Y dot pro P-R-O, and just sign up and you'll see immediately beginning benefits in minutes. If you are B2B, most likely we'll find you before you find us. And that is sort of a newer thing we're doing and being very selective on who we are. to do business with, but you're able to, you know, maybe we can put something away for them to contact me in some way in the chat or something like that. But if you want to do B2B, you can contact me directly too, which is scott, S-C-O-T-T dot fahl F-A-H-L at privy, P-R-I-V-Y dot pro. I'm happy to have any of those conversations. Like I said. very passionate about this stuff. And if you want to have a conversation about it or you want to learn how to do business with us, please reach out. Craig Fuhr (47:21) Folks, data is everything for real estate investors, but great data and that fingertip access to it is how we are going to differentiate ourselves as better operators, I believe, over the next. year and the years to come, especially as technology becomes even more accessible for great platforms like privy and building it out. Scott, I can't thank you enough for taking the time. It's been a fascinating conversation. The platform that you have built is so slick. And just can't congratulate you enough on the fine work that you and Doug Hayes must have done at the at the outset of this thing. So I'd love to have you back on the show sometime as things develop. You know, new things develop. Scott Fahl (47:57) Yeah, yeah, I appreciate that. Craig Fuhr (48:04) And even to talk about the market in general, it's an idea that I'm going to talk to Jack about. It's just having really smart guys on to talk about what they're seeing in the market and sort of what they're seeing coming down the pike for better investors. So we'd love to have you back on sometime. Scott Fahl (48:20) Yeah, it'd be my pleasure. Craig Fuhr (48:21) Well, folks, thanks for tuning in. Jack, another great episode and or two. Thank you very much. Jack BeVier (48:29) Always a great time. Craig Fuhr (48:31) This is Real Investor Radio. I'm Craig Fuel, Jack Bevere. We'll see you next time.