Scaling with PropTech with Marshall Beck and Dan Spillane | The Real Estate Investing Club #34

Scaling with PropTech with Marshall Beck and Dan Spillane | The Real Estate Investing Club #34

Gabriel Petersen 0:02
Hello and welcome to another episode of The Real Estate Investing club. Place investors go to learn tips, tricks and stories from other investors in the field. If you feel we provide value to you go ahead and hit that thumbs up, share whatever it may be. And if you’d like for us to cover a specific topic, let us know in the comments or reach out to us on our website. Today we have a very special guest. So buckle up, grab your pen and paper and enjoy the ride.

All right, we are back. Marshal Dan. Thank you guys very much for joining How you guys doing today?

Marshall and Dan 0:42
Hey, we’re doing great doing great. Yeah. Thanks for having us.

Gabriel Petersen 0:45
Awesome. I love it. To get started. Why don’t you guys give yourselves a little bit of an introduction, who you are, where you’re from and how you got started in real estate in the first place.

Marshall and Dan 0:57
Sure, yeah. This is Marshall speaking here. So I got started as a broker agent about five and a half years ago out of Chicago and the surrounding suburbs. So I’ve been mainly practicing as a broker there. Were from I’m from Chicago originally. I’ve also got I had my license for a little while in rural Colorado and practice out there as well. And then in the last couple years, I developed this platform called broker assist. That has added a lot of value to agents and brokers for referral networking nationwide, as well as an expanded gig economy for real estate agents to get coverage on any deal specific tasks they might need from fellow agents and brokers and their brokerage firms. So it’s been a little bit of brokers, a little bit of technology and investment as well. And this is Dan I have 20 plus years in real estate. I was always interested in real estate as a kid. My grandfather was a big real estate investor in Chicago and he taught us the value You have invested in real estate. And over the years, as I grew my investment portfolio, I knew I needed to add real estate. So 20 plus years ago, I bought my first property, single family home. I did rehab and then got addicted to that can have done multifamily and other large structures as well. So it’s been a 20 plus year fascination with real estate. I’m still learning a ton. And also now in real estate development around the software development. And it’s been, you know, really wonderful. I have a background in technology. I’ve worked at IBM for 20 plus years, I’m the current chief Revenue Officer of nerdery, a major digital innovator, and transformation company, with companies like Google and Verizon and others as our clients. So the real estate markets always looking for new invention. And when Marshall came with this idea around real estate technology, I thought, Yeah, let’s do it. So I’m the founding advisor. broker says, and as well,

Gabriel Petersen 3:02
I love it. So you guys, I mean, between the two of you, you guys kind of spanned pretty much everything that you can do. Except for it sounds like lending in real estate you got on your side, you’re you you’re a broker. And then you also started broker assist, which is prop tech. And then Dan, it sounds like you’ve been buying holds and development and rehabs for 20 years now.

Marshall and Dan 3:28
Yes. Yeah. And I just started my first investment property recently at three flat in Colorado. So it’s been you know, quite an interesting project learning will the handyman work there to

Gabriel Petersen 3:41
take in real estate here. Nice. Nice. You’re doing the work yourself.

Marshall and Dan 3:46
A little bit here and there. Learning as you go.

Gabriel Petersen 3:51
Yeah, yeah. The first one is always one, that’s for sure. All right.

Marshall and Dan 3:57
So I learned a lot.

Gabriel Petersen 3:59
So so the thing that kind of brings you two together is, is the prop tech it is the the software that you guys are developing together. You guys each have your own separate businesses. And then you know the thing that ties you together is that prop tech? Is that about right?

Unknown Speaker 4:14
Mm hmm. Yeah, that’s right. Perfect. I love it.

Gabriel Petersen 4:18
So I kind of want to, we all know that like real estate it, there’s a spectrum or a process that happens when you start investing. And the very beginning of that, that sequence is finding the property. So what I really how I really like to start these out is figure out, you know how it is exactly. You guys go about finding the properties? Marshall? It sounds like you’re more on the broker side. So this is more a question pointed towards Dan.

Unknown Speaker 4:45
Mm hmm. Yeah.

Marshall and Dan 4:47
Yeah, so it’s a great question. I think the first thing to do is understand what you want to invest in as far as your portfolio isn’t a single family home is it a multi family Emily, is it a next user? Is it a commercial only, and that’ll help understand what the kind of return you expect on it is. And obviously, you know, I kind of did in reverse order, the highest yield would be a single family home that you want to go for. And then the lowest risk has been commercial, honestly, up until COVID, which I think has changed significantly now with much commercial space available and having significant challenges in that area. So you first have to know what that risk score file looks like and return and then really understand what area so one, what type of investment then to what area you want to invest in. Are you comfortable in a remote investment that you would be likely having a manager work on the property for you leasing the space etc? Or would you rather be more hands on and closer to that asset that you’re going to invest in? I think location is really important and And then the third is do you want to do it by yourself or with partners? And those are the top three things that I look at as a piece of real estate investment is, again, what type of property we’ll help to determine their return. Where that locate where that investment will be. And then again, will you have a partner or will you do it by yourself?

Gabriel Petersen 6:24
Gotcha. I love it. And partnerships is definitely one of the most the most the thing that brings the most reward to a business and can also be the thing that kind of tears a business down when you don’t have a good a good partnership set up. Is there any piece of pieces of advice you can give on on the end of partnerships? I’m sure if you’ve been in the business long enough, you’ve seen good partnerships, bad partnerships. So kind of go into that and how do you identify people that you really feel like what makes a good partnership?

Marshall and Dan 6:57
Yeah, that’s a great question. partnerships. If you decide to go in to real estate, investment with a, with a partner, you’re really gonna have to decide on what each of your roles are going to be. I’ve seen in my experience, individual investments with silent partners, those honestly tend to be the best because you’re going to continue to be the decision maker. And then that person is put the money in and will be a silent partner will not control the decision making in that investment. They may have some exit terms that you’ll want to agree to. But those kind of work really well. Because they trust who you are. They trust your experience. those tend to be for more mature investors that have the ability to gain capital from sources like friends, family, and maybe even qualified investors too. I would say the next one that I think more is more common are people that have shared partnership decision making shared care requirements, those tend to be the hardest, because you do have to come with a expectation of what each each roles are going to be. And if you’re bringing bringing both skill sets are similar, I think that’s a challenge because then you start to head but but if one wants to take care of the development of the increase in the value of property another wants to handle the business side of it, such as paying the bills, make sure the rent is paid and identifying the right tenants, that tends to work out really well. And that partnership should be spelled out even if it’s a really close friend or family member, I would highly recommend that there still be a partnership agreement that’s very clear in each of your roles and responsibilities. And then I’ve seen partnerships as fractional partnerships to or someone so say, look, I, I’m just going to invest in a portion of it by I also want to say so in it. Now, it could be where you have three or more investors or Come in and identify a property together. Those tend to work out really well, when they have different skill sets, bringing some may bring more capital than others, others may do more of a hands on work. And others may, you know, do more of the advising from a distance. Especially having someone local close to that property may be the reason why you might want to go to a third investor, if there’s two primary investors that are bringing most of the money and skill, but then want to have somebody that has some skin in the game, if you will, maybe a local investor that’s closer to the property. So those are the types of partnership agreements that I’ve seen work really well. And when you don’t set the expectations up early, they can go wrong.

Gabriel Petersen 9:43
Gotcha. I love that. And expectations are definitely key. And it sounds like it all kind of boils down to how decisions are made. And really, really, you know, getting in sync on how decisions will be made whether one person will be silent, who will be doing what Getting that all upfront before you actually proceed into the partnership?

Marshall and Dan 10:04
Yeah, absolutely. And then have a clear understanding of the financial outcomes that you desire as investors. So there’s not some, you know, mismatch on something happening, and then someone being unexpectedly, you know, wanting to exit the partnership, which should really jeopardize the overall investment.

Gabriel Petersen 10:23
Absolutely. So this one applies to both you guys. I mean, we were talking about the very beginning of the of the process of, you know, investing in real estate and that is finding the right deal. And even before you are, I guess, it would be after you identify your criteria, you have to start bringing in the leads. This is applicable to both, you know, being an agent broker and an investor. So how do you guys go about bringing in leads for your businesses? Do you do digital marketing? Do you do yellow letters? How is it that you go about finding those?

Marshall and Dan 10:57
Yeah, I mean, traditionally A lot of my businesses come from referrals. So extending, you know, through past clients, family and friends and letting everyone know, right, hey, I’m in business, you know, calling me when you need something, I think that’s a huge part of our business is under leveraged by a lot of agents and brokers, I’d say to you know, we, when it comes to finding investment property, I mean, a lot of it is some spread, you know, spreadsheet work, right. And looking at cap rates and all sorts of metrics, rents, and the sky, you know, finding out all that information and and following the MLS very closely, is really how I’ve done it. I was on this first property of mine. And then, you know, when it comes to our, you know, technology business, it’s been a little combination of everything that’s a whole nother beast when it comes to marketing, especially as a double sided marketplace that we’re developing. You know, being out I think my, the biggest success we’ve had with that and even as a broker agent is the shaking of hands, like I said, putting yourself out there going to the conferences going to the networking events locally and nationally with NAR and and shaking hands and getting to know other investors. And they may have the next opportunity, right? And the that shows up. So that’s where, you know, networking has played a huge role in our success whether it’s with broker system, this technology as a broker agent, as an investor finding the next big deal I mean, just hearing Colorado even just said music or no, it was a film festival and telluride. I’m meeting a big time real estate investor who’s out of Utah and and others, you know, developing and growing our network there for further investment capabilities with angel investors. and such. So I think that’s a big part of it is just putting yourself out there and learning in that process for me at least.

Gabriel Petersen 13:09
I love it. Yep. And I think your words have been echoed across every single episode I’ve had is that networking and relationships pretty much are the crux of real estate. And it’s, it’s not only Yep, it’s not only the way to, to further your deals, it’s also the way to find the deals. So I love that you met. So I want to jump on here and switch gears just a little bit. You guys mentioned that you are, you know, the thing that ties you guys together is the software that you’re developing. And so I want to dive into that just a bit and understand, you know, what it is that your software does and and how it can be, you know, investors and there’s brokers that listen to this podcast as well on how they can utilize that platform.

Marshall and Dan 13:54
Sure. So broker assist is the new collaboration and referral network. For real estate agents and brokers, so we have essentially built out what is considered the gig economy for real estate professionals. So similar to like all these good economies out there, Uber and grubhub and all these things where, you know, we have these double sided marketplaces, people seeking help other people, you know, pitching in right and delivering a service. So, with real estate agents and brokers, what we’ve found working as realtors ourselves, there’s this highly disintegrated system in place when agents and brokers need assistance from each other for last minute showings, inspections, appraisals, final walkthroughs, any deal specific tasks, open houses that come up and maybe they’re out of town or across town and can’t make it something comes up last minute and we need to delight our clients on demand. All right, and typically mobile first as realtors we have moved to a mobile first Technology across our different platforms and, and like whether it’s CRM and whatnot. So we put it all together in one spot where you can seek assistance in the gig economy, hire other fellow realtors within your firm, if you want to keep it in house, that is, of course available through our white label solutions. And then outside of firms as well for other virtual firms that exists nowadays. And then, the other side of it is the referral networking piece, which is nationwide. We do not charge any Commission’s on our referral networking, we’re simply a connection source. So agents and brokers can post for on demand assistance on a referral, meaning Hey, I’m in Chicago as a referral going to New York and I’d like to get connected in my meeting with that client who is moving in 45 days now that we’re under contract it needs to find a place so we don’t lose out which typically we lose out. Big time on those referrals because our clients go find an agent, you know, on Zillow or some other platform and we don’t ever get that 30% cut of that referral commission. So it provides that on demand mobile first technology for that networking yet again, networking, a huge piece of real estate, whether you’re, you know, an investor, or broker owner agent, it’s essential. So we put it all together in one platform payments are integrated if you’d like to pay directly to the app, because what we’ve also found the big sticky point is the, you know, chasing down checks and cash still, that have happened in one spot in one app. And then of course, reducing our email noise, which is at a brokerage firm, a lot of our white labels, that’s a huge selling point is that they get rid of so much email noise from all these jobs, and the systems that agents you know, partake in and as well as the referral piece that we send emails. out on all the time. So there’s a lot to it. And, of course, you can visit our website for more on that broker says, calm

Gabriel Petersen 17:10
Wow, I, I really liked that idea. So it’s a gig economy for the real estate industry. And this I’m assuming this can be applied also to, you know investors who are doing fizbo who are trying to sell their own their own houses and you know, so many times you’re on the job or or something comes up and you just can’t get to the property when you need to be showing it and so they can use your app to find somebody to go out and basically step in to where they’re they’re kind of dropping the ball. Is that correct?

Marshall and Dan 17:40
Yeah, you know, we have definitely looked at expanding it to that. I mean, currently right now, when you sign up, we’re asking that everyone is licensed real estate professional. So if you are great, yes, if you’re happen to be also licensed and an investor Absolutely. And if you’re not licensed, feel free to shoot us an email support at broker says calm and I will set you up for sure for investors we’re willing to customize it in that fashion because it’s something we’ve we know is a need. We haven’t seen a huge need for yet because we’re only in the marketplace now for about five months so but we’re we’re definitely open to expanding that. I love that idea.

Unknown Speaker 18:18
Cool. Well, I hope your your app see

Gabriel Petersen 18:21
success, because I can definitely see the potential there. I’ve I’ve tried to sell my own houses before fizbo style. And things come up. And it would have been nice to have that kind of app in my back pocket at that point.

Marshall and Dan 18:34
Right. Yeah. Virtual Assistant. Yeah.

Gabriel Petersen 18:39
I love it. So we try to keep these episodes to around 20 to 25 minutes. So we’re running, running up to the end here so quick. But before we do, I like to hear a little bit experiences from the two of you. We love hearing stories from you in your real estate career. And we all know that real estate, it’s a roller coaster. You got your ups you downs. So kind of take us to one of the one of the periods in your career that was like it was it was the most difficult one of the one of the troughs that you’ve experienced. And what was the lesson that you pulled out of that?

Marshall and Dan 19:14
Yeah, this is Dan, I could tell you the trough would definitely been 2008 when the real estate market collapsed on itself, because of the mortgage crisis. And what that did was remove both supply and demand, which is really interesting. And it really dried up the sources of funding as well. So properties that were to have been refinanced, because say they were commercial loans. And during that time, were nearly impossible to get financing for and so many people have, you know, to lose their commercial properties, even if they were cashflow positive and, you know, returning grade cap rates. Banks just weren’t willing to lend so Unfortunately, myself and others in that space lost, you know, significant amount of capital, due to not only the decrease in the, you know, overall valuation of the property, but also in the ability for you to continue that funding arrangement with banks. So, it was definitely a struggle. What I learned from that I learned from that was, you know, really stay very close to the lender and understand early on what their capabilities are, and if it is going to be a portfolio loan, and kept in their house, what that looks like and what their requirements of capital are going forward. Because, you know, there always there always be a dip in real estate every 10 to 20 years. So understanding what those needs are from your capital providers super important. And when that loan comes, knew what your partners are willing to do to because they may also be strapped for cash and look for that cash to come out of that property. So that was the lesson I learned stay close to your your lender and be very tied to your partners on each of the deals because that will become the task, that partnership and what you’ve come to agreement on. And then the high points of course, we’ve been buying at points that are a lot low, right? Even though they’re very tight on capital, because you stay close to those bankers and people to provide the capital and other investors. They said, You know what, let’s go out and look for something. Those are some of the best times so even the word times, yeah. All right, so even the worst times you can turn around and say, hey, look, let’s take advantage of this. So those are my two, huh?

Unknown Speaker 21:51
I love it. I love Yeah, no, I

Marshall and Dan 21:54
yeah, I can pitch in here a little bit. I mean, I haven’t been in the investment side. long. I mean, right now it’s to the high is the low rates, like I mentioned there, I, it was pretty exciting. I’m really pregnant in the midst of all this craziness. But, you know, I say, the challenges I’ve had as a broker and then also with this technology business in the last year, year and a half is more so around building the right you know, the network, right, and like I said, putting yourself out there, but what I’ve learned is just persevering and never giving up on those email, follow up, phone call follow ups. I have, there are a few instances where I followed up probably for eight months, regularly, and it finally stuck. And we got an amazing, you know, customized white label opportunity that we’re, you know, working so there’s a lot of just perseverance involved in real estate of course, whether it’s buying and holding right and not getting And then just persevering through the ups and downs in the market, as well as just in, you know, that next big deal that you’re trying to secure. So yeah, that’s probably what I have from my experience.

Gabriel Petersen 23:17
I love it and eight months that is, first of all, kudos to you. Because following up for eight months, that’s it’s a hard thing. Just to remember that that long, it’s very difficult thing, but right. Yeah.

Marshall and Dan 23:29
It was even before the businesses launched.

Yeah, I just, every time I followed up and never heard back, I would just move it to the next month. And like, just, you know, every three to eight weeks to a month, I would just keep moving it And finally, you know what they’re like, Hey, thanks for Oh, no, I got been doing it for a year now.

Gabriel Petersen 23:49
That is great. That’s great. And, I mean, it’s absolutely true. we’ve, we’ve seen it in our own business where we’re following up with, you know, sellers and one on one point they’re like, Yeah, well, we’ll think about it. Check out with us in a week. And we check up on a week and then a month and then another month. And you know, I think the last one is our longest is six. So not eight, but it’s pretty close. But somebody did it. They wanted to go home. Yeah, exactly. pays off. Yep, yep. Yep. All right. Well, before we close out here, why don’t you guys just give us one piece of advice. You know, you both have been in the business for quite some time. And so you’ve you know, you’ve been through the ads, you’ve been through the downs. So if you were to go back to yourself, starting out, however many years ago and just say, you know, a one liner, one piece of advice, follow this to to see success in the future. What would that piece of advice be?

Marshall and Dan 24:49
Yeah, my piece of advice is to stick to your values. And that means, you know, personal values as far as what kind of deals you want to get into And then also your values as a business person. Follow that gut instinct around your values, because that’ll be the absolute critical part of when things go wrong, that you stick to those values. You’ll be able to rectify it. Mm hmm. Yeah, I agree I was gonna initially the first thing that comes to mind is very similar. Follow your heart. I think that’s a whether you call it your heart, your intuition, your gut, whatever it is, whether when it’s building those partnerships, the beginning and, and following through that with your all of that persevering, I’d say, you know, really, I love this quote from Napoleon Hill’s book Think and Grow Rich. Winners never quit and quitters never win. And I always remember that when it does get tough and doesn’t seem like you’re moving anywhere. And then you know, just around the corner with that next, follow through So, yeah, those two pieces of advice I’d say have worked out worked some wonders for us. So, yeah, my

Gabriel Petersen 26:12
values and never give up those two pieces of advice that you can’t go wrong with.

Marshall and Dan 26:18
Yeah, for sure.

Gabriel Petersen 26:20
So you guys, I’m sure I can speak for everybody listening and watching. We appreciate you coming on here and sharing some of your wisdom. before we sign off, though, if somebody did want to get in contact with you, what would be the best way for them to do that?

Marshall and Dan 26:36
Yeah, absolutely. You can email me directly at Marshall with two L’s at broker assist calm and yeah, and that works in check out our website as well. Their broker says calm if you have any questions on that I’d be happy to, you know, discuss and then I can forward anything to Dan as well. So

Gabriel Petersen 26:59
all right there Go. So check out broker assist COMM And I will also put the his LinkedIn profile in the show notes. So if anybody listening or watching wants to get in contact, go there and get out to Marshall and he can he can get you in contact with Dan. Again, thank you guys very much for coming on. We really appreciate it. And for everybody listening and watching, we look forward to seeing you guys on the next episode.

Marshall and Dan 27:25
Wonderful. Thank you. Thanks for having us. Thanks, Jason. It’s wonderful to be here. Thanks. Good.

Gabriel Petersen 27:33
Thanks for joining us on The Real Estate Investing club. If you feel we provide value, we would appreciate it if you hit that thumbs up, share with your friends online, whatever it may be. If you’d like to share or partner with us on an investment deal, we are always looking for quality projects, go to www dot real estate investing club.com get contact with one of our partners. Otherwise, I hope you guys have an absolutely fantastic day and I look forward to seeing you on the next episode.

Transcribed by https://otter.ai

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