Ep. 9 – Better Buyers Means Better Offers, with Eli Fisher from Audantic
About Eli Fisher
As a lifelong tech evangelist, Eli currently serves as the Chief Sales Officer for Audantic. Having joined the Audantic team in 2019, Eli saw Audantic as the true intersection between artificial intelligence and real estate investing.
As an entrepreneur and noted public speaker, Eli works with large investors from across the country to help them optimize their targeting data with respect to their acquisition and disposition process.
On a daily basis, Eli meets with clients and provides critical insight as to where clients are losing deals within their revenue funnel via the Audantic Attribution platform LiveLoop.
Prior to joining Audantic, Eli co-founded an online platform that united Fortune 500 companies with best-in-class talent for their hiring & human capital needs. With clients ranging from Johnson & Johnson, to KPMG, Eli helped numerous private and Fortune organizations develop and implement scalable talent strategies to accelerate their business.
A graduate of the University of Montana, Eli currently resides in Seattle with his wife & two sons.
Jordan Fleming and Eli Fisher, Chief Sales Officer of Audantic, sit down for a dynamic conversation about data, regression analysis, and how consistently finding the right buyer means more money in your pocket.
“The problem that we solve in the industry right now is we help our clients really hone in on who has the highest likelihood to sell off-market at a deep discount.” – Eli Fisher
Eli talks about the background of Audantic, and how regression analysis – famously applied in baseball and investment banking – needs to make its way to the real estate market. Having tons of data doesn’t help you if you’re wasting all your time time wading through the buyers who will never sell. Eli talks about the ways that real estate investors can really hone in on the right buyers instead of every buyer.
As Eli points out, “You can have the best data in the world, it’s not going to make a difference. It’s the equivalent of giving me the keys to an F1 car. Yeah, it’s cool. But I didn’t go to race school, what’s the point?”
Jordan and Eli break down why great process and operations can be the difference between stagnating and growing as an investor. Sometimes it’s important to convert the leads you already have, rather than hoarding new leads.
Plus, That Real Estate Tech Guy Fast Five gets, well, real! Eli talks predictive data, who’s paying the most in the marketplace, and more!
Transcript (automatically generated)
Hey, everybody, it’s Jordan Fleming here with another That Real Estate Tech Guy podcast. Welcome Eli Fisher from Audantic as my co-pilot for the episode! Why don’t you give an intro of yourself and to the company.
Absolutely! I’m the Chief Sales Officer for Audantic. We’re a data science company. The problem that we solve in the industry right now is to help our clients really hone in on who has the highest likelihood to sell off-market at a deep discount. We are able to really efficiently help people’s marketing focus on the best class of target in the market. We hear it every day, ‘people check all the boxes on surface, and yet, they’re never gonna sell to me.’ So that’s really a problem that we solve here.
Absolutely. There’s nothing I hate more than the spray and pray mentality of buying a big ass thing and throwing it at the wall, hoping something sticks, versus the targeted approach. That’s going to mean that you maximize what you spend, and you maximize your time. Let’s dive into a bit more about why your approach is better? I can’t wait for people to hear it.
One of the easiest ways that I’ve explained to people what we do without getting overly technical is I just ask ‘have you seen the movie Moneyball?’ Some people say, yeah, the Brad Pitt movie. Billy Beane in the 80s – What did Billy do? Billy basically used math and statistical regression analysis to really optimize which player should go in what spot. Or if you’re a fan of Ray Dalio and the work that he’s done on Wall Street, Bridgewater capital. Ray really distinguished himself in the early 80s by doing regression analysis. That’s how Ray was able to effectively beat the market.
We’re no different. We take regression analysis, and we apply it to the real estate market. It offers a couple real fundamental differences than the conventional approach. Every day I talk with investors across the country, large, small investors, and I hear the same frustrations because everybody has access to pretty much the same data. If everybody has access to the same data, how do you delineate what a good target versus a bad target is? And for the longest time, people would deploy what is known as a stacking approach. What I will see people do is buy an equity list and stack it against a non-owner-occupied list. And maybe we’ll put in some zip code exclusions if you want to get fancy, maybe you’re putting in an age barrier, 65 and up. And the thing is, it works.
But the downside of that is you also spend a lot of money marketing to people that check all the boxes on the surface that are never gonna sell to an investor. And that happens because with the stacking approach, you assume all things are equal. Now we talk to real life operators and they’re saying ‘I have a set of 20,000 people and Target 5000 is an awesome target, Target 10,000 is absolute trash.’ But with the stacking approach, you treat it all equal, so it’s very, very problematic.
What we do is look at every single real estate transaction in the market, monitor that daily, ingest that daily and we feed it to an algorithm. What the algorithm does is it says, okay, in a given market, these are all the transactions that occurred, here’s all the properties that sold conventional. Here’s all the ones that sold distress to an investor, what type of person and product sells to an investor.
But then you have to go a lot deeper than that, because not all investors are the same. If you’re a fix and flip guy, you probably need CapEx in the product. That’s fundamentally different than how a hedge fund or an iBuyer that acquisitions at 98 cents on the dollar will review a product in a transaction. So there’s a real important part of the nuance there. Yes, they’re both investors, but they’re playing fundamentally different games. And so the algorithm really decides and looks at it based on: these are the people that are most likely to sell off market at a deep discount to a wholesaler, or a fix and flip guy, as opposed to a fund, and then we give that data to our clients for their marketing purposes.
You’re putting yourself a mile ahead of the race, without even doing anything. That has an impact on everything: your success, your return, the amount of money you’re investing. If you’re going to invest in marketing to 80,000 people and you’re gonna try and pray, or you’re going to target that marketing down to 8000 people and really run the table. That’s a conversation that if you’re not having with yourself, you really should.
Yeah, it’s really kind of its two sides, right? You have to have best in class data. But best in class data is only so good. It’s really incumbent upon the operator; you have to have great systems and processes. Because if you don’t, you can have the best data in the world and it’s not going to make a difference. It’s the equivalent of giving me the keys to an f1 car. Yeah, it’s cool. But I didn’t go to race school. So what’s the point? And I think there’s a lot of similarities there.
One of the things that I think is really exciting as we see technology come in and start to influence the industry, is how can we become more efficient in our operations? Because you look at any market as it progresses over time and efficiency is always at the forefront. One of the things that we do to help our operators understand and become better at what they do is we’re the only people in the industry that publish attribution. Now as a marketing guy, I know you can appreciate this. So what I mean for those of you that aren’t familiar with attribution is that we generate a data set and say, ‘Hey, these are the people that are most likely to sell off-market at a deep discount in your market.’ After one quarter, we publish those results to an online portal, it says, Okay, we predicted these 3000 transactions would occur in your market. How many of them did you get? And what it allows the client to do is really understand the relationship of conversion to their revenue funnel. Because all of a sudden, people will say, ‘nobody called me this month.’ Well, sounds like you have a marketing conversion problem, as opposed to a data problem. Because this product traded in the market, it just didn’t trade to you.
It also allows them to understand the downstream relationship of okay, we talked to this many people, but we didn’t win the deal, it went to this competitor. It gives them the ability to ask why. Did my competitor pay more? Or was it a follow up issue? Did the acquisition guys just not follow the process? Or maybe the process itself is flawed from a follow up standpoint? And I think that is the future of where this industry is going. How do we leverage data and analytics to get better at what we do?
I couldn’t agree more. I had a podcast conversation where we talked about how much we wished people would not just track the cash they made from each lead source but also track the steps. Of course money is important but if the market tightens or the economy turns, efficiency becomes more important than when money’s flowing.
Yeah, we’re talking about operations at the end of the day, operations wins. But operations is not sexy. People say they want more deals, and they equate that with more data, more leads, but they’re failing to look at all the stuff they have in front of them right now. What happens if you just improve conversion on that? Because if you spend more money, buying more data, it doesn’t necessarily mean more leads. You’re literally spending the same or more money to accomplish the same thing, which is just compounding the inefficiencies, and it’s not a sustainable system.
When we start working with clients, I ask them a couple basic questions. This last 90 days, how many people did you market to, that sold to a competitor, never contacted you? And nobody knows the answer to that question. All they look at is what came into my funnel, and what I converted on. But that’s called House conversion and that’s a flawed metric, because what really matters is what happened in the marketplace. It’d be like if you and I are stockbrokers and this last month we got a 10% return. Feeling good about ourselves, right? Meanwhile, without knowing it, the market went up 30%. All of a sudden, we didn’t do so hot. I just let people know: ignorance is bliss, unless it’s your money.
If you start to understand your relationship of conversion tools, the total market of all the stuff you’ve touched, but you’re failing to convert on, then you can take the steps to become better and improve conversion on both marketing and on acquisition. If you just make a 1% improvement and conversion at the top of your marketing funnel, what is the downstream effect of that? We’re talking hundreds of 1000s of dollars, potentially millions of dollars, depending on the size of your operation?
Everybody’s got an investor journey, some people are at the start of the journey and some people are at the mature end. What is the level an investor should get to before they start looking in your direction? If someone is relatively new but has the hunger to do it right, can they bring you on board?
Right now we service the top 1% of investors in the country. For the individual that you’re talking about, that is dialed in, and focused on success, I’m going to present a different dynamic. One of the things that happens when an investor starts out, is they’ll buy niche lists, whether it’s code bios, BK, probate, you name it. That’s great, but at the end of the day, we want to buy low, sell high, right? One of the things when people start off that gets overlooked is who is the end user of this product that I’m gonna unload to? There’s usually not a cohesive focus on establishing robust buyers out of the gate, and I think that’s fundamentally flawed.
People get hung up on needing to get a deep discount but there’s only so many deep discount deals available in the marketplace. But what if you have buyers that will pay you more? If you look at the largest wholesalers in the country, they operate differently, because their focus is on buyers. If you can only pay 60 cents on the dollar, and I can pay 80 cents or 90 cents on the dollar, because I have better buyers, I win all day long.
We have a platform called Buyer Sonar. It shows all of the investor transactions in any MSA in the country, who is buying and who’s paying a premium. So I would challenge that person just starting out, yes, you have to get the deal. But your life will become so much easier if you already have a better class of buyer. Instead of fighting it out with all these other people, worrying about getting 50 cents on the dollar? I could come in, and I can offer at 85 because I have a better class of buyer. Our platform allows people to do that. If you want to build a sustainable machine that continues going on, there needs to be a heavy emphasis on buyers right out of the gate.
If you’ve got better buyers, and if you know who your buyers are and what they’re interested in, you can be strategic in how you look at deals and what you’re putting in front of the right people.
Because we’re a data company, we see every transaction, every investor in the country. And I can literally go into almost any MSA in the country. And it’s interesting, you plot the transactions of who buys the most, and who pays the highest, right? And it’s always a U-shaped graph. On the left hand side you have people that have done one to two investor transactions. One of our clients affectionately named them the HGTV buyer. This is an individual that on a rolling 16 month basis has typically done one to two transactions, they don’t put it in an LLC, because they don’t know any better. And they typically pay 90 cents and up on the dollar.
On the other end of the spectrum are your funds, your ibuyers, your prop tech companies, and in the middle that bottom of the U, that is where established investors are at. If you think about it from a market standpoint, where does the opportunity lie? Well, because we’re in a contracting economy, the funds, the ibuyers, that is not a viable exit path for most wholesalers anymore. But those onesie twosies, those HGTV buyers, they have not slowed down.
Three weeks ago there was an article in the Wall Street Journal talking about laptop landlord; these are people that are looking to buy properties. And why do they want to do that? Well, there’s a fundamental distrust of the stock market. So they want to put their money into something that is a tangible, hard asset. The great irony in that is, guess what Wall Street’s doing? They’re buying up as many single family properties as possible. So where does the opportunity live? These people on the far end of the spectrum, your HGTV buyers, have not slowed down. They continue to pay the premium, then it becomes incumbent on the operator to target those individuals. And that is how you will make a lot of money, but also afford yourself the flexibility of not having to worry about getting this at 45 cents on the dollar.
I was talking to Paul from TwnSqr the other day about this concept of valuing buyers and how much that is a critical part of a successful business growth. I think you’re backing that up.
When we talk about companies that are helping to move the ball forward, with respect to technology, you know, selfishly, I placed us in that category. But I really respect Paul and the guys at TwnSqr, because one of the things that they’ve done is they’ve built a platform that is very focused on data integrity and security. They do not share people’s data. That’s really, really important. It becomes even more important moving forward. But because I would say this industry hasn’t historically focused on data and tech, I’d say it’s lagging behind what we see from a lot of stuff coming out of the valley. If I was to say a group that is doing it right, I would definitely point to them.
I think you can relate as well, because you built a tech company here, you deal with a large amounts of data. Maybe you could share with the audience some of your thoughts on that, because that is something that gets overlooked. We look at it because there’s a right way to do it, regarding data and privacy laws. But It’s one of those things that oftentimes goes overlooked.
Paul from TwnSqr has been on this podcast, and I definitely recommend people listen to it. A lot of our thinking as a platform is around data integrity, security, and compliance, and making sure that we are always promoting best practice, which historically in our industry is not always at the of everybody’s list. Best practice ensures that when you do reach someone, they’re not sick of talking to people because a bunch of cowboys have been blasting them at three in the morning.
The shining light is that it’s really a forcing function. It forces people to up their game and then the people that are unable to do that get weeded out. All markets become proficient over time, and this is just one of those steps. Now this market is becoming more efficient, in this case with technology.
Fast Five Questions
- What feature of your system do you think has the biggest impact on on your customer’s business?
Right now, in this marketplace, buyers. We allow them to see who’s going to pay the most.
- What is the biggest mistake people make within your technology area? IE data and data processing?
You don’t take the time to actually look at the results.
- What is your best advice to someone new to the real estate investing business on how to get involved in data and data analysis?
From the very beginning, start to look at your conversion, and understand why marketing isn’t working, or why in acquisition you’re losing that deal. We can help people with that.
- Is there one thing across all the Audantic products you wish everyone knew about Audantic?
I would say our predictive data. There’s a better way to target people. And it would help people not waste the amount of money that are buying lists from all these other aggregators and just doing the same thing as everyone else.
- If someone was just starting out, what are three bits of technology you would recommend that they bring on first?
You’re gonna need a calling platform, a dialing/texting platform, number one. Invest in a decent CRM, and then find a tool, whether it’s ours or whatever, that helps you identify buyers.