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(00:44): All right, welcome to the show guys. I'm excited to introduce our guests that today. This is somebody who I feel like, you know, with our guests and our database and the people that follow us. There's guys doing wholesale, single family, wholesale multifamily, doing syndicated deals, and a lot of stuff on the backside that is necessary. And my guest today has a solution, which I think is going to be something that's very beneficial to a lot of our listeners. So without further ado, I want to introduce Jake Mermelstein. What's up Jake? Welcome to the show. Hey Joe, thanks for having me. Yeah, man. Thanks for being on. So, you know, we were chatting a little bit before we we went live here and we were talking about the solution that your company groundbreaker is capable of providing for investors. But tell us a little bit about some of the angles that we were just talking about right before we went live here with the wholesaling piece and syndication, all that kind of good stuff.
(01:34): Yeah. So I can definitely talk a little bit about the way that this technology is influencing the transaction. And it's interesting. Cause when you look at real estate transactions, most of them happen offline through phone calls or emails, and people kind of raise their hand and tell you what they want to invest, but to be able to put it online through a website where it's kind of password protected, everyone has a login. You know, you've got your username and you can look at deals unfettered without having anybody to talk to. You can just, as the investor, be able to peruse a portfolio and be able to invest. And our software actually handles that process so that investors can log in. They can see your own assets in your private portal and they can evaluate whether they want to invest in your deals or not.
(02:18): And if they do, they can actually move through the whole process. So you're no longer limited to having a website. That's just a business card and email list, sign up. You can actually make a transactional and close that loop and reduce a lot of friction in the process. So we were talking about how this applies to syndicators, but it also applies to wholesalers and applies to private money lenders, anybody who's looking to close capital faster. And it's also very interesting because if a long time ago you wanted to fund a deal, but maybe it was too big to be able to satisfy across one investor and too complicated to spread it across multiple investors. That problem is now gone because we give the infrastructure so that multiple investors can take a fraction, a deal, and then they can get the whole deal funded.
(03:02): So, you know, our typical buyer, our typical listener they're out there they're they have a multifamily under contract where they're there to have an LOI out, walk us through that piece. You know, they find a building, they find a property in front of project. Maybe it's a better wholesale play. Then there's a buy and hold play. When you're telling me they can upload it directly to the portal. And then what other investors can see it as a public and they have the option to make it a public.
(03:25): Yeah. So, okay. You've got the asset and you want to decide if anybody's interested in it in groundbreaker you put all the information in like you would a typical offering memorandum, and then you've got investors that either are following you and you give them access to the portal. Then you decide if you want to give them access to that particular deal. If that's the case, you can email them, let them know about the deal they can log in and look at it. And then there's a minimum investment amount that you set in the system and you'd upload whatever document you want the investors to sign. And they're really ready to go from there. If they log in and look at it, you can tell if they've logged in, if they're active and then when they move through the process, you'll be able to know if they submitted an offer, how much, and you can kind of approve that offer or push them through and let them sign, and then review the documents, prove that let them wire the funds in. So it could be a very seamless process. It's not necessarily public. We do want to keep, make sure that people are in compliance. So we assume that everything's really invite only, and these portals are restricted, but if people want to do like a public raise, we're definitely open minded to helping with that. We just want to make sure that information is secure. People are following the right regulations, but you could do it for either a syndication or you're doing it for a wholesale and you're just matching it to one single investor.
(04:39): Love it, love it. And this works for, let's say syndications or wholesales. We just talked about that, right? And let's say, you want to take the deal down? What happens after that? Now like, now I can, I can own it. I can run all my investors through the portal, get their paperwork done that way. I don't think a lot of listeners realize when they get into a syndication deal, just how difficult all those moving pieces are, right? Like this is a one stop solution for all those, right?
(05:03): Yeah. It's tough because you got the date when the money's going to go hard and you're wrapping up due diligence, you're doing all this other stuff. You probably have talked to your investors and you know, roughly how much they're in for, but you don't really know if they're going to invest or not. If you know, this is your first time or second time or whatever the situation could be, maybe somebody's inner out, depends on their liquidity and personal situation. But when you put the deal in front of them and it gives them the chance to invest, you'll be able to see whether people are really interested in how much they want to invest. And our software just helps to make that process easier. So you're not just doing a one-to-one communication like me talking to you about a deal with trying to close you on a 50,000, a hundred thousand dollar investment, you're doing it for however many people you can fit into that portal. So it just extends your ability to, to conduct that work. And I think if you're working with a group of investors you've worked with before and you know, roughly how much they're going to invest based on historical, which you can, again, track in the portal, then you have more surety of funding. Got it, got it. Okay.
(06:03): Now, can you communicate with one or all at the same time, let's say a 20 investors in there and you have an update on the project or you want to send update pictures or whatever's happening at the moment. Can you, is it one stop shop for you to communicate with all of them at once?
(06:16): Yeah. There's ways to send email out of the portal and there's ways to make updates in the deal as well. We're definitely interested though, in making kind of a more seamless experience to kind of communicate and send out information real time. I think it would be really cool if we could develop a chat at one point, but my engineers don't really like when I suggest new, crazy features. So right now it's just like email and providing updates on a deal. You can do things like upload documents, like quarterly reports and you know, it notifies the investors, your email to check the portal and everything. So you could definitely do that.
(06:51): Okay. And what do you think is the best takeaway from when people were using the experience? Like what's their best testimonial about the building, the whole user interface and things like that?
(07:02): Yeah. So I've got this on video. Actually, we did an interview with one of our really successful clients. He's done over a hundred million dollars in funding with us through our portal. And he said, the thing I like about groundbreaker is when I put up a deal, go have dinner with my family. And I wake up the next morning and my deal has been funded overnight.
(07:22): So this is a guy that's obviously he's built a database he's gotten Besters. He plugs them all into groundbreaker. It makes it easier for him to communicate with his existing investors. And when he pops up a new deal, he has an LOI on a deal or whatever, you know, maybe he's at the point where he's ready to do the race, you know, literally they're automatically getting updated and they're just taking shares.
(07:41): Yes. And they're doing all that. Yeah. They do the whole thing and yeah, he just, he puts the deal up and he gets the money. It's pretty fun. Kind of aha moment. Yeah. The other one is the distributions, when you're, you know, sending payments to a bunch of investors, people have to stuff envelopes and send checks out, or they have to manually update the information, their bank account of doing ACH. And we make that process easy. Cause we bring the ACH into the application itself so you can calculate and send the payment and you track the payment through the process so that people love that too, when they can just send out $150,000 or so with a distribution and just with a click of a button,
(08:24): I love that. So walk us through that back end, right? Say I take a project down. Now I have an investor. I have a deal right now where we have 30 investors in on the dealer. We have 30 shares of the deal, probably spread between maybe 12 and 15 investors. Now I have them in there. I bought the deal. I'm under construction. I'm paying preferred returns quarterly. What does groundbreaker do for me in that aspect?
(08:46): Those investors, it depends on who they are, but maybe, you know, they're wondering, Hey, how's the construction going? And what have I invested in the deal so far? What am I getting out have been giving me the distributions? Cause sometimes they just forget. They forget that they invested how much they invested, what they invested in and they forget even about the distributions. So the nice thing with groundbreaker that you get right off the bat is this investor portal, which is professional and secure. And they can just log in any time and they can see what they invested in their ownership percent when they invested their distributions, the account that they used, the bank account, that's getting the distributions and then they can look at the deal. They can look at the updates and reports and anything else that you post. And it just gives them kind of this peace of mind that something is actually happening with my money.
(09:30): It's not just gone into this black hole and for you, the sponsor, it's really great because you can kind of cut down on those one off requests that you're going to get, which just, you know, team to annoy you and nag at you. It's a good excuse to talk to your investors, but it's really, you know, at the end of the day, it's a waste of time. If you have a lot of people asking you, Hey, how much have I invested in? Can you send that document to me again? I lost it in my email. Yeah. Yeah.
(09:55): And it's got to obviously add a level of professionalism because there is a portal they can log in. It's not like go, you're sending updates through Gmail or anything like that. Right?
(10:03): Yeah. The investors can log into the system. And I think that the comments we get from our customers and their investors, you really upped your game. Not like, not like the deals are changing or anything, but you've really upped your game. And then they feel just, they feel great because the investor experiences now on this convenient portal. So it's kind of like likening it to stock brokerage. Everybody's used to being able to log into a TD Ameritrade or Schwab and see their portfolio and real estate. Hasn't been able to move forward in that direction because it's so fragmented, right. You're not just investing into one investment and that's the, like the mega Corp where you can log in and see your portfolio. It's like every syndicator is in every zip code in America. Yeah. Now every indicator in America can get groundbreaker, you know, to power their business.
(10:51): And on top of that, obviously if you have multiple deals going on with multiple investors in each deal, and now all of a sudden they can get an update from one portal for multiple deals. It obviously makes it a lot more efficient that way.
(11:02): Yeah. There's no limits on the number of investors or deals or accounts. So really it is flexible. The one thing that we can't do right now that I think is really interesting though, is if we could have like a one portal for all portals kind of thing, that way you don't have all these portals, but we can't until we're the ones that are the ones that have all the portals. Okay. But maybe one day.
(11:26): Gotcha. So talk to me about, I think it's cool that somebody in your position is you're seeing deals in all different verticals, all over commercial sector, all over the country. Talk to me about some trends that are happening with COVID is anything you see things slowing down. Do you think, see things taking off? Is there industry specific? That seems to be hot.
(11:44): Yeah. Everyone in storage is killing it right now. No multifamily hasn't taken as bad of a hit as people. It would. My multifamily clients are doing pretty well. They've been able to collect rent the key thing. And that is the online payment system. Having an online payment system is so important in times like these because either automatically collect or it just makes it more convenient for people. So you're not chasing them down and they just don't have an excuse to not pay rent. At that point. It's just, you know, they've got the money and it's easy and convenient to do so company that didn't have that in place though. They were kind of scrambling. And then hotels are really, really tough. Occupancy numbers are extremely low, like in the tens and 20%. And that I came from the hospitality industry. So I know like a lot of my friends who are in that industry are struggling, but that, you know, that shouldn't be a surprise to anyone.
(12:39): I think industrial is also doing very well, just like it was before, but it's, it's doing great. And there's opportunities for conversions and opportunities to take advantage of those assets. And then commercial office is like a big question, Mark. I've heard though that a lot of, a lot of companies have moved out of the big cities. So there's a tremendous amount of subleases that are on the market, which is going to push down prices considerably. And there's going to be a lot of vacancies. So it remains to be seen what's going to happen as work sort of shifts to be a little bit more remote perhaps, or how that human touch is going to come back. I can stay from my company that we're all working remotely right now, but we all miss being able to see each other in person. So, yeah.
(13:27): Yeah. It's funny. You mentioned that from a cultural perspective, I have a big office building here in town and we went completely virtual within 24 hours. We just completely changed and shifted, but I'm not gonna give him my office space because I believe that, like you said, people still have to interact. They still have to see each other. And so, you know, our game plan is to go two days a month. We'll just do an event where we come in and do some training. Everybody grabs lunch, we all talk, we'll see each other. And then, you know, you can go out and do your virtual thing if you want either way. But I don't think not having an office as an option at this point, which I think, you know, some people are seeing it that way and some people are, you know, they're still married to their office space. So we'll see what happens with that industry.
(14:03): Yeah. It's really hard. What you just mentioned though. I would love to be able to do that. And I don't think that a lot of offices are set up to be able to offer that as a benefit. And it's so hard to subdivide the office by number of days.
(14:17): Yeah, for sure. So you had started to mentioned rent collection. Does groundbreaker help with that side of things, automatic income as well as distributions?
(14:26): No, we don't really do anything on the property.
(14:31): I just didn't know if it was part of the deal, as far as the new people don't value, add deal, stuff like that, if it was tracking and other stuff, but you know, as a mass value in dealing with the investor and having them all in one spot, I can definitely see the benefits to this. And in fact, I'm going to be potentially a user here for this interview over the check it out because we do syndicated self storage deals. We have, we have all the needs that this type of technology offers. And then I'm hoping that my listeners who are doing this type of stuff, whether it be wholesale or syndication deals, definitely check it out. What's the best place they can reach you Jake or, or connect with you. Yeah, you could go to groundbreaker.co. We have a chat. If you want to chat before you fill out the form or demos or online, so you can fill out one of those forums and there's a link to schedule with us. We're not going to beat you over the head and call you just if you're interested, reach out and you can go to groundbreaker.co. Very cool. But I'll take, I appreciate you being on the show. It definitely added a lot of value to the listeners. I'm sure. And guys, you know how to reach out. If you see the notes in the show notes below, we'll have Jake's contact and the website so forth.
(15:33): Jake mama, Steve. Thanks for being on the show, bro. Thanks so much, Joe pleasure. If you are ready to put the immense power of whole scaling to work for you, then head over to Joe evangelists.com/downloads and get your free business in a box download. Or if you're a true action taker, ready to blow the lid off your results. You can apply now to work with our team, to build a business of your dreams faster than you ever thought possible. This call costs $500 to weed out the tire kickers, a mental masturbate, a feed. The real ballers will make back many times over on the first deal. Even if you don't get selected to work with us, you'll get a full year of access to our private coaching group, a $1,200 value and a 30 minute coaching call with Joe. So you win either way, go to www dot real estate money, mindset.com to apply and change your life.
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