EP241: Cutting-Edge Solution for a Streamlined Landlord Experience - Ryan Barone

Do you want a cash-blowing portfolio that lets you live a life of freedom? Sunsets and palm trees on your terms. Your host, Corey Peterson, is a rags-to-riches-real estate millionaire who started with no money or credit and quickly grew a multi-million-dollar portfolio of cash-blowing apartments. You're only one deal away from creating the cash-blow life, and the multi-family legacy podcast will show you how. Hey, everybody. Welcome to the multi-family legacy podcast. I'm your host, Corey Peterson. And today we've got a really cool podcast episode where my good friend, Ryan Barone, with Rent Ready, a property management solution company is going to share some insights on how he specializes in helping those investors with those from four to 75 units in their property management software solution. And I think you're going to really enjoy what he's going to offer and talk about. And we really go deep into how he founded his company, how he built it from scratch, and he just kind of bootstrapped it. It's an amazing story and to see where he's gone in such a short time really tells the tale of he's figured it out and dialed it in. So I really want you to pay attention. Before we do that, a word from responses. Are you ready to take your multi-family game to the next level and learn the amazing results of living the cash-blow life? A part of investing can change your life. I know for a fact it's changed mine and I would like to share my extraordinary journey with you in the clues I've learned a long way by giving you my book, Copy Your Way to Success for free. So text the word book B-O-O-K to 480-500-1127. Again, that's the word book B-O-O-K to 480-500-1127. And my team will ship it to you absolutely free. As a way to say thank you for listening to this podcast. And remember, your paradise is possible. All right guys, we're back. I'm so excited about this episode. It was really good. It's very intriguing to hear an entrepreneur's journey, started with an idea and incubated it and then really just put it out into the world and did the work and really had passion behind it. I think that you're going to find out in my friend Ryan. So guys, let's get to it. Hey Ryan, welcome to the show, brother. Thanks for having me, Corey. Excited to be here. Awesome. So this is a new episode that we've not done in quite some time, but this is going to be really about some of the actual levers that you're going to need when you're running multi-family properties. And specifically that smaller little, I would say, between four doors to 75, that little weird, I say weird space because I'm used to some big space. But I've got a lot of my students that are doing these 20 or 30 unit deals. And your company, Rent Ready, is really positioned to help that consumer a lot. First of all, before we get started, give us a little background of who you are, what's going on, then let's talk about what you guys do. Yeah, absolutely. My name is Ryan Barone. I'm the co-founder, CEO and CEO of Rent Ready. And we're essentially, as you said, property management software that's primarily designed for independent investors. Like it have many of those 20 unit, 30 unit, 70 unit doors and they're trying to figure out basically, how do I operate that property more efficiently? How do I get rid of some of those manual tasks and make things easier for myself without breaking the bank at the same time? And so we've really built an end-to-end platform for them that now tens of thousands of landlords all over the country used to manage their properties today. Yeah, and property management software solutions are generally, a lot of times they're super expensive. I mean, we've got some that we run. A lot of the big ones like your yardies and even app folio, they're really built for like 100 unit plus doors. And there's not really a great solution, probably up until now that I think you probably filled the space that I see a lot of investors right now like, where is the opportunity? There's a lot of opportunities, those 20 to 30 unit projects. They still need the big boy solution and probably not so many bells and whistles, but they still need all the functionality. So what does your software do exactly? Yeah, absolutely. So it's essentially from the day that unit goes vacant, syndicating it out to different listing sites like Zillow, Trulya, Hotpads, Realtor.com, rent ready site, free qualifying tenants. So you're meeting with the best tenants that come up to your unit instead of necessarily the first ones that apply, going through the screening process, digitally signing leases, handling all of the rental management in terms of collecting rents and depositing to different accounts, especially if you have different LLCs for those properties, which a lot of investors are typically recommended to do for the liability side of things there, and then keeping track of everything for you. Auto late fees, auto reminders, handling any maintenance, and you can even offload that if you don't want to do it yourself anymore, ultimately communicating with the tenant and then at the end of that lease, starting that process over again, it's really a cycle. They are either resigning that tenant and you go right back through those other steps around the rental collection and payments and made inside of things or listing it back out to find that next great tenant. I want to talk about how you found this company, right? So this is going to, like, your ownership idea, entrepreneurship. How did this company come about? What made you decide to do it? What's your background for it? Yeah, so it was really natural, honestly, how I got involved in it. I was actually going to school the time. I was in college in New York City. I was a double major in economics and mathematics, minor computer science. I had gotten my first internship at Goldman Sachs in New York City and was all excited to get my first apartment, move out of dorms, live here for that summer internship and the following school year. And I quickly realized I really was not ready to rent an apartment. There were a lot more steps involved in actually applying to that apartment than I realized in terms of all the documents, like W2 and letter employment, bank statements, and even having a guarantor. And I actually left that experience saying, how could have I made this easier for myself and friends to apply to apartments more easily on the tenant side? It wasn't until I actually brought that application to landlords and tried to start using it that said, hey, wait, a lot of us, that you just so happen to be interacting with our independent landlords that don't have access to these massive property management systems, like Apple, your yard, your design for tens of thousands of doors. We have a 20-unit building, build something that works for us too. It makes it better for us. And I really fell in love with building it for really landlords and then their tenants as a result of that. And so it really grew naturally over the years from what initially was an idea around how can make the application actually applying to the apartment more easy to do into other things like, hey, I have this couple come and view my apartment and if I pre-screened them a little bit upfront, I would have saved both of us a lot of headaches and pain. Could you give me a pre-qual or I'm in Texas where if I have a tenant payment, a dollar of rent, it resets the eviction clock. Can you give me the ability to block payments on a tenant by tenant basis? And all these little stories over the past seven years have really grown the platform into the end end platform. It is today. It's really just built on the backs of all of these individual stories of landlords using the platform. That's a great little initial story, right? So it was not even landlord focused. It was tenant focused, right? Yeah. Absolutely. A different way to approach it, right? To say, how do I make it easy for the end user, your customer, your tenant, right? That really fast forwards probably the uptake of what that is, right? So coming from it from that perspective is probably a fresh idea. And in technology, technology moves so fast that some of these bigger companies are too big, they can't add new technology quickly. They can't keep it up with it, right? And they've always built their platforms probably the opposite way. I would think that creates an hindrance, right? Yeah, absolutely. I mean, a lot of the investors that have come to the platform have been excited about it, not just from how do they make it easier for themselves, but it's important that the tenants in your unit are happy living there and want to stay there. So giving them an experience that's great is a huge benefit. So it really has been a big advantage that we haven't just solely focused on one side of the equation, but really make sure that the answer is going to be that approach, right? Yeah, really. If tenants are happy, if they can get on, pay their rents, get communication, right? So let's talk about the time because really, I always like a good software helps you save time, right? Absolutely. How does your come to do that? What do you think it's best at doing for that? Yeah, so we really tried to take an approach of saying which processes can be automated. What are things that are repetitive? You could explain to somebody else and teach them to do it and how do we just auto away that manual work? So things like auto late fees for example, are things a lot of investors are calculating keeping track of all themselves. They don't have to do that anymore. They can come into our system and even on a unit by unit basis say they have a pen unit property and Massachusetts and another one in Oklahoma and there's different laws around the maximum late fee you can charge in those different areas. You can set up automated late fees to calculate your five day grace period and $50 the first day and $10 every day after that up to your 5% cap in that state or something like that. And so we've built in those types of flexible, customizable solutions for investors for landlords on the platform to be able to basically eliminate things like automatic late fees, things like rent reminders. Yes, to put it on a 10-electoral attendance. All that stuff super, super important and usually if you're managing your operating a smaller property like that, it doesn't mean you have full-time staff. So this is now something you are doing as an owner operator and I find that most owner operators, people that are like me are entrepreneurs, the details are not usually their strength, right? They're usually visionaries or bigger picture people and but this is the real work of property management, right? And so anything you can do to simplify that I think is a great great use of technology for sure, right? Yeah. So from that first initial idea is what does you do to start rowing your platform and getting out to the public, right? Because how many units do you guys manage right now? In terms of assets under management, it's over $15 billion in assets under management today. From a small idea to what that is, that's crazy, right? Right. Hey, really is. It's crazy. So how did you grow to that? Like tell me that story, right? That growth phase, you've got to have some amazing challenges and setbacks and wins and then putting the team together to manage that as well as a that's a whole nother ballgame. I'd love to write more about that. Yeah, I mean, the team is huge and you're right. There have been a lot of challenges along the way to get where we are. Still a lot more to come and we're excited for them, but I mean the very early days, it was really my co-founder myself basically going out to beat ups ourselves in the early days and trying to understand what were the problems, the challenges that people were facing, landlords, owner operators, independent investors. What could we do to understand what were the biggest challenges they were facing? Honestly, at that point, really not a dopt anything. Most of them were coming on from pen and paper and spreadsheets. So really just understanding what the biggest challenges were, I think, was the first step in that. And then once we moved a bit more digitally in terms of as the platform grew and we were more so advertising online and having people come in, it became live chat and we kept that same methodology in place where if you wrote into us and you had an idea or a question or a challenge that you were facing, we would ask ourselves how can we solve that? Some of those popped up through COVID where landlords reached out to us and said, "Hey, what's a way I can incentivize my tenant to pay rent on time?" For example. And tenants were saying, "Can I get any benefit from paying rent on time?" And so we actually ended up building the ability for tenants to report on-time rent payments to credit bureaus and build their credit score just by paying rent through the platform. And it was really a win-win for both sides. Investors were getting their rent on-time more often and tenants were going to build their credit score. So everybody was happy in the process but it was still founded in that same idea of, "How do we talk to people?" "How do you reward anybody for playing?" Right? Exactly. "Get everybody what they need and want so you can grow the platform." Word of mouth. How did that play a part in your guys' growth? Yeah, I think it's huge. I mean, one of the things that I love about the real estate industry is there is this mentality of, I think this podcast is a perfect example of it. There's this mentality of if I can figure something out, I want to share it with other people. I want to help them lift them up and vice versa. And I think it's where you see podcasts like this pop up. It's where you see things like the bigger pockets forums pop up where people can go ask questions and get answers. So the word of mouth was huge for us. Of you own properties and you use rent ready and you love it, you know other investors. You're going to talk to other investors and explain, this was a great experience for me. Especially the company that came to this. When you find a new good technology that really works, right? You're like, I remember for me, I didn't think about my first experience with Podio, right? Podio is just an open SaaS type of software that's CRM. I don't use it anymore when I did. It was like the next new thing that you could customize to do a lot of things. You're like, "Oh my God, this is so open source, so flexible." Right? And it was really cool. And everybody was, "Here's the thing I learned out of here's how to tweak it. Here's how to do it." And good news like that travels super fast, right? And obviously you guys have created something that got a lot of traction because that's a seven year run to have that many assets, right? Word traveled fast, right? Now with that huge amount of growth, so how did you manage your growth, right? Yeah, I think that's where the team is huge, right? So figuring out how could we bring on the right team to support that growth along the way, even taking that, automating the manual task approach, or something we look at internally as well. So as we grow the team, I think everybody on the team has this great mentality of how can I take things that otherwise would be more manual tasks, those things like that and just make it a quicker process. I think in turn makes things faster for someone reaches out with a question, we have answers faster for them. So they're happy with that, but certainly the team is as well that it's creating less work for them. But I do really think it starts with understanding what are the most important roles you need to bring in as you grow as a company and making sure you have great people in those roles. And we were fortunate enough to bring on a lot of people that have really helped with that. You guys go some kind of IP or what? Still private for now, but about 40 people on the team today. Okay, right on. And then funding, I always like it's a business, it's a new business, right? Like it's a business idea that's working and serving people. I love getting into the idea behind the businesses of what it takes. So how did you guys fund this growth, right? Is that taking on investors? You guys have where you after doing capital call or capital talk? Like tell me about that. Yeah, so it's a really interesting story actually in the very early days, we're completely bootstrapped. I was actually doing all of our development from the first three years, I built the initial platform myself, the iOS and Android apps and the app for landlords. We're in a lot of my night oil, right? Oh, yeah, I'm totally, totally everything, right? Yeah, living in a studio apartment with my sister going out to the stairwell in the middle of the night, so I wouldn't keep her up with the screen on. Very similar to a lot of the people that use our platform, they have a full-time job during the day and they have their side hustle that they're trying to do, that was rent ready in the very beginning. And that was your flow. You had the idea, you're like, okay, I'm so before it is just let me flow with it, right? Absolutely. Yeah, it's exciting when you're in that space where you found something that you really love and enjoy and can have a big impact. And so in the beginning, it was just completely self-funded bootstrapped. Our first investors though were actually landlords on the platform. So we had people that were using the platform, we were going out to meetups and meeting with the platforms by co-founder and myself and eventually some of them asked us, hey, are you raising money or would love to see this grow more and be able to add more features, have more people on the platform and things like that. And so they actually became our first round investors. And then after that, we did end up doing three rounds of venture funding over the past six years. But it really started at the very beginning with just having people that were actually using the platform invest in it. That's a huge win, right? What a great story to you, by the way, because those things really happen like Mark Zuckerberg, you have an idea, you solve a problem, right? Users what you're trying to do, you solve a problem. And then you have to work diligently, right? You had to look at your baby and make it good and get response, get feedback. You got users, right? So then you're okay, we got users. Those users liked it so much, so well that they're like, this is good. We want to invest in it because we think you guys can make it better too, right? What do you need? That's huge, by the way. That is an app that's an accident. And usually those times investors are not stupid, right? Absolutely not. No, I mean, they were huge for us, honestly. Yeah. And it just takes a couple of people to believe like when you got that first round of like that kind of money, we're like, we got something here. When did you feel like you knew Ryan like, we got something? Was it from the very beginning? What did you really know? Yeah, to be honest, getting the first paying customer on the platform was still something that was huge. I still remember the very early days of that. Like I said, we're bootstrapped from the beginning. So for a long time, it was building a platform. It was completely free when we first started trying to just figure out like, could we build something to add it value period? Like, could we get something that we would say that solves a problem in my life? So the first person coming to us saying, I am willing to pay for this. Right. Right. Right. Right. Now it says we're paying a subscription fee at hell. Yeah. We're finally, we made it, right? Yeah. I think that's a huge moment. We still laugh today because our head of growth who's been with us since the very beginning and my co-founder, myself, every time we're like, oh, we got one more subscribe. One more landlord on the platform. It's just as exciting six, seven years later. You would think it would change a thousand. Keep watching your numbers grow. You're like, okay. And then the, so does the income. So does the monthly recurring revenue, right? And then you realize at this point, you guys have a real company, real business for sure, right? What does the future look like? So if this is where you're at today, I'm assuming one day you'll probably go public, right? That's the goal, right? Yep. Absolutely. Every New Yorker dream is to take a company and make it public, right? Yeah. Absolutely. That's when the big money comes in, right? He's like, wait, that's when we know we made it because our bank accounts will say so. But the truth is making your company awesome, right? Yeah. I mean, that's really the bottom line. There's so much upfront work that goes in before you ever see anything come of it. I think just the validation along the way of people saying, I've used this. I like it. It makes a difference in my life. It means a lot. Like we've had that live chat since day one and literally it used to go directly to my cell phone, my co-founder cell phone. If you called in, it was going to one of us. So when you have somebody on board and then three months in, they come back and tell you how much has changed, how they're operating things and how much easier it's made everything for them. It means a lot. We intentionally chose this segment that we did for a reason. I like it. It's under-sourced. Yes. It really is. It really is a niche. That is a niche that needed to be served with a really nice platform where people care. And like you said, you knew, God, you're like, this is what we built it for. This size, we knew that's what we purposely did. That's powerful, right? A lot of times people say, I want to get everybody. No. I want to go this right here. This is the people we want to serve. Let's build it to meet their needs. Yeah, absolutely. That's powerful, by the way, right? And when you do that in such a way to go in the short amount of time, and I call that short, because 10 years or seven years, whatever you just said, that's fast. It goes by so fast, right? But to get where you're at today, that's most companies would never do that. They never understand what that looks like or feels like, right? So when it comes to the future, then where do you guys see your future? Where does it go? Yeah. Truly just expanding even the amount of landlords using the platform today is only a fraction of the segment in the US. I mean, it's still extremely underpenetrated in terms of the amount of people using anything to help them manage outside of spreadsheets and pen and paper. My big goal, honestly, the end vision in my mind is any company that's done it really well, whatever they were trying to solve, when you look back, it's almost hard to imagine life without that company or without that thing that they put in place. I feel very much like the management of these properties, especially in this segment, is at that stage now where we have the chance to really make it hard for people to imagine how difficult it would have been to manage or rent in one of those properties 10 years ago. And really, the goal for us is to just grow and help as many possible landlords and tenants as we can. Awesome. Talk to me about your logo, right? It looks like it's hands-interlocked. I can't tell that it looks like somewhat of a house. Tell me what that logo means to you. Maybe it looks like a checkmark or the checkmark? It is. I wouldn't sure. It does like checkmark or a house, right? Exactly. Yeah, so it's a house and then a checkmark on the bottom. And tell me how that got selected. The idea was rent ready, the application in the very beginning, it was how do we make it easier to be ready to rent an apartment to actually be prepared when you show up to rent some place. Right. It's like a checkmark. Yeah. You're home and you're ready. Yeah. Listen, logos, marketing, branding, all that stuff comes from somewhere. And usually there's a meeting behind it or some type of thought process because when we first started, we didn't have a logo at all. I wouldn't say we have a logo per se, but we have the way we do it, right? We have our house for Kahuna. The house is the eight, right? But when it start there, we're like, we didn't have any logo. It was just like Kahuna Investments. And one day we're like, like, let's make something that looks right. And we're like, wait, that's it. That makes sense for us, right? It works. And those things are really important. I think it may not be that important, but at the end of the day, this is your brand recognition. Yeah, absolutely. Right. It's got to be simple. It's got to be easy. And people got to understand that that's your brand. Like, how do you stand out? Right? No, for people that are not seeing it, if you go to rentreadyprobably.com, right? Ready.com? Yes, it is. You can see that logo yourself, right? And see what they start up. So we have to spell it a little wrong. So we took out the age. Oh, yeah, yeah. Yeah. Rent our EDI, our EDI, right? Which is cool too. Like it makes sense. It stands out, right? Yeah. So as you keep improving your platform, what do you think are the new integrations? Or what are the things that you guys are working on? What's in the future? Yeah. So really, it's trying to figure out how do we make a really flexible platform that still automates away a lot of that manual work. We've done it with certain things, but I think there's a lot more that we can do. Some of the more recent ones we've done were around the maintenance side of things where some investors are coming to saying, basically, I fall into one of the three buckets of I do it myself. I have teammates that I invite to the platform so they can invite them for free. But there was a third bucket we weren't really helping at that point, which were people that said, I don't want to do myself and I don't really have somebody to do it. I want to just hand off the maintenance side of things to someone. And so we found another partner in the prop tech space. And basically, we're able to build an integration with them so that any maintenance requests coming through our platform would automatically be routed out to vendors that they would schedule and complete the work and market complete. And ultimately, it was the same thing as if you invited basically your own teammate onto the platform to do the work. But if you didn't have somebody all of that scheduling and handling was done for you. So I think there's still more areas we can do just like that. But a lot of people on your still innovating, you're trying to make sure like just how do we make it better improving listening to your customer still? Absolutely. I mean, it's a constant feedback of just building something, measuring the impact of it, learning from it and iterating again. Awesome. Well, listen, Ryan, I want to tell you I've really enjoyed just kind of learning about your company and your foundation. I'm actually going to go to your website and take a look. I've got people that are in my mastermind that probably could use something like this, right? So forever, let's listen right now. How do they find your company? Where should they go? Which they pay attention to? Yeah, so it's rentready.com, R-E-N-T-R-E-D-I.com. And you can drop us a note there. We still have the live chat phones till this day. You can always call us or message in and say hi. We're pretty friendly bunch. But that's your place to get started. You can really do it on your own, self-serve, set everything up. And you don't have to ever talk to us if you don't want to. Or you can call us in and we'll help you every step of the way that you'd like help with. So it's really fitting personalized to however you want to get started. Awesome, beautiful. Hey, listen, I love your story. Any books you've been reading lately that you'd like to share with our audience about things that have really helped you in your entrepreneurship journey? Yeah, one of my favorites still for this day is a book called The Lean Startup. I don't think it applies just to startups. I think it applies to really any business, anything you do. But I think it's a phenomenal book that just teaches you how do you get an idea from just that and idea to something that's in the market, grow it, improve it, and really fit the need of whoever you're trying to help. Yeah, amazing, great book. That sounds like a book that I want to read as well. Always say it's always different when you see from a different lens, right? And sometimes as owner operators of real estate, we see things always in one lens and we forget sometimes we run businesses, right? And businesses are ran differently than just owning real estate, right? If you want to own a real estate business, that's different than just owning real estate, right? And learning anything you need to learn and improve your craft, your presence, and operations, because it comes down to your lifetime's operations. How do you get the thing done? And dealing with people because I'm sure when you first started, it wasn't as complex as it is today. Definitely not. And with that chaos, you got to have systems and processes. And obviously you guys have built those types of systems and processes to run your company. So very honored to have, to share that with you. And then also if you can give any advice to anybody that's kind of starting out and has an entrepreneurial tick, start up, what advice would you give them? Yeah, I would honestly say time is your most scarce resource, although it's scary to get started, whether it's investing in a property or starting your own business or whatever that might be, it's easy to get into that analysis, paralysis phase, the worst action you can possibly take is no action. So obviously evaluate your the best option, but then try it and learn from it and just keep trying and iterating on that. Because every time you do attempt, you get a chance to learn a bit more, to improve on that. And I think ultimately eventually succeed. That is true, true, true, could say it better. Ryan, thanks again for coming on this party because it's sharing your company, your passion, your vision, and what you guys do and helping investors like us find solutions, management solutions that can really help us save time, money, and add value to our most valued customers, which is our tenants, right? So thanks again for that. Guys, if you're listening right now, make sure that you give us a like, a love, share this podcast because people need to understand that there's lots of ways to make money in real estate. It doesn't have to be these big apartment complexes. It could be the 10, 20 units. And I'm telling you right now, there's wonderful opportunities now and actually on its way. So, guys, but before you can do that, it starts with an idea. Ryan, six, seven years ago, had an idea. He had this vision. He incubated it. He protected it. He grew it. He meditated on it. And then he did the work, guys, guys, if you believe it, you can achieve it. And your paradise is possible. 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