What Tools Are Real Estate Millionaires Actually Using?

0:00This episode is brought to you by Indeed. Stop waiting around for the perfect candidate. Instead, use Indeed Sponsored Jobs to find the right people with the right skills fast. It's a simple way to make sure your listing is the first candidate seat. According to Indeed Data, sponsor jobs have four times more applicants than non-sponsored jobs. So go build your dream team today with Indeed. Get a $75 sponsor job credit at Indeed.com slash podcast, Terms and Conditions Apply. Spring is here and the shopping list is long. Time to make a lows run. Buy three bags, get three free of stay green, one cubic foot garden soil. Plus, right now, members can earn four times the points on an eligible purchase. Start spring off strong with these deals and more. Our best lineup is here at Loves. Balance the $3.25 while supplies last. Soil offer excludes the last and who wide. Lowellty program subject to terms and conditions. Sealows.com slash terms for details. Subject to change. Point booster subject to exclusions and more terms apply. One time only offer. Already folks, we are going to talk about something we have never done before.

1:02That is hard for me to say with 18,000 videos on YouTube. And that is what is the tech stack real estate investors need to think about. And to have this conversation, we're going to be speaking with the CEO of baseline. Matias, how you doing, Matias? I'm doing very well, Michael. Thank you so much for having me on your show today. Very excited to talk about this topic. I think behind every great rental property owner, there's definitely a set of tools. That make this possible. Obviously, there's a team and most importantly, a community that helps get yourself on this journey. But really, drives efficiency, effectiveness, sometimes accuracy of data is super important. You all have had CPA ask you for your receipts or I need my financials. You don't have them at hand and it takes a lot of time to get that ready. And ultimately, I think most investors, I speak to, they want to grow their business. And to do so, you need a system. There needs to be some automation in there. And so, we've identified a huge problem in there. Obviously, across the financial service side,

2:04which we'll touch into a little bit, and how you kind of really optimize the financial operating system. But there's four core areas that I think, I love to touch upon, but I think are great tools to help you win in this space. I love it. Again, it's really hard for me to think of a topic we haven't broached on this channel with 18,000 videos over eight years. So this is the first time we're hitting something. So that's really cool for me. Let's not forget that my channel has an audience of, you know, people in the beginning. But also, lots of operators who have 5, 10, sometimes even 15 or 20 years in the business. So when we're talking about the tech stack, let's make sure we address kind of both the audience. So Matthias, this is your house. Where do you want to start with this tech stack? Yeah, so I think what I'll say is that, you know, one of the biggest problems that, that baseline kind of identified when we got started was that, you know, across the financial management, there were sometimes, you know, investors that were using, you know, six different tools just to manage the financial surface side of things. And that's, you know, forgetting, you know,

3:05you know, acquiring the property, forget about, you know, the property management stuff, you know, maintenance, things, all that. This is just the financial surface side of things, right? Just the money, you know, just the money. Just the money. You know, they were using multiple bank accounts. You're not built for real estate. You know, maybe a few checking accounts, a few savings accounts. They had, you know, different credit cards, sometimes for each property. You can just imagine kind of a bulging wallet with multiple cards in there. You know, many times, you know, contractors, you know, they're paying them through Venmo through cash app. Sometimes that's hard to track. And you forgot to kind of, you know, put an expense and you're not, you know, putting that into your taxes. And then, you know, tracking the expense is managing the books. Like, everyone comes, you know, and we're kind of a tax time moment, right? So, folks are, you know, probably organizing your expenses and trying to track all your income. It, you know, it was mind-blowing that so many people were doing this in a manual way. And beyond the time that that's going into it,

4:05there's a lot of inaccuracies. In inaccuracies, usually mis, mean mis-deductions. And, you know, when you don't have, you know, something very well organized, of course, then there's, there's sometimes isn't the right level of intelligence in the tool, right? It's not telling you, hey, I can improve my expenses. I can increase my rent. So, that's that bookkeeping pain. And of course, you know, we all know how much, you know, bookkeepers cost. So, you know, I think bookkeepers talk where they're essential, but let's use their time on, you know, things that are very high value, right? And advisory things, and I'll share a few that I think are fantastic, you know, in a bit. And then, you know, of course, everyone needs to collect rent. And, you know, collecting rent, you know, that is, that is the livelihood of us and investors. And, you know, we want that to be paid on time. We don't want to be chasing people down. And we want, you know, we want a notification. Hey, someone's, someone's positive money. Hey, I've already gone and reminded that person so that, you know, they know to pay on time.

5:07So, that was just the financial side of things. And we'll dive into kind of how based and solves that. But, you know, maybe I want to zoom out of it. And what I want to do is actually maybe start with kind of the four main categories, I think, that are the essential stat to help, you know, real estate investors, whether you're doing, you know, you're just starting out or you're looking to kind of, you know, figure things out as you kind of, you know, set yourself up for success in 2026. Whether you're doing, you know, long-term rentals, you're doing mid-term rentals, you have some short-term rentals. I think all of these things apply. First thing is, is, is de-lack position, right? You know, you need to, you need to buy your first property or buy your 10th property. And there's so much data out there to help find the right property and, you know, assess the right comps, calculators, and so forth. And I think there's two companies that I want to name, which I think, they're a fantastic job of this, both, you know, offline and on market deals. You know, one is prop stream. I think they have 160 million, you know, properties

6:10on their platform, both, as I mentioned, on an off-market, you know, you can imagine doing comps, calculators, demographic data. Another one is batch leads, and what I love about that product is they have a really powerful property search, right? You can, I think they have like over 100 filters. And then once you've kind of dialed down kind of what you're looking for, you can easily engage with the property owners. So I think that's fantastic. And then one other tool that I'll mention on the deal side, which I think is awesome, and it's not always used for the acquisition side, is kind of on the short-term rental side, you know, products like AirDNA and price labs, mostly kind of what you call revenue management, right? Dynamic pricing, but they have so much data on kind of supply and demand in your market. And so, you know, they're fantastic tools, if you know how to use them well, to say, where are the pockets of opportunity for me to kind of, you know, think about its short-term, the right strategy for my rental. And so I, those are, you know, I won't go into too many deals, but those are, those are fantastic, fantastic tools. Yeah, when I think,

7:12when I think about buying or identifying deals, I really think about two investors, one at the very beginning, and then one that's kind of seasoned. So the, the beginning investor, a lot of them are come to me, or they find one rental out of the time, and like, hey, it doesn't work in my backyard. I don't know where to go. And that's why I think, you know, things like Propstream or Retominer, or any of these other kind of data sets. They're like metal detectors, right? They're like, hey, let's take out this metal detector and just see what we see. And again, any metal detector, sometimes they find, you know, gold, and sometimes they find a bottle cap. Yeah, you just don't know what you, you got to go deeper. And then I think about, you know, the folks that follow what we talk about here at one rental at a time, get a buy box, be focused, look every day, be disciplined, figure out average. And what I love about those systems, and actually I use Propstream for this, is I had a very tight buy box. And deals were hard to find. This was years ago. So I just did a mailer to like an entire condo community.

8:15And, you know, it was the only one I ever did. I got two leads and closed on one deal. But, you know, once you have a buy box, you can really dig in. And today, how am I using Propstream? So I'm trying to do a new buy box. And I'm just trying to figure out, okay, you got on, you got on market. I'm looking for 50% equity or more because what I'm doing is I'm like, hey, I could pay cash, but it's going to be cheap. Or I can get seller financing in second position. So again, when you, once you figure out what you want to do, then you can start playing with these systems and create value. And that's where elite investors go. So I love, love number one. What's number two? Yeah, fantastic tools. And I think, you know, what I've seen is a few of them are starting to incorporate AI, which for me, it translates into kind of less time, right? You know, it can do some of those searches for you, right? It can do some of the outreach for you to follow up. Notify you. Yeah. There's a lot of interesting stuff. The second category really is kind of starting to set up now your, your operations. And I think there's just two parts of it.

9:16One is the financial operations. And the other one is with the property management system. So I'll talk about both of those. You know, financial operating system, that's what Baselin does. You know, we are five year old business. You know, we got started really with the vision that, you know, there's 14 million real estate individual real estate investors in the United States. And they're all using general purpose financial tools, really not built for real estate investors. Amen. Having started 30 years ago? Yes. That is very true. Yes. You know, the vast majority of our customers are coming off a bank of America account or a TD bank or a region's bank or a community bank. And, you know, we know what banks are. Banks, you know, there is a general population. And they do as best as they can with, you know, thousands of different types of businesses or different types of individuals. But, you know, real estate investors are a lot of commonality. And, you know, our customers that we focus on today are, you know, anyone that, you know, is what we consider someone that is, you know, just getting started or has scaled to, you know,

10:1730 plus properties owners across long-term, midterm, short-term rental strategies. And we've gone across kind of the financial strategy. How can we really make this highly efficient and automated for our customers? How can we drive a lot of education through our product? So, as you're coming, how do we help you actually set up your finances for success? And at the same time, try to drive intelligently. As an investor, you know, we're making decisions all the time. How do we make the best decisions on, you know, how my property is performing and how I can improve things or, hey, something not performing. Is this property that I should dispose of or how can I improve it, right? And so, there's a lot of, there's a lot of things to discuss. And so, the first thing is, like, we really create bank accounts, both checking and saving accounts that are built across every property. So, you know, if you have property A, you open a bank account for property A, you can open a security deposit account, you can open a maintenance reserve, if you want to hold a profit account, right? So, we structure what we call property-level accounts.

11:19And so, the reason why this is so important is when, you know, an expense hits for property A, it's going to come out of property A's bank account. And you keep things really organized. And our AI will then go and actually tag that transaction to the specific tax category, right? So, all of a sudden, you've started to create, you know, structure and you may have, you know, let's say four properties, you have four operating accounts for each of these, you may have one account for just security deposits that keep clean. And then you may have a profit account, right? You know, you know, every quarter, you know, when it takes some profit off the table, I want to keep it there and save this account. I want to make sure that I'm actually, you know, we're making money saving for potential new acquisition or for something you want to do on your personal life. And so, this is super important. And we also have, you know, a whole card product on our platform. You can, you know, set up cards for a specific property or for an expense type. You can even have all sorts of kind of controls. So, if you wanted to give a specific card to someone that helps you with maintenance, you can say, I just want this to be, you know, $500 a month.

12:20I want to only tag it already to maintenance. So, the system already knows where that transaction is going. Of course, we don't have any hidden fees. No monthly fees, no minimum balance requirements. We really want to make it very transparent for our customers. At the same time, if you have receipts, you know, I've heard nightmare stories where CPS are asking for receipts to end of year and people have, you know, boxes or all sorts of different methods to kind of, you know, organize the receipts. With baseline, you can actually drop in 100 receipts into our platform. We will go find the transactions and automatically attach them to the different transactions. If you have invoices in your email, just forward them to specific based on the email that we write our customers, recognize the words coming from, you know, scans the RAI, scans the invoice, attaches it right to the right transaction. So, this level of organization is critical. Because the second you want to say, okay, I want to go and look at my cash flow or a PNL for a property, you press a button and take seconds. And you can see that, right?

13:20So, I can, you know, we have this beautiful graph where you can go side by side, you know, imagine you have three properties. You want to look at PNL for a year to date or you want to look at the last year to do the presets of filters. You can actually see PNL. How would they compare? Why is one performed better than the other? Let's actually look at, now let's go look at cash flow. Let's actually look at the balance sheet of each of these. And you've been, you know, more scarce sometimes. So, I need to tax, I need my tax docs, right? And we have a specialized tax center. As all of this, as you can imagine, is highly automated. Everything's coming in with a click of a button. You say, I want to, I want to tax package for these properties for this time period, you know, for fiscal year 2025. And it'll pull all the receipts that we've automatically matched. You know, it will have income statements, schedule E, everything, all wrapped up. And you can send that directly, you know, to your tax repair or CPA, right? And so, you know, saving you tons of time, but just giving you, giving you a lot of clarity, right? I think, you know, I think clarity is something that we all want with our finances.

14:21And sometimes it's difficult because, you know, there could be hundreds or if you've scaled, you know, many properties, thousands of transactions that are occurring, you know, throughout the year. And so, I think, you know, this is a real out of vision. How can we drive, you know, a lot of financial clarity to our customers? Yeah, I think there's a lot there. Because again, you know, most real estate investors, in my opinion, once they get past a couple, they just have a, you know, just a portfolio, right? They're not really doing a great job of managing it down to the unit. And then it's really interesting with the pickup and short-term and midterm rentals, there's a lot more real estate investors than I would have probably guessed that have some long-term, some short-term and some midterm. And again, the ability to kind of manage all of that is very different. A long-term rental, right? You might, you'll have, you know, ideally, you'll have 12 deposits, right? You'll have one a month. And maybe you have like three expenses, right? If it's a single-family home. But if you go to a short-term rental, where your average day is three days,

15:21I mean, you could have, shit, five, six, seven deposits a month. And every time there's a cleaning fee and deposits and all, I mean, just all of this, all of this stuff. So having a platform that's not gonna, you know, be purpose-built for a long-term and then Jerry Rigg for short-term or vice versa, it's pretty sexy. You know, when we got started, we very much were kind of focused on the long-term rental and all of a sudden, you know, you know, I think Airbnb and booking is, you know, the largest contributors of deposits coming to the bank, and we can see that. You know, I think 40% of our customers have multiple strategies. Yeah, but that doesn't surprise me. That's, you know, almost, you know, 50% of our real estate community is really actually going off from multiple strategies. And I think, you know, there's a lot of platforms that enable this into doing a really easy way. But, you know, I think we've really built our product to focus on this. The last thing I'll say about our product, you know, I think rent collection is critical

16:22for every real estate investor. You know, we have an automated rent collection product. It's, you know, it fast deposits in two days, direct into your bank account, directly built into base lane. So everything is in one place, you know, lots of notifications and automation around it. So, you know, that's the financial OS and then kind of that piece. Okay. And then you obviously have the day-to-day management layer with your other providers. Correct. Yeah. So then there's what I call the property management system, right? And this is, you know, you're marketing, you're listings, right? You know, you're going to go list on departments.com or rhythm.com or, you know, Zillow, you want to, you have the application, you have the screen, and you want to make sure you're bringing in high quality tenants. You need to find, you need your, you know, graph to, you know, compliant and secure. At least document. And then there's the communications side. Maintenance tickets, all of that stuff. Yep. Right. Yeah. The management of running the, yeah. So, you know, on the, on the launch on rental side, you know, I'll name two names, you know, I think Hemlane is one of them. And, you know, we have, you know, those guys

17:22well, we love the product they're building. Yep. And, you know, and then there's turbo tenant. And both have, both have, you know, things that are great about them. You know, turbo tenant is very self-serve. You know, a lot of products that are easy to use. How many as well? And, you know, I think those are, you know, great place for you to have, you know, your core property management system built up. I think if you are a short-term rental, though, that they're slightly different, right? So, on the short-term rental side, you want to be able to connect, you know, your OTAs, I mean, depends, right? Imagine if you wanted to, one or two short-term rents, you may just go directly to Airbnb or booking.com. But once you have, you know, and even if you have two or three, like, you know, you might as well consider some of the lightweight options. You know, there's like, you get to see a lot of this $9 a month, I think, right? And this connects all of your OTAs, right? You don't know, that way you don't have double booking to connect on Airbnb on booking. You can do your own direct listings in your own kind of advertising site through them. You communicate with them, and they manage operations, right? There's a lot more to it. Who was that last one? Nine bucks? Who was that? That's the same. Sorry, so the ones I'll mention is there's hospitable. There's a host of way.

18:22And I think, you know, Guesty. Guesty, obviously, kickators, so sometimes, you know, the larger, sometimes operators, super-hosts, or even, you know, the vacation rental managers. But they do have a $9 kind of Guesty light version that I think is fantastic for someone that has, you know, a few doors. Okay, very cool. All right, and so that's two of the four. Where do we go from there? Yeah, so that's three of the four. So it's the property management, the finances, the deal acquisition. And then, you know, the last thing is what I would consider professional services. And this kind of encompasses a broader bucket of things, right? So, you know, we really, you know, we really believe in actually structuring and forming the right LC to protect your asset, right? You're investing a lot of money in properties. You know, we work a lot with, you know, enters and business advisors who work with prime corporate services to two fantastic providers that, you know, can really structure the entity which protects your asset best. And, you know, we work with them helping them, you know, open bank accounts for their customers.

19:22So I think that that's super important. There's obviously tons of other, you know, LC formation companies. I would look at ones that, you know, really specialize in real estate. Real estate has, has a new one. You know, then on the insurance side, you know, today we partner with OBE, OBE is a fantastic insurance provider for, you know, property level insurance for real estate investors. I also mentioned steadily another, another great provider. You know, they focus on everything from, you know, single-family, multi-family, apartment, buildings, condos. And I think the old way of getting insurance was, you know, having to call a bunch of, you know, real estate brokers. A lot of it was time-consuming. They'd be asking you for information, piecemeal through email. You know, today it's extremely fast. 30 seconds, you're getting, quote, live quote. You do this all in line. Very, very good competitive pricing. Yeah, steadily saved my butt. We had a commercial broker I'd used for 20 years, dropped the ball and steadily insured nine of my residential properties in 24 hours. And I also saved me 20 grand. So shout out steadily for coming through for me.

20:24No, these are companies actually kind of got, got started, you know, same time we got started, you know, around, for sure, in 2019, 2020, we're at the beginning of COVID. I remember. But yeah, they're specialized in real estate. They know what they're doing. So I would definitely, I would definitely check them out. And then the other kind of professional service side I would talk about is something that has come up more recently. Is really don't cost segregation in tax strategies. And so, you know, I think, you know, on the tax strategy side, I'll kind of mention two folks that are, you know, more than CPAs. You know, one is Vestora. If you're a baseline customer, they specialize on kind of tax strategy and advisory using the baseline platform. So they're professionals and, you know, you can give them access through kind of our multi-user access to their advisors. And they really help you structure things. If you want a little bit of additional support, it actually help you on kind of your tax strategy. And they do offer kind of just real estate investment advisory strategies as well. And on the CPA side, you know, CPA IOLA and that CPA IOLA, you know, they specialize in real estate tax strategy.

21:27You know, they work with thousands of real estate investors and, you know, they really know what they're doing. And then the other thing I mentioned was cost segregation. So being able to depreciate different parts of your assets at different depreciation schedules can save you a lot of money. It's almost like a hidden thing that, you know, it seems, you know, some investors still are not fully aware of. We've launched a really beautiful kind of live balance sheet with a cost segregation component built into it. So you can actually go and put your assets into base lane. You can upload a cost segregation study and actually depreciate different parts of your properties. You know, at different rates. And so there's a lot of benefits there from the tax side. You know, we do work with a platform called EST, engineering tax services. You know, I think, you know, one of the more professional kind of and larger kind of cost segregation companies in the US and, you know, obviously, I highly recommend those folks.

22:29So that's on the professional server side. Obviously, you know, there's tons of things, but kind of, you know, recapping. You know, there's the acquisition side of things, being very data-driven. You know, I think I like your idea of having very strict buybox and, you know, you'll get there. The financial operating system, you know, essential, right? You know, this is something that if you do wrong, you're just going to, it's going to be a headache. Yeah, you die. You die. If you don't figure out cash flow and how to pay your bills, you lose the property. That's not good. The property management system, you know, obviously, this is super power to, you know, market, be compliant with leases, find tenants that are, you know, they have great income verification, great background check stuff, so that you're actually bringing high quality tenants. Like, that can make or break the year for you if you bring in the wrong tenant. And then, obviously, I mentioned kind of professional service. And the last thing I'll mention, so there is a fifth category. And I think that that is the community and mentors that everyone uses. And I think, you know, this is where, you know, investors come to learn, to avoid mistakes, you know, to accelerate their growth.

23:30And obviously, you know, I know, you know, one rental at times, school community is a fantastic place for that. You know, bigger pockets, you know, mature moats, investors know, community of millions of of real estate investors across, you know, every state, different strategies, they have fantastic forums. You know, and they actually now have a fantastic bigger pockets pro membership that gets you a lot of amazing value. So they've kind of built up some really cool partners, including base lane and other partners across, you know, lending insurance and stuff. So, you know, check them out kind of the offering there. Very cool, Matthias. This is a lot of fun. This is our first time we had a conversation. We're going to do this again every couple of weeks. I appreciate you. If somebody want to learn more about base lane, where do we send them? Send them to to baselane.com. So that is B-A-S-E-L-A-N-E.com. And we have a specific, actually, promotion with you. So if customers go to kind of baselane.com, then we have a specific coupon that gets them $100 off

24:35when they sign up in front of the account. So we'll get a promotion. Very cool. There'll be a link in the description, folks. I believe I have that email. I will put that there. Matthias, thank you for your time. This is a lot of fun. I love this conversation. I look forward to having you again in a couple of weeks. Thank you very much, Michael. We'll appreciate it. Yep.