Real Estate Underground

Carfax for Houses: How Property Lens Revolutionizes Real Estate

• Ed Mathews

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Ed Mathews:

So the big question is this how do real estate investors who don't have a ton of free time, don't have access to off market deals and didn't start life on third base, how do we conservatively grow our real estate business to support our families, finally leave the corporate rat race and build a legacy? That is the question. In this podcast, we'll give you the answers. I'm Ed Mathews and this is Real Estate Underground.

Ed Mathews:

Greetings and salutations, Real Estate Undergrounders. It is Ed Mathews with the Real Estate Underground. Thank you so much for joining us today.

Ed Mathews:

With me today is Bob Frady. He is the CEO of Property Lens and, being a recovering technology guy, this popped up on my radar a few weeks ago and I started to dig into it. Bob and I were just talking before we hit record and I cannot believe that someone didn't come up with this earlier. So I'm kicking myself because I probably should have been one of those guys. But to each their own. Bob was the one that was smart enough to pull the trigger. So, bob, congratulations on property lens and I can't wait to talk about it. Welcome to the show. Thank you, ed. I'm happy to be here. Excellent For those folks who haven't heard of you or Property Lens, yet why don't you tell us a little bit?

Bob Frady:

Sure. My name is Bob Frady. I'm the CEO and co-founder of Property Lens. Basically, Property Lens is like a Carfax for Houses. Plus, we not only tell you what's happened, we tell you what could happen. And I started this company. I had another company called Hazard Hub which did natural hazard predictions, sold it, and they tell you never to do anything rash after you sell your company. And I live in Edina, Minnesota, I do now, but I didn't then. And I knew a lot of stuff about the house that wasn't disclosed to me and I didn't want to wait for an inspection to figure it out. So I went to the seller and said, hey, here's all the things that I see about this property. Can you verify this for me? And they said sure, and I offered them 10% less and they took it. It's because I looked around for a Carfax for houses and there wasn't one. Being an entrepreneur and being a little bit of an idiot sometimes, I decided to start PropertyLens.

Ed Mathews:

You already sold. Yeah, you exited to the positive and then you dove right back in. What were you thinking?

Bob Frady:

I had tried to retire, and before I left the company that we sold to, I took a couple of weeks off and after the first day I had played nine holes of golf and I went to the Best Buy and then I sat in the parking lot of the Best Buy. I'm like I'm bored. So I knew I'd drive my wife crazy if I hadn't done something else. So I decided what the heck Still got a little gas in the tank, let's go.

Ed Mathews:

A good friend of mine. He plays the IPO game in Silicon Valley and plays it very well. So he went to one company called Salesforce and they went public and he participated in that. I think he's since participated in at least two other IPOs and each time he takes about six months off, which was the advice he gave me. He said don't you know? Just breathe. Are you going hard? 80 plus hours a week? For however many years you've been there, take a breath, decide what you want to do and then do whatever. That is Right. And I said why six months? He goes because after about three months your wife is going to get tired of you following her around in the grocery store and all the other things that you're going to do to annoy the hell out of her. And by about six months it's either go get a job or I'm leaving you, and that's when you crank up the engine and go find another gig.

Bob Frady:

Ignored that six month rule. It's an excellent rule.

Ed Mathews:

So I listened to him and by the time I hit six months, my wife Patricia was just about sick of having me at home.

Bob Frady:

As my wife likes to say to me on occasion, it's time for you to go to a trade show.

Ed Mathews:

Yes, I'm done with you. So Carfax for properties and obviously we're a real estate investor show and I can think of innumerable ways that I could leverage a house, a property lens report, you know, in terms of either getting additional information as I walk into an auction, which I tend not to do because there is no information but if I was able to uncover that then I've got an unfair advantage walking into that auction. I'm curious. You know this is a consumer-based product with an application in the real estate investor world, not vice versa. But how would an investor you've you bought a house? So you know, how would a guy like me who's looking to get an unfair advantage in terms of information about a property? How would I use this to my advantage?

Bob Frady:

I think that the short answer is would you rather know upfront? And if the answer is yes, then get a single report, take a look at it and see whether it gives you, or download the sample from our website and say does this give me an advantage that I wouldn't have otherwise had, and is it worth the 69 or so dollars I'm going to spend on it to help get me an advantage that I wouldn't have otherwise had? And is it worth the 69 or so dollars I'm going to spend on it to help get me that advantage? And that's the approach that we take with investors, and we do have a couple of investors who use this to help screen properties. One of the big things is what's the age and condition of the roof, because the insurance market has gotten so tight. We'll tell you how old we think that roof is, based upon permits or based upon listing data or based upon real estate data that we have.

Ed Mathews:

So this isn't necessarily just you pulling risk data. Hey, it's in a flood zone and over the last hundred years, here's how many times this property has flooded. It's also real world events. Last time there was a permit pulled for HVAC, for plumbing, for electrical roof, for siding, for windows Yep.

Bob Frady:

Wow Okay, and it depends upon the municipality. Some places are really diligent about making sure you get a permit and other places are less diligent. Sometimes, if there's an improvement that's like for like, it doesn't require a permit, but a lot of times they'll put that in the real estate description In an auction property. Maybe not because you're doing it before the market, but if there is a real estate description, we read that as well, because people tend to brag a little bit in the description and they'll tell you a lot of things in there that they won't tell you in all the underlying data.

Ed Mathews:

Wow, that's interesting.

Bob Frady:

How does that process work? We've got islands of data. You put in an address, we match it to a geocode and then we go to each one of those islands and pull back all the data that's relevant or that's available for that location and then we put it into a report. So pretty much we build it all in real time. So the data exists. But if there was a storm yesterday and there was a damaging hail event, we'll have that in the report. We won't have whether a permit was pulled, but we'll have the storm and that's for damaging winds or damaging hail. So yeah, it's like you type in an address, we do all the work, we pull it all together and in about a minute you get a report back. That is in. Pardon the visual here, but it's not insubstantial. It's a good 50 page report on the location.

Ed Mathews:

Yeah, if I had that for every property I was serious about buying boy, that would make my life a whole lot easier. I got to tell you, like I said, I can't, I can't believe I didn't think of this. So I'm kicking myself and can't believe somebody else didn't think of it 20 years ago, because it's maybe the access to data didn't exist, but that was with Carfax, but but it's Lots of people think about this.

Bob Frady:

The first is the data available, which it's more available now than it's ever been, right. But the second is when it's not available, how do you build systems to go get it and pull it all together? And that's where we come in. That's what we do. I've done it, for most of my career is wrangling data.

Ed Mathews:

Yeah, so walk me through that, because the garbage in, garbage out thing is real right. What's?

Bob Frady:

the process you go through to assure yourselves, first, that the data is accurate. So we do a couple of things. The first is the data source itself. We have a team of geospecialists who bring all this data in and examine it for correctness, consistency, make sure that we can actually make something up. And then the second is we do a lot of QC on properties that we know, pulling specific data elements before we release the product. So we'll pound it and say, okay, here's 50 properties. I know because I've been looking at them for the last three years. Tell me what this data says and does it make sense? And then we'll go through a process to publish it.

Ed Mathews:

Okay, so does it jive with your other sets of data? Yep.

Bob Frady:

Gotcha Does it pass the reasonableness test? Because we're all homeowners, we've bought homes and sold homes before. Does it look right and like, for example, with building permits? Building permits are messy and there's 8,000 different municipalities and they produce it 8,000 different ways, it seems like. So the first step that we do is we go through a cleaning routine with the data, try to put it into more of an English language form, and then we can pull it into the report and we use that knowledge in the permit to help us figure out how old is the HPA system, how old is the roof, how old is the was it flooded before system, how old is the roof, how old is the was it flooded before? And that's the fun part is not just assembling the data but twisting it so that it gives you the answers that you want.

Ed Mathews:

So obviously there's risk data, there is claims data, there is permit data. What other types of information are you collecting on these houses?

Bob Frady:

We have we start with the real estate data?

Bob Frady:

same thing that you would see from the assessor Property card type stuff, yes, we start with the real estate data, same thing that you would see from the assessor Property card type stuff. Yes, we look at aerial imagery for the roof and we machine read that aerial imagery to figure out what the condition is. We look at weather events, so whether if it's hail over an inch or winds over 65 miles an hour, we pull that in and then we do a lot of work to say how old is the root, what's it composed of, how long does it last in this state on average and what's the expected replacement cost for that roof. We pull in flood data from a couple of different sources. Fema is one of them so we can tell you is it in a 100-year flood zone or a 500-year zone. But we can also tell you the likelihood for flooding from either the ocean or a river and we'll use that as a flag to say you might not be in the hundred year flood zone but we do suggest that you get flood insurance for this property because it looks like it's subjected to it.

Bob Frady:

We look at building permit data. We look at all sorts of neighborhood information when are the fire stations? Where are the fire hydrants? Where are the hospitals? What's the quality of the water? What's the soil that the house is built on? Because if you have a lot of clay oriented soils, they tend to have more water leaks than if you don't. Tons and tons of data that we try to bring together, but really the answer is we're trying to just give you the questions that you should ask to make sure that you go in to an offer with your eyes wide open, okay, and so I'm also curious about property types.

Ed Mathews:

So, single family homes, obviously, but are there any other asset classes that you pay attention to?

Bob Frady:

Yeah, the system works on any type of house. Where it gets tricky is when you have I grew up in a three family house in Boston and they're all condos now yeah, each unit might not the permit might be assigned to the address and not to the unit, so it gets a little tricky in those situations. But it still gives you like the roof and the value and all that stuff, because we'll prompt you is this unit one, two or three, so anything up to pretty much a four. A four by, if you will, will give you really good data. Works on commercial properties.

Bob Frady:

Commercial properties don't have an MLS listing the way that residential properties do, so you miss some of that juice. But we can tell you the roof condition of pretty much any property in the US and sometimes with commercial properties the permits are yay long because they have a ton of permits on commercial. We don't pursue the commercial piece of the market just yet but we get asked a lot so we're considering it. But it works pretty much on all properties. But the strength is SFDUs up to fours, yeah, up to a quad.

Ed Mathews:

I can tell you as someone who's bought them if I was spending a few million dollars on an apartment complex, I would pay you way more than $69 to make sure I wasn't buying a lemon.

Bob Frady:

I tell you what. If you find it valuable, then reach me afterwards and we'll develop a product. You, sir, have a deal.

Ed Mathews:

In terms of the product, cloud-based, I assume.

Bob Frady:

So you access the web, access it from the web, and what we do is we have a portal where you can look at the report or you can download it to a PDF if you want to.

Ed Mathews:

And so the other thing I'm curious about you've mentioned it a couple of times is the quality of a roof.

Ed Mathews:

Like, I use a tool and I'm not going to mention it here, but it's an aerial tool, satellite-based, I presume where they give me access. They don't give me quality, so I don't know the condition, but I do get the measurements in terms of the. You probably know which tool I'm talking about, the. You probably know which tool I'm talking about, and if I want, I can get the window and door count, I can get the siding squares, I can get the floor plan from an aerial perspective, not the interior, and it's hugely valuable to me when I'm sitting here trying to figure out okay, I know I have to replace the roof, I know what this building needs windows, the facade is shot and I need to replace the siding at some point in the next five years and that helps me construct a plan. So when you talk about the quality of the roof, is it binary, like good, bad, or are you also providing another layer of, like, sizing, information or measurements?

Bob Frady:

It's on a scale of one to five. Where one is I can't believe there's not a new roof on this house and five it's in great condition. So we'll tell you things like ponding, algae, staining, as much as we can. There's always going to be situations where hail is tricky to give the overall condition. So we'll give you a score one to five on what the condition of the roof is. But then we'll tell you is this a high exposure or a low exposure roof, like in New England? It's a relatively low exposure roof. Rain and ice dams are big in New England as well, versus in Texas. You get everything. You get wind, hail, tornadoes, all that stuff. So we'll tell you what the exposure level is as well.

Ed Mathews:

Okay, wow, that's phenomenal. All right, let's get into the final five. So I'm always interested in entrepreneurs and leaders and how their brain works, because you've had a lot of success already and you're not sweating the mortgage. The college tuitions are probably handled, retirement is pretty good, but you nevertheless get out of bed on Monday morning. So I'm curious what your purpose is. What drives you and causes you to shoot out of bed on Monday morning to take on the world? You know.

Bob Frady:

I'm a huge believer in fairness and I think that home buyers get screwed because the seller knows this and the buyer knows that, but from a business standpoint, what gets me out of bed is I'm pushing towards fairness. I love that. As a kid growing up, fairness was always like that's not fair. So let's try to make it fair, and that's always fun to do. Yep, I love that. So what is the best advice you ever got? And go, do it and believe in yourself. And he saw it way before I did, because I did the corporate thing and then I finally jumped into my own driver's seat, if you will. So Joffer, who was a wonderful friend, was the first person to believe in me as an entrepreneur, and I finally listened to him.

Ed Mathews:

Smart man. I think that I really, truly believe that you learn more from your mistakes than you do from your successes and, like in my company, mistakes are not frowned upon, right? Just don't make them twice. Stubbing your toe is a good thing, because it's something that we overlooked and we can fix it and never have to worry about it again, or?

Bob Frady:

professional life. That is that you made, and what was it and how'd you recover from it? I made a lot of mistakes. Yeah, I know co-founder, and I have a bet who gets fired more. The biggest mistake is not betting on myself earlier in the process. Right later, it's like I kept working for these companies and I'm like, okay, now this is the next thing we can do, and they're like, no, we don't want to do that, you need to leave because I would make trouble. So I like building stuff, and so the biggest mistake I would say is telling my boss to go F himself if he didn't want me to solve problems. And then I was gone two days later, surprise.

Ed Mathews:

It's funny, how that works.

Bob Frady:

Had similar experiences, yeah, and then I realized I just need to better myself.

Ed Mathews:

Excellent. Yeah, that's good advice. I bet you I could give you guys a run for your money on who got fired more, because I'm cut from a similar cloth and I don't know that I ever told a boss to go F himself, but I came pretty darn close yeah.

Bob Frady:

It was fun and I knew HR was going to come in, because that wasn't the first. I'm like let's go. Yeah, all right, I don't recommend it.

Ed Mathews:

I'm going on a blaze of glory.

Bob Frady:

I don't recommend it, but it was stressful.

Ed Mathews:

Yeah, obviously you're somebody that you've got leadership responsibility, and with that comes the urgency to continue growing and learning, and so I'm curious about how you take in information. The question I'm really driving at is what's the book on your either physical or virtual nightstand? Who are you paying attention to and what are you learning from?

Bob Frady:

them is not to be emotionless. It is to understand what you can control and what you can't. That was a massive change in my life, and it was relatively recently as in the last five years, that I picked that book up, and I still go back to it all the time. You can control certain things. Those are the things that you should pay attention to, and things you can't control are ones that you should pay as much attention to. You can't control are ones that you should not pay as much attention to. Breakfast with Seneca so brilliant.

Ed Mathews:

I can't wait to read Control and control. That one I wasn't familiar with, so I'm so glad you just mentioned that, because now I've got a new book. I was literally inaudible today. And what's my next book?

Bob Frady:

It is a fantastic book and it's listen and it's listen. It might not be for everybody. For me it's like. My wife is an incredible reader. She reads everything. I don't read a lot of books. I read the internet, it seems, every single day, so I'm always ingesting information. But that book was? It changed my life.

Ed Mathews:

Can't wait to read it. I will have that in my either my Kindle library or my Audible fleet this afternoon. All right, cool. The other thing I'm always interested in is how leaders like you define success in their own lives. How do you do that?

Bob Frady:

You know, I got divorced once, never want to do it again and I changed my tenants in my life and I have three. Number one am I a good husband? Number two am I a good father? And number three husband? Number two am I a good father? And number three am I a good friend? If I'm doing those three things, that defines success to me. All the money and the houses and the Rolexes are all great, but they don't mean anything. Those three things for me aren't?

Ed Mathews:

Yeah, it doesn't mean a darn thing if you're being buried with your nice Rolex, but the funeral home's empty, right, yeah, exactly, all right. So when you're not saving the world from people buying lemons in the real estate business or personally buying their homes, what do you like to do? How do you spend your time?

Bob Frady:

I am a terrible golfer, yet I remain undaunted. I love the competitiveness of sports. I love the fact that I can still feel like I'm 15 again by getting out there and even at the old man level, still get out there and compete.

Ed Mathews:

So when you compete, what do you play?

Bob Frady:

I actually still play a little bit of softball, play a little golf. I was runner up for New York City dark champion one year. One guy tried to roll me one time. He was slow playing it. He wanted to bet me money and I never bet money Smart. But then I'd bet beer and he got hammered and I didn't.

Ed Mathews:

So that was a big day he sees oh, that's right, I'm not lefty, I'm a righty Boom.

Bob Frady:

Yeah, I see you.

Ed Mathews:

Yeah, I've learned a bunch and I can't wait to use your product. How can people learn more about you and Property Lens if they want to do something?

Bob Frady:

The easiest thing is to go to Property Lens, www. propertylens. com. There's a sample report on there. You can order a report. Listen, if you order a single report and you don't like it, just let us know. We'll give you your money back. That's how much we believe in the product. I'm on LinkedIn, we're on the socials, is my Property Lens and I'm Bob@PropertyLens. If you want to reach out and talk individually, I'm happy to

Ed Mathews:

Excellent! Bob Frady from Property Lens.

Ed Mathews:

Thank you so much for joining us today. Continued success, and I can't wait to use your product.

Bob Frady:

Ed Mathews, good to see you.

Ed Mathews:

Thank you, sir, take care.

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