Nate Smoyer on Tech You Need as a CRE Investor Today
Over the years, Nate Smoyer has led marketing efforts at early-stage proptech companies, driving growth and achieving remarkable results. With a proven track record, Nate has delivered impressive outcomes at startups such as Roofer.com ($7.5M Series A), Obie ($25.5M Series B), and Avail (exited to Realtor.com). Despite the myriad challenges faced by early-stage startups, Nate has excelled at building dynamic teams, standardizing marketing operations, fostering an analytics-focused culture, and generating inbound interest from channel and media partners. Central to Nate's approach is a focus on solving customers' problems efficiently and repeatably, which lies at the heart of every successful marketing program Nate has developed.
In addition to day-to-day work, Nate hosts Tech Nest: the Proptech Podcast, showcasing innovators and leaders who are transforming real estate through technology. Through engaging interviews and insightful analysis, Nate helps listeners uncover the latest trends, opportunities, and challenges in the proptech space.
https://www.linkedin.com/in/natesmoyer/
Get commercial real estate coaching, courses, and community to jumpstart your investment journey over at CRE Central: www.crecentral.com
Key Takeaways:
There are concerns about the potential liability for brokers and property managers using AI-powered tools like RealPage, if the tools have biases that lead to unfair rent pricing recommendations.
It's unclear if new construction technology like Field Materials solves a major problem today, given the challenges of getting multiple parties to adopt new tools in the construction process.
Enterprise-level software for commercial real estate may not always justify the high cost, as it doesn't fully replace employees and requires dedicated staff to manage the implementation.
Brokers should carefully evaluate the value and functionality of new technologies to ensure they are worth the investment, rather than just adopting the latest tools.
Nate has some Ohio vacation cabins for sale that listeners can inquire about through his LinkedIn profile.
About Your Host:
Tyler Cauble, Founder & President of The Cauble Group, is a commercial real estate broker and investor based in East Nashville. He’s the best selling author of Open for Business: The Insider’s Guide to Leasing Commercial Real Estate and has focused his career on serving commercial real estate investors.
Episode Transcript:
0:00
Are you looking to take the next step toward investing in commercial real estate but don't know where to go? Series central offers a comprehensive education and coaching platform designed to help you get started. Our online courses cover a wide range of topics, from the fundamentals to advanced strategies, ensuring you have the knowledge and skills needed to thrive in this competitive industry. As a member, you'll gain access to our exclusive online community and monthly group coaching calls, providing you with valuable networking opportunities and personalized guidance from experienced professionals. Whether you're a beginner or looking to take your career to the next level, cre Central has the resources you need, visit www dot cre central.com. To learn more. Welcome back to the commercial real estate investor Podcast. Today we're gonna be diving into the tech, the tech stack that you need as a commercial real estate broker. I hear this all the time, because I've got my own brokers as well. Man, if I just had that one more piece of software, it would change my business. And Nate might argue against me, I'm gonna call bull shit on that one. And that doesn't mean that there aren't some incredibly valuable pieces of technology out there that will totally change the way that we are doing brokerage and business and whatnot. So one, if there's a piece of technology that you're using, that we don't talk about today, I want to hear about it. Drop me a comment, you know, shoot me a DM on Instagram, whatever. We'd love to dive into it, because let's check it out. And other than that, mate, what's going on, man? Oh, it's
Speaker 1 1:38
been it's been a week, to say the least. It sounds like I've
Speaker 2 1:43
had a tall order of different things. I mean, you know, I have my hands in a lot of different pots. I'm doing all this prop tech stuff. We onboard a new client last week. So that's been a ton of work. Got some stuff going on with my storage facility up in Wisconsin. We're selling the cabins in Ohio. So if anybody listeners want some cabins, vacation rentals, you know, Ohio, hit me up on your blog. And then I've got stuff in Washington dealing with, with rent control rules that I've never dealt with in the past and not not fun to say the least. So this is a good break for me.
Tyler Cauble 2:27
Well, while you plug your your Ohio cabins a little bit more. Tell us more about that. Yeah,
Speaker 2 2:32
so we got three, like standard home cabins. They're all on one property. So they're all two and three bed one bath kind of situations. You're kind of tucked up in the Hocking Hills State Park. So a really great place to get away. Quiet, you know, people do hunting and ATVs and that kind of stuff are out there. And then we value add on this property. So we added two additional airframes kind of tucked back into the property. It's almost 12 acres of land. And so you have those two additional a frames that are really ideal for like that quiet getaway, you know, think like the couple's retreat kind of thing. You know, those. It's basically like a single bed studio you walk in, and there's a little bit of a sleeping loft, in addition to above the main bed, but I actually got to be the first guest last September, so we just put those online last October. And the property's doing really well. And but we're moving on to other projects. And so it's time to let someone else have it for the long haul. That is an interesting vacation market, I would have never personally went and looked into Ohio, mostly because I'm from Pennsylvania, and we just hate on everybody that borders Pennsylvania. But I was pleasantly surprised when I got a chance to go out there and stay in the cabins as the as the first guest when I was on a road trip last year. So yeah, I can I can hit up anybody with the with the link if they wanted to afterwards. But yeah,
Tyler Cauble 4:10
that's not too bad. Yeah, I've got Nate's LinkedIn. Link, I guess in the description. So reach out to me on LinkedIn.
Unknown Speaker 4:19
Yeah. All right.
Tyler Cauble 4:21
Let's dive into technology. Because yeah, man, it feels like in the last couple of years. I know AI has been going a lot longer than that. And I'm sure we'll touch on that today. But man, I feel like tech in general, and commercial real estate in the last two years since AI has come about has completely changed. I mean, honestly, man, as a layman, it's very difficult to keep up with. So walk me through a couple of stacks that we should be using and let's talk about it. Well,
Speaker 2 4:49
actually, maybe we start on the AI piece because there's something that I came across. Recently I think a lot of people have been seeing the stuff it's real page, right? So no A real page as an AI tool that was essentially learning off of rental prices in aggregate and then helping set rents for property managers. And it sounds good. And the claim is that it was a bias. And this was causing rents to artificially be raised higher than it should have been. Well, here's where it gets really interesting. Because it's easy to say like, well, that sounds like rent or real pages problem. That sounds like something for them to deal with. But the end of the day, the broker brokerages, management companies that are using AI tools, if you're using them to guide your decisions, and making decisions based off the AI, that's the piece to understand here, that's actually your liability. So yes, real page might have its own jam to deal with and problem to deal with here. But to me, the real story here is now that the liability doesn't stop at the tech company, it actually can pass on to, the broker can pass on to the leasing agent, etc. So that's the piece, I think that people need to be concerned about the I won't necessarily be following the news, like, you can follow that kind of stuff and jump on Twitter, if you really want to be following news kind of stuff. But that is that's the piece that's very interesting to me. I'm not really sure what to do about it. I'm curious if there's any talk at all, in the brokerage world, of what this means for them, but how do you even safeguard yourself from liability? Because you assume that tools are telling you the truth, you assume that the data analysis or the guidance is good for you, and it's there for you. But if it's got bias, but it can be a bit of a problem? I
Tyler Cauble 6:48
think it's a trust but verify situation. I mean, look, it's the same as calling on, you know, analysts and, you know, appraisers and hoping that they're giving you the right cops, and then you're using that to make a decision, right? I mean, if they give you the wrong information, and you make decisions based off of that, it still comes down to you. Right? So I think it's totally, I think it's just another tool in your tool chest that you got to be wary of, you know, hey, if this tool isn't sharp, it's not going to cut right.
Speaker 2 7:15
Yeah, exactly. And so I think that that's, that's something that I'm paying a little bit of attention to, but it's mostly just stuff like, practically, what is the day to day practitioner need to understand about the technology so that they can also infer and like make good judgments based on the outputs and not purely follow up, and I think this is really is probably going to lean heavier into the management space than it does into the the buy and sell space, I think you're going to be a little bit absolved from some of that risk. But inherently, you know, the models are built off of sets of data. And it all depends on the quality of those inputs that determine the outputs. So it's something certainly I think, for some people to be to be concerned about and to be aware of, for sure, they are moving forward. There was there was something else, I came across a new company called Field materials. I don't know if you've heard of them. I haven't. Okay, so they they raised a seed round of funding, it's mostly in the construction space. So this is a certainly impact, you know, project starts, that sort of thing is their idea. So there is, you know, 4.6 million, not a huge round, it's a it's a seed round. And their whole push is the idea of leveraging AI to streamline material procurement, as well as contractors. I keep hearing this come up a handful of times, but I'll be honest with you, I genuinely am not attuned to that space very closely. So I don't know if if you're seeing that impact any projects, or if anyone's else is using this, there's, I've had a handful of guests kind of talk on this topic on my show. But I'm curious if you've heard anything about on the securement side of getting project started in the project management space where that's really being adopted. You
Tyler Cauble 9:07
know, what, it's interesting, I haven't really, you know, we haven't talked much about supply chain and procurement really, since 2020, in the height of COVID. And I don't know how big of a problem that really is. Right? I mean, that's, that's interesting to me. I mean, there's a look, you know, we just started a hotel, right renovation, and yeah, you know, there's, there's aspects like I've got doors on site today, we already we just started, right, but I ordered doors and windows, because I knew that there was just going to be a long lead time. So to me, it's like, does that solve a problem today? If the supply chain is no longer disrupted? Like was that a black swan event that will never happen again? Or is there actually like an issue with our supply chain that a piece of technology could solve to cut the procurement time down in half which means you know, then theoretic We eyes and investor can keep my money with the bank for a little bit longer instead of spent and you know, incurring interest rate charges. Could be interesting, but I wonder how big that could actually be.
Speaker 2 10:13
I think some of the challenges that I've heard the cases that I've heard laid out is you have, you know, let's say you're building a new apartment tower, of course, you have your general contractor, and then you have your drywall or which a drywall or then has subbed out to four other companies. And then now you have this problem of like material procurement for each of those contractors, and then proof work has been completed. And then how do you get payments to waterfall down to everyone who needs to get payments in order to move forward? This is where like, you can get different contracts inserted, or there's different systems of record. And I think that's some of the problem that's been trying to address or trying to solve with this. But you know, I think we're probably going to continue to see that there's like this sharp divide, you're going to probably find companies who fully lean in on this, and it works. And you're going to find those who just keep it's business as usual, a we're just going to do what we do, because there's just so many people involved in the process, especially on a new start on a new build. It's, it's really difficult to add in a layer of tech and assume everyone else is going to adopt. And to use that and jump on with that.
Tyler Cauble 11:30
I wonder how different this is from built technologies. That's a that's a Nashville based group, they're worth over a billion dollars. Now. They weren't they weren't started too long ago. I mean, they reached unicorn status quickly, it was like 2021, I want to say they probably started in 2015, give or take. But basically what they do is they manage or they help contractors manage the construction loan administration process, the asset, they do asset portfolio management, they do a lot of the, you know, payment processing, and I guess
Speaker 2 12:07
the did they did they go public? I don't think they raised 312 312 million still private, so they're not public? Yeah. So that they've raised quite a bit. Yeah, they're,
Tyler Cauble 12:20
they're doing well, I went to high school with, with a couple of those guys.
Speaker 2 12:24
We should have that one as another as a topic at some point. But, you know, somewhat similar to them. So I kind of think of North Spire, have you heard fire? I don't know if so, we've had North spire on the show. And I kind of like I started thinking of companies like that of like, you know, so they, they put it through the development command center for projects. It's not necessarily on the material, procurement side or contractor procurement, but they'd laid out until like three stages, you're planning pre development, construction. And, you know, even I forget how to say it was like one of the convention centers. That was the founders like first project, as a project manager in New York City, was like a massive renovation of one of the convention centers downstairs, downtown. So he had a incredible glimpse into what was broken, in a very difficult market to build. And it seems like from what I can find, on North Spire, of course, they're still a private company, but they've raised 32 and a half million, and their employee count, I can look at it on LinkedIn continues to grow. So that's obviously a good indication that there is there certainly obviously, is adoption, in into technology for construction companies, on new builds and construction starts. I think it's interesting to me to try and figure out what is you can do, and what is this will actually impact the project, this will actually impact the bottom line. That's the part for me as a non practitioner, that is the tough one to figure out here. I'm trying to find more practitioners to talk to to tell me, Hey, what's actually making a difference? And what's just kind of buzz?
Tyler Cauble 14:18
I can I can actually answer that for North spire because we used to use them. And I was, I was a subscriber, you know, I guess up until January, give or take, we used him for about a year. And here's my problem with with, you know, software's in general, when it comes to commercial real estate. They go, Oh, these guys are dealing with big numbers. So we're going to charge big numbers. And, you know, the onboarding process wasn't great. They weren't for us. This is my experience specifically. They didn't solve such a big problem that it was worth half the amount that we were being charge for it. Was it can did it create convenience? Absolutely. It made things easier. But not so much easier that we couldn't use a typical project management software that cost 20 bucks a month. Right? So
Speaker 2 15:13
you get to like Monday or like an air table or something like that? No,
Tyler Cauble 15:18
I mean, I would have to ask my project manager, I don't even know what we use now. Because we don't, we just went back to kind of what we did before, which is basically keep track of stuff and spreadsheets. I mean, I use I use notion for all of my project management stuff. Yeah. So I don't know necessarily what he's using. But like notion, I think it's like 100 bucks a year. And we can build it out for what we need. And that's, that's where I struggle, which is kind of exactly what you said, it's like, what what should be done, versus what can be done. Just because you can build it doesn't mean that you should kick
Speaker 2 15:52
you can templatized your your notion boards, is that something that what what you've built out, could apply to other projects. Question tailored each project? No,
Tyler Cauble 16:06
I mean, it probably we could probably actually template it out. And it can apply to anything. So I mean, I would imagine, look, I'm not the organized guy, right? Like my, my project manager, James, he is the organized guy, he could put together like the perfect templates. Yeah, mine is just like, hey, this works for me, as anybody else. But yeah, I mean, if somebody went in there and spent the time and notion to put together a project management tool for commercial real estate, there, people would easily pay $1,000 a year for that. Right? It wouldn't take you that much time. If it if it was good, I mean, you know, these these software companies that are coming out here, and you know, they're to an enterprise sales or whatnot, and they're selling stuff for 1020 $30,000 a year, that makes no sense at all, to me at least.
Speaker 2 16:54
Yeah. Okay. So I want to press into that. So that when when does it make sense to to pay enter price level enterprise tier costs for software's? Because I think you're just part of what you're, you're saying here is accurate, right? Price, the customer, not the product, which is one of the strategies certainly used in in, in that, but it's also, if you only have, you know, 50,000 potential customers, then you have to charge a high price, obviously, for that business model to be venture backed and to be worth it. So, but for the for the broker side, and even potentially, in the investor side? How are you evaluating some of these tools to even say, like, this is yes, this is worth 10 grand a year? And no, this is not because it doesn't? Is it a certain functionalities data is? What what are some of those factors you're looking for?
Tyler Cauble 17:45
I mean, you know, at its core, like the way that I look at my business is every employee should bring in three to 5x their salary and revenue. Right? And not necessarily directly, but they like having them in should allow somebody else to create three to 5x in revenue, when I look at software's, or I'm kind of looking at it, like, it might need to be seven to 10x. So even if I'm spending 20 grand a year, if it creates me $200,000 in value every year? Hell yeah, absolutely. The problem is, it's not going to replace two employees. Right, like, it's not going to fully replace that. In fact, I could probably get three employees to, you know, for the for the same amount and get more out of those three employees, instead of spending that money on a software. So, you know, I know, obviously, having one full time employee at 60 to 80,000 hours is a lot more expensive than 20 grand, but at the end of the day, somebody has to be investing the time and putting all the data and and farming, that's piece of software.
Speaker 2 18:54
Yeah, yeah, that's true. That's right. I do think that probably one of the one of the pieces that frequently gets missed on any sort of, especially if it's enterprise tier is that you need an implementer, you need an administrator in house. And that is a oftentimes, I would describe it as a hidden expense. And it's at least the cost of a part time employee to have that done well. And that's at the very least, well,
Tyler Cauble 19:19
and so that's what I would say is the problem, right? Because the majority of development companies are fewer than 10 employees. And I would say probably fewer than five. I mean, one of the biggest developers in Nashville, he's got an incredibly lean team. So when you're telling these people like, hey, this software is gonna solve all these problems, but you basically have to hire a you know, half or another employee to to do it. It's like, okay, well, it's not worth it.
Speaker 2 19:46
It sounds like it just added half an employee didn't eliminate one. Yeah, exactly. Yeah,
Tyler Cauble 19:50
it added more work. That's that's the problem I have with it. Like I really want these things to create solutions. I'm in another industry, I think that would work unbelievably well. Maybe it works in residential construction? I don't know. But I mean, that's, that's my experience. I know, we've got off on a complete tangent here.
Speaker 2 20:12
I think this is all related. And I got one more I'll throw in here that, you know, we're, we got on development and build new builds. And I think it's all kind of part of that process. And to what role is a broker you play on the side of new builds, probably, to some degree, helps or hinders your ability to close those big deals. But there's a there's a company called jet build. Have you heard of them? Or seeing them? No, no, I haven't. So that as they describe it powering real estate developers, construction professionals, or cloud based pm solutions, they break it down. They break it down to four stages to kind of describe their end to end solution, you know, the planning of the project, to design the project. So helping you manage like bid management invoicing, permit tracking, all throughout the platform, the build phase, so they have their own little construction modules, and then some accountability, checks and balances within their submittals and schedules. And then the management, you know, the final data is compiled and stored. And then so then you can see refer back to photos, and status as you go throughout the build, so that there's some checks after the fact, which I'm sure for the point of payments, and making sure that things was done well, or in scenarios where things have not gone. Well. You can reference back to that to kind of like see, okay, what was in this stage? Like the contract, you know, electric electrician said they did this, we have photos of the build at this phase. Really? What, what what happened there, and they can go back and take a look at what that is. Yeah,
Tyler Cauble 21:58
I like technologies like that. Because as you're going through the process, you know, being able to go back and look on a specific day and see what was going behind the wall. I mean, even for future maintenance, right? It allows you to know, should we drill in this wall or not? So often, you have no clue what's behind it, and you don't know what you're going to hit. And that's a problem. That's
Speaker 2 22:24
that, then there is a company that specializes in that called on site IQ. So they do I think I've probably brought them up before because I'm actually I'm just a big fan of them. So they do 360 view camera tours throughout the entire construction process.
Tyler Cauble 22:47
Yeah, we've definitely talked about them before.
Speaker 2 22:49
Yeah, because they're going through and they're like, so basically, like per the layers of your blueprint. They are cataloging photos of everything that's happening all throughout the process. And so they can take on some very large projects. And this is actually the power of, of AI. This is really where it comes into play. Because now you can actually far better reference to go find something like a lot of us think about, we don't really think about this, but like, computer vision so powerful when you open your iPhone, and you're like you're telling someone a story about that, that old motorcycle used to have, maybe this is just me, right, and I can go into my iPhone, I could just type in motorcycle, and I can quickly find out of the US. Right? That's, that's computer vision at work. Okay, now apply that to large scale construction projects and commercial buildings. And but you can do this in a far better way you can, you can start fresh, like think about the capabilities here where you can reference a phase where you can reference a specific trade and dig in and search. So as we get used to you leveraging AI tools, and like search, and chat formats, we have to start learning about some of the capabilities of like, what the computer vision technology enables us to do. And that's some of the potential upsides of some of these tools, I think that it's really going to be opened up and unlocked in the future. And it's all I mean, it's already here now. I mean, it's, it's here now, and hopefully, I didn't just totally inaccurately describe what onsite IQ does. That's a good chunk of it, of what they have the capabilities of and where we're at already with computer vision and AI.
Tyler Cauble 24:37
Well, yeah, I mean, you just start thinking about it. Okay, well, let's, let's go back and look at, you know, everywhere that we installed, you know, 16 gauge electrical wiring. I mean, I know that's very specific, but if if AI can start pulling that stuff up, then you'll be able to see okay, what's the capacity of this room compared to that? I mean, you know, that becomes a bit of a game changer there.
Speaker 2 24:59
Yeah, yeah, I swear I don't read the entire internet to try and find all this stuff I wanted to plug. It's not it's not mine, I don't even know who runs this, there's a newsletter that I think is gonna be relevant to the to the audience here. It's on substack. So if you're like one of those, like substack, email readers, it's called last week in contact. So this is this is a great resource where I'm checking in on like, new startup foundings different like policy and regulatory changes and, and also like new infrastructure projects. And it talks about like bigger picture things, not just maybe like stuff in your city, but like larger highways and things like that. Anyway, this is a, this is a great newsletter, it can be free, you can also choose to donate to them, so that they can write their articles and things like that, I should start implementing that same model. And now that I think about it, this is a great, I was
Tyler Cauble 26:02
gonna say that sounds like 100%, something that you could aggregate to because I mean, one, the fact that you found this too, I mean, you're you're like a library when it comes to commercial real estate technology, like news firms, all that kind of stuff. You should totally do that.
Speaker 2 26:18
Yeah, maybe. But I don't know if my newsletter, I just talked about marketing in my newsletter, and then I give a few links out to like, product announcements, but but this is, this is one of those good ones, because this is like, I found a friend of mine. He's an electrical engineer, specializing in evey charging stations, and commercial implementation of evey charging stations. And he was looking to make a change in his career. And I was able to find evey companies that he hadn't heard about, you know, through this newsletter, and as well as, like, some of the just very interesting things that are impacting buildings and development. You know, it's, I found a lot of it through here, just because they've really hyper focused not just on the technology side, but anything that's directly related to construction, 10, trends, new builds new development, and even stuff outside the US, which I generally don't give a ton of time to, but I think is important because you can kind of you can learn what other from other markets, even if they're not comparable, you can take in a lot from them of either what's possible or better ways of rethinking, you know, to practice in your in your own specific trade. So, there's some cool things to consider there.
Tyler Cauble 27:35
Yeah, I love that. I mean, that's, that seems like a pretty interesting newsletter. If you're interested in construction tech news, which you should be because it'll it'll help keep you really on the cutting edge of the industry there. Nate, Thanks for walking us through everything today. This was awesome. Your LinkedIn bio is obviously gonna be in the description. But give a quick plug on other things we're working on right now.
Speaker 2 28:01
I've got my newsletter, you can check it out. And my podcast tech nest.io easy way to get on the list top right hand corner of the screen. I send out marketing articles on early stage prop tech startups, but as well as other prop tech news, including products, announcements, partnerships, funding that sort of thing. New podcasts weekly, but for the next two months, I have two podcasts weekly because I have a backlog of interviews that I've just got to get out into the open. And otherwise I'm at needs more on Twitter, Nate's are on on LinkedIn, very easy to get a hold of, you know, ping me, shoot me your suggestions or love it. Shoot me all your hate. Tell me I'm wrong and don't know what.
Tyler Cauble 28:45
That's mostly Twitter. Anyway. Thank you guys for joining us. We'll see y'all in the next one. Are you looking to take the next step toward investing in commercial real estate but don't know where to go? Series central offers a comprehensive education and coaching platform designed to help you get started. Our online courses cover a wide range of topics from the fundamentals to advanced strategies, ensuring you have the knowledge and skills needed to thrive in this competitive industry. As a member, you'll gain access to our exclusive online community and monthly group coaching calls, providing you with valuable networking opportunities and personalized guidance from experienced professionals. Whether you're a beginner or looking to take your career to the next level. Cre Central has the resources you need. Visit www.cre central.com To learn more
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