Imagine calculating ARV, managing your projects, analyzing and marketing your deals, and getting funds – all in one software! 

Daniil Kleyman is the founder of True Vision Analytics, a software company with a current user base exceeding 80,000 real estate investors (wholesalers, rehabbers/flippers, builders/developers, and landlords) and brokers all over the US and abroad. He is also the founder of 

Evolve Development is a real estate investment and development company specializing in the ground up development of multi-family and mixed use projects. 

A diverse man with incredible knowledge and skills – this is the one episode you don’t want to miss! 

More about him – tonyjavier.com/valuator

===============================================================

Welcome to the Real Estate Masters podcast, where we interview the top names in the Real Estate game. If you want to grow your Real Estate business, see more podcasts or get free resources – Go to www.REMmastermind.com. The only podcast that allows you to directly connect with the guests and many of the highest level names in the real estate game.

You are in for a treat with our next guest. Do me a favor, subscribe to the podcast, leave us a review, and don’t forget to go to www.REMmastermind.com to connect with some of the highest level Real Estate professionals in the United States through our community and through our high-level masterminds. Let’s go.

Itunes – www.TonyJavier.com/itunes 

=================================================================

Show Transcription:

Tony (00:01):

Welcome to today’s show. We have an awesome guest as usual today, Daniil Kleyman, a very diverse guy. He’s got a software company, which I’m really interested in hearing a little bit more about, he does some ground-up development. He does commercial real estate. He’s done some residential, done, done all kinds of good things. So I’m excited to have him on, Daniel, how you doing today, man?

Daniil (01:04):

Doing great. Thanks for having me on Tony.

Tony (01:06):

Yeah, absolutely. So we connected in a kind of a mastermind type group just recently, someone else actually recommended you and your you and your software. So I’m really curious about this software. So I guess we’ll get into that here in a little bit but let’s start, let’s start with your, with your background. Let’s get to know you a little bit more, how you started and kind of how you got where you are now, what you’re doing, you know, software and ground up development and all that kind of good stuff.

Daniil (01:34):

Sure, sure. I’ll give the 30 second story instead of my whole life story. Well, I’m an immigrant originally. I came here from Russia in in 92, came here with my family. Out of college, I ended up working in New York, in wall street. I had a job. I had a number of jobs in finance. I bounced around because I quite really fit into a lot of places, but my job was in bond trading and bond deal structuring. And when 2008 happened, I was working for a company called Bear Stearns. So if you were around during those days, you’ve probably remembered that name. It’s one of the top five investment banks on wall street that completely blew up in 2008 and got bought out by JP Morgan. And my position was basically eliminated and I was laid off.

Daniil (02:30):

Thank God. At that time I was already really interested in real estate, but you don’t, when they pay you a bunch of money, you don’t leap. Like you just, it’s so hard to walk away from a really nice salary what do they call it, golden handcuffs, right? So luckily 2008 happened and I had no choice. They let me go. And at that point in time, I decided I’m done. I’m not going to hunt for another job. I’m going to take this as a sign. And I think this is an opportunity to work for myself. And so in 2008, I moved back to my hometown in Virginia. And I had already passively invested in a couple of rental properties and they wanted to grow that. And at night I jumped into real estate full time. You know, I started to buy one house at a time.

Daniil (03:17):

I did some wholesaling, but very quickly I, I started doing bird deals basically, right? You buy a house, you renovate it, you put tenants into it, you refinance it and you take, and I was using a private lender. And when you think that money and you roll over to the next year, and I started building my portfolio up one house at a time I didn’t have much money at that time. I came from a very nice salary in wall street, but I couldn’t save anything. I was in my twenties. So I was living with my parents. I was 28, 29 years old. I moved back in the home with my parents. And while I was building up this real estate portfolio to try to replace my, my old income live with mom and dad for a couple of years. And until I probably got to about six or seven houses and I started generating enough income to then go and pay my expenses and pay some rent.

Daniil (04:08):

And at the same time, I started the software business, almost kind of like an accident. And I needed something for myself to be able to evaluate deals. And at the time I was relying in private money lenders to to fund me in order to build this portfolio of houses. And I needed something to generate presentations to those private money lenders to show them that, Hey, this is the deal. This is how much you’re going to get paid. This is how you’re going to get paid off. And I came from that world where I kind of understood how to speak to investors and understood what people want to see in order to trust you, to give you their money. So I built a tool for myself, and then I made it available to a couple of other investors and they said, man, this is really cool.

Daniil (04:51):

You should, you should sell this. And I organically started the software company. And since then it grew into, we’ve been able to help. Yeah, there’s a free version, the paid version, and the free version has been in the hands of probably hundreds of thousands of investors at this point. And we’ve been able to help a lot of people since 2009 when they started this business and I’m able to meet a ton of people through that business now. So it’s been very cool. And, you know, again, my interest almost immediately was in monthly income, right? Everybody seems to enter the real estate business wholesaling or fix the flipping, but I bypass wholesaling very quickly. My interest was in, how can they build back my monthly income to where I don’t need to work. I can replace my old corporate income and I can grow from there.

Daniil (05:46):

So my interest has always primarily been in that mailbox money. I don’t really get excited by flipped checks. We flip houses, we built probably eight to 10 spec houses every year right now, and sell them and make very nice profits on them. And I’m weird. It doesn’t get me excited. I just want that monthly reliable, recurring income to keep building.

Tony (06:07):

You like that boring money, right?

Daniil (06:09):

I like boring money. Because, because the boring money will come in and it gets predictable. The boring money will come in again next month. And the month after that, if I stopped doing deals and to me, that’s hugely important, right? I don’t want to have to hustle for that next deal if I don’t want to, or if the market dries up. So, you know, again, they started doing bird deals and they did one house at a time and they slowly then got into buying and renovating, you know, duplexes and four union buildings.

Daniil (06:35):

And then I got into new construction. So my business right now is primarily, we build ground up rentals, anything from duplexes to I’m working on the 150 unit project. That’s going to go to permits during the couple of weeks and everything in between. So I’m building a 25 unit mixed use project now with 21 apartments and a 5,000 square feet of commercial space you know, 16 unit project bunch of duplexes, like my bread and butter was just building duplexes. Cause you can build them by residential building code. It’s cheap. People love to rent them and they cashflow very, very well. So that’s, yeah. That was longer than 30 seconds. I’m sorry. Yeah,

Tony (07:18):

No, that’s good stuff. That was good stuff. So it sounds like the rehab valuator, which sounds like a great thing. That’s been in many hands of many different people came out of necessity, right? It’s like you needed something that you could use that would help you to analyze deals, raise money, pretty much, you know, most of, do most of what you needed in your business. So tell us about the multiple businesses, right? So I have multiple businesses as well, and I know other people that they start in business and they start with something, whether it’s wholesaling, rehabbing, whatever it is. And then they start varying way off into different things. And for some people that can work, if they laser focus and like get something and do something really well, like varying off is not a big thing, you know, but I find that people chase too many shiny objects sometimes.

Tony (08:12):

I was one of them at one point I I’m much more focused in just real estate, even if there are other things I go outside of my main businesses. So tell us how that has been for you. Like when you started the software business, you were doing real estate at the same time, how were you able to do both of them? Cause it sounds like both of them you’ve been able to scale pretty well. How did you take on both of those so efficiently and be able to keep both of them up and running at a high level.

Daniil (08:41):

So, you know, I I’d be lying to you if I told you that there wasn’t a constant tug tug and pull right between between the businesses and we have an in-house property management company, but that’s, I’m fairly hands-off with that. You know, I started both companies almost as a hedge. They were both nothing at the time when I started them. And I said, I don’t know what’s going to grow. Let me, let me scale up both businesses and see which one takes off. And then I may not continue the second one. And but they both grown and scaled and, you know, it helps, they’re very complimentary businesses. Meaning when I do real estate deals I can take what they learned in the market and I can apply it and I can improve our software. I can record content and training for users that comes from real world experience. And I can release that to our email list and to YouTube and, and deploy real-world knowledge about real estate and then use the software to demonstrate how we do the deals. So it’s been very synergistics and they’re generic. So that helps, right. If these were totally unrelated businesses, I think I would have closed one down by now.

Tony (09:59):

Because you can make you can make changes every day, right. Cause if something in your software you’re using it and it’s like, oh man, it would be cool to have this feature. You can just jump in and have your programmers change it. Right. So it’s a, yeah, definitely ties together.

Daniil (10:12):

And that’s what we’ve been able to do. I mean, the software has evolved from something very simple to now, something that, that has very, very deep functionality and it’s evolved basically almost based on my needs, right? There’s a whole project management suite there where it’s basically a construction management software now, and that’s evolved from my own needs to be able to, to create very quick cost templates. So I can estimate my projects going forward and create you know detailed budgets for my lenders and then schedule out my project. So in Napa county where I can actually track every rehab and every construction project that I’m doing and knowing real time where things stand and now we can do lender draws inside the software. And so it’s evolved based on my real estate business and the needs there. But to answer your question, it comes down to, I think hiring really good people.

Daniil (11:04):

And I, you know, I’m still figuring that out and I’ve, I’m probably understaffed right now. And that’s one of my big focus points for this year is how to delegate more because I am probably your classical control freak. You know, I have a really hard time letting go, but when they let go and they put that into the hands of every time I’ve ever let go and put that into the hands of a really good competent person. I’ve not only never regretted it, but I’ve always been able to then obviously scale a lot more and focus on higher level tasks. So, you know, I, I’ve done a decent job of hiring some good people in both companies and, and I, it’s something I’m working on improving even more this year. And you know, it’s also, it also requires to not be greedy, right? Because every new person I hire my overhead grows and maybe my net income in the first year when that person comes on board thinks because now I’m paying their salary, but in the longterm, it’s always a good decision.

Tony (12:09):

Yeah. You touched on some really good points. And you know, for me, I’ve said this many times as if, you know, back 10 years ago, when I was doing most of the work myself, I had a staff and I fired them, fired my whole staff for the second time. So I had to take back everything. And, you know, from that standpoint, it was like, I was the choke hold of the business. Like, you know, everything came through me. And I thought that at that time, when I took it back, I was the best at everything. Like I would negotiate best with the sellers. I could manage the contractors the best cause I knew what work needed to be done. And what I found is fast forwarding about four years back in about 2014, I stepped out of my business. And when I looked at everybody in my organization that was running the business, the person that was taking the calls was, was better than I was. Cause they were more patient. They were more, you know,

Daniil (13:01):

That’s their only job, so they’d better be amazing.

Tony (13:06):

And they had the personality for it. Right. And then the acquisitions, it was like, you know you know, they did it better than I did because again, they were better customer service. They were more patient than me. I just wanted to drill in, get the job done and you know, and then even the contract, I’d get so frustrated with contractors and I would try and just like drill them and just like push them so hard. But my project manager now she has the little bit of that that she needs to have, but she’s also very detailed and patient where she’s like, okay, didn’t get done today. But as long as you get it done tomorrow. And like, so every position that I’ve hired for, I thought would take a dip and maybe it did in the very beginning because I had to train.

Tony (13:44):

But then it just like those people did it way better. But even if they did it 75%, as well as I did, like, it was still worth giving up because I could go create other businesses or other streams of income or raise more money or find another marketing avenue that I didn’t have before. Right. so it’s great stuff, you know, and we talked about this right before we jumped on. It’s like, I love talking about automation. Like I get fired up when I talk about like growing and scaling. Cause I’ve got, you know, six businesses I’m running right now. And you know, a couple of them are newer and you know, fairly inefficient, but I’ve got, you know, other businesses that are running really well. And I wouldn’t be able to do the, you know, the other businesses, if those weren’t weren’t running well. So,

Daniil (14:25):

And that’s the only way to keep your salary coming because you know, it’s that classic paradox of, we all get into business. We all say, when we’re starting businesses, we want to do it for the freedom. And then we ended up working three times as hard as we did when we had a full-time job and the boss nights, weekends, you know, if you’re anything like me, you’re constantly thinking this crap, you’re going to sleep thinking about it. You’re waking up. You’re thinking about it in the shower. You know, I’ve got two toddlers and I catch myself, you know, I catch myself, but like when I’m with them and I need to be present with them, I still catch myself drifting off and thinking about some real estate deal or some bullshit that’s not really that important compared to my kids.

Daniil (15:13):

And it’s that classic paradox. Like that’s not why we got into business. That’s not why we suffer all this, you know, frustration and heartache and take these risks work harder than ever the rest of our lives. Right. And the only way you do that is through automation to your point then, and hiring really good people. That’s the only way you can get out of it. The actual time freedom for yourself without the time freedom. Now I’m not perfect. I’m, I’m getting there. Right. But it’s something I’ve really been focused on is, is the time for you. There’s nothing more important, right? That’s the most valuable currency you’re ever going to have is ability to control your time. And if you do not have the ability to control your time, you are not truly free, I don’t care how much money you have in the bank. So, you know, that’s, it’s automation and it’s delegation.

Tony (16:11):

Yep. Yeah. So we talked about people, you talked about your software a little bit, so that, that, that’s another thing. So like great systems in place, right? So rehab valuators, a software or what you could also call a system. So let’s jump into that a little bit more because I’m very intrigued about that. So tell us again in, you may have already gone through this, what the software exactly does. So from beginning to end, just walk us through the phases of exactly what that can do for other real estate businesses.

Daniil (16:40):

So picture your sort of deal process start to finish, right? It starts with, if you’re wholesaling you’re, if you’re doing your own marketing to sellers, you’re, you’re doing that, then you’re getting leads and then you get a lead. You need to analyze that deal. You need to figure out what the fall for. You need to look comfortable sales, you need to research the property itself, right? You need to get the offer, get the contract. If you’re wholesaling, you need to sell your deal. If you’re buying a deal yourself to flip or turn it into a rental, you need to get money to fund that deal. And so on and so on. Our software basically picks up at the lead stage, right? We, we do not give you seller leads because there’s 50 million data companies out there in 50 million software companies out there that will give you seller leads.

Daniil (17:35):

But as soon as you have a lead, our software picks up and helps you do everything from there, meaning you can analyze multiple exit strategies. You can click a button and pull up a owner name, contact info, all the property stats from public records. You can click a button to pull up comparable sales and calculate your after repair value and your offer. You can get the deal under contract. And then if you’re wholesaling, you can create very clear marketing presentations and syndicating them to social media or text blast them to your buyers and get that deal sold immediately. And if you are rehabbing, or if you’re going to be keeping this property as a rental, you can generate very effective presentations and deal funding proposals for your hard money, lenders, private lenders banks. We will use the software to generate bank presentations for, you know, 20 plus million dollar ground up development projects as well.

Daniil (18:36):

So you can use the software for multi-family single-family everything in between. So now you’ve got funding, you’re closing this deal. The other piece of the software is project management, construction management. So you can create a detailed budget scope of work. You can click a button and load an existing template and with costs pre populated there. So you can estimate repairs in the project. You can then when you’re, there is a visual project schedule where you can lay out the schedule of the whole deal, right? This is when plumbing happens. This is when electrical happens. This is when we close up the walls. This is when the windows are going in, et cetera, et cetera, you can share that schedule with your team. And then there’s an in-app accounting that allows you to throw QuickBooks away and basically account very easily your costs during the project and know exactly where your project stands or your bookkeeper can do it inside the software and then generate real time reporting. And this is what we budgeted. This is what we spent so far. This is who we’ve got left to pay. Are we over budget, under budget? And you can share that report you get with your lenders partners, et cetera, et cetera. So basically we pick up a delete stage and we help you with every stage of the deal from there.

Tony (19:57):

I love that. I love that. So, so just so I’m clear, is it considered a CRM as well? So if a lead comes in does it, can you manage leads or is it just finally when you get the deal under contract, then that’s when you put it into the software.

Daniil (20:11):

If you treat the lead as, as a property, you can store unlimited properties in the software and unlimited deal analysis of properties. Right? But it’s not a, it’s not a true CRM because it’s not going to let you manage your follow-up with that lead until you get the deal under contract, right. It doesn’t have that component in it. So, you know not to say that we won’t have a CRM at some point, but it’s really not our superpower. We’ve kept out of that sandbox, but that’d be.

Tony (20:46):

Fantastic. Well, if you guys want to get a free trial of that or a free version of that, go to tonyjavier.com/valuator, we’ll get a link in a code set up for you guys to get into the free version of the software. Try it out, see how you like it and check it out. So I think, I think that’s something we’re going to do with our business. Getting to know you a little bit better and, and what you do. I think that’d be something that’s great for our business, because there’s not a lot of, like you said, there’s thousands of data services. There’s hundreds of CRMs. There’s all kinds of different things to get you to the deal. But once you get the deal, like people, don’t like, there’s a lot of management to it, right? It’s valuating, it’s raising the money, it’s organizing the job site and this is something actually, I’m probably, now that I think about it, I do a lot of gap funding for real estate investors.

Tony (21:35):

And a lot of them are newer. They’ve done maybe a project or two or 10, but any which way they’re having trouble managing their jobs. So I think this is something that I may ask them to plug into to help them manage the jobs better because that makes my money safer. And, and on top of that if they send me a deal, maybe there’s a way for them to put the information into the software and then send me the package through that that makes it easier to read. So we can talk about that. I like that.

Daniil (22:03):

Yeah. Lenders love seeing those reports because it breaks down what you, as a lender want to see, this is the ARV. This is what I plan on buying the deal for. This is how much I’m going to put into it. This is what I’m going to sell it for. Oh, here is a report with comparable sales. Here’s my budget. Here’s what you’re going to make to the penny if I have this deal and this money out for six months, nine months, et cetera. So our users are communicating data points to the lender that the lender actually cares about and wants to see to gauge their risk. So it’s been very effective for fundraising, especially.

Tony (22:44):

Awesome. Very nice. Very nice. Well, we’re going to start wrapping up here. You know, you’ve been in the business for what, 12, 13 years now, right? 2008, I think is when you said you guys started after the layoffs. So tell us about learning lessons. Like for me, you know, 20 years, I could spend two days just talking about ups and downs and learning lessons and all that kind of stuff. So, you know, what are some things that you feel like you’ve learned from? Cause for me, like even things that have been really quote unquote bad in my business typically ended up turning out good because something came good out of it. Whether it’s a learning lesson or I ended up hiring someone that I had, you know, after I had to fire someone and it turned out to be a good thing. So what are some things you’ve learned throughout the last 13 years of business that you’d like to share with the audience.

Daniil (23:31):

Sure. I can share a couple of things. First of all, when, when there’s a downmarket again, buy more, whatever you, whatever you plan on buying double or find a way to double or triple it. Right. I mean, we, we all probably look back at 2010 and 2011 and wish we picked up 10 X, you know, in our portfolio. So when everybody’s running scared, and it will happen again. I don’t know when that will happen when everybody’s running scared, make sure you’re not one of those people and that you’re, you’re out there buying. And related to that, you know, time, fewer as a lot of mistakes, that’s, that’s been one of the big lessons. I mean, I, I did some deals and they bought some rentals where I probably overpaid, you know, but you, you hold property long enough when you allow the magic of holding that property long enough take effect, right.

Daniil (24:27):

And what do I mean by magic? Depreciation amortization, appreciation and rent growth. Right? And if you just, if you just can weather the storm time will eventually erase a lot of the mistakes that you make. You know, we might my original properties, I bought at the top of the market and I paid top of the market money back in 2006. I just wanted to get in the game. I wanted to get in the game. And, you know, I bought properties passively with a buddy of mine off of MLS. Overpaid. They came with a ton of deferred maintenance. And as, almost as soon as we bought these couple of properties, the market tanked, I still sold them in 2017 at a 20% premium over what we paid in 2006. Right? I mean, just things that I should never have bought. We held on to them and time cured the mistakes that we made.

Daniil (25:23):

But related to that, those properties taught me another important lesson, which is just because somebody says something as turnkey, just because there are tenants in the property, doesn’t actually mean that it’s turnkey. And I see a lot of investors make this mistake where, you know, they’re buying properties that already have tenants in them and it seems easy, right? You’re, you’re taking over an asset and you can start collecting rent right away, but they’re not screening for deferred maintenance and all that cash flow that they think they’re going to be making ends up going back to replacing heat pumps, replacing roofs, replacing. So I learned that lesson early on and I have almost never bought properties with tenants in them. You know, quality of product and quality of construction is incredibly important. So everything I’ve done has been either a gut renovation where then we have a like new property or now I do new construction because again, I have a property that will, once my permanent financing is in place, I’m actually pocketing that cashflow because it’s not going to fixing random things in the property. It’s maintenance free. So all those things are kind of related – buy more, buy smart. And don’t, don’t assume that something is turnkey just because somebody says it’s turnkey, you know, that’s a popular marketing phrase now, turnkey rentals, but yeah, don’t get caught.

Tony (27:03):

Well, you said something that really resonated with me, time cures mistakes. I really like that quote because when you make a mistake in the moment you, you kick yourself and you’re like, and sometimes I don’t know if you’ve done this before, but you feel like you’re trapped. Like I made this mistake. I’m not going to get out of it. Like, you know, this is going under, you know, there’s things that go through your mind when you make a big mistake. And so just knowing that time cures that, cause there’s been many times in my business where I wanted to give up, I wanted to quit. I wanted to like, you know, I had to fire my whole staff, like I said, 10 years ago. And, you know, knowing what I know now, I mean, I kind of knew this, but the way you said it just resonated even better, like time cures mistakes, like there’s going to be better deals down the road that are going to make up for it. There’s going to be better employees down the road that you’re going to hire you even if you lose a good one or have to fire a bad one there’s always going to be better times down the road. So I really liked that.

Daniil (28:00):

And it’s always an opportunity, right? I mean, that’s what seems like a really bad situation, you can usually reframe it and look at it as an opportunity. You had to fire your whole staff. This is your opportunity to hire better people. And this is your opportunity to slow down a little bit and rethink your systems and processes so that you can then go faster down the road. Right. Then, then yeah. Usually whenever we’re faced with a really crappy situation or really bad dire sort of event, a couple of years later, you look back on it, you don’t really remember it. And yeah, for some reason, like for me, it’s always been also staffing related, right? I mean, I had one property manager that worked for me. He was my first property manager. And he was my only property manager. He managed my whole portfolio and he quit on me right in the middle of leasing season.

Daniil (28:58):

And I had to take over his position and do his job, which distracted me from really important things in my core businesses. And it suck. And it seems like end of the world at the time, but it gave me an opportunity to then hire somebody much better than him. And they look back on that situation as a positive event because you created an opportunity to improve. It was a momentary setback, but we’re better off for it. And usually everything is like that. It very rarely is something, you know, end of the world, even though it feels that way.

Tony (29:42):

Yeah. Like I’ve been divorced before, you know, the first one was a practice run, got divorced, thought it sucked, but you know, and the next one came along and it’s much better than the first.

Daniil (29:50):

There you go, everything is an opportunity.

Tony (29:53):

Yeah. Yeah. Well, great, Daniel. It was good to connect with you to get to know you better. I think there’s a lot of synergy for us. And, again, if you guys want to get a free version of the rehab valuator to go to tonyjavier.com/valuator, and get a free version of the software and check it out. So thanks again, Daniel, appreciate your time and we’ll connect again soon.

Daniil (30:16):

Awesome. Appreciate you having me on.

Tony (30:18):

All right. Have a good one.