E50: PropTech, the Metaverse, and Modernizing Multifamily with Zain Jaffer

"You can pick any asset class, and there's so much change happening at PropTech. It's the best time ever to be in the sector." - Zain Jaffer, PropTech VC & Partner at Blue Field Capital

The world of technology is constantly evolving and has only been accelerated since the advent of the pandemic. Today, we are joined by Zain Jaffer to discuss the evolution of PropTech, the metaverse and modernizing multifamily. Not only has Zain founded a venture capital fund that invests in early-stage PropTech startups, but his last startup sold to Blackstone for $780 million. He is now a partner at Blue Field Capital, which has a $1 billion real estate portfolio, including multiple asset classes. In this episode, we find out what led Zain to real estate and what advice he has to impart to those stepping into the industry. He fills us in on what drew him to his personal investment niche, PropTech, and shares insight into a few of the compelling startups he has invested in thus far. Tune in to hear Zain's predictions and speculations when it comes to property management, marketing technology and so much more!

Key points from this episode:

• Zain Jaffer's extraordinary origin story and path to success
• Why he got involved in real estate and chose to join Blue Field Capital as a partner
• What led him to start a venture capital fund and focus on his niche, PropTech
• Zain shares an early mistake he learned from in the real estate space
• Why it's important to pick a niche
• The types of projects Blue Field is currently involved in
• Why single-family rentals have taken off post-Covid
• How the PropTech industry has evolved in the past two years, in light of the pandemic
• Two compelling startups that Blue Field Capital has invested in
• What Zain considers to be the biggest gaps in the multifamily space and in technology
• What he predicts will be the most exciting and disruptive trend in the PropTech industry
• How marketing technology has evolved in property management and how it can improve

If you liked this episode, be sure to rate, review, and subscribe or follow Sync or Swim wherever you get your podcasts, Apple, Google Podcasts, or Spotify.

Episode Transcript

[00:00:42] NS: Welcome back to Sync or Swim. I'm your host Nicolina Savelli. On this podcast, I chat with multi-family and PropTech experts to learn how you can reach more renters, sign more leases and maximize the value of your assets. Today, I have Zain Jaffer, who sold his last startup to Blackstone for $780 million and is now a partner at Blue Field Capital, which has a $1 billion real estate portfolio, including investments in land, apartments, warehouses, hotels, offices and senior care facilities. Zain also founded the venture capital fund, which invests in early-stage PropTech startups. Thank you so much for joining me today, Zain.

[00:01:13] ZJ: Nicolina, thank you so much as well for having me on the show.

[00:01:16] NS: Now we've got a lot to unpack on this episode. But first, I always like to start at the top and kind of discuss your educational, and professional background, and really how this has served you in your career. How did you find so much success with your last startup before joining Blue Field? If you could share some of an abbreviated version of kind of your history and how it led you to where you are today.

[00:01:40] ZJ: Everything always feels like or seems like an overnight success when you're looking at it from the outside. I guarantee you, it was not. It was at least a decade prior to the exit or even two decades prior. It was just failure after failure. Grew up in a poor neighborhood in the UK, and I was just addicted to computers, building websites. That kept me out of trouble. I didn't want to go and pursue an education degree, but my parents, you could say being of Indian origin, they value education a lot, even though they didn't have any education themselves.

[00:02:12] NS: Yeah. My family's the same.

[00:02:14] ZJ: They forced me t go to university against my will. I got into a good university at King's College London. I'd said to them, "Look, I'm allowed to apply to six universities. If I get into King's, then I'll give up my startup ideas that I'm working on and I'll go do that." I was like, "Okay. Wait. One in six chances. [Inaudible 00:02:35] chance. I got accepted to all six, right? Also, let me renegotiate here, because I didn't really get the terms figured out. I was like, "Okay. Here's the thing. Being that we're all Indian in our family, at least we seem to value hygiene a lot, which means, I want my own toilet. More like eight different apartment, student housing complexes you could live in." I was like, "Okay. I want the one that has the ensuite toilet." I was like, "I'm probably not going to get that." This time, it was a true one in eight chance it felt like. Because it was like a lottery system, and they only accept you [inaudible 00:03:06] preferences or whatever and I somehow got it.

[00:03:10] NS: That's awesome. That was the decision as to where you went to university and what campus you chose.

[00:03:16] ZJ: Yeah. Well, it changes the trajectory of my life at least in that, but quite negative because I have to give up the startup I was working on. It was decided by a damn toilet.

[00:03:27] NS: That's an incredible story. That's an incredible origin story.

[00:03:32] ZJ: One of many failures.

[00:03:34] NS: I mean, obviously, that toilet served you well. You have done some incredible things in your time. How did that serve you in your career trajectory and with your startup ideas? Obviously, you pursued those. How did that come to be and how were you able to kind of get your education while also pursuing your passions, I guess?

[00:03:56] ZJ: Yeah. I was one of those people that went to university and barely attended any lectures. I just was so involved in social activities. I was doing little ventures here and there. It feels like every student when they're at university wants to launch a company targeting other students, so I was working on things like that. I also started at King's College London in the UK, the Entrepreneurship Society, which is now called King's Business Club, which went really well. I think 15, 16 years in a row now, it's just been growing and growing. 

I came across someone else having started that club, who was running a startup, and I was like, "Hey, it's really cool what you're doing." I'd love to sort of check it out. I just loved his idea and I was like, "Can I join you?" I joined really as like the first employee of that startup. I decided to hedge my risks, and because he couldn't pay me a salary, I think I'm also going to do a part-time. I'm going to do another degree like a master's degree at UCL in technology entrepreneurship. I liked that course because it wasn't as academic as it sounds. It was based on the Stanford University curriculum. It was around coming up with a business idea and writing up a business plan. I convinced the professor two things. Number one, can I do the course part-time? They weren't a fan of the idea, but I was like, "Well, you're teaching us about running startups. How about I actually work for a startup and I try to grow it." Anyway, that startup crashed and burned, obviously.

We had to do this dissertation thesis. It's like, "Oh God, so annoying. I've got to write this huge, huge thesis away. But wait, a thesis is a business plan." I said, "Look, I need to delay my education for another year because I'm trying to raise funding for the startup." I made a deal with the head of the school. I said, "Look, given that we're supposed to write a business plan, surely an academic shouldn't be judging the quality of the business plan. Surely it should be judged on its merits. If I raise money for my idea, partly through the business plan, right? Can you give me – can I get 100%?" [Inaudible 00:05:58] I was going to fail, right? He said, "If you raise more than –" at that time, most pre-seed rounds were like a few 100,000. He's like, "If you raise a million from some qualified investors, sure." I ended up raising $2 million in the US for my startup idea with a deck and the business plan, which I sort of wrote after. I had to hold them to account. I managed to get like a distinction on the course, purely as a result of that. So yeah. that's how education served me, I guess. [Inaudible 00:06:29] running those startups and I would argue, I wrote more from the failed experiences than I did from my success.

[00:06:36] NS: I think that that's typical kind of, I mean, if you're willing to keep doing it, and then keep learning, then that's really the key to startup success.

[00:06:43] ZJ: Yeah, exactly. 

[00:06:45] NS: I mean, obviously, you sold your last startup for – yes, your most recent startup for $780 million. Now, how did you find success with that specific startup? Obviously, you learned success and failure early on. Obviously, perseverance was probably key, but more so, what was the core kind of selling point and kind of technology behind that startup?

[00:07:07] ZJ: As a VC today, I look for startups that are part of a huge market. I can't be self-promoting and also say a good team, right? But that's sort of what happened at that time. We hired really good people and we were in a huge market. Mobile apps are starting to take off, but we were still at a period where, like, as of today, at this podcast. This hype around the metaverse, this hype around NFTs. Well, in those days, mobile apps are also getting hot. But most people were not really getting it. It was very complicated to explain to people. Here I was thinking, "Okay. Mobile apps are taking off. What if we bring video ads to mobile phones? That sounds like a really cool idea." I'm betting that the new generation is not going to be reading their own newspapers, and billboards and watching analog TV. I bet people are going to consume video content on mobile phones. 

How do we create an advertising experience around that? That's what we did. Remember when I was trying to raise funding, very few people got it. Even people from the industry in advertising didn't get it, you know. But I encountered comments like this, I encountered comments which were basically like, mobile apps, why? It's like, you got these flashlight apps. When people browse the internet, this is the World Wide Web. This is about Yahoo and AOL ruling the world. What are you trying to build something for mobile apps? Then the sophisticated strategic investment. I said, "Yeah, we love mobile. It's a mobile web, right?" The Safari browser on your really bad iPhone at the time. We're talking about mobile apps and people just didn't get it. We were there quite early, and we took off like crazy first-year revenues. 850,000. Second-year revenues, 15 million.

[00:08:52] NS: Second-year revenue, that's quite a jump. But can you talk about potentially what happened there? Was marketing involved on that or what happened?

[00:09:00] ZJ: We went from 850 to 15 million, to 56 million.

[00:09:03] NS: Oh, my goodness.

[00:09:05] ZJ: Yeah. Then we sort of plateaued for a while.

[00:09:07] NS: Did people start to get it after that?

[00:09:09] ZJ: Oh, yeah. People are telling me, "I just don't see how we can generate even a 10x return." But we're invested in a $5 million valuation, how can you get to 50 million? You need to be like $2 million in revenue?" How about, we were doing that per day by the time we exited. Really, things took off. We built a scalable model. I think we were just part of a big trend. We got very lucky in that sense. We took video ads and we didn't just like – we hated how ads looked at the time, and we thought, let's go after a niche. Let's go after gaming apps. With gaming apps, let's figure out how to make video ads a natural part of the user experience. What we did was, we invented the concept where if you're playing a game and you die, game's over, buddy, and you can buy the in-app purchase for $3 or check this, you can watch a video ad.

[00:10:03] NS: I choose that selection every time. Yeah.

[00:10:06] ZJ: Everyone else did, it turns out, right? Mobile apps, to see their retention go through the roof and churn reduce. They would actually make more money showing video ads, and that's what we did. I'm sorry, I'm the guy that pioneered that.

[00:10:18] NS: That is genius, though. Wow! What year was this?

[00:10:22] ZJ: 2010, 2011 is when I started. In 2012, 2013 is when things started to explode.

[00:10:29] NS: Amazing. I guess the next question and the next step would be, what led you to joining or partnering at Blue Field Capital?

[00:10:39] ZJ: I worked so hard and I went for years and years without a salary. At the same time, I saw a lot of folks who leveraged up to their necks, bought properties and made a killing. I just saw, how is it that they're able to gain this leverage, they can even refi and get their capital back. If they sell, they can do a 1031 exchange? They've got cash flow coming in. I want a piece of this.

[00:11:07] NS: Of course, yeah. I think everyone does now, and I think everyone's kind of doing it now.

[00:11:12] ZJ: Right. When you study how a lot of people made extreme amounts of wealth, real estate is generally one of the common factors. A lot of billionaires have come from real estate and real estate becomes a large part of people's portfolio when they reach a certain amount of net worth or assets under management. For me, I feel I want to actually learn more about real estate. It's such a different thing, that's why I joined Blue Field. I felt I was doing things individually to start with. I was investing in projects, and I put money in opportunity zones. I did hard money lending, I bought multi-family apartments, I bought single-family rentals. I did a lot of things. I felt, I'm making a lot of mistakes. I really believe it's about being part of a good team. How about I joined a team that's just around the right size, so I can join them, I can take a seat at the table, I can put a lot of money with them and I can buy things? Blue Field's done that. Blue Field's got a lot of multifamily, primarily multifamily. But then also – within that, be able to ramp townhomes is a niche that we're starting to really see huge success with.

But also, as you mentioned earlier when you introduced me, hospitality, senior care, industrial. No office, thankfully, actually, but a little bit of flex space too. I joined them, and I then decided, let me start a venture capital fund because I missed technology and just see so many things that are broken. That's what led me to focus on my niche, which is PropTech.

[00:12:34] NS: Awesome. Now, I mean, I kind of wanted – I know this isn't part of the questions, but you've just mentioned something that I kind of wanted to just talk about a little bit and go off-script. What would you say is kind of the early mistakes that you made that you wish, if you could go back, maybe you would change it and maybe you wouldn't, but maybe you learned from them? Is there anything that you feel you could share for maybe early investors or someone who might be early on in kind of multifamily?

[00:13:00] ZJ: Oh, no mistakes as a founder, because I could write books on that. But if you mean –

[00:13:05] NS: Oh, yeah. No, in real estate. In real estate investing, yes.

[00:13:09] ZJ: Because I come from a tech background, and I was investing in startups, I learned to analyze opportunities based on the passion of the person pitching me. We certainly do not want to buy the passion of that real estate developer pitching you their project with a broker telling you, "This is a great deal." You want to scrutinize the numbers. We throw away financial forecasts and business plans when we receive them in venture capitals. Why are you projecting five years out? Well, let me tell you, in real estate, you better make sure those every assumption is fine-tuned. Whether it's your rent growth, whether it's your interest rate, whether it's your exit cap rate.

That was something that I didn't have the discipline around to start with, and I relied too much on the representations of other people. Those representations are not honest at all. But hey, what can you do?

[00:14:00] ZJ: Exactly. I'd also say, you need to pick a niche, unless you're part of a bigger platform. Blue Field has quite a diverse portfolio of real estate throughout the US. But if you're just getting in and trying and do it yourself, you're going to get your butt kicked. Unless you become the expert in a zip code, or an expert in a really niche asset class and multifamily is not a niche asset class, right? We're talking really, really niche. I'm a fan of that, which is why I love what Blue Field's doing with the built-around townhome concept, which is really taking off. I'd say, focus on your niche. Even better, be the expert in a zip code for a certain asset class.

[00:14:35] NS: That's great advice. Yeah.

[00:14:36] ZJ: That's what I'd say. Yeah.

[00:14:38] NS: Okay, awesome. Moving on to real estate and what Blue Field is doing right now. You have a mixed portfolio. You've kind of mentioned, acquired investments that are really standing out to you right now. You're saying the built rent townhomes? Can you elaborate a little bit about why that's such an exciting opportunity or what you're seeing there? 

[00:14:56] ZJ: Yeah. Over time, real estate goes in cycles and we got to a point where we realized, at one point, we were able to buy buildings way below replacement cost. But then the cost of lumber and the cost of construction has been increasing. Then we got to a point where, hold on a second. If people are buying stabilized assets because they want yield, and now suddenly, it's cheaper just to build. I'd rather build a new product, rather than buy like a 1980s concept where you're going to have a lot of capital expenses and plumbing issues. I've seen it all. I don't want to talk, right?

[00:15:28] NS: You have PTSD from your –

[00:15:31] ZJ: Oh, yeah. I got a bunch of 1970s multi-family buildings that I bought that are always in need of constant repair. We wanted something of a newer vintage, and we also felt that with COVID happening, it feels like a really good time to rethink what the future looks like for living. We felt that people want more and more spaces. People are struggling to rent. When they do rent, they're getting really tiny spaces. If we go slightly further out, and we can build like a community, with larger square feet, with a yard, with a dog can run around, there's a garage or garage as Americans say. That will really work. Wow, we really had a gold there, because we bought – I think now we're probably about 10 plots of land that we've been developing, and we're trying to do five to 10 a year right now across the US.

In regions too, and we got lucky, we went with regions that we analyze, and we felt population growth seems pretty solid, the diversity of employment seems good, so you're not too reliant on a military base, or a hospital or whatever, right? Oil and gas, which also assuming a lot of volatility. Really good, safe, secure employment base, and feels like a place where people want to go and create families. Rather than buying, they can rent a home. Single-family rentals have been taking off. This is sort of a niche within that. That's sort of basically saying what led us to this as we've been doing that now, and it's working really well. Our assumptions have just been, we were too conservative. I wish we bought everything we'll have to have. But yeah, it's working out.

[00:16:56] NS: Yeah. It's funny you say that, because the last conversation I had was with a marketing director at Fitzrovia. He said specifically that three-bedroom apartments are taking off. I mean, we don't even have the data really on three-bedroom, because there's just not that many available, but yet the demand for them is there. It makes so much sense that, I mean, you were forward-thinking and understanding that people wanted space. They can't afford homes, so they need to basically rent a home, like their apartment homes now. Because their long-term kind of plans are renting now. That's just kind of become the reality for a lot of people. Having that space is definitely ideal, and jumping on that trend is obviously important.

I mean, you've kind of talked about this and I guess, what I would like to do is talk about your focus and your expertise in PropTech, and how you've seen the industry evolve over the last two years since the pandemic began. Because I feel like when I started was exactly two years ago in the real estate, multi-family rental housing space. When I started, the education and the awareness of technology was so low. It felt like we were innovators in the space, and now I feel like people are beginning to catch up. I'd love to hear kind of what you've seen evolve over the last two years in PropTech.

[00:19:00] ZJ: I started the venture capital fund just as the pandemic kicked, because I felt like, "Okay. This is going to create a monumental shift and change in technology." You hear this a lot in PropTech that the trends are the trends, but COVID accelerated the trends by like a decade. Certain asset classes came under tremendous pressure. There were so many folks that only did retail and office. In those sectors and hotels too, those three sectors, wow, there has been so much change and efficiency that's come as a result of technology. I mean, even if you zoom into hotels, the idea of contactless check-ins. That was such a game-changer, and being able to do everything through your mobile phone, and application and be able to unlock everything like a smart lock. Even if you take the residential side, residential and multifamily have done really well. But because of COVID regulations, the whole contactless trend was powerful because people were now doing self-guided tours and 3D virtual tours suddenly became a thing. Because now, I don't want to really risk and I was scared too. I was looking around and touring things to buy. I didn't really want to go expose myself. I'd say, "Can we take a 3D virtual scan of each vacant unit? Can I just see how it looks and do my inspection that way?" I mean, we did a lot of investments in that. 

Then other sectors boom, like multi-family residential, but also industrial. I mean, wow. The supply chain sector completely just created a whole new set of opportunities, because everyone's now ordering things on Amazon. Everyone's lobbies are getting filled with these big Amazon boxes and things aren't arriving on time. Factories are shutting down everywhere because of constant lockdowns, and so the whole supply chain needs to be reevaluated and that online shopping became massive as if it wasn't massive already. Amazon was the best in the world over this period, and potentially for the foreseeable future.

Yeah. I made investments across the entire spectrum of PropTech and it's exciting. I think office really got hit a lot. With office, you started to see more of a repurposing of space, and things like figuring out our real estate and having occupancy analytics to figure out what spaces do we need in our portfolio, how do people use these spaces, how do we entice people to come back if they're going to work from home and we want them to come back to the office. Well, do they really want to be sitting in a cubicle? No, we got to make spaces more open plan. With that, there was a lot of focus on ESG, environmental, social, and governance, where, let's make the space more green, more energy-efficient. I mean, you can pick any asset class, and there's so much change happening at PropTech. It's the best time ever to be in the sector.

[00:21:32] NS: Yeah, absolutely. I know it was a bit of a loaded question. I know you probably can't even cover half of what is going on in the sector. But I needed to ask just because I feel like we don't have that many PropTech experts to your degree on this. I feel like you've summarized that very well. Now, I would like to hear if you have seen or are looking at any compelling startups that you've invested in at Blue Field so far and kind of what they're doing to move the industry forward? Are you able to comment on that at all?

[00:21:58] ZJ: Yeah, but that's like asking me to pick a favourite child.

[00:22:01] NS: I'm sorry.

[00:22:04] ZJ: I think I'll just pick one or two really clear pieces that might resonate with the audience. It's really sad when you look at the average net worth of a renter around $6,300 is the average net worth. It's really sad when you think about that. A lot of people are caught in this cycle of poverty, where their credit score is perpetually low, they have a hard time renting and they're basically underbanked. In fact, some of these unbanked segments, mass America, workforce housing, big opportunity. 

I came across a startup called Stake.rent. Stake starts out with the idea of, "Hey! Let's really align incentives with the renter and the landlord and the owner and the property manager. Why don't we give them cash back every time they do something good? Every time they pay their rent on time, they can get a bit of cash back. If they're going to keep the unit clean, and we do an annual or quarterly inspection, they get more cash back in their account. Hey, if there's a maintenance issue, and they can go and change out the light bulbs or do some DIY, we'll pay them for that. We'll give them $20 rather than pay 150 bucks to send a maintenance staff down. Also, rather than giving concessions, which tenants do not appreciate, concessions like, hey, move in now, and you get six weeks rent-free. Just give them cash back. Just give them a big amount of cash if they sign the lease today. As they pay their rent on time, [inaudible 00:23:28]." 

That concept took off like crazy. I implemented it in my portfolio and it became a differentiator. People would sign my lease, because they're like, "Wow! This landlord actually cares about us and gives us cash back." The average rent is now higher. When people go out to renew their lease, or rather churn, we'll hit them early, because we know they're going to renew. We'll be like, "Hey! If you renew your lease today, we're going to give you another 300 bucks."

[00:23:53] NS: That concept alone as you were speaking, to me it did it felt exactly what you said. It sounds like a landlord that cares. That's what you want to feel when you sign your lease. You want to have someone who cares. That is absolutely going to be the differentiator when you – because you understand them, it shows that you understand the renter and you understand their needs. Also, doing those little things they probably would do anyway, but now, they're getting something in return for it and incentivizing it to do it more.

[00:24:23] ZJ: Absolutely. With that to, what Steve did next was mind-blowing. They created us to have a checking account, like a bank for renters. They did a poll and they found out 8% of their renters have never even had a bank account before. I mean, they've been living in debt, and then they also had debit card for renters too. The idea was, "Look, we're going to incentivize you to save. If you keep your money in the account with us, or on your debit card will give me really high cashback more than any savings account." I think right now they're offering 5% cashback. "Use our debit card to spend and you'll get 5% cashback. If you keep the money in the savings count, you'll get more cashback." Now, they're at a point where they're embedded in so many multi-family apartment buildings throughout the US. They can also provide a picture of the financial health of your community. 

Imagine this, I can now see my community goes to Costco, and they spend this much on gas. Here's the financial health. It's way better than a rent roll that you see. Of course, of course. You also see how users are behaving. Some users are quickly taking the cash out of their account before going interest rates. There's a concern here. This tenant might not be able to pay.

[00:25:30] NS: You can be ahead of the game before things kind of go south by being able to monitor that data.

[00:25:35] ZJ: Exactly, exactly. I like it because it touches mass America and workforce housing.

[00:25:40] NS: Okay. Do you have another one that you would – I know you have lots of startup children that you would you want to address. Is there another one that you feel you could maybe speak to?

[00:25:49] ZJ: Yeah, so many. I'm trying to make it relevant to the audience. There was one recently, Poplar Homes. Poplar Homes is an example, as a case study of how you can really use PropTech in property management. They have implemented technology every part of the way. It was my first ever investment actually, from my VC fund. I was so nervous when I wrote that check. I was told when repeat founders tried to be investors, they make a lot of mistakes, they get too excited and they're not rational. I was extremely excited by Poplar and wrote that first check. Very recently, they announced a $53 million series B-raise. We participated in that. It's doing really well.

They have built so much tech that they're basically cut down the need for a huge leasing team. They've cut down the need for a lot of administration staff. They've used automation everywhere you can think about. There's a chatbot to help with leasing. There's a chatbot to help with maintenance issues. They've got contactless 3D virtual tours, the whole thing. They've got to the point now where they're actually buying mom-and-pop property management firms. They're going around, and they're buying traditional property management firms where someone owns a couple hundred units, and they're tired of running it because the entire life now is like, "Okay. I'm running around from property to property." 

They're buying those firms. They're increasing the gross margins and they've now bought nine companies. They're buying a company every single month now, and they're on the way to becoming one of the largest property management firms in the country, tech-enabled. You can bring tech anywhere in the traditional sense, whether it's brokerage, whether it's property management, whatever part and you can do really well. I liked that because it's a case study that people can probably appreciate.

[00:27:28] NS: Absolutely, and obviously, implementing their own technology in order to run these, I'm sure as well and manage them. That is awesome. Now, I know, we've kind of gone over a few things. You've touched on a few things that I had questions on later on in the conversation, but I kind of wanted to just drill in and talk about what you feel are the biggest gaps in the multifamily space, I would say, and kind of in technology and what you feel you would want to see come from technology maybe in the next year, maybe the next five years.

[00:28:00] ZJ: Yeah. Very few things move that fast unfortunately in real estate, unless there's a pandemic, right? Fortunately, the time horizon that we have to take is like five to 10 years out. I don't know the fact that there's so much information and symmetry in multifamily. It's often, the buyer knows something, the seller doesn't know, the seller knows something that buyers don't know. People arbitrage that game. I would like to see real estate and multifamily trade how stocks are traded. I think the power of the blockchain and the idea that you can tokenize real estate, split it into fractions, e.g., tokens that can then be traded is going to be a revolutionary concept.

It'll take a while to gain adoption. But when it does, and the regulation and everything is cleared, people will be buying shares of random homes, and zip codes and trading in and out just like people buy shares of Apple or people buy commodities. I think that will be really powerful and disruptive. It will provide a new way for people to raise money for that real estate projects, by raising tokens from blockchain. The selling of real estate we're really a threat to the typical role of a broker. A broker sell the entire building to Esther who represents multiple LP sometimes. Well here, people are trading in and out in fractions. That's interesting.

Also, the time horizons for real estate. A lot of times, real estate is passed down from generation to generation. When there's a messy event like a divorce or a death, you have to liquidate or when people buy and they have a fund. and the fund timeline is like seven or 10 years. They have to liquidate no matter what. Well here, you have the option for individual shareholders to liquidate a portion of their holdings or all of it. That to me is going to be the most exciting disruptive trend. I'm so excited about it. I sometimes think I should go start a company again.

[00:29:48] NS: You should probably. I mean, that will take some adoption. Your five to 10-year projection sounds pretty one point, because I know that there's a lot of people in this industry who are not as far ahead in terms of adopting even simple digital marketing and Google ads yet. I mean, there's there needs to be a lot more education around those things, obviously, in the industry. But that, I mean, I think you've – if someone is listening to this, and doesn't take it and see like the possibilities with it. Then they need to kind of go back to the basics. But yeah, I think that you've hit the nail on the head on that one. That's interesting.

[00:30:23] ZJ: If someone's listening to this, and they like the idea of tokenization as a concept, even if you're a potential buyer, and you want to buy tokens, reach out to me. I'm researching the space. I'm investing actively in the space. Interesting approach, actually. VC funds, we've been very careful to avoid conflicts of interest and competitive conflicts. But we look at this space, and we're like, "It's hard to pick a winner. We're going to invest in so many companies." I've said to some companies that are in the tokenization space, "We are a real estate strategic investor, ultimately. We're going to invest in you and your competitors in this space," and people are fine with it. Because, again, I don't have one broker. I have multiple brokers. I don't have a property manager. I have multiple property managers. 

I am talking to every tokenization startup I can come across. I've already – I'm investing in a load of them right now. If there's even people that are interested in this space, reach out to me, because I would really love to just have a conversation and ask questions, because I'm trying to learn like. This could be the next big thing. It's probably 10 years out. Maybe five years if we're lucky, but this will change everything.

[00:31:27] NS: Okay. That's quite the call out for people. I don't know. I don't know if you'll get any takers on that. I feel like that's a big ask for some people. But I'll move down because I will let you actually share how people could reach out to you at the last part of this conversation. But obviously, I want to touch a little bit about marketing. Rentsync is trying to fill the gap that exists in marketing and multifamily. How have you seen marketing technology evolve in kind of real estate, or more specifically, property management over the last few years? Where do you kind of see the marketing technology going in PropTech in the future?

[00:32:01] ZJ: There's quite a few areas to cover when it comes to marketing technology. You can probably look at it as a breakdown of the funnel and every part of the funnel you can optimize. One issue is, how do you reach the consumer at the point where they're looking to find property. Here, you've got certain channels like social media, which is becoming a bigger way, even using influencers, which is a really cool way to sort of get people organically to see a real opportunity as content, not an ad. Then there's [inaudible 00:32:32] figuring out how to do paid media advertising, not just social, and SEO optimization as well.

Then there's also the matching of property to the user. Right now, if you look at the listing marketplaces, it's really flooded with classified ads. It's basically a pay-to-play business model, where only really nice properties are ones that can afford to bid and pay. When you look at mass America and workforce housing, you've got to scroll down to like page 10 to start to see things. I think a better way to get discovery happening and the funnel will help. I found my best rental opportunities have come when the description's been rubbish.

[00:33:12] NS: Oh, really? Okay.

[00:33:14] ZJ: I bought places, and I've rented places deliberately because I was like, "This sounds awful. It sounds shady. Let me take a look." You realize, "Wow! This is a beautiful place. They just didn't market it well." Then write a good damn description. You need a video. You need HD photos. You need that fancy drone, or beautiful, crazy, photoshopped, whatever, right? I [inaudible 00:33:36] of all things. But really, what I'm saying is, that's my opportunity and someone's loss. People need to do a better job with marketing the property too. Then there's the whole signing up process. Application fees can be really high. Sometimes firms have a really black and white model of, you need to be at a certain credit score, you need to meet these tenant profiles and then implement that across an entire portfolio. Well, I had that happen. I had that happen in areas where there was high immigration. I had that happen in areas where the median average income was way below. No one would ever qualify for that. Even I wouldn't. There was like a 720-credit score. I don't even have a 720 credit.

[00:34:10] NS: You miss one payment, you don't have a 720 credit score.

[00:34:13] ZJ: I know. No one told me about it.

[00:34:14] NS: Accidentally and it just happens.

[00:34:17] ZJ: Yeah. I think flexibility there, the pricing of the rent too. A lot of people are using dynamic pricing, and that's smart, but also offering variable leasing terms too. Why do you have to be stuck on 12? There's a big opportunity to do that. Then, I think the other part of the marketing is, this is not really on the tech side. It's more on the landlord side, but segment your property. There was a time when Sonder was buying entire floors, and buildings and making them short-term corporate rentals. Well, you can do that. You could potentially take some units and make them for Airbnbs. You can rent them out to travelling nurses, or the military or for students. I think looking at your unit mix, and figuring out, don't sell everything as a commodity, make each one a little bit more unique and offer things to tenants. I could go on and on about marketing technology, but all of these areas are things that very few people optimize.

[00:35:14] NS: It's interesting, you actually bring that up because I had a conversation with a rental listing site founder, who's actually – their initiative right now is to create spaces for Ukraine refugees. I think that it's a really great initiative. They're working with basically those Ukraine refugees who have escaped to Poland, and they're looking for places to live in Canada right now. We're hoping to work with large property management companies that have spaces that they would be willing to accommodate depending on the terms. The terms of the leases are up to them, but basically just opening up their spaces for them. I thought that that would be – and they're basically creating like a whole kind of new technology in order to accommodate these rental units. That's kind of interesting, and nice to see and like you said, mixing the property and using it for different reasons is definitely an interesting concept and I think people need to be more open to it.

[00:36:07] ZJ: Yeah. Very few people are doing it. It's usually the early adopters, the technology enthusiasts of companies. Most property management firms are not thinking like that. They're just trying to operationalize and make everything a process and I get it. That's precious to keep occupancy up, and delinquencies low and rents high. But you got to take a step back, and sometimes think, "Okay. How do we test and do something different?" If you do it, you can really materially improve your net operating income.

[00:36:33] NS: Absolutely. Now, I'm not going to switch back to real estate in terms of deals and things like that. I think that you've covered everything. I'd like to ask you one question before we get to the final question. That is, who do you think we should interview on this podcast? Who do you think someone may be in this space, PropTech space that would be a great person to talk to you?

[00:36:54] ZJ: Honestly, all the founders that I have in my portfolio at Blue Field Capital.

[00:36:58] NS: That you mentioned, yeah.

[00:36:59] ZJ: They're all great. I think for your listeners, you should try to get maybe the Stake.rent team.

[00:37:03] NS: Yeah, I would love to.

[00:37:05] ZJ: They would be great. The way they figure out things, it's just – there are companies I've invested in, and then there are companies you look at and you're like, "Wow! The way they innovate on their products, the way they really understand the user, this is going to be different. This is going to be big. Statesmen, those companies where they just seem to be the model of how people should manage their real estate.

[00:37:24] NS: Okay. I'll try and I'm going to connect with you about that later if you don't mind. Last but not least, if listeners are looking to connect with you, obviously, you've got some discussions on NFTs and things like that, and tokenizing multifamily. Where can they find you? What's the best place to find you?

[00:37:43] ZJ: Yeah, my name is Z-A-I-N, zain@proptechvc.com. proptechvc.com is my – I coded it myself as a directory of all the investors that I know in PropTech. My podcast is on there too. I put some blogs on there, but really, zain@proptechvc.com is the best way to email me. I have a newsletter too, and I would love to have conversations.

[00:38:04] NS: Okay, amazing. Thank you so much, Zain for sharing all of your knowledge with me and to our listeners and taking the limited time that you have to join me on this episode of Sync or Swim. Until next time, keep swimming.