How REISift Reached $140K MRR and 1,300 Customers While Staying Fully Bootstrapped (Interview with Founder Tyler Austin)

Introduction and Tyler's Background

Nathan Latka

00:00Hey, folks. My guest today is Tyler Austin. He's a husband, father, former air force serviceman, and a 7 figure real estate investor. And also today, the founder of REISift, a bootstrap SaaS company and prop tech helping real estate investors scale their sales and marketing. He also has bachelor's degree from Florida Tech and Computer Information Systems. Alright, Tyler, are ready to take us to the top? Let's do it. Alright. So what got you in I imagine it

00:22was your own real estate investing, but what got you into real estate in the first place?

From Air Force to Real Estate Investing

Tyler Austin

00:27>> I got tired of traveling 50% of the year for the government, basically. So I started dabbling in real estate and, you know, wrote my own scripts because I was a a cyber guy by trade to solve my own problem, and that kind of ended up slowly developing into, hey, other people wanna use that, basically.

Who REISift Customers Are Today

Nathan Latka

00:45And so tell me about those people. Who are your customers today?

Tyler Austin

00:48>> So our customers today is more than what we originally thought out to be. It was originally, you know, real estate investors, wholesalers in real estate, people who are doing a lot of outbound marketing direct to to homeowner. So that's a lot of and I would say probably 80% of our customers are still those types of people. But now we also have a lot of real estate agents starting to use us as well. And even companies like

01:10>> roofing companies, anybody who who wants to learn more about and and do more efficiently, you know, to homeowner marketing. Mhmm.

Nathan Latka

01:19Okay. And so I imagine tell me about churn there. Right? A lot of people try this stuff and they churn quickly because they just they don't have it in them. You know, they don't have the hustle.

Churn Rate and Micro-SMB Challenges

Tyler Austin

01:27>> Yeah. That's did initially, it was it was pretty tough, but we're actually at, like, a 5% churn right now, which with micro SMB customers, which is a lot of what we have, a lot of, you know, people getting into wholesaling. Yeah. I I wanna get into, you know, real estate. Let me go ahead and, you know, throw, like, $200 at it. And and it was a big problem initially, and and we've really went from about 10%,

01:51>> 11% churn down into that 5% range. Sometimes we get to 6%, but that's monthly, yeah. But it makes me feel good because I think a lot of people in our space, some of our competing products and and others that are similar in our space, you know, there's floating around, you know, nine or if not 18%. So I feel good about it.

Pricing Plans and ARPU

Nathan Latka

02:10And so what do you charge? I mean, what are these customers paying on average per month to use your technology?

Tyler Austin

02:14>> So we have a base plan of $49 a month that has restriction a lot of restrictions in it, and then we have a $99 a month and then a $299 a month.

Nathan Latka

02:25And then when you average when you average that all out, what do you say, like, the sweet spot is?

Tyler Austin

02:30>> Our sweet spot our our our average from where our customers are sitting, a lot of them are in that professional plan. We did some adjustments to get a lot more people in that mid tier plan at $99. But I would say a good a good split and spread is 25% in in essentials, you know, 45 to 50% in that professional plan, and another, you know, 25 to 35% in that business plan.

Nathan Latka

02:53So So let's make those numbers make those numbers easy for me then. So the average customer is paying what? A $100 a month?

Tyler Austin

02:58>> Oh, yeah. Yeah. ARPU is about a $100,100 bucks a month.

Nathan Latka

03:00Yeah. 100. Yeah. Okay. Interesting. Take me back to customer number one. When did you guys launch and how'd you get the first customer?

Launch Story and First Customers

Tyler Austin

03:06>> So we I I officially called it REISift in, like, February 2019, I believe. We pre launched and I did a YouTube video and ended up getting, like, 50 customers that paid us before there was any product. And so that got us to about 2,500 or so MRR. And we officially launched in September 2019.

Nathan Latka

03:26Sorry, 2,500 or 25,000 in MRR?

The Challenge Funnel Explained

Tyler Austin

03:29>> 2,500 in MRR. Okay. That yeah. And so then so that got us there. And then in really, our big growth catalyst was in around June 2020. We launched a challenge funnel essentially, and that was where we started really gaining a lot of attraction to kind of teach people how to really do, you know, real estate marketing.

Nathan Latka

03:50Teach us how that works. It's very popular on the inner circles, but the common sort of SaaS founder does not know what a challenge funnel is yet.

Tyler Austin

03:57>> Yeah. So what we did is I realized that a lot of our churn was was because of micro SMB, you know, entrepreneurs not being good entrepreneurs. So we had to fix the the the mindset of of the the customer coming into the gate about business, not really about our product. So we created a challenge to solve that problem called the auto lead gen challenge, where in the where we marketed it as, hey. You have a problem

04:20>> getting leads? Come in, and and we're gonna teach you how to get those leads. But the first, you know, week and a half of that challenge is actually how to actually set up your business. You know, what kind of revenue do you wanna make? How do you even calculate that kind of information? So that gets them adopted in confidence into what they're doing, and then we say, okay. Cool. Now that you have the foundations to know

04:38>> where you wanna go and, you know, what to do to get there, let's teach you how to actually implement it. And we use we teach them how to implement, you know, generating leads through using our product, which adopts them into, you know, the product itself and understanding it and how to use it. And then at the end of that product, we have essentially an upsell where that challenge is an upsell to put them into website.

Nathan Latka

04:58Challenge though, Tyler? Is it how many leads you can get over a thirty day period?

Tyler Austin

05:03>> No. Ours actually, our challenge structure is two weeks of of education on how to how to market, how to properly bring in big data and get it managed and then get marketing to it. And then the second half of it, the second two weeks is actually marketing to see how many total that you can get. So we kinda split in half. We market it as a fourteen day challenge, but once they get into it, we're like,

05:26>> psych, it's actually a thirty day challenge, fourteen days of education, and fourteen days of of actual, like, doing the work.

Nathan Latka

05:32So how many leads did the winner get of that challenge?

Tyler Austin

05:35>> We do it we do it every single month. So we've had people that have come out of it making a 100,000, you know, some even even more than that, closing multiple deals through the challenges. And I mean, we have we've had, like, I don't know, somewhere around, like, three or 3,000 or so people gone through that challenge since last year a ton. And every every month we have you know, it's a rolling challenge now. So we

05:56>> basically automated it. But here in January, we do like a reset for the year where we're gonna do the challenges live again to bring in a bunch of new revenue from the customers we already have, plus bring in some new update the content. Because as your product updates, right, and we have a lot of new features we've done since last year, so we need to update the the the challenge to get, you know, more of that

06:17>> feature adoption in.

Nathan Latka

06:19So you guys, there we have it. A question for you is, what challenge can you launch in January that gets your customers excited, but also by nature, almost by default, gets them using your product more to decrease churn? So 3,000 folks in there. Now that winner, Tyler, that might take home $100,000 in terms of just revenue from a challenge. How many leads is that usually from?

Tyler Austin

06:38>> You know, because of the way that we teach how to market in real estate, you know, it's it's a lot different than the traditional norm. A lot of times they have to get, you know, 75 or so leads to get, like, one deal. And a lot times it might only be, you know, 7 to $10,000 on a deal. The way that we educate, we we teach people how to find, like, the 1% of the 4% of

06:58>> people who might wanna sell to you right now. So they really narrowed down their marketing. And they might, you know, only generate 10 leads, but they get a deal from it. So that's a big part of what we teach is is how do

Nathan Latka

07:09you So what would that winner do? How many leads that winner do? The 100,000?

Tyler Austin

07:13>> It it just really depends. If someone got if someone locked up a real estate contract and they got a $100,000 from it, it could have been their first lead. It could have been their tenth or fifth. I'm I'm not quite sure what in the in the scenarios of that person. But, I mean, people close deals during the challenge all the time. So I see. Yeah. Hard hard to depict.

Nathan Latka

07:30Yeah. Okay. So challenge is working nicely. How many customers are you serving now today?

Current Customer Count and MRR

Tyler Austin

07:35>> Right now, I actually had it opened up. Here, we have active customers, about 1,300.

Nathan Latka

07:44Okay. 1,300. So that would put you at, what, about a $130,000 in revenue right now?

Tyler Austin

07:49>> About $140,000.

Nathan Latka

07:50Yeah. $140,000. Okay. Very cool. And where were you exactly a year ago?

Tyler Austin

07:54>> Exactly a year ago let me go back. I'll tell you exactly. It was probably like maybe 40 or so, maybe.

Nathan Latka

08:04Okay. 40,000. And then go back to 2019 where you got like four or five grand a month in revenue back then.

Tyler Austin

08:10>> So what are we in? We're in November right now. So July, September, October November 2020, we're at 38. And in

Nathan Latka

08:21November 2019.

Tyler Austin

08:23>> November 2019, we were at 3,754.

Nathan Latka

08:28Very cool. Alright. So with this skill, have you bootstrapped or did you raise capital?

Bootstrapped with $30K of Personal Capital

Tyler Austin

08:33>> Fully bootstrapped.

08:34Boot. Congrats.

08:34>> Yeah.

Nathan Latka

08:35I love that.

Tyler Austin

08:36>> Thank you. Yeah. I I I put I at the end of twenty nineteen, I had $30,000 left over from some real estate deals that I had done. And I basically, instead of paying off some debt, I threw it to an account to start REISift.

Nathan Latka

08:48And that was that. So do you own a 100% of the business?

Tyler Austin

08:50>> Yes. I do. Yeah.

Nathan Latka

08:51Wow. Who built, like, the tech? Do you have a, like, engineering co founder or do you code?

Tyler Austin

08:56>> I coded originally, but I know how to break things. I don't know how to build things very well. So I I ended up into it originally, like, using some people off of Upwork, and that didn't go very well. And now I have a team. Half of us are in Brazil, and half of us are here in The US in my office.

Nathan Latka

09:13How did you find folks in Brazil?

Team Structure and Monthly Expenses

Tyler Austin

09:16>> So Upwork and just slowly, you know, talking to the right people, essentially word-of-mouth, got to meet to the right back end developer. And after I got that back end developer, he happened to work at a specific company that happened to know other people, and we slowly kind of, you know, built our team.

Nathan Latka

09:33That's how it works. That's always how it works. How many folks are on the team today?

Tyler Austin

09:39>> This year, we'll have 10 full time, five of which are US w twos and the rest are contractors.

Nathan Latka

09:46Very interesting. Okay. And so if you look at total headcount expense in November, it's December 8, they were recording this. What like, what'd you spend on just people at last month?

Tyler Austin

09:54>> So salaries, we spent about 40,000 on the dev team, product and dev team, and then another 12,000 on on no. But close to 16,000 in w two. Our total company expenses monthly is about 60,000.

Nathan Latka

10:09Okay. So you did a 140 k last month. Right? So so we're personally, mean, is where you wanna go ahead.

Pay-As-You-Go Credit Revenue

Tyler Austin

10:15>> So we actually year to date this year, revenue wise, we're at about 2.3. So we actually have a credit system and a bunch of other ways internally that we build revenue. So MRR wise, one forty, but there's about another 60 to 80,000 or so. It was like 220,000 last month we did in total. Yeah.

Nathan Latka

10:36Oh, from selling what? Like, time stuff courses, trainings?

Tyler Austin

10:39>> Like, credit system we have in there for skip tracing

Nathan Latka

10:42What is that? Stuff like.

Tyler Austin

10:44>> So, like, people upload, like, a thousand dollars, and then they'll use that thousand dollars to get phone numbers of homeowners or send direct mail to homeowners. So we have a whole, like a marketplace internal to the product.

Nathan Latka

10:56That's so we just maybe call that like pay as you go revenue. They're buying credits and giving Yep. Them To verify a mailing address they wanna send a letter to.

Tyler Austin

11:06>> Yeah. More or less.

Nathan Latka

11:07Yeah. Interesting. Okay. Cool. Okay. So same question. Right? So you did 220,000 last month. Your total expense are 60 k. Right? So what are you doing with the $160,000 personally as a Bootstrap founder? Is where you wanna be a lot of profits. What do you do?

Profit Distribution and Team Incentives

Tyler Austin

11:20>> I put about 40% of it in my tax account, and then I distribute the rest.

Nathan Latka

11:26That a lot of Bootstrap founders want to incent their team, but they don't know how to set up a distribution plan.

Tyler Austin

11:31>> Yeah. So there's a few things. So this year, I've kinda looked at my teams in in across the board, and I've decided to do raises on all all everybody in my in the company in general, 5% minimum raises. And then outside of that, I I distribute most of it to me personally because of, you know, my my objective and where I wanna go with the company and and me and my own investments in the real estate

11:56>> side. So, basically, the way that I look at it is is, you know, I wanna incentivize the team. I wanna make sure that they're they're feeling committed and they're that they want it. But what I've also started to do is gave everybody a tech budget now too as well, we didn't have that originally. So everybody has a $5,000 tech budget that they can use for their home offices and everything else. And then in addition to that,

12:21>> we're trying to, create other bonus programs, like pulling back 2% of our revenue month monthly as well for at the end of the year, doing something bigger for for the whole team and stuff like that. So we're trying to really build that out. We just hired a a head of people ops to really focus on a lot of that core culture because we have a really good product culture, but we were kind of like lacking on

12:39>> internal company culture. So we're really trying to focus on that right now.

Nathan Latka

12:42So if hold back 2% per month, mean, that's like 5 ks a month or about $60,000 per year, right? What do you think you might do with that next December? Like how would you split that among your team members? Do people in Brazil get some of that or just the five W2s?

Tyler Austin

12:53>> Yeah. No. People in Brazil will as well. So part of it is our in person. So we're working to really try. It's been kinda hard with the whole, you know, global senior situation we've had going on last two years, but they were just here in The US. We brought other developers in The US. We do a mastermind twice a year. A lot of our our users come in. They pay money. They come to our office and

13:13>> we mastermind. And the

13:16>> in Brazil came in, three of them did. And so that, you know, some of that money goes through that, you know, bringing them in to to be here in person for some of those q four meetings. Other than that, our plan right now as of right now, depending on how things go next year, is, to distribute some of that as bonus revenue. But more than anything, it's gonna be focused towards culture. And I don't know what

13:35>> that answer is yet, but I'm hoping it's some sort of like, you know, vacation as a team, as in a retreat. Right? Because I I plan on using separate revenue for bonus revenue. I wanna dedicate that to retreat.

Nathan Latka

13:47So taking a step back again, because I love Bootstrap founders, like, if we were to sort categorize or describe the business of Tyler, it's software revenue, very high margin, dividends out to you personally, which you then reinvest in real estate as maybe a hedge against the software business. And those are really to your personal net worth is really split mainly amongst those two things.

Tyler Austin

14:05>> Yeah. My personal net worth is split, you know, on building that, you know, personal expenses and passive income from real estate, you know, above that so that all those distributions that I get, you know, from my real estate company and my software company, because I still do a lot, you know, flips and I still do real estate myself, not just buy deals. But mostly now, it's, you know, taking all that revenue, getting that passive income, and

14:29>> then and then taking that distributions to be able to, you know, have to dissipate out there. I put a lot of money in whole life policies now, index funds, regular stock market, you know, 5% into crypto. And then and and so I have a whole diversification that I that I like to try to do. But most of it, it's about 40% of my revenue goes into your real estate.

Nathan Latka

14:48Very cool. I mean, this is a life, man. Don't you know, people hit founders like you all the time. They go, oh, well, Tyler's not VC backed. Like, he's not on TechCrunch. And I go, you know what? Look how happy Tyler looks. You wanna be like Tyler. Tyler's Tyler's it's way easier and less risky to build a $5,000,000 SaaS company than it is to go try and raise 500,000,000 and build a billion dollar business that you

15:07own like 1% of at the time you try an IPO. So kudos to you and what you've done. How have you resisted? I'm sure you get outbound all the time or inbound all the time.

Tyler Austin

15:16>> I I have been so not many people know about REISift even in the real estate space. I mean, we have we're slowly people are hearing about it. Are you talking about with offers, like getting offers?

Nathan Latka

15:24Yeah. So VCs wanting to invest. Yeah.

Tyler Austin

15:26>> Yeah. So I've had people looking to invest. I am looking now to put on probably an adviser. And so I and my core dev team, the guys in Brazil, I am looking at right now doing and and giving them some equity to maintain them long term and and, you know, we wanna build other projects together. So but as far as, like, receiving revenue, it's just it's not something I technically, you know, need. I'm sure there's things

15:51>> and mainly because I probably don't know what to do with it, to be honest with you. If I were to receive 500,000 right now, I really wouldn't know what to how to, like, impact on my business. So we are looking to hire a marketing per person right now because we've done zero marketing to date, you know. So it's like

Customer Acquisition via Facebook and Masterminds

Nathan Latka

16:05How have people found you then?

Tyler Austin

16:07>> Facebook, word-of-mouth.

Nathan Latka

16:09Where in Facebook? Are you a big group or something?

Tyler Austin

16:11>> We have a personal group, but no. It's you know, we we have, you know, some people that that used our product that ended up having groups, and so they Yeah.

Nathan Latka

16:20But how do get the original folks?

16:22How do get the original folks?

Tyler Austin

16:24>> I just need to know them from, like, mastermind groups and stuff like that. So, like, once I go to one mastermind, I talk about it, and then they talk to somebody else, and they kinda just slowly spread. And they're like, oh, there's this challenge. And then from those, they talk about it, and then just I don't to be honest

Nathan Latka

16:37What's the top mastermind that you're in?

Tyler Austin

16:40>> On the real estate side or the software side?

Nathan Latka

16:43Oh, actually, one on each.

Tyler Austin

16:45>> Software side, SaaS Academy. And on the real estate side, I actually am not part of a real estate mastermind. I have my own now, and that's it.

Famous Five Rapid-Fire Questions

Nathan Latka

16:54Okay. Very cool. Hey. We're out of time, Tyler. This is great. Let's wrap up with the famous five. Number one, favorite business book.

Tyler Austin

17:00>> Oh,

17:02>> shoot.

Nathan Latka

17:04If you don't have one, that's okay.

Tyler Austin

17:06>> I probably do, but I just lost it. My favorite book right now that I'm reading is Breath: The New Science of a Lost Art.

17:12>> That's good one.

Nathan Latka

17:13Number two, is there a founder you're following or studying?

Tyler Austin

17:16>> Trevor Mauch at Carrot. Mhmm.

17:18>> Yep.

Nathan Latka

17:19He's a good he he's not an investor, is he? You're bootstrapped. Right?

Tyler Austin

17:22>> I am bootstrapped. He's not an investor.

17:24>> To He would write you a check.

Nathan Latka

17:26You know that. Number three, what's what's your favorite online tool for building REI?

Tyler Austin

17:32>> The tool we use the most is Slack, so I'm just gonna say Slack.

Nathan Latka

17:35Number four, how many hours of sleep do get every night?

Tyler Austin

17:37>> Right now, between nine and ten.

Nathan Latka

17:39Okay. And situation, married, single, kids?

Tyler Austin

17:42>> I am married with a six year old and a four month old boy.

Nathan Latka

17:46Wow. Busy guy. How old are you?

Tyler Austin

17:48>> I'm 29.

Nathan Latka

17:4929. Last question.

Tyler Austin

17:50>> Something you wish you knew when you were 20.

17:54>> There's more outside the military.

Nathan Latka

17:57Guys, there you have it. REISift. He, you know, built it really to solve his own itch, scratch his own itch, using his own dog food, launched about a, call it, two years ago, went from $38,000 a month in revenue a year ago to $220,000 a month today. Profits $160,000 per month, which he plows back into real estate, serving 1,300 customers that wanna launch their own real estate businesses. He's teaching them with challenges. He's onboarding them for

18:17free, no CAC right now, Mainly free stuff via Facebook groups. Team of ten, five in Brazil, five here in The States as he looks to continue to scale. Tyler, thanks for taking us to the top.

Tyler Austin

18:26>> Hey. Thanks, man. Appreciate it.

Nathan Latka

18:29One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on three hungry buyers. They try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday one

18:54p. M. Central. Additionally, remember these recorded Founder interviews go live. We release them here on YouTube every day at two p. M. Central. To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's

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19:37are saying. Sign up for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to

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