How SRT Brain CEO Nochum Rabin grew to $30K revenue and 12 customers in 2022.

Str BR brain helps you understand when you buy or when you want to buy a short-term rental what you can pay for it what the returns could look like he's put in 340 000 bucks of his own money into this business spent 160 000 so far building the MVP he now has 12 customers you know doing about 2 000 bucks a month in Revenue just getting going he's boots dropped it team of three him and his co-part as him and his partner and then a developer they've got out there in Italy building building building hoping to ramp up here to go from 12 customers to 2000 with paid ads and some other tactics we'll see what happens hey folks my guest today is a note drum Robin He is building Str brain stands for short-term rental brand where you can gain access to underwriting with real-time data nation wide no subscription needed they help you become a better short-term rental investor no to be ready to take us to the top absolutely all right so real quick is are people if people want to buy a short-term rental put on Airbnb they'll use you to find it or they use you after they purchase to manage the short-term rental that's a great question so that's twofold is twofold either you could buy a property and then see how much is the going rate in the area but really we like to focus on if you're looking to buy a property for basically a Zillow and a short-term underwriting platform so you know that you want to buy a house for short-term rentals right near your house you want to see how much it's going to make prior to you buying it you're going to go on to the site you're we're going to run you an underwriting in literally 10 seconds and you'll have that share with your friends family co-workers investors Etc so I find something on your site and it's a house that's going to cost me 500k right next to where I live and I click a button that says purchase this and you say wait do you want to see what your mortgage could look like and and you're I can say yes and then you're going to show me like amortization table immediately similar to that it's it's you can go onto our website find a house right next to you for 500 Grand that's for sale for 500 Grand you can see all the property details for free then there is a purchase button when what's going to happen when you press that purchase button it's gonna unlock your income your projected income expenses average daily rental and all things spent all the expenses incurred with running an Airbnb many people think that Airbnb is just buy a house slap it up and that's it there's fees there's costs there's Furniture costs and it really all boils down to uh cash on cash for a cap rate basis so we'll give you all that in one spot and if you want to make edits yourself we give you that opportunity as well so what I just put in my address so I guess a couple a couple things here one is it free for people to sign up or is your main Revenue stream investors paying you a fee to access the data so we don't we have a subscription model but I like to tell let's say people like yourself that if you could go on a one-time basis not a city basis not a nationwide so if you see a house right next to you you're able to go there and and just buy that it's ten dollars um one time and that's it and you'll have it in your account forever but it is free to sign up okay so but but how do you view the business like all right are you are you just gonna try and get as many one-time ten dollar sales as possible or do you want to try and keep people subscribing for X dollars a month every month to access everything so we have a lot of subscribers at the moment we do have subscribers we also really like we that that's really the end goal and model so what do they pay per month on average they pay on average about 250 a month okay and what do they get for that they get uh 25 reports at a cost of close to seven dollars a month okay roughly sorry I thought you said they paid 250 bucks a month yeah I mean so they pay seven bucks a report it it ends up being that it it ends up being that 250 250 a month gets them instead of 25 reports and 10 bucks a pop they'll get about 35 reports okay got a subscription base but we're really excited because we're working with brokerages and lenders and brokerages are signing on with us to provide this for their agent so there's Mega packages as well for agents and lenders are starting to lend off of Airbnb on a purchase which they've only been doing on refi's so they're starting to do it on purchases so part of their subscription is telling their appraisers to go buy a report for to see how it could work for short-term rentals so of your occurring Revenue what percent is from brokerages and lenders paying you fee versus individual individual investors like me currently we're at about a 40 lender broker lender and brokerage we're at a 20 of individual reports and the remaining part of the subscription oh what's going on there YouTube good to see you guys now imagine this you love watching these interviews with SAS Founders but imagine if we took all of the valuation data out from over 2807 interviews I've done manually saves you a lot of time well we've done this we've built the into the beautiful interface inside of founder path check this out I'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for evaluation this year now the secret evaluation is there's many different ways to value a SAS business so the reason you're going to see three or four different valuations inside of your founder path dashboard this is all free by the way is because depending on who's doing the buying of your SAS company you're going to get a different valuation a VC is going to pay a different valuation private Equity Firm is different if you're going to do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when I hover over here here right so the teal is what a VC would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on YouTube all these datas are built from Real Time valuation data points Founders share with us on the show so traction 1.2 million seed around 3.7 raise they sold 22 percent of their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of SAS valuation than what you can get now inside of founder path and we're thrilled to bring it to you all right we're gonna go back to the YouTube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash valuations or if you go to founderpath.com and hover over products click on get your valuation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform I hope to see you there all right let's jump back into the interview oh so okay so your total revenue is brokerages and lenders paying one time for one property is 40 percent like this is monthly right and like they pay it one time like as in last month investors are making another 20 and then your actual recurring Revenue each month that makes up about right now 40 to your total revenue correct I see I see okay that makes sense um very cool I guess put this on a timeline for me when'd you launch so we're actually still coming out of beta testing we're still really fresh off the press we've been working on it for a little bit we haven't done much marketing uh when did you write the first line of code uh we did that probably at the beginning of the year January okay interesting and so are you guys pre-revenue today so it's no it's not pre-revenue uh we're we're off the ground but as of a month ago uh Nationwide you got your first paying customers last month yes okay so what total revenue last month was 100 bucks a thousand bucks 10 000 bucks current Revenue last month was close to twenty five hundred dollars this month or this month we're looking at uh we're waiting on a few brokerages to finish up um their contracts we should be looking at about eight to ten thousand dollars this month that's great congrats on your first dollar of Revenue man that's exciting yeah all right so 2 500 a month and how many brokerages and lenders and investors and everybody else how many people are paying something currently we're working with one lender at the moment that's actually paying um and obviously we have a lot of uh meetings and relationship building to do to get more and we're working with currently one brokerage one brokerage of 60 agents and what about the rest and then the rest the rest we have I think we have about 10 10 subscribers 10 monthly subscribers so they're going on their second month and and we have individual reports I would have to look no that's good so you got 12 customers though but two of them make up sixty percent of your Revenue the lenders and brokerages the rest are paying that monthly fee to get 235 reports correct yeah yeah okay this is great um I guess where'd you come up with this idea did you come were you a broker yourself or a lender yourself or where'd you get the idea yeah nice question um I was a broker myself uh about three years ago I started and this was In the Heat of cobit when property was flying off the shelf I had a client that came to me and said I want to buy an Airbnb that's when it was like hot good deals and everything and he was working with uh he had a partner that was an underwriter and the market was going moving fast and I couldn't figure out how much it's going to make because that was their follow-up question how much is this property gonna make and I didn't have fast enough underwriting even with error DNA and other software is out there it's time consuming it's not on the go on the fly so the underwriter and I who's my partner now see uh we came up with ideas like there's a way to streamline this and we pretty much made it streamlined by bus putting in the business model putting in the financial model adding in expenses what it what it entails what it costs and from there it really grew and grew and we that's pretty much how we got into it and now I literally am I'll drive in the car I'll be on the 95. I'll buy a report send it to a client in a beautiful laid out PDF and that's how it came about that's awesome I guess I don't understand what you mean when you say um you're underwriting have you have you raised a debt fund and you're actually lending against your underwriting or you're selling your underwriting to somebody else no I'm selling my underwriting to someone else so I'm not sure if you're so familiar with Airbnb but people are going to buy it and they need to see if the numbers are going to make sense are they getting a 10 cash run cash 20 cash on cash a 10 cap rate so they have to underwrite it now the way to underwrite it is to see how much what's your ADR average daily rental uh what's your annual income and what are the fees incurred if you're a new investor you don't really know that if you're not a new investor but you're new to the area or you need to cross-reference something you could either go manually onto Airbnb and look at different numbers or you go to air DNA but it could end up being more pricely pricey and costly and and why is your are you using the same data source as error DNA we use some of theirs but we have a few other data sources tied in what are the data what are the other data sources you use uh we have a lot from match visor uh air DNA has a lot from VRBO but we have a direct relationship with them and a few other providers which slipped my mind at the moment but I could get back to you on that how do you know um like when you're giving out the underwriting do you consider what the mortgage might be that the investor takes out to pay for the property or are you basically just saying if you pay all cash here's what you could earn here's what the cash on cash returns could be no we we actually underwrite it we have a preset um mortgage amount right now our preset on the website I believe is six percent and last month it was five and a half percent we did move it up because this is just projection but at the bottom on the box you're gonna see it's super editable to go in and change it and be like look I'm not at six percent I'm at nine percent I need to underwrite it based on that are these gonna be those seven seven year adjustable rate mortgages though or a 30-year fixed or like what are you modeling or modeling a 30-year fixed okay interesting um okay so you're modeling a 30-year fixed um does the person that's looking to buy the thing have to upload their credit history and their kyc file like all that so like how do you do all how do you get an accurate underwriting picture if you don't get all that data from your customers because we're look we're looking at the regular kind of person the only thing that will vary is the rate and that is very editable we can't we can't be a mortgage company that tells you what your rate is going to be we just give you a projection so you're like a calculator correct correct yeah yeah your attack so if I know that my cost capital is going to be six percent or seven or two percent I can put that into your calculator and you'll help calculate the the potential returns that way correct I see okay very interesting um that's done once that's done and editable there is a download button where you're gonna get a five page PDF with the property the property summary the comps the comparables um and your whole expense sheet whatever you added in or took it out I actually had a client the other day he bought a house and he it's all solar so there was no electricity so we took that out of the underwriting yeah now are you an engineer you built this yourself or if not how did you find the engineer so my partner his name is Wesley my partner is uh has a degree in computer science and he has um he outsourced the work we have a Italian we have an Italian um developer and we really love him we have a great relationship with him he's how did you find him uh Wesley Wesley had a friend that knew him and he interviewed him and in the computer science world the line they clicked and lined up that's funny how did you convince Wesley to take a risk on you he's going no no you have tons of energy I know you love this idea but I've got 170 000 offer from Google and why do you want me to come work for you on this thing he believed in the product he believed in the product and we have such a strong great relationship that he was like let's do it oh come on let's talk money how much Equity does he own uh we are I'm a little bit more of an owner than him but we're close to 50 50. all right so like 65 45 something like they're 55 45 something like that exactly yes all right fair enough okay so you're building you're building your building what's your plan to go from 12 customers to 200. so we're actually in the middle of a really strong marketing campaign which is starting next week uh we just started finishing that really interesting idea what's going to happen is let's say you list the property for sale SDR brain is going to be triggered and send you a text saying hey see how your property is going to monetize as an Airbnb so if you're an agent you can show it to potential buyers or if you if you just chance upon it the numbers will be there but we're going to be as soon as you list the property you're going to get a text not an email um with a link to going redirecting you exactly to your report to buy ten dollars that's one way um also we're going to be using a lot of YouTube ads Google ads and Instagram ads to really scale it up now that we're Nationwide where are you getting the money to do that did you guys raise money or are you bootstrapped for bootstrapping right now uh we may go into the raising Capital uh part we're not sure yet exactly I still don't know exactly where I want to go with that you put your life savings in the company or what are you all in I'm all in uh I don't I don't know if it's my life savings but I'm all in on it um how much of your own money about 345 000. does that make you nervous a little bit a little bit but going into going into you know what I said I was like look if if this is not good and it doesn't end up going anywhere I will have a great product that I will always use so it's worth my money you know that's a great I love that approach that's a good attitude um now people are gonna go on man I want to be like but man I'm not I'm not rich I don't have 340 did you work really hard for the 340 care like where did you get that money from is it just savings over time or what it was savings over time but I really also I brokered a lot of real estate um I broke close to 55 million dollars real estate wow in one year what do you make of that I just don't know what does a realtor make off that 50 well it all depends um I closed I closed a lot of single-family houses including airbnbs roughly on that was I probably made close to 200 000 from broker and single family properties and then I sold the 32 million dollar property in Indiana where I need to do the math but if it's about two percent on that yeah I mean that's like uh 640 000 bucks right roughly right and I had a partner on the deal so to structure it really quickly that's that's kind of how it came about but I definitely took a gamble but I believe in it and I think it's very scalable and I could see down the road a lot of companies which which is starting are knocking on door to learn more about it and potentially merge and acquire and we'll see where that goes I mean in your world you know a lot of debt providers you know Scott would sell our DNA uh he was on a show a while ago you should just raise a bunch of money go buy our DNA air DNA was actually bought out in March by a company called they did sell it called um a predictus yeah I did not I haven't texted him recently you're right you're right a PE firm grabbed it yep Oh good for Scott all right well guys go listen to that episode with Scott that was a really good story going into that but okay so the Market's yours you know once the ones are private Equity provides a company it dies so the Market's yours if you build fast enough how much of your 340k have you already spent um we Pro we're in roughly a hundred and sixty I would say 265 developers mainly developers mainly new ideas I hear me and Wesley have a really unique relationship I'll call him at 12 a.m and be like Wesley we gotta change this this is my new idea this is what we're doing could you put together a plan or could we could we Implement that by the end of the week and sometimes he's like bro you're crazy sometimes he's like dude that's great let's get to work on it so it really there's a lot of development there's a lot of meat changing my mind like I have a whole road map that I can't get all into but I have a whole road map for this to literally actually change the entire business of how it runs to scale it and make it massive those of you listening to your car in the morning you can't see Nordstrom but I can tell he's into it because his hands are flying everywhere he's animated he's definitely got a road map I can't wait to see it uh no drama time though now for for right now let's wrap up here with the famous five number one what's your favorite book my favorite book is honestly seller be sold number two is there a CEO you're following or studying uh my brother what's what's he running what company my brother is uh a marketing a marketing Guru he's been extremely successful he's actually being he started his own company in marketing his own marketing company and as soon as he started that he got a job offer to become a CEO of a larger marketing company after he left this previous well what's his first name his name is Lenny Lenny Raven interesting okay Lenny Raven very cool co-founder of brown boots co-founder of brown boots there we go all right very cool uh number three what's your favorite online tool for building Str my favorite online tool it's the one you use the most insult in the development yeah I mean what could be like you could say Google or Trello or or Zoom or whatever click up whatever you want oh yeah definitely Google good okay number four how many hours of sleep do you get every night eight okay that's good in situation married single kids I am married and my wife is pregnant with a baby oh mate the first kid first kid wow exciting when's he or she do uh March 22nd oh man you better get as much building as you can in before March and as much sleep and as much sleep that's right that's why eight hours makes sense and how old are you I am 24. 24. last question something you wish you knew when you were 20. to probably believe in myself more and take the leap of faith guys there you have it Str BR brain helps you understand when you buy your when you want to buy a short-term rental what you can pay for it what the returns could look like he's put in 340 000 bucks of his own money into this business spent 160 000 so far building the MVP he now has 12 customers you know doing about 2 000 bucks a month in Revenue just getting going these boots dropped it team of three him and his co-part as him and his partner and then a developer they've got out there in Italy building building building hoping to ramp up here to go from 12 customers to 2000 with paid ads and some other tactics we'll see what happens no Trump thanks for taking us to the top thank you have a wonderful day one more thing before you go we have a brand new show every Thursday at 1pm Central it's called Shark Tank for SAS 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 our poo CAC LTV you name it they share it and the buyers try and make a deal live it is fun to watch every Thursday 1 p.m Central additionally remember these recorded founder interviews go live we release them here on YouTube every day at 2 p.m Central to make sure you don't miss any of that make sure you click the Subscribe button below here 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