How STRBrain Reached 12 Customers and $2,500 in Monthly Revenue with $345K Invested (Interview with CEO Nochum Rabin)

Introduction and Company Overview

Nathan Latka

00:00STRBrain helps you understand when you buy when you wanna buy a short term rental, what you can pay for it, what the returns could look like. He's put in $340,000 of his own money into this business, spent a $160,000 so far building the MVP. He now has 12 customers, you know, doing about $2,000 a month in revenue just getting going. He's bootstrapped it. Team of three. Him and his co part him and his partner and then

00:19a developer they've got out there in in Italy building, building, building, hoping to ramp up here to go from 12 customers to 2,000 with paid ads and some other tactics. We'll see what happens. Hey, folks. My guest today is Nochum Rabin. He is building STRBrain, stands for short term rental brain, where you can gain access to underwriting with real time data nationwide. No subscription needed. They help you become a better short term rental investor. Nochum, you

00:43ready to take us to the top?

Nochum Rabin

00:44>> Absolutely.

Who Uses STRBrain and How It Works

Nathan Latka

00:46Alright. So real quick, is our people if people wanna buy a short term rental and put on Airbnb, they'll use you to find it or they use you after they purchase to manage the the short term rental?

Nochum Rabin

00:56>> That's a great question. So that's twofold, it's 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, we're 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

01:17>> to you buying it, you're going to go on to the site, we're going to run you an underwriting in literally ten seconds and you'll have that share with your friends, family, coworkers, investors, etcetera.

Nathan Latka

01:27So I find something on your site, and it's a house that's gonna cost me 500 k right next to where I live. And I click a button that says purchase this, and you say, wait, do you wanna see what your mortgage could look like? And and you're I can say yes. And then you're gonna show me, like, amortization table immediately?

Nochum Rabin

01:44>> Similar to that, it's it's you can go on to our website, find a house right next to you for $500k. That's for sale for $500k. You can see all the property details for free. Then there is a purchase button. What's gonna happen when you press that purchase button, it's gonna unlock your income, your projected income expenses, average daily rental, and all the expenses incurred with running an Airbnb. Many people think that Airbnb is just buy a

02:10>> 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 cash on cash or cap rate basis. So we'll give you all that in one spot. And if you wanna make edits yourself, we give you that opportunity as well.

Pricing Model: One-Time Reports vs. Subscriptions

Nathan Latka

02:25So what I just put in my address. So I guess a couple a couple of 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?

Nochum Rabin

02:35>> 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 nationwide. So if you see a house right next to you, you're able to go there and and just buy that. It's $10 one time, and that's it, and you'll have it in your account forever. But it is free to sign up.

Subscription Details and Revenue Mix

Nathan Latka

02:59Okay. So but but how do you view the business? Like, alright. Are you are you just gonna try and get as many one time $10 sales as possible, or do you wanna try and keep you all subscribing for x dollars a month every month to access everything?

Nochum Rabin

03:10>> So we have a lot of subscribers at the moment. We do have subscribers. We also really like we've that that's really the end goal and the model.

Nathan Latka

03:18So what do they pay per month on average?

Nochum Rabin

03:20>> They pay on average about $250 a month.

Nathan Latka

03:23Okay. And what do they get for that?

Nochum Rabin

03:25>> They get

03:28>> 25 reports at a cost of close to $7 a month. Okay. Roughly.

Nathan Latka

03:34Sorry. I thought you said they pay $250 a month?

Nochum Rabin

03:36>> Yeah. I mean, so they pay $7 a report. It it ends up being that it it ends up being that $250 a month gets them instead of 25 reports at $10 a pop, they'll get about 35 reports.

Nathan Latka

03:54Okay, got it.

Nochum Rabin

03:54>> Subscription base. We're really excited because we're working with brokerages and lenders. And brokerages are signing on with us to provide this for their agents. 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 refis. So they're starting to do it on purchases. So part of their subscription is telling their appraiser to go buy or report for to see how it could

04:21>> work for short term rental.

Nathan Latka

04:22So of your recurring revenue, what percent is from brokerages and lenders paying you fee versus individual investors like me?

Nochum Rabin

04:30>> Currently, we're at about a 40% lender broker lender and brokerage. We're at a 20% of individual reports, and the remaining part is subscription.

Nathan Latka

04:42Oh, what's going on there YouTube? Good to see you guys. Now imagine this, you love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect

05:05your Stripe account, you see your valuation real time, you can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna

05:30get a different valuation. A VC is gonna pay a different valuation, private equity firm is different. If you're gonna 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. 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

05:51not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna 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

06:17going out right now and you're raising your seed round. We'll 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 dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. Alright. We're gonna go back to the YouTube video here in a second, but if

06:39you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/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. Alright. Let's jump back into the

Timeline: Launch and First Revenue

Nathan Latka

07:05interview. Oh, so the okay. So your total revenue is brokerages and lenders paying one time for one property is 40%. Like, this is monthly. Right? And, like, they pay it one time like I was as in last month. Investors are making up another 20%, and then your actual recurring revenue each month, that makes up about right now 40% of your total revenue.

Nochum Rabin

07:24>> Correct.

Nathan Latka

07:25I see. I see. Okay. That makes sense. Very cool. I guess put this

07:29on a timeline for me. When'd you launch?

Nochum Rabin

07:32>> 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.

Nathan Latka

07:40When did you write the first line of code?

Nochum Rabin

07:43>> We did that probably at the beginning of the year, January.

Nathan Latka

07:46Okay. Interesting. And so are you guys pre revenue today?

Nochum Rabin

07:50>> So it's no. It's not pre revenue. We're we're off the ground, but as of a month ago when we were still finalizing going nationwide.

Nathan Latka

08:00You got your first paying customers last month?

Nochum Rabin

08:03>> Yes.

Current Revenue and Customer Breakdown

Nathan Latka

08:04Okay. So what total revenue last month was a $100, a thousand bucks, $10,000?

Nochum Rabin

08:09>> Current revenue last month was close to $2,500. This month we're This month we're looking at we're waiting on a few brokerages to finish up their contracts. We should be looking at about 8 to $10,000 this month.

Nathan Latka

08:25That's great. Congrats on your first dollar of revenue, man. That's exciting. Yeah. Alright. So 2,500 a month. And how many brokerages and lenders and investors and everybody else, how many people are paying something?

Customer Breakdown: Lenders, Brokerages, and Subscribers

Nochum Rabin

08:37>> Currently, we're working with one lender at the moment that's actually paying. And, obviously, we have a lot of meetings and relationship building to do to get more. And we're working with currently one brokerage of 60 agents.

Nathan Latka

08:53And what about the rest?

Nochum Rabin

08:54>> And then the rest we have, I think we have about ten ten subscribe 10 monthly subscribers. So they're going on their second month, and we have individual reports.

09:11>> I would have to look.

09:13>> No. That's good.

Nathan Latka

09:14So you got 12 customers though, but two of them make up 60% of your revenue, the lenders and brokerages. The rest are paying that monthly fee to get 200, you know, 35 reports.

Nochum Rabin

09:22>> Correct.

Background: How the Idea Was Born

Nathan Latka

09:23Yep. Yep. Okay. This is great. 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?

Nochum Rabin

09:30>> Yeah. Nice question. I was a broker myself. About three years ago, I started and this was in the heat of COVID 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, he had a partner that was an underwriter and the market was moving fast. And I couldn't figure out how

09:52>> much it's gonna 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 AirDNA and other softwares 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, we came up with the idea, was like, there's a way to streamline this. And we pretty much made it streamlined by putting in the business model, putting

10:15>> in the financial model, adding in expenses, 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 I-95. I'll buy a report, send it to a client in a beautiful laid out PDF. And that's how it came about.

Nathan Latka

10:34That's awesome. I guess I don't understand what you mean when you say 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?

Nochum Rabin

10:45>> No. I'm selling my underwriting to someone else. So I'm not sure if you're so familiar with the 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 on cash, 20% cash on cash at 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? What's your

11:03>> 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, could either go manually onto Airbnb and look at different numbers, or you go to AirDNA, but it could end up being more pricely pricey and costly. Mhmm. Mhmm.

Nathan Latka

11:23And and why is your are you using the same data source as AirDNA?

Nochum Rabin

11:29>> We use some of theirs, but we have a few other data sources tied in.

Nathan Latka

11:34What are the what are the other data sources you use?

Nochum Rabin

11:37>> We have a lot from Mashvisor. AirDNA has a lot from VRBO, but we have a direct relationship with them and a few other providers, which slipped my mind at at the moment, but I can get back to you on that.

Nathan Latka

11:52How do you know like, when you're giving out the underwriting, do 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?

Nochum Rabin

12:04>> No. We we actually underwrite it. We have a preset

12:11>> mortgage amount right now our preset on the website I believe is 6 percent and last month it was 5.5%, 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 6%. I'm at 9%. I need to underwrite it based on that.

Nathan Latka

12:30Are these gonna be those seven seven year adjustable rate mortgages, though, or a thirty year fixed? Or, like, what are you modeling?

Nochum Rabin

12:37>> We're modeling a thirty year fixed.

Nathan Latka

12:39Okay. Interesting. Okay. So you're modeling a thirty year fixed. Does the person that's looking to buy the thing have to upload their credit history and their KYC file, like, 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?

Nochum Rabin

12:54>> 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 gonna be. We just give you a projection.

Nathan Latka

13:07You're like a calculator.

Nochum Rabin

13:08>> Correct. Correct.

13:10>> Yeah. We're a calculator.

Nathan Latka

13:12Yeah. You're a so if I know that my cost of capital is gonna be 6% or seven or 2%, I can put that into your calculator and you'll help calculate the the potential returns that way.

Nochum Rabin

13:22>> Correct.

Nathan Latka

13:23I see. Okay. Very interesting.

Nochum Rabin

13:25>> Once 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, 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.

Nathan Latka

13:46Yeah. Now are you an engineer? You built this yourself or if not, how'd you find the engineer?

Nochum Rabin

13:51>> So my partner, his name is Wesley, my partner has a degree in computer science and he outsourced the work. We

14:03>> we have have an Italian developer, and we really love him. We have a great relationship with him. He's

Nathan Latka

14:08How'd you find him?

Nochum Rabin

14:10>> Wesley Wesley had a friend that knew him, and he interviewed him. And in the computer science world, the line they they clicked and lined up.

Nathan Latka

14:18That's funny. How did you convince Wesley to take a risk on you? He's gone, Nochum Rabin, you have tons of energy. I know you love this idea, but I've got a 170,000 offer from Google. And why do you want me to come work for you on this thing?

Co-Founder Wesley and the Equity Split

Nochum Rabin

14:30>> He believed in the product. He believed in the product that we have such a strong, great relationship that he was like, let's do it.

Nathan Latka

14:37Oh, come on. Let's talk money. How much equity does he own?

Nochum Rabin

14:40>> We are I'm a little bit more of an owner than him, but we're close to 50/50.

Nathan Latka

14:46Alright. So, like, 55/45, something like that.

Nochum Rabin

14:51>> Roughly. Yes.

Nathan Latka

14:52Alright. Fair enough. Okay. So you're building, you're building, you're building. What's your plan to go from 12 customers to 200?

Growth Plan: SMS Alerts and Paid Ads

Nochum Rabin

14:59>> So we're actually in middle of a really strong marketing campaign, is starting next week. We just started finishing that really interesting idea. What's gonna happen is, let's say you list a property for sale, STRBrain is gonna be triggered and send you a text saying, hey, see how your property is gonna monetize as an Airbnb. So if you're an agent, you can show it to potential buyers, or if you just chance upon it, the numbers will be

15:26>> there. As soon as you list the property, you're gonna get a text, not an email, with a link redirecting you exactly to your report to buy $10 That's one way. Also, we're gonna be using a lot of YouTube ads, Google ads, and Instagram ads to really scale it up now that we're nationwide.

Nathan Latka

15:46Where are you getting the money to do that? Did you guys raise money or are you bootstrapped?

Funding Status and Capital Spent

Nochum Rabin

15:50>> We're bootstrapping right now. We may go into the raising capital part. We're not sure yet exactly. I still don't know exactly where I wanna go with that.

Nathan Latka

15:59You put your life savings in the company or what? Are you all in?

Nochum Rabin

16:02>> I'm all in. I don't I don't know if it's my life savings, but I'm all in on it.

Nathan Latka

16:08How much of your own money is that in?

Nochum Rabin

16:12>> About 345,000.

Nathan Latka

16:14Does that make you nervous?

Nochum Rabin

16:16>> A little bit. A little bit. But going into going into you know what I said? I was like, look. If shit 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.

Nathan Latka

16:28You know, that's a great I I love that approach. That's a good attitude. Now people are gonna go on, man, I wanna be like, but man, I'm I'm not I'm not rich. I don't have 340 k. Did you work really hard for the $340k? Like, where did you get that money from? Is it just savings over time or what?

Nochum Rabin

16:41>> It was savings over time, but I really also I brokered a lot of real estate. I brokered close to $55,000,000 of real estate Wow. In one year.

Nathan Latka

16:50What do you make off that? I just don't know. What what does a realtor make off that?

Nochum Rabin

16:54>> 50 well, it all depends.

16:57>> I closed I closed a lot of single family houses including Airbnb's. Roughly on that was I probably made close to 200,000 from brokering single family properties, and then I sold the $32,000,000 property in Indiana where I need to do the math, but it's about 2% on that. That's 16 what is that?

Nathan Latka

17:20Yeah. That I mean, that's like $640,000. Right?

Nochum Rabin

17:24>> 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 it's starting are knocking on the door to learn more about it and potentially merge and acquire. And we'll see where that goes.

Nathan Latka

17:46I mean, in your world, you know, lot of debt providers, you know, Scott would sell AirDNA. He was on a show a while ago. You should just raise a bunch of money. Go buy AirDNA.

Nochum Rabin

17:54>> AirDNA was actually bought out in March by a company called I did sell it. Called

18:01>> Predictus.

18:03>> Yeah. I did not I haven't texted him recently.

Nathan Latka

18:05You're right. You're right.

Nochum Rabin

18:06>> A PE firm grabbed it.

Nathan Latka

18:07Yep. Well, good for Scott.

Nochum Rabin

18:08>> Alright. Yep. Well, guys, go listen to that episode for with Scott. That was a really good story going into that. But okay.

Nathan Latka

18:14So the market's yours. Know, once once a private equity provides a company, it's it dies. So the market's yours if you build fast enough. How much of your 340 k have you already

18:22spent?

Nochum Rabin

18:25>> We pro we're in roughly a 160, I would say.

18:35>> A 165.

Nathan Latka

18:36Developers mainly?

Nochum Rabin

18:38>> Developers mainly, new ideas. Me I and Wesley have a really unique relationship. I'll call him at 12AM 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 and 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.

19:03>> There's a lot of me changing my mind. Like I have a whole roadmap that I can't get all into, but I have a whole roadmap for this to literally actually change the entire business of how it runs to scale it and make it massive.

Famous Five: Books, Habits, and Personal Life

Nathan Latka

19:17Of you listening to your car in the morning, you can't see Nochum, 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. Nochum, we're out of time though now for for right now. Let's wrap up here with the famous five. Number one, what's your favorite book?

Nochum Rabin

19:32>> My favorite book is honestly Sell or Be Sold.

Nathan Latka

19:36Number two, is there a CEO you're following or studying?

Nochum Rabin

19:40>> My brother.

Nathan Latka

19:42What's what's what's he running? What company?

Nochum Rabin

19:44>> My brother is 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 his previous

Nathan Latka

20:01Wait. What's his first name?

Nochum Rabin

20:02>> His name is Lenny.

20:04>> Lenny. Lenny Raven.

Nathan Latka

20:05Interesting. Okay. Lenny Raven. Very cool.

Nochum Rabin

20:08>> Co founder of Brown Boots?

20:10>> Co founder of Brown Boots.

20:11>> There we go.

Nathan Latka

20:12Alright. Very cool. Number three. What's your favorite online tool for building STR?

Nochum Rabin

20:19>> My favorite online tool.

Nathan Latka

20:26The one you use the most.

Nochum Rabin

20:30>> In soft in the development?

Nathan Latka

20:32Yeah. I mean, what could be, like, you could say Google or Trello or or Zoom or whatever, ClickUp, whatever you want.

Nochum Rabin

20:38>> Oh, yeah. Definitely Google.

Nathan Latka

20:40Good. Okay. Number four, how many hours of sleep do you get every night?

Nochum Rabin

20:44>> Eight.

Nathan Latka

20:45Okay. That's good. And situation, married, single, kids?

Nochum Rabin

20:48>> I'm married, and my wife is pregnant with a baby.

Nathan Latka

20:53Oh, mate. The first kid?

Nochum Rabin

20:54>> First kid.

Nathan Latka

20:55Wow. Exciting. When's when's he or she do?

Nochum Rabin

20:59>> March 22.

Nathan Latka

21:00Oh, man. You better get as much building as you can in before March.

Nochum Rabin

21:03>> And as much sleep.

Nathan Latka

21:05And as much sleep. That's right. That's why eight hours makes sense. And how old are you?

Nochum Rabin

21:09>> I am 24.

21:11>> 24.

Nathan Latka

21:12Last question. Something you wish you knew when you were 20.

Nochum Rabin

21:17>> To probably believe in myself more and take the leap of faith.

Closing Summary and Wrap-Up

Nathan Latka

21:23Guys, there you have it. STRBrain helps you understand when you buy when you wanna buy a short term rental, what you can pay for it, what the returns could look like. He's put in $340,000 of his own money into this business, spent a $160,000 so far building the MVP. He now has 12 customers, you know, doing about $2,000 a month in revenue just getting going. He's bootstrapped it, team of three. Him and his co part him

21:43and his partner then and a developer they've got out there in in Italy building, building, building, hoping to ramp up here to go from 12 customers to 2,000 with paid ads and some other tactics. We'll see what happens. Nochum, thanks for taking us to the top.

Nochum Rabin

21:53>> Thank you. Have a wonderful day.

Nathan Latka

21:57One 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 1PM

22:22Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM 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 an acquisition, a big

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23:06for 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. 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 counter those people. We got

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