In this episode of The Same Day Podcast, Lior Abramovich, the Co-founder and CEO of Blanket, joins Mat Zalk to discuss the relationship between property managers and owners. Lior explains how Blanket helps managers and owners build their portfolios, the platform’s multifaceted features, and how to retain clients and properties by delivering value.
Facilitating Investor Relations Between Property Managers and Owners
Lior Abramovich is the Co-founder and CEO of Blanket, which offers a retention platform to help property managers keep their doors under management to grow their businesses. With over a decade of experience in the single-family rental market, he has facilitated over $150 million worth of acquisitions for over 1,000 individual investors. Lior also co-founded Golden, a nonprofit organization renovating homes for senior citizens. Before Blanket, he served as the Executive Officer of the Israeli Naval Academy and a Chief Engineer in the Israeli Navy.
Here’s a glimpse of what you’ll learn:
- How Blanket’s property retention platform helps property owners and managers grow their portfolios
- Property managers’ roles as asset managers and trusted advisors
- Delivering value to retain clients and properties
- Lior Abramovich describes Blanket’s multifaceted platform features
- Lior’s background and entrance into real estate and technology — and how he founded Blanket
- What obstacles did Lior overcome when building Blanket?
- Advice for preserving relationships with property owners
In this episode…
Historically, property managers have experienced a 30% churn rate on their managed rentals. This can originate from misaligned interests between property owners and managers. For instance, property owners often view management services as a cash-eating expense, and managers may lack an understanding of homeowners’ objectives. How can you reduce the gap between owners and managers to foster a mutually beneficial relationship?
As a property management growth facilitator, Lior Abramovich maintains that these real estate professionals should act as asset managers and trusted advisors to homeowners. Landlords invest in properties to build a stable financial future, so managers must collaborate with them to ascertain this goal and provide profitable rental and investment options. This may involve offering valuable solutions to specific problems, allowing the owner to take complete control of their investment journey. With real estate software platforms like Blanket, property owners can have full visibility into their profitability and the level of management services, creating an investor relationship between the two parties.
Resources mentioned in this episode:
- Mat Zalk on LinkedIn
- Keyrenter Property Management
- Keyrenter Property Management Tulsa
- Keyrenter Property Management Oklahoma City
- Keyrenter Property Management Arkansas
- Keyrenter Property Management email address: [email protected]
- Chris Lile State Farm
- Chris Lile’s phone number: 918-878-7771
- Lior Abramovich on LinkedIn
- Blanket
- Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! By Robert T. Kiyosaki
- Bryan Jenkins on LinkedIn
- Yonatan Schmidt on LinkedIn
- “The Value of Private Money in Real Estate Investing” with Jay Conner on The Same Day Podcast
- “Why You Should Confer With a Mortgage Lender” with Marc Marroquin on The Same Day Podcast
- “Successes and Failures in Real Estate” with Deren Huang on The Same Day Podcast
Sponsor for this episode…
Chris Lile at State Farm Insurance:
This episode is brought to you by Chris Lile at State Farm Insurance.
Chris Lile at State Farm helps you protect your most precious assets and investments, including home and auto.
To learn more about how you can save double digits on all your insurance needs, visit dialliale.com or call Chris’ office at 918-878-7771.
Keyrenter Property Management:
This episode is also brought to you by Keyrenter Property Management.
Keyrenter Property Management is a full-service property management company that helps clients buy, renovate, and operate real estate assets.
The team helps clients build wealth while taking the headache out of property management.
That’s why, no matter what rental you have — single-family homes, condos, townhomes, or apartments — they can give you the management solutions you need.
To learn more about their services, go to https://keyrenterpmc.com/ or send them an email at [email protected].
Episode Transcript
Intro 0:05
Welcome to The Same Day Podcast where we discuss driving incremental business growth and other topics related to real estate, property management and entrepreneurship. Now to the show at hand.
Mat Zalk 0:20
Mat Zalk here on the host of The Same Day Podcast where I connect with top business leaders and real estate experts. past guests include Marc Marroquin when talking about lending as a mortgage lender and talking about lending which is particularly germane to this current environment where it’s harder to get financing, and more expensive to get financing haven’t had, having had so many interest rate rises over the past year, year and a bit, Jay Conner talking about raising private money, in case you want to do that for investment purposes, and Deren Huang was 100 units under management and a host of industrial properties. Today’s episode is brought to you by Chris Lile State Farm Chris Lile State Farm helps you protect your most precious assets and investments whether it’s your home and auto investment rental properties or other valuables called Chris Lile State Farm for a quick and painless phone call to potentially save you double digits on all of your insurance needs. Is it diallile.com Recall call his office at 918-878-7771 Today’s episode is also brought to you by Keyrenter Property Management and Keyrenter Property Management. We are a full service property management company helping our clients buy renovate and operate real estate assets. We help our clients build wealth while taking the headache out of real estate ownership. Go to keyrenterpmc.com or email us at [email protected] dot com. Before I introduce today’s guest I want to give a big thank you to Yoni Schmidt, a true friend of Keyrenter and Blankets. He’s a huge supporter of Blanket which we’re gonna get into in a second. He’s a colleague of ours here. He also happens to be my wife’s first cousin, we love Yoni are glad that he’s a part of our business. But that is to say he introduced us to Lior Lior Abramovich is a co founder and CEO of Blanket bringing a decade of experience in the single family rental market with over $150 million dollars worth of acquisitions over 1000 individual investors. He’s also the co founder of a nonprofit organization that renovates homes for senior citizens and survivors of the Holocaust, those that are in need. And he’s completed eight years of service as a naval commander, which we’ll get into here in a little bit. Lior Abramovich Welcome to the show. Thanks for being on how are you?
Lior Abramovich 2:26
Pretty good, excited to be here, man,
Mat Zalk 2:28
I’m so excited to have you. As I was saying before the show, like I’ve just heard about you from so many different angles. Everybody’s like, You got to talk to Blanket, you got to talk to me, or you got to figure out what’s going on. Because apparently, this is the next greatest thing in property management, retention. And it’s just super cool technology. And I’ll just say, you know, not that the website is everything. But when you go onto a website and you see it, it looks just super sleek and sexy, you know that you’re dealing with a real company, sometimes you get on these companies, and then they look like they’re built in the 90s. And you’re like, I don’t know what’s going on? Let’s start. Let’s start from the beginning. No, it’s not start from the beginning. Let’s start with Blanket houses. And then I want to figure out what what kind of drives you and how you got there. What is Blanket homes? And what’s the gap that it feels for both property owners and as a result property management companies.
Lior Abramovich 3:13
Okay, so let’s really with the basics, we call it a property retention platform, in sort of exactly that, that purpose is to help the owners and the property managers to retain and grow their portfolios. Because we normally hear about this, like, you know, misalignment of interest between property managers and rental property owners that on the one hand, the rental property owner, you know, wants to just save as much money as it can the property manager, so like wants to make as much money as you can from every property. And this is sort of like a misalignment. I say, on the contrary, like 180 degrees, because when you ask for example, a property manager, what are their interests? And why why are they’re doing what they’re doing and the rental property owner, you’ll find it’s probably pretty much the same
Mat Zalk 3:57
because they the owner money, so they stay long term.
Lior Abramovich 4:01
Even more than that, it’s even deeper. Like why do we invest in rental properties? It’s one of two reasons. We want to build the financial future for ourselves. Yeah, financial freedom, early retirement, etc. Everybody sees a little bit differently, but to build a stronger, and a more stable financial future. And the second thing is to leave a legacy for our kids or our loved ones. Yeah. Why do property managers build great and successful companies? Same thing, exactly. To build a stable financial future and leaving a legacy for our loved ones and our kids? What’s deeper and stronger than having this perfect alignment of interest? So I’m starting with that because eventually, the mutual goal of a property manager and around the owner is to grow their portfolio. Yep, this is what it is. And this is exactly what Blanket is doing is helping both parties grow together towards a mutual beneficial goal. And eventually like if you want to use Bigger turtles are like bigger terms is a better future for all. And the guests will have to identify is really that first understanding of many rental property owners around, okay, I can get a lot of guidance, advice, and pretty much tips for success from my property manager, because who knows better what the hell is going on in the market? Who knows better, which type of properties should I focus on a were the best tenants were the fastest lease up times, pretty much everything I need as a strategy and, and also connections to vendors, like preferred lender, preferred insurance providers Sure, name it, I can get all of that. But as property managers normally, and I’m, like ticking on the head of the property manager for a second, we are dealing with so much, so much on the basic things, which are maintaining the property, making sure everything’s okay with the tenant, all this like heavy lifting that we normally don’t want to deal with as rental property owners, because this is why we came here in the first place. Yeah, we want to like to build that portfolio, but keep doing what we do, which is our day to day job, or maybe even other things. So there’s a lot to so like, grasp here. And we understood that there is a big need. There’s also a big, I would say SPIRATION, from the side of a property manager to be more than just a property manager, to be a trusted advisor to grow into the role of an asset manager and provide what what their clients or rental owners are expecting them to be, instead of just a typical as some people say, toilet, fix the rent collector, etc. Yeah. And another thing, which is also aligns very well here. When you look at commercial real estate, for example, when you look at how REITs operate, and how the big funds operate, which is the most important department and these companies are not and I like work with one and worked in one. It’s the investor relations department. Why is that this is the this is the revenue generating? So like the department was there’s the operational side of things, but who brings who takes care of the capital calls? Who brings in the money? Yeah, that enables everything. This is the investor relations and these companies, the REITs, the funds, etc? They work with millions of investors in the United States. Yeah. Who else works with millions of investors in the United States, property managers? Do we have an investor relations mindset like this, a lot of commercial real estate and big funds have
Mat Zalk 7:34
abandoned. I mean, the challenge is that when you have a person that owns an investor that owns one property, like we have an investor relations mindset, but it always goes to our biggest investors. So we go out and visit them. And we have them in Tulsa. And we do all sorts of things. And we talk to them and we do portfolio reviews. But you don’t have time to do it. If you have 3000 or 5000 properties and 1000 owners, you don’t have time to deal with everybody. We’ve long wondered and thought and planned how we can do a sort of property update, a performance review with each of our clients. And if you had to do them, for every client, it would be it would take your whole year. But you can certainly do out of your biggest ones. But we’ve thought about this a great idea. Okay, so yeah, so the retail investor relations people, but it also, I mean, so much of that is to say, hey, you invested in REIT one, two and three, for example, one killed it to underperformed a little bit, three has been flat, and four we want you to invest in but these are the ancillary benefits that you get in US versus somebody else, etcetera, etcetera. So it’s it’s about continuing the investment journey with somebody and explaining to them why, even though Fund is a little bit down, they should continue to make the investment.
Lior Abramovich 8:45
Exactly, exactly. And this really leads me to that second part. So we talked about growth. Growth is like the main goal. But there’s also another thing that we’re still not talking a lot about, which is optimization. How do I optimize and make the most of what I currently have? Maybe I should re select replace my insurance provider, maybe I should sell a property and buy different ones and tell you what, I can do a lot of stuff that can help me make more from what I have right now. And I think these like two buckets of responsibilities are so like the biggest gap that we have right now in the industry and property managers can and should fulfill it. And this is something that I suffered for so many years, because we’ll get to in a second on the experience. But I was always on this bridge between 1000s of rental property owners and property managers. And the only one the only stakeholder in your entire investment journey as a rental owner that you are literally getting married with is the property manager. This is the only stakeholder that wants your best interest for the long run right and not for the sake of completing a quick deal and you know, leaving you to handle the result, right. And by understanding that before we started like this was still like my biggest dream I wanted to solve this. I wanted to somehow bring a plot For bring it to whatever, to make this seamless to make this usable in a way that we as rental property owners. And I’m like looking at my mom, my parents and my grandparents that have rental properties. I want them to get all the needs. The same as any institutional or accredited investor gets in his quarterly performance reports and takes everything and everything is covered. Like I want that. I want that the people and as you said, we don’t necessarily have a lot of time to do these owner performance review sessions with every owner that has this one property. But what if we could? How amazing would that be? How we also as property managers would be able to really win clients for life. Yeah.
Mat Zalk 10:43
So that’s creating that stickiness. We’ve often thought about stickiness in terms of doing more than than an average property management company. Many property management companies say, I’m not paying your taxes, I’m not paying your mortgage, I’m not paying your insurance bill exposes me to risk and liability and all sorts of stuff. And it does I mean, the truth is it does if something comes in, and you miss the tax bill, and there’s a and there’s a late fee, the owner says, Hey, you, you overpaying the late fee, it’s on you. But in doing that life and paying that late fee, and showing the commitment, and maybe you split it, maybe say look, I’m willing to do this, but occasionally, I’m gonna give myself five, you have 100 properties, and I’m gonna give myself five grace, late peers, and you’re gonna pay those because you don’t pay me to actually send the money out. Maybe I’ll have some grace, but whatever else doing that creates stickiness, so that if somebody wants to leave, they go, Oh, it’s way more painful. I’m gonna take back my tax payments and my mortgage payments and my insurance payments, etc. So this same Blanket is, in essence, a stickiness tool. You call it retention, stickiness, it’s the exact same thing. It’s how can you do more? How can you provide more service for your clients, and keep greater parts of the of the overall lifecycle of the of one house one property, so that you can both extract more and give more, I should say, give more and extract more because we know business and all businesses about service providing service
Lior Abramovich 12:03
100% Why not? Because I will say even more than that. There were there were several years. Now it’s already so like faded away a bit. But there were several reasons at the top property management in this we were sort of was sort of like in a race to the bottom. In terms of management fees. It was always like, I’ll take less management fees, and I’ll bring in more clients. But it’s it’s exactly what it is. It’s a race to the bottom, the race is all it’s all about racing to the top with providing as much value as we can for our clients. And that this is like where you win. This is really when you win and pray that stickiness and create those clients for life when you provide more value. And again, it requires time to acquire resources. But when you show that commitment, like who wouldn’t want to stick with you for the long run, and really be there. So with all that being said, Yeah, I mean,
Mat Zalk 12:54
there’s just my experience with property management is that you can do everything right for five years. And then you can put a bill on the wrong property. And people are like, that’s it I’m done with you’ve stolen from it, you’re like, Well, let me just explain. We have five addresses that 123 Main Street ones Main Street main place, main court, Main Avenue, we did it’s one mistake, and people are very quick to assume the worst about property managers and hire you. And that causes the churn that we’re trying to avoid here with Blanket that we’re trying to avoid a Keyrenter. And so anything that you can do to build goodwill, like showing them the full picture of their portfolio, showing them the value that you create, obviously, and that was where we that was where we came from. We were coming from it from the churn side when we figured when we decided a year ago that we wanted to have some tool that would allow owners to see a full, comprehensive picture of their, of their portfolio, their property, but also how many work orders like now, an owner does not see how many work orders we get sent that we kick back to a tenant and say this is your responsibility do this because the owner doesn’t shouldn’t pay for this according to our lease. They don’t see how many work orders we receive. Pick up the phone, troubleshoot it with a tenant, hang up the phone, press Cancel, they never see that stuff. So we thought inclusive of everything that Blanket homes does, and I want to get into it, but inclusive of everything that blanket homes does, how do we show them how much we handle that they would have to handle if they did this by themselves when we save them money?
Lior Abramovich 14:17
Exactly. Anyways, so so true. And so on point, it’s like in a relationship. It’s all about communication. And it’s like in marriage, you build credit, you know, you stay home with the kids you build credit for afterwards to hang out with the guys. Like you need to show those credits. And and I think this is really the main issue here is how do we communicate the successes, but also the things that didn’t work out well, so that when something doesn’t work? Well, it’s not the main message. It’s not the only message Yeah, and and having that ability and again, because time is the biggest challenge here, having that ability to communicate proactively and not reactively and bring forward those Insights and things that we as rental owners need. And it’s really not a lot. We I consider myself the rental owner, we don’t ask for a lot. We just want to know how everything’s going and be communicated on sort of like, the reasoning behind stuff, right? Why are we doing what we’re doing? Or why is this work order that just came in handled the way that it was handled? Just to be in the know, like, I know, some might be a little bit more, I would say, requiring of additional stuff. But at the end of the day, it’s not a lot. But again, it takes time. And I think having a platform like Blanket is really something that when we started, this was the vision to provide a solution that doesn’t require that so much time that is difficult to provide, especially for the one one rental property owners that really need that. Yeah, they’re the ones that really need that they are more, I would say, sensitive or emotional about some of their properties rather than rational and just, you know, taking care of the numbers. And so this is where I think where this entire solution really fits in perfectly to provide the owners that transparency they need, the clarity they need, so that when there is a challenge, it wouldn’t be the whole story,
Mat Zalk 16:10
right? This is sort of like so how does Blanket provide that? What’s the gap that? Or how is it filling that gap?
Lior Abramovich 16:18
So our platform is built with two, we can call them components. It’s built with an investor dashboard, and a property marketplace. Now, the platform is white labeled with like the property managers logo, meaning it has the property manager has the Select control and the ability to really customize it to his clients needs. And how does that so like fit in? So on the investor dashboard, what do we have in the investor dashboard, we have things like for example, my portfolio value, how much my my entire portfolio of properties is valued at the total equity that I have in my in my properties and my entire portfolio, because what we do, we integrate with the property management software of the property manager. But we also pull in a lot of data from county records and other data providers, some of the largest ones in the industry. And you’ll be surprised to like to know how much data is out there. So scared even, Indeed, indeed, I gotta say, as well, indeed. But it enables to also do some good things, and a lot of useful things. And this is what we’re doing. So we enriching all that data that you already have in your property management software, so that we provide the owner the full view, because the Owner Statements are okay to provide that some kind of accounting snapshot. But it doesn’t give me the Performance view. It doesn’t give me the investments view that I need as an artist, how much what is my return? What is my cash on cash return? What is my net operating income, cash flow, total equity, total value, and real time visibility to my portfolio, instead of just doing like an annual, you know, spreadsheet performer type of update that I do with the 99 that I get at the end of the year, and just seeing backwards, like what happened, I want to be in the know, like, on a real time basis. So that investor dashboard gives me that all those metrics to be in general, but it also gives me gives me that real time visibility across all of my rental property finances, and this is also something that is automated. So what we also do besides pulling in the different transactions that you have in the property management software, we’re also pulling, for example, your property taxes. So you have this little like checking account type of experience, instead of the PDF experience that you have in your overstatements. That shows you real time transactions of all your property finances, on top of which you can add, for example, things like your travel expenses, let’s say you took a flight to see your property, you can write it off in your Texas, you can add that as a simple, literally two clicks of a button. And you’re done. You have that like full full picture of all the rental property finances in real time, everything in real time. So that really brings me that clarity. And other thing that I that I’m getting in my investor dashboard, which as a whole, we call it like the property hub, the market investor dashboard together, we also get access to different vendors. So we have integrations to different vendors that are relevant for me as an owner, lenders, insurance providers, inspectors, 1031 Exchange providers, so that I can get with a clickable button and immediate quote, I can get with a click of a button pre approval. And that way I don’t need to like search online, go to different places and we even negotiated some of these vendors. So me as an owner right now, when I’m your client, I have everything I need from you. You as my property manager, with the access to all of these tools can act as my trusted advisor to really guide me in the right direction when I want to do something whether it’s to grow my portfolio, optimize my existing portfolio, etc. So this is on the investor dashboard side. And this is something again, I can log in on a daily basis see how everything is going being updated on every transact. because that is happening, etc. The Marketplace serves me as an investor as a source for two things. First, I can buy more properties. Because what we’re doing, we are integrating a vast network of off market inventory providers, wholesalers, turnkey providers and homebuilders, all of market, nothing from the MLS, and we push it into that marketplace. And all these properties are in your area of operations so that you as the property manager can manage it for me when I decide to buy it. So I can have access to exclusive properties that I can’t find anywhere else, that when I have the ability to financial capability to grow my portfolio, I can do it almost with the click of a button. Where
Mat Zalk 20:42
does that inventory come from, from another property owner in our portfolio that says, Click I want to sell my property and puts in all rights that they think?
Lior Abramovich 20:50
Good question. Awesome. So we have like we call it to inventory sources, one, outside inventory source, one is an inside inventory source. The inside inventory source is properties that were listed by other owners in my property managers, client database, again, all of market, these properties wouldn’t be found anywhere else. But we also pull more inventory from our outside inventory sources, which are other wholesalers, turnkey providers and home builders in your area of operation. So I’m buying properties in a market that I know I’m buying properties in a market that I can evaluate, or maybe already know. So like, what are the best neighborhoods, what are the best zip codes and I can select target those with the inventory that I have. And I can also utilize my existing properties to buy those. So I can refinance one of my existing properties, literally with a click of a button and they
Mat Zalk 21:39
earn they get seeds that the the lender will get or the potential lender, the vendor lender will get all the details of the property so you don’t have to send anything else. It’s all there. auto populate
Lior Abramovich 21:50
beautiful most most of the vendors that we have are integrated like through an API, so much of the data is already auto populate. So you don’t need to go through all of these processes for some you might need to go through but we partnered up with some FinTech lenders, like Tech Tech, venture backed companies that have a very similar process, even if you have to go through it from like from the very beginning. So you can refinance you know, cash out use that those proceeds buy another property, you can tend to you want a property that you you’re you want to sell, for whatever reason, buy another property also. And everything can be done within the platform, or you can also sell your property. Let’s say you want to sell your property and put it on the market and sell it as it is with a tenant inside. No need to wait for the tenant to vacate. No need to sort of like risk yourself in putting the property on the MLS with a tenant inside and then that’s who knows what happened. My god horrible experience. A lot of horror stories, a lot of horror stories, and then you can sell it on your own select timeline. You don’t have to wait for the lease to end. Let’s say you need the money right now. Listed on Blanket like you can list it that way. So let me
Mat Zalk 22:55
ask you a couple of questions. What is the view so many of our owners are myopically focused on cash on cash return, and I think that our owners should be focused to some extent on cash on cash return, what they’re not focusing on is the are the other ways that you make money in real estate? Number one, you’re inflating away debt over time, if you got a reasonable interest rate will pay down principal pay down, you’ve got the tax benefits associated associated with depreciation. So will owners in Blanket be able to see their principal pay down as a payment to themselves? It’s a forced savings plan, in essence, will they have any ability to see potential depreciation that they would get in in specific markets? Because in Oklahoma, for example, there’s been 100% depreciation for a long time that’s that’s going away. There’s also in the state of Oklahoma, there’s the the 100%, I think Indian depreciation based on Indian Territory and specific rules of Oklahoma. And owner, many of our owners don’t see that depreciation, as they don’t even know it exists, they need to talk to a CPA about doing it right. They need to do cost segregation to make sure that they’re maximizing their appreciation. And then they don’t look at that as I actually didn’t pay 20,000 or 30,000. of income tax, because I’ve wrote that off as depreciation, and that is 37% or 35, or 32% times 40,000, or whatever the number is tax savings, that’s cash in my pocket. So that’s one thing that I try to explain to owners and of course, I don’t get to speak with as many owners as I’d like to, but when I talked to them about the benefits of real estate, I personally in my portfolio don’t care that much about cash on cash return. I care about principle pay down over 30 years and I care about
Lior Abramovich 24:38
depreciation. exactly see that in Blanket. So first of all, we have the principal pay down, you can literally see exactly how much principal was paid. Specifically that portion you can also see like the loan balance and with the progress bar that shows it’s very visually beautiful. You have also the appreciation that was gained because we have your purchase price. And we also you can have the ability to also add any closing costs or any home improvements that you’ve made to, to have the calculations super, super tight and, and precise. And we have appreciation, you have the principal pay down, the only thing we don’t have is the lack of the ability to show you the depreciation because depreciation is is a challenging one. And as you said, it varies by state. Yeah, it varies by state. And it’s definitely something I would love to add. But I really think this is something that at least at this point is more like, educational type of thing. And I would do this a lot with my previous company that I worked for. So I always vouch for, like, why should we invest in in new construction rental properties, because of that depreciation, because depreciation is based on the construction element and not the land element, right, the bigger the construction element, and this is only new construction properties, and the smaller the land element, you can write off literally, almost any taxes that you owe, yeah. But if you buy a very old one, so there is almost like no depreciation to be written off. So that makes that thing a little bit. So like, different when when we look at the entire perspective, but in general, I definitely would like to have that and see that in the future. And Blankets will definitely add it to the product roadmap, it
Mat Zalk 26:12
definitely raises also the ability to have trusted CPA vendors, people that know specifics about your tax environment for your state or your whatever is going on nationally and legislation. One other thing that I wanted to ask about there is sometimes a desire for property management companies to not show real time data, if I can find at the end of the month that we really should not have sent out this vendor for 70 bucks or 100 bucks to do something. And instead, I want to pay that back to an owner before they get pissed off for finding out that we did something that we should have done. I have that ability when I send them a once monthly statement. So property manager can go and look at all the statements before they go out and go, You know what? I told the maintenance tech not to do that the tenant should fix their own blinds. And yet we build them for that. I want to reimburse them for that cost. And then I will go to the tenant and say that needs to go on you. So a good example is recently we had a snake there was a plumbing issue. And I spoke to the plumber. And the plumber said, Yeah, I was able to clear it, I pulled out a bunch of routes, but also a bunch of tampons. Sorry, that’s going to the tenant because the tenant knows that they should not she should not be flushing that stuff down the toilet. Now if it was real time, I haven’t had it, I haven’t gotten the bill, I don’t know when we’ll get the bill. We’ll get it in the next couple of days. But if we get that bill and it shows up in real time on the on the owners portal before I’ve had the chance to take that back, because I have to ultimately I can build to the tenant, but it must go through the Owner Statement because it’s something that comes off. Otherwise, I pay it as a property management company from our operating account. It must do if it updates in real time, and they happen to pop on at the wrong time, they see that there’s $120 Plumbing cost, they’re gonna be like, What the heck, I didn’t even know that this was happening. So there’s some stuff that I want to prevent owner from seeing, how do we deal with that when there’s real time visibility on everything.
Lior Abramovich 28:04
So first, even if it would happen, it’s easily explainable, like, if it’s going to be reimbursed, you will see that in literally when it’s going to be reimbursed in real time, because what we do is we’re not so like getting that transaction and it’s done, it’s closed, because it’s real time, it’s also updated in real time when there is like the reimbursement. So it will appeal a peer. So like other income whenever that that money. So like we’ll go back. So it will be fixed. It might be fixed with a couple of days or etc. So like, no, like, and I think in general is a perspective, like, nothing is burned. Everything’s okay, correct this, there was an expense, but you’ll see that fixed in a couple of days. So no, like no rush. Yeah, and I think in general, that really changes a little bit the perspective on everything, instead of just, you know, waiting for like a one time a monthly update that you have to always look gather everything up and make sure that everything is lined up, sort of like an ongoing type of you know, partnership going forward, we’re taking care of everything, don’t worry, like everything is taken care of, then you’ll see that in literally in a couple of days once it will be reimbursed. So it’s a transactional view type of solution is already in place, they literally see that. But in general, what we also enable, and again, there are accounting related transactions that are not relevant for the owner, internal so like movements that we have between our GL accounts that we get are not relevant now because we want to hide them or anything is just not relevant, and it creates a lot of noise. And I can give also the opposite example there are property managers that are literally sending out not the owner statement, but the general ledger, sort of like view which is with all the internal and then owners are literally going bananas. They don’t understand anything that’s like same same transaction moving from place to place like what like I was build that same expense like even like lifetimes, right? No. So what we enable just to also make sure there is no confusion that what we call it sort of like suppressed fees, you choose what are suppressed fees, again that counting wise are not relevant for the owner, you can make more confusion that then then then value. So we eliminate that also we eliminate that noise. We said that in the onboarding, we said those are like suppressed fees, and then it’s all taken care of. And you me as an owner, eventually I’m getting the right data and the exam that I that I want to get the cleaned out irrelevant noise. Exactly. Exactly.
Mat Zalk 30:30
So you did eight years as a commander in the in the Israeli Navy, is that right? I mean, I think we should we should we should talk about this your accent as you speak great English. Your accent is not the same as mine. Where are you sitting right
Lior Abramovich 30:42
now? Currently, I’m studying in Tel Aviv. What a great city. Lucky Yeah, this is. This is exactly behind me. You’re probably the main highway.
Mat Zalk 30:52
Beautiful. Love Tel Aviv. Good party scene. Good food. Good people. Good beach. Okay, so you’re in Tel Aviv, you found this idea. After you served in the Navy, you joined a couple of companies. I want to hear the whole the whole, the whole thing, what’s your whole story? And how did you end up starting a technology business?
Lior Abramovich 31:13
Well, I’ll start by saying that I was never in, like the tech space, no relation to high tech cover real estate guy. This is what I loved. And this is what I intended to do pretty much all my life and I was fortunate just to have that, that opportunity to really mix it with technology and really create a larger impact than what I imagined. But the start really started with pretty much I think as everybody story in real estate, I read the book, Rich Dad, Poor Dad, Kiyosaki. At the age of 13, my mom bought me that book, I hated books, I wouldn’t lie, I wouldn’t say that I was a good learner read a lot of books, I hated books. But this was the first book that got me interested. And then I went into sort of like this wormhole of just reading only books about real estate and self improvement type of thing. Yep. And I remember I would mark a lot of stuff, you know, and write notes. Like, I was always happy and excited about, you know, extracting tips for like, for being better. And, and taking that into account. And also, like having my mom as my role model that was able to amass an impressive portfolio with literally like, we we came as immigrants to not immigrants, but sort of like immigrants to Israel, from Ukraine, my entire family is from Ukraine. There was a big wave from the Soviet Union after it’s like broke down into Israel and to other countries. And we were the ones who still like kills Israel as a Jewish home because we were very old Jewish family in Ukraine. And we literally had the like, all the reasons why not to succeed or not to grow and become an which you have better position and a better place in our lives. And seeing my mom how she literally worked three jobs, and with even a minimum wage was able to amass a real estate portfolio really got me to like, you know, Huh. Interesting concept, like, you know, taking somebody else’s money, which is the bank, by with it a property that appreciates and pays off for that sort of, like money that I took as a loan, and having even some money left aside to really use it for my daily like, needs. Quite an interesting cause pretty good. I said, Okay. Yeah, pretty good. Like nobody told me about the different challenges there are there but that concept sounded very good. And that was like my first park around real estate and at the age of, I think, 19, I saved money. So like, I worked also during school, saved some money, got some help with from my parents that took on a loan. So like, on my behalf a small loan, and I bought a rental property in Atlanta, Georgia, not in Israel. I was in Israel, I literally just started my active duty service and the Israeli Navy. And, like, went on this crazy idea of buying a rental property 1000 miles away that I never stopped in real in real life, trusting a person that I never like, never met and never knew. I did some scary things in my life. But this was by far the scariest man but also the best decision looking backwards, the best decision financially and by setting so like this first step in my career, so I bought this rental property in Atlanta, Georgia thought that it works. At that point, I sold like you know, I didn’t buy any more properties because I started my active duty service because this is where the time I was enlisted into the Israeli Naval Academy. I had a very interesting time there. So for about eight and a half years as a naval commander on board a naval warship, chief engineer, and afterwards, executive officer of the Israeli Naval Academy, so I came back to look to training after I finished my active duty service. Click on as we say in the field, but on the water. I came back to look to be a lead instructor of the Israeli naval Academy to teach them like the next generations of naval cadets. So this is also where I got my passion to talk a lot, but also to, you know, to coach and, and to help people learn new things. Quite an interesting time I commended hundreds of soldiers, petty officers and officers, most of which I can really talk about again, because the I always explained like why specifically in the Navy, we can really talk about anything like even things that aren’t necessarily, you know, crazy as in the movies, because the Navy is pretty much the only, like, at least in Israel, it’s the only arm of the Israeli Defense Forces that is always in the enemy in the enemy’s field, in the enemy’s territory, like Air Force is, you know, going out taking a very precise action coming back infantry, same thing as well. The Navy’s always there, in a lot of places so we can, can literally talk about even some very specific stuff is just, you know, cruising and gathering. So yeah, definitely, definitely exciting time, I would say made 90% of who I am today, values, ethics, approach to life perspective, pretty much everything with one of the biggest wins and takeaways from that time is how to feel comfortable in uncertainty. This is literally the thing that you’re being trained on the most from the first moment you start your your naval service, the feeling comfortable with uncertainty. And I think nothing could have better prepare me for startup like, exactly, exactly. Not making
Mat Zalk 36:39
decisions with uncertainty with with imperfect exaggeration. Okay, great.
Lior Abramovich 36:43
Exactly. And so this was an exciting time. In that time, I kept sort of like helping other Villanova law officers to invest in us real estate, with select my knowledge, etc. And when I finished normally, a lot of naval officers who was Israeli is really aware of that. It’s like a taking, like vacation, like literally, as you finish your duty, you immediately take a long vacation for about like six months, we call it the big trip, everybody’s gonna go into like South America to like, Thailand, India, like you name it. The first day that I finished my active duty service, I was on a plane to the United States to check out some new developments for the company that I started working for. So no risk, no, you know, no time to take a break. Just wanted, you know, to get into the business. And you know, I had a crazy hunger to succeed. And that’s how I started. So literally the first day after I started working for a private us real estate investment firm, that was focused on built to rent mainly when built wasn’t really a term, it was new construction for you know, investment purposes. There will focus a lot on build to rent in the United States, pretty much across any market that you can imagine. Now, we also had some projects in Europe, some very exotic project. But the main focus that I always had is really single family rental properties, whether existing whether new but built rental was always so like that focus started there as Head of Acquisitions. Afterwards, Vice President of Business Development, oversaw our entire operation in the United States, from managing our contractors, doing the land acquisition, the due diligence, up until like leading all the other and managing all the other deal related parties that we had, whether it’s the lenders, insurance providers, inspectors, pretty much across the board. That’s I’m oversaw about $150 million worth of acquisitions for over for over 1000 individual investors, mainly mom and pops, but also some accredited investors and some institutional investors as well. So I really had this very interesting school regarding like how rental property owners think, and for pretty much every like, you know, background that you can imagine, I have worked with Chinese Russians, like Israelis, Canadians, American investors, of course, and really saw these like different mentalities and how people approach rental property investing as a whole from the crazy stuff to the very inspiring stuff. And the people that really helped me succeed throughout this time was really our property managers. These were like actual partners in some project, like literally Equity Partners in some projects. And then some just, you know, our long term partners for any like, you know, investor rental property owner that we refer to sure because they were always my boots on the ground, my center of knowledge, my closest friends, and pretty much a lot of what I learned was really thanks to my, my time with them. So that was about three years there. During that time, I also co founded a nonprofit organization here in Israel, actually, that renovates homes of senior citizens in need and Holocaust survivors. We’ve set it up with other fellow naval officers as well started literally ourselves, first of all renovating, then, you know, started raising some funds from different donor donors, and then you build it for a very impressive and really isn’t an organization to be proud of, because really, what we’ve done, just, you know, it just you need to see the reactions to understand and feel how impactful it is, you know, sometimes it might be just, you know, regular paint job, no, taking off some mold, you know, some fixes, but the expression the, like, it’s insane. So this was really close to heart. And then, at that point, I decided to make a move, like an actual move to move to Toronto to Canada to set up my own investment firm, to sell new construction properties in the United States of Canadian investors did that for about like, almost a year before COVID started. And then so like, that was the point where I started to become more aware of that challenge of ownership. And this was a gradual understanding of how big own return is in the industry. And it really like this whole thing started when I heard about so like the, the statistics, this was the first time that my brain really went bananas. I asked my property management, like friends that we work with and partners, like, how much properties are you losing each year to churn? Pretty much all of them said that around 30%. And this will like blew my mind because I positioned myself for a second in the business owners seat. If I would lose 30% of my revenue generators every year. I can imagine the implications on sort of like the team, the operations, it’s like, to every business owner, this is like a tragedy, the tragedy tragedy, like into property managers, to To my surprise, it was like a regular Tuesday.
Mat Zalk 42:04
It is what it is. It’s painful. It doesn’t matter how you spin it is really painful. You paid so much in terms of Google spend in a BDM. And everything else to acquire a resident as a property owner. To lose them is very painful. Yeah, exactly. So you decided you decided to start Blanket if you’ve found your niche, as soon as you heard that 30% churn was a normal statistic in the property management industry
Lior Abramovich 42:04
that clicked that click because the thing that really made it even more, I would say, surprise is by like how they’re even, there was no solution, no process in place to try to mitigate that. Because like what we were used as property managers to mitigate that loss of doors by pouring more money into like different marketing campaigns and try to somehow, like offset that trend with new rental property owners that we bring in, or why
Mat Zalk 42:59
bring in new owners if you over 30% of them are going to leave in the first six months, years or whatever. actly.
Lior Abramovich 43:04
Exactly. I would say more than that, like, look at yourself, something that one of our one of our clients also said, like, thanks to Blanket, I understood that I’m sitting on a goldmine that I’m not mining, like, because at the end of the day, your clients, your rental property owners want to buy more properties, probably the majority of them would like to grow the portfolio if they had the opportunity.
Mat Zalk 43:26
And they just trusted that you were doing a good job. And they didn’t have a third thought every week that they wanted to fire you.
Lior Abramovich 43:32
Exactly. So it was really a communicate like there was a big gap in communication was a back of like technological capabilities. Because it’s like, it requires a lot of time. Like, you can relate, creating even that, you know, one of like a single few owner performance review sessions that you’re doing for the larger clients. It takes time to create a pro forma. Yeah, maybe there’s like a also presentation that needs to be created, you know, organizing all the eight takes a lot of time. Yeah, it can take like sometimes maybe it can take weeks because you’re doing other stuff. So imagine, like how much time it also takes without like a technological platform to facilitate that really made this thing like, you know, green magnet that like something needs to be done here. And it really resonated also with my, you know, general approach to bringing that value to owners like myself and my parents that need it. Like, we don’t have to be institutional investors to get institutional service, right. Institutionalists like, like type service? Like what do we need? We need reporting. When it communication, we need some help with disposition and acquisition. Like we don’t, we don’t really need a lot, but there isn’t no way to provide that without a technological platform. did.
Mat Zalk 44:49
You know many startups go through various iterations before they land on the final thing that they present to the world or maybe they present multiple things and they fail and they turn and finally find success? As did you was Blanket the same in its first iteration, essentially, conceptually as it is now.
Lior Abramovich 45:08
Same, literally, we we raised our seed round about a year ago from some of the leading venture capital funds in the United States. And literally the product as it was in our like, first, you know, mock up designs that we iterated with the property managers that we started this whole, because we had like a better group type of like thing with about 10 property managers that we built everything. And it was literally the same. The only difference is we haven’t built out the entire select platform, yet. There are many things to come to really make this as, like, a crazy platform.
Mat Zalk 45:46
So what are some of the biggest hurdles that you encountered? While while you were
Lior Abramovich 45:51
building? Blanket. Well, I think we underestimated the challenge of of the GL accounts. I think we like when we thought about, you know, how quick will create the investor dashboard, we thought, like, you know, we have really, we have a killer team, we have the best software developers in Israel, like, by far, they literally can do the impossible in literally in no time. And II, even before we understood how, like, strong we have a team we can build, we thought that really it can take maybe like six months, six months or so or like maybe even between three to six months at best. And we underestimated how, like challenging it is to create this dashboard. Due to so like the cleanliness of data, right? The GL accounts can be a mess, they can really be a mess. And we unintentionally we sort of like became accounting auditors to be able to bring our investment dashboard to that level that is really precise, and is really readable, easy to digest for the rental property owner. But is
Mat Zalk 46:58
that is that because without getting into too much detail about general Ledger’s is that because the chart of accounts is different from company to company, I might call it plumbing repair and somebody calls it plumbing optics or something like that. So everyday, supposing the normal standard chart of accounts would wouldn’t that be much easier than then you’d have the same wish GL codes for everybody.
Lior Abramovich 47:21
We wish we wish that that was an industry standard that everybody’s implementing, but not everybody’s implementing it. That’s the problem. And it becomes even even more challenging because every property management software has a different level of customization. So some fields are gone are like static, some fields are dynamic. And for some things you can write, like, you can write a comma. And in some areas, in some fields, you can’t write a comma. So it makes this whole thing so problematic and so complex, because you’re also dealing with different platforms, and because you’re also dealing with uncleanliness. And the answer that utilization of of data, that man, wow, wow. But it’s
Mat Zalk 48:04
also suspect that if somebody changes the chart of accounts in the middle of they go, Oh my god, there isn’t an RPM standard chart of accounts. And then they change and all of a historic data is washed. And it’s you know, it’s all terrible unless you go back and classify everything accordingly.
Lior Abramovich 48:20
Yes, so we have a solution for that I wouldn’t get into so because this is already the secret sauce, but we have a solution for that as well. We have the solution for changes and and the I would say the an organization or the lack of organization in so like the GL accounts like they are a platform can really take the the messiest, the most problematic organization and turn it into the beauty that literally beauty in the eyes of the investor. So I would say this was one of the biggest challenges. One last question.
Mat Zalk 48:53
You’ve seen a lot from the property management side from the ownership side. What’s based on your experience? And of both investing and running Blanket? What advice would you give to a property manager that would help them keep their owners happy and retain property management? That is not technology related?
Lior Abramovich 49:16
Well, good question. So first communication, really communication can really solve a lot and prevent a lot of stuff from happening. And it requires a little bit of, I would say finesse and assemble like, like the type of the right type of communication, we don’t have to say everything because a lot of information is is useless and not necessarily needed by the rental property owner. So there is also there’s the first hurdle of understanding what we need to communicate, communicate and as you said, The Work Orders are a big thing here. Yeah, big thing here. And there are solutions for that that can be pretty much simple like even creating, you know, like a template. Like a Google So let’s say Google Sheets, okay, real time form that, that you can create with a certain automation simple one that really anybody can do to just update like things from the software into that Google Sheets, and just show the work quarters. Like maybe that’s the solution, I don’t know. But I’m just saying, identify the right things that are really valuable to your owners, and just communicate them in the right way that will make them feel in control. So really, that thing because most owners are really afraid of the unknown, right? And when the unknown is cleared, and you know what’s happening, a lot of questions are limited, and will probably wouldn’t happen. So first of all, is communication, communicate the right things to, to your owners.
Mat Zalk 50:46
And I say one thing, I don’t want to interrupt you from your next thoughts or keep your next thought in mind, but we have communication, as one of our core values communicate it, we send every work order that comes through that gets assigned to our owners, so that they see the PDF, they can see the tenant name, the property name, etc. The problem is, we want to communicate and what I train our team to do is communicate the things that are important, not the things that are just nonsense noise as we call it in the show. But also communicate proper next steps and guidance, because somebody wants to know, what would you do if this were your property? If there’s a plumbing issue? Should I replace the entire sewer line for seven or eight or $10,000? Or should I just plan to escrow money, I know that every six months, I’m gonna have to send a snake down there to clean out the routes, what would you do? So don’t tell somebody, your your plumbing lines have an issue, unless you can also tell them two or three options for what they could explore and do and what you would do yourself. So communicate, but communicate, as you say, the right things and and some potential solutions and the next steps. Otherwise, it’s just nonsense and garbage. And an owner says, Why am I paying you to tell me the problem? I’m paying you to give me a problem and the solution?
Lior Abramovich 52:09
Exactly, that’s exactly. So I want to capitalize on that and say another thing. Take financial advisors, okay? They financial planners, financial advisors, they’re doing that, but they’re working in so like a very regulated industry, where there are a lot of things that they can’t do, they can’t say, they are very limited in what they can do. We as property managers, we are expected to act as trusted advisors. And there are no limits and boundaries to what we can provide. There is no lack of regulation. So what we can say, of course, like investment advice and things like that, we are like we’re literally supposed to give investment advice. This is why we are hired for. And an investment advice is really an encompassing, like category that has a lot of things, some of them are things regarding the maintenance. And I think we we got to take that in both hands and just you know, implement that at our core that we our advisors, and advisors advise on what to do, they don’t just show you the problem, they are not reporters, we are not reporters, we are advisors, so really taking that and communicating, as we said, the right messages, but also explaining sometimes the why we should do this and this and so like the reasoning behind option A, option B, Option C. And then in most cases, we’ll probably just date as rental property owners, this is what I even do, like even me, which I consider myself to be an experienced investor. In most cases, I just tell my property manager, whatever you see fit. You give me those options. I trust you to do the right decision. Just do it. Right. Like because I have so much on all my mind with a lot of stuff going on. You don’t want I just want the profession. Exactly. I want the professional to handle that. So in many cases, providing these options will literally make our lives easier, because they will just say I trust you just do it. Oh, good. That’s it. Thumbs up? Yeah. So communication, the right messages the right way with the next steps. And I think the last thing that I want to add is really conveying that message that we are really like we have the same interests in mind. Yeah. Interesting. And, and literally say that because a lot of people consider property management as an expense is another line on our cash flow performance. Right? I see that and this is something that I hope more property managers will start to convey as an investment. It’s an investment in our time. It’s an investment in our future. It’s an investment in our most valuable asset that we have probably in our entire lives. And just, you know, it’s an education It’s a long process, it’s a long term result, but it’s worth it at the end of the day, because if people if our, at least our clients, you know, started your own, you know, we don’t need to change the industry. But starting with our clients, making them understand that the money they are spending is not an expenditure, it’s actually an investment and that we are working into a mutual goal. And if we can even ask, like even ask your rental property owners, what is your goal? Why are you investing in rental properties? Why did you buy these rental properties that might be extended to landlord and say, I just heard I get stuck with it. Sure. Okay. But why are you doing this and maybe the the, the, the answers would be surprising, and very similar to what we’re doing is we’ll have the opportunity to tell them, Hey, man, like a Mat, we have the same goal. We’re also building our business, to provide to our loved ones to our team members, to our families, a better financial and stable future, our goal is also to grow our portfolio, so we’ll be able to do that and leave a legacy for our kids. So if that’s your goal, it’s Michael, we are partners in this, we are partners in getting to that goal together. And I think if we’ll have the communication part set, and if we’ll be able to communicate that that mutual goal that we’re striving for, and showing them that we’re partners and that they are investing in this and not like sticking another expense on the cash flow performer it will completely change the conversation. So I think these are the two things that are again, are not technology based or the like require a specific solution in place. It’s communication, it’s just conversation thing the goal Yeah, and conveying the mutual goal.
Mat Zalk 56:44
Who are some people in the industry that you really respect and trust maybe somebody that I should be talking to you after this podcast?
Lior Abramovich 56:53
Well, there is a person that really sparked a lot of like what I’m doing today this is his name is Bryan Bryan Jenkins from today’s your but his first company was a chai properties in Alabama. So even before this whole notion of you know selling into your own network doing these owner performance review sessions was the like, technology based solution he was doing it by himself. Like he was doing sometimes dozens of transactions for his owners to his owners, and helping them sell properties in his own network and I’m talking like years ago and he was doing also he was doing these like performance review sessions with the help of a very trusted and super talented at that point who was his business development manager who I also proud to call him a friend today they were doing this they’re like together and and a lot of us are like my inspirational also came from there so Bryan is definitely person that I really look up to and trust. He is today Leading today’s leading the institutional so like relations at pure so definitely that someone to you know, to interview and see how he’s looking out from his like perspective how, how he catered to investors, and now even to institutional investors that can that like whole thing another level? The Bryan is definitely
Mat Zalk 58:17
in love with Well, this has been great Lior I want to thank you for being on the podcast. How do people reach you if they want to get connected if they want to have bBanket homes, be a service provider in their property management business.
Lior Abramovich 58:32
So easy. I’m a normally mighty moles with jokes that don’t sleep and they can contact me directly like via LinkedIn, find me on LinkedIn, send me a message I normally respond pretty quickly. We can schedule a call, I can connect you to band or partnerships Manager, which is amazing. You’d love every moment with him, even if you decided not to go with a blanket, but you’ll enjoy it. Or you can just go to our website. It’s blankethomes.com. Skip, like click on the very pinky button there. There’s a demo. Yeah, exactly. And you’ll be you’ll be easily connected to Ben. And again, if I can help with anything that is not even Blanket related, like feel free to reach out. I helped a lot of property managers even before that, you know, to how to structure so like this investor relations mindset even without a technology platform in place. There are a lot of things as we talked about that don’t necessarily require a tech platform that we can already do today that can really help us win our clients for life so I’ll be happy to help with with
Mat Zalk 59:32
Lior Abramovich is the co founder and CEO of Blanket, Blanket homes blankethomes.com, bringing a decade of experience in the single family rental market with over $150 million of acquisitions over for over 1000 individual investors. He also the co founder of a nonprofit organization that renovates homes of senior citizens in need and Holocaust survivors and has completed eight years of service as a naval commander in the Israeli Defense Forces. We are I’m really excited to meet you next October and we really appreciate you being on the show.
Lior Abramovich 1:00:04
Me too, man. enjoyed every moment of it. Thanks.
Outro 1:00:06
Thanks. Thanks for listening to The Same Day Podcast. Tune in to a new show each week and be sure to subscribe to get future episodes