From Math Teacher to Real Estate Mogul: Michael Franke’s Inspiring Journey

Dylan Silver (00:01.148)
Hey, everybody. Welcome back to another episode of the Real Estate Pros podcast. I’m your host, Dylan Silver. And today on the show, we have Michael Franke. Michael is running a wholesale operation in Kansas City that does 15 deals a month. And he’s also the owner of a software company, NicheData.ai that provides daily automated foreclosure data across all 50 states. Michael, welcome to the show.

Michael Franke (00:29.516)
Hey, thanks for having me, Dylan. I appreciate it.

Dylan Silver (00:31.876)
Absolutely. Before we hopped on here. I said, wow, I love the background. I haven’t seen a background like that with the lights and the black and I said looks looks looks really looks really nice. And we were talking a little bit about how you got into your first real estate deal and how it wasn’t always easy. And there was a journey there. Tell us a little bit about that. How did you get into the real estate space?

Michael Franke (00:55.554)
You it’s interesting, I actually came from the teaching background. I had a degree in teaching math. So I taught ninth and tenth graders algebra. That’s honestly a harder sell than getting a house at a discount. But for a long time I was earning, you know, 40, 45 grand a year. And we tried to scrape by, but things just weren’t going well and I just didn’t see it as sustainable. So fortunately, my folks, my parents had good paying jobs and I said, hey, look,

Dylan Silver (01:08.56)
Yeah.

Michael Franke (01:23.79)
I’d really like to flip a house. don’t know anything about it. Haven’t the first idea what we need to do, but if you guys could provide the money, I’ll do all the work on the property and then we can split it 50-50. So I started scrounging around for deals, not knowing where they were. Happened to find a platform called Hub Zoo. If you’re familiar, probably a decade ago, it was more popular than it is now, but bought a house in Pleasant Hill, Missouri for about 80,000 or so.

I spent the next three months doing all the repairs, all the painting, all the tiling, electrical work. Threw it on the market. We ended up making 19 grand on the house. I split it with my folks. So I made 9,500 bucks. So it wasn’t a ton of money for the first deal, but it was proof of concept that I could do this on my own. So I left teaching and started doing this full time. And it was not an easy first couple of years, but I bet on myself and

Dylan Silver (02:08.515)
Okay.

Michael Franke (02:23.106)
Here we are today.

Dylan Silver (02:24.721)
What tools were you using to educate yourself and to get yourself off the speed in an industry that maybe there was a lot to learn in? I can resonate with this.

Michael Franke (02:37.518)
So this was 2015. There wasn’t as much on YouTube or different masterminds and things that we have now like Investor Fuel and things like that. it was mostly just bootstrapping. I didn’t know what I was doing. I just knew what I wanted. we definitely bought that house for way too much. But fortunately, I did all of the work myself. So we were able to come out OK.

If I did the numbers now, I probably wouldn’t have offered much more than about 50 or 55 for that house, but I was excited and I just got out there and bootstrapped it. And for those of you that are newer to the game, sometimes that’s what you got to do. You just got to fail forward. You don’t want to be one those people that is just consuming content and being what I call a content warrior. Just out there looking for information and waiting for the perfect time and the perfect time never comes. So.

Fortunately for me, I just took the plunge and it turned out okay. It wasn’t always great, but just failing forward and we’re to where we are today.

Dylan Silver (03:40.066)
You know, I tend to think that it’s a combination of two things. First is relationship building. You know, like I wouldn’t be sitting in this chair if it wasn’t for a cold call that I made to an investor that is not part of this company but referred me. And just the divine intervention there is like so many stars had to connect. But then also it’s the knowledge, right? So you have to be able to analyze deals. Otherwise you’ll lose a lot of money if you’re just going out there and buying deals without knowing how to analyze them.

And so in your first couple deals, were there any relationships that you made that were like super critical that maybe you still have today or that guided you in some big way? And then also was there their knowledge that either you had that you’ve relied on ever since or that maybe you wish you had?

Michael Franke (04:29.336)
Yeah, in those first few deals, we didn’t make a whole lot of money, but I did make a relationship with a private money lender that we still use to this day as one of our primary lenders. But one of the main things I learned is that you don’t swing the hammer. That’s one of the biggest things that you can learn. Basically, I was doing all the work. So during that time, I’m not doing any marketing. I’m not finding new opportunities. Then you get done with the house, you sell it.

and you’re basically unemployed and this is kind of a basic thing but try to get out of that swing in the hammer phase and be doing the lead generation, the marketing, the closing of sales. That’s the higher leverage task there.

Dylan Silver (05:13.932)
I’ve also found I don’t have any deeds in my name, but I found working with other people that when I’m in the mode of helping on a site on a job site and I’m acting like a contractor, I’m doing some type of demo work, know, hauling away.

something from the property, right? Going to the dump and dumping some demo pieces of a home away. And I’ve been doing that all day and I’m doing that all week. That it’s almost like hard for me to shift my mind back into, okay, let me call foreclosures. Let me, you know, go to these networking events. Did you find that at all or were you able to multitask all the time?

Michael Franke (05:52.274)
for the longest time, that’s just all I knew, right? I didn’t have a big network of people to rely on. So it was just me doing the marketing, me doing the acquisition, me doing all of the work, me doing transaction coordination, the whole thing. And that’s kind of the way it begins for a single entrepreneur. And it’s good to learn all those tasks so then you can delegate it out down the line.

But it is hard to scale an operation when you’re wearing all the hats.

Dylan Silver (06:23.817)
And so that first deal, how did you come across that deal? it a friend of a friend? Was it on the MLS?

Michael Franke (06:31.608)
That one was on a auction platform called Hubzoo. You just get on there. It’s previously foreclosed properties, conveniently enough for what I do now. But I bid on it and I got kind of caught up in the whole process of bidding against another person or two. Like I said, bid way too much for it, but it was where I started. We made a little bit of money on it, so ended up okay.

Dylan Silver (06:35.218)
yeah, that’s right.

Dylan Silver (06:48.63)
Eh.

Dylan Silver (06:55.736)
And then your investors, which in this case were your folks, have seen the light at the end of the tunnel because even though there might have been some losses there, you said, hey, we’ve got proof of concept here. Let’s keep going with this.

Michael Franke (07:08.726)
Yeah, 100 % they were super supportive of me and they’re actually part owners in my operation now. So we’ve been a family owned business for a long time. I think they didn’t quite sign on for the amount of deals we do now. They were just thinking a couple per year, but it’s been great working with them.

Dylan Silver (07:25.784)
That’s a truly a blessing. I many, many times people talk about doing deals with family and it’s hard. It’s very hard to get family on board. Even if you have a successful operation, people will talk about their kids and specifically right now with the greatest generation and baby boomers. there’s this huge opportunity right now, you know, where billions of dollars worth of businesses are either going to be sold or nothing’s going to happen to them because

the next generation is not interested in taking it over. It’s a lot of work carrying that torch, so to speak. So to have family in the business with you is pretty, pretty cool stuff.

Michael Franke (08:07.564)
Yeah, it’s been a great experience. of course have to keep business and family separate. A lot of times we end up having lunch with them on Sunday afternoons and it turns to business and my wife rolls her eyes. So as long as you keep it separate and kind of keep the family and business separate, been great.

Dylan Silver (08:23.854)
Speaking of family and business, is your wife in the in the real estate space as well?

Michael Franke (08:30.904)
She worked with us for the first handful of years. I had my daughter five years ago and my wife stays at home now so she’s not terribly involved but she kind of helps us with some of the design and things for some of our flips but mostly she stays home with my kiddos.

Dylan Silver (08:44.203)
Yeah.

That’s awesome, man. Going from the first deal to 12 to 15 deals a month, was it a steady or were you like, hey, I see an opening here and then boom, it all hit at once. What was the process like for you?

Michael Franke (09:01.388)
No, it was a slow build. to say that it all came easily is not accurate at all. Probably about two years in, I had had a string of like five or six different houses in a row to where we broke even or even lost some money. And how did that happen? At that point, I didn’t know anything about going off market to buy houses. It was mostly just referrals from realtors and they would inflate the ARV and the numbers they gave me. They would minimize the amount of repairs.

Dylan Silver (09:28.503)
Yep.

Michael Franke (09:31.47)
And that led to deals that were not very fruitful. And I remember one particular property was on Cantor Drive in Raymore, Missouri, to where I was about to make 20,000 bucks on this house. And my finances were horrible at the time. They were down to their, I was down to my last few hundred bucks. I needed this thing to close. Appraiser calls the day before the property was going to close and he said, Hey, look, bad news for you. It appraised about 20,000 low compared to your, your contract price. So

Dylan Silver (09:37.45)
Yeah.

Dylan Silver (09:48.929)
Yeah.

Michael Franke (10:01.302)
Went from profiting 20,000 to making zero. And that was a kind of a turning point for me and my investing career. I didn’t know if I was going to be able to keep investing or if I was going to be able to, you know, go back to teaching. And that is when the point in time came to where I knew that I had to find something that was a little bit different than what I was doing. Instead of focusing on realtors, I needed to find deeply discounted real estate. And I happened to stumble upon a foreclosure.

It’s on Aspen Drive in Lee’s Summit and I found it on Zillow of all places years ago. This was 2018 when I found this property. Had a little red dot on Zillow and said foreclosure and it happened to be about a half mile from my home. I walked over there, went up the driveway, door knocked the house. Super nervous because I’d never done anything like this before and just said, hey, I happen to live in your subdivision here.

Dylan Silver (10:40.716)
Thank

Dylan Silver (10:56.716)
Yeah.

Michael Franke (10:58.668)
Lender had scheduled a foreclosure sale here next week. Just wanted to see if I could lend a hand. They invited me in. We had a 90 minute conversation. And then by the next day, I had a purchase agreement on this house and assigned the thing for 50,000 bucks. was by far the biggest profit that I had ever made. And I didn’t have to buy the house, didn’t have to flip the house, just assigned the contract and only had probably two or three hours into the whole thing. And it just kind of was a light bulb moment for me.

Dylan Silver (11:27.99)
Wow, so then from there, did you dive into Zillow foreclosures where you’re like, is a gold mine?

Michael Franke (11:36.174)
So after that, I really poured myself into foreclosures and refining that process in terms of how do you get the data? How do you market to these people? How do you speak to these people and solve their problems? And ever since then, I’ve done a little over 800 foreclosure deals and kind of established the whole system of approaching these people and serving them. And if you provide enough value to these folks, cash comes out the bottom of the funnel.

Dylan Silver (12:04.732)
Wow, wow so that that door knock it seemed like that was maybe the turning point

Michael Franke (12:12.268)
it was definitely the turning point. Before that, I didn’t know if I was going to continue in real estate investing, but you know, sometimes for us, the new people or the people that don’t know if you can make it in real estate, sometimes you have to be backed into a corner a little bit and forced to produce something. Cause a lot of us feel like, well, I’m in the safety of my W-2. I don’t know if I can do this or we have all of the excuses not to perform. Well, for me, it was forced out of me and I’m glad that it happened. It was difficult at the time, but

It was necessary.

Dylan Silver (12:42.751)
What year was that in do you crawl Okay, so then seven years ago, which seems like just yesterday I was living in Boston at the time but Fast forward a little bit pivoting a little bit. What was the growth like the next couple of years from? That deal to then doing 15 deals a month. How did that how did that scale?

Michael Franke (12:44.546)
That was 2018.

Michael Franke (13:06.062)
So I was a solo guy, just me and my father mostly, for the next three years, just kind of stacking deals, really figuring out the mechanics of real estate and getting consistent at it. In 2021, I started kind of dropping some balls, right? I was doing three or four deals a week at that point by myself, and I was still trying to do all the project management and the transaction coordination. And I just started making a lot of mistakes and not getting things done.

So then over the next 12 months, I hired my first sales guy and hired a transaction coordinator. And then over time just gradually added more staff to where at the peak we had about 15 people. And I’m actually kind of scaling back now, realized we didn’t need all of those. And now we just have a core team of about seven or eight people that we rely on to run our operation.

Dylan Silver (13:48.35)
Hmm.

Dylan Silver (14:00.362)
Are they all out there where you’re at?

Michael Franke (14:03.628)
Yeah, they’re all in local to Kansas City.

Dylan Silver (14:06.003)
Okay, okay, cool, 15 deals a month, then you decide we’re going to open a software company focused on the foreclosure data. So you clearly saw something there. was proof of concept. You’re doing 15 deals a month. Was it like, hey, let’s take this to another level or were you approached by someone? How did the niche data.ai come about?

Michael Franke (14:33.816)
So I always had the vision of having a nationwide network of people that are trained to work these deals and serve people in all 50 states. I recognized, hey, I’m doing a lot of volume here in Kansas City, but Kansas City is just a small market in an entire country. And I made a presentation on my process at a mastermind probably four years ago now. And there were just so many people who enjoyed the presentation, put it into a

place and started getting deals and I was like, you know, I would love to be able to serve them at a higher level. So I started kind of formulating a plan in my head of how I could automate data nationwide. That being said, I’m not a tech guy. I know nothing about that. I’m the real estate guy, but I actually got through that mastermind introduced to my tech side of our company. His name is Rashad and he’s built out a team.

Dylan Silver (15:10.71)
Super special.

Michael Franke (15:29.206)
underneath him and over the last 18 months we’ve been building out this niche data.ai platform and now it’s something super special that gathers foreclosure data daily from the county layer, six different layers and skip traces that information and provides it to our clients and they’re having a lot of success.

Dylan Silver (15:48.107)
Wow. So all 50 states. So if I’m in Texas, I can go ahead, I can use Niche Data that they are.

Michael Franke (15:56.152)
Sure can. Yeah, we’re in all 50 states and you know, some of those different markets are super difficult. Namely, Texas is very difficult in their county data and how they do it, but we’ve built out some pretty robust technology and we’re basically in most every county down there in Texas.

Dylan Silver (16:04.723)
Brian.

Dylan Silver (16:13.065)
Huh, I’m trying to think what tools I would use. I mean, are you familiar at all with the ROTI report? Okay, so that’s what I’m using. I’m not even aware of a… I’m not aware of any competitor that you would have in that space in Texas. mean, I’m thinking, know, InvestorLift I’ve used to find people who buy these deals, but as far as distressed properties, people that are heading into foreclosure themselves, the ROTI report’s the only thing that I can think of.

Michael Franke (16:18.433)
I am, yep.

Dylan Silver (16:43.6)
Tremendous accomplishment to get that started and to have that relationship to create the company You’re 18 months in you said what have been some of the Some of the growth that you face some of the obstacles along the way

Michael Franke (16:59.69)
man, what obstacles haven’t we faced? So of course I was completely focused on real estate before this. Now I’m growing an education community, growing a software company. So you can imagine the fragmented focus when you have three things. just learning how to be a manager of a quickly growing company and trying to balance all of the different arms of the company.

That has probably been the biggest focus and I’m right in the middle of that in terms of the challenge that is. But right in the middle of that right now, we’ll see how it comes out. But it’s a super cool product. We’re super proud of it. So just definitely a big growth season for me.

Dylan Silver (17:42.276)
Yeah, can imagine that I’m almost speechless because I want I want to jump in and see the platform myself. If and we’ll get into this more at end of the show. But if people are interested for those listening in seeing how they can gain access to niche data, they AI where would they go? Is it just to the website itself?

Michael Franke (18:03.842)
Yeah, nichedata.ai if you’d like to directly sign up. If you’d like to check out the community, getnichnow.com. You obviously get the data, but then you can get the community that sharpens your axe on the side.

Dylan Silver (18:16.776)
That’s awesome, man. That’s awesome. Before we hopped on here, I mentioned that one of the things that I like to ask us about is their perspectives and opinions of maybe where the future of this stuff is headed. I know no one has a crystal ball, so it’s impossible to say for certain, but all this AI, all this AI, Cat GPT, DeepSeek, your company, where do you see AI and real estate

co-mingling and assisting each other in the near future.

Michael Franke (18:53.326)
So AI has come a long, long way, just in 24 months. The project that we have built, Niche Data, would not have been possible without the technology that we have now a couple years ago. But we have a very, very big vision to create an whole ecosystem out of AI. not only the data in terms of foreclosure, but probate, eviction, divorce, et cetera. But

being able to market to that autonomously. So there’s so many things that we have to do manually in real estate and that’s where AI is going to take us. So not only being able to gather the information without humans, but have that information go into a CRM without humans, being able to automate your texting, your direct mail, your email, your cadences for things without humans. And eventually there’s all kinds of AI to where

Dylan Silver (19:28.392)
you

Michael Franke (19:49.856)
It’s voice driven to where it can call your sellers, it can call your leads and have a conversation like you and I are having. That technology is a little bit away from now, but within a couple of years, you very well may be able to go the entire arc of doing a deal from lead generation to speaking with a seller to signing a contract to disbowing the deal without human intervention. So that’s kind of where.

Dylan Silver (19:57.051)
Yep.

Dylan Silver (20:16.175)
Yeah

Michael Franke (20:17.166)
our thought processes. We’ll see where the technology goes, but I can see a path for it maybe in the next 24 or 36 months.

Dylan Silver (20:24.717)
me too. And I know that doesn’t sound that far away. But this is selfishly I was, you know, on chat GPT. And I saw I don’t know when this was, but they released a plan that was $200 a month. And I said, Man, what are they what are they giving away? Because I can’t think of I mean, maybe I can’t know I can’t think of any other application.

on my phone that I’ve ever seen charge $200 a month. I can’t think of a single one. And so I haven’t experimented with that version of it, but I’m like, man, it’s got to be doing something that’s knocking our socks off for them to be charging this price. What is it doing? And so I can only imagine what the future holds talking about, you know, being able to analyze deals, find deals, make calls, all of it.

and you basically oversee it and give it some guidance and it’s just going.

Michael Franke (21:23.416)
No, that’s definitely where I see it going. A few months ago, I was able to test out some AI to where it was actually a sales trainer for you. So it was trained on like thousands of hours of sales conversations. So you’d have all different types of sellers, young sellers, old sellers, nice sellers, really difficult sellers. And you would have a conversation just like we’re having, and it would grade you. And you could win the conversation and get the contract. You could lose.

Dylan Silver (21:49.735)
Thank you.

Michael Franke (21:52.712)
and they would hang up on you. So there’s just endless possibilities with this. So I’m excited by it and it’s changing every day. It seems like every day there’s some new breakthrough thing in the AI world. So you kind of got to stay on top of it.

Dylan Silver (22:09.166)
On a personal note, what do you think about folks who are using AI in their Airbnb’s and their rentals? And where do you see that going to? mean, I know someone, I couldn’t believe this was a thing, but he’s like, yeah, the grass is cut. I have it automated, the grass is cut, I’m not there, you know?

Michael Franke (22:33.95)
I mean, AI is going to take over most jobs. I have a feeling in the next decade. it eliminate humans entirely? No, we’re just going to start changing what we’re doing a little bit. But I’m using AI in my company daily, obviously with the data, but even on the side of, hey, I want to use AI for copy in terms of all my direct mail pieces or my text, or in the case of an Airbnb, a lot of it’s getting people’s attention. So it’s like, what’s the title of my

Airbnb? What is the compelling copy within the listing to make people want to come? So if you’re not using AI, you’re missing out, even if it’s small things in your daily workflow.

Dylan Silver (23:10.922)
Yeah.

I think it’s one of these things where if you’re not using AI, it’s about to come upon us like a wave. It’s like you’ve had to have lots of agility in your career, recognizing that I need to be, you know, rather than getting these deals off the MLS from a real estate agent, I need to be looking at the foreclosure to then realizing there’s a goldmine here, you know, partnering with someone in the software space and

going head first into that. If you don’t know about AI, it’s going to replace lots of middle people. I’m going to be a real estate agent, God willing, in April. I feel like it’s ripe for disruption. You have the open doors of the world. of course, Zillow itself uses some type of AI to get the property values, which…

They told us a real estate school don’t rely on that, but they’re shockingly accurate. You know, they’re shockingly accurate. So I see title companies. see realtors themselves. I see a lot of this very soon being replaced in large part by by AI and to go a little bit even deeper than that. Before I was doing real estate, I came from the automotive space and that’s even

more ripe for disruption because how many people have the experience of going to buy a car and feeling like it’s just not transparent, not sure, you know, what the interest rate is or whatever the case may be and feel like why is this the only purchase that feels like I’m, you know, haggling over here, whereas everything else is so transparent.

Michael Franke (25:04.248)
Yeah, I mean, if you’re a real estate investor or any space out there, now is the time to start educating yourself on it. I know a lot of us are like, this is kind of goofy or hokey. And years ago, maybe it kind of was, but now it’s a truly viable, valuable thing. And you need to take that 20, 30, 40 hours to really educate yourself on this, because no matter what space you’re in here in the next couple of years, if you have not…

integrated this into your business, the companies that have are probably going to eat your lunch and make it a little bit more difficult for you to do business,

Dylan Silver (25:38.428)
Yeah, that’s for sure. Having that agility, being able to continue to learn, analyze deals, yes, but I mean, in your case, it was almost divine intervention, mastermind, meet your co-founder, correct?

Michael Franke (25:57.004)
Yeah, co-founder through a mastermind and that’s why it’s so important. I know you represent Investor Fuel and that’s the power of those masterminds. Do you go to every meeting and just learn an insane amount of stuff? Maybe not, but you learn that one thing or you meet that one person that can change your life and that’s been my experience with masterminds. Love them to death.

Dylan Silver (26:21.057)
Yeah, I I am hopeful to get some deeds in my name here soon so I can follow down a similar path that you’re on. for me, the biggest takeaway from my first year and a half, two years in real estate has been the power of yes, deal analysis, yes, knowing the numbers, being able to estimate rehab costs. You know, I’m a wholesaler right now. So understanding

terminology and how Texas contracts work. We call it a trek one to four on the promulgated forms, but more so than that, it’s really, really, really understanding, specifically as someone that came from W2 and from the automotive industry, that your relationships are where the value is, truly. And I was not so keen on that. To me, that was not obvious.

Because I wasn’t thinking like someone’s gonna hand you money and that’s not that’s not the case at all, but they will shockingly I’ve found time and time again if they see that you’re hungry for knowledge and that you’re showing up and that you take an interest in what they’re doing there they will like give you information and show you what they’re doing and it’s like a Education that you couldn’t have paid for

Michael Franke (27:40.236)
100%. Having a power team, what I call it, around you in terms of all of your buyers, your lenders, your title company, your bankruptcy attorney, probate attorney, anyone that you could need in real estate. I mean, that determines whether you’re a small shop or you’re a really good shop. And relationships mean everything.

Dylan Silver (28:02.24)
Everything. On a personal note, was worried when I got out of the school in Fort Worth, it’s called Champion School, it’s where you get your 180 hours. I was worried that I couldn’t be a wholesaler because I’m sitting in class and they were talking about wholesalers and realtors and wholesalers kind of have, you may know, they butt heads a lot. so they, needless to say, there was a couple people, one lady in particular, God bless her, I’m sure she’s a

Michael Franke (28:22.062)
Yeah, little contingent.

Dylan Silver (28:31.693)
fine lady, but we’re not thrilled that I was openly a wholesaler and that I was, you know, not not ashamed about it. I was proud of it. And they were dropping some names of some some famous wholesalers that we probably know and not the most favorable light and saying, you know, watch what happens to them. But to me, you know. If I hadn’t gone through that experience and if I hadn’t had the experience beforehand.

I would just immediately assume, you know, one thing or the other. Instead, I’m like, I came from the wholesale world. I’m going to be a realtor. And so to me, it’s like, I know how to talk to both people. I know how to talk to the distressed sellers that most realtors may feel like that’s not my cup of tea. And I also know the promulgated forms. I know how to talk the realtor speak. So it’s like, I feel like I’m a chameleon in a sense.

Michael Franke (29:26.412)
Yeah, I mean having both of those tools is extremely valuable because as a real estate investor, I’d love to buy every house, but we’re not a good fit for everyone. Some people just don’t want a lower offer. They need retail. So it’s like that’s when you enter into realtor side, list the house, get them top market value, get a commission. And that way you’re just more valuable to your market. You have more tools in your tool belt.

Dylan Silver (29:49.396)
Michael, we’re coming up on time here. Where can folks go to get a hold of you?

Michael Franke (29:54.796)
Yeah, you can check out me on YouTube, Michael D. Franke, if you’d like to check that out, or you can check out Niche Data, nichedata.ai.

Dylan Silver (30:04.93)
Well, folks, that wraps up another episode of the Real Estate Pros podcast by Investor Fuel, the nation’s premier real estate mastermind. I’m your host, Dylan Silver, and thanks for listening.

Michael Franke (30:17.454)
Thanks for having me, Dylan.