Free AI Property Management Software That Pays Landlords? | Joe Edgar

Joe Edgar (00:00)
Everybody’s talking about this AI and how it changes. And if you look at most of the software, it’s clunky old software with a search bar that they call AI. That’s not helpful at all. This is an actual assistant that’s going to help manage all your properties. And not only is the software going to be free, but now landlords can earn money

from their software. What that means is if you take the symbiotic environment of what’s going on, you take any map and you draw a circle, and what you’re gonna find is a whole bunch of rentals and a whole bunch of small local businesses.

Freddie Steen (02:03)
Welcome to the Investor Fuel Podcast brought to you by Real Estate Pros. I’m your host, Freddie, and today I am in the podcast with someone I’ve been looking forward to connecting with, none other than Joe Edgar, who is the CEO and founder of Loca.us, who is making serious moves in the real estate technology space. Not only that,

our Real Estate Pros audience is going to be so excited, Joe, to hear how you have found a gap in the market when it comes to many of our multifamily investors, property managers. Lean in, guys. This is going to be a good one. So let’s dive in. So first off, for people who may not be familiar with your world, Joe, give us the short version. What’s your main focus these days, and what markets are you operating in?

Joe Edgar (02:57)
Yeah, great. I mean, it’s—it’s a fun question because it’s kind of what have you been up to lately. And after TenantCloud, which is property tech, we ended up buying ShowMojo, Tenant Turner, CollegePads, created a company called PropertyTech. So very heavy in kind of the DIY and the REI space. And after that, we started Loca.us,

which is local. We like to say we’re crazy for local businesses. And it’s really connecting local customers with cash rewards and local businesses. And so we’ve been building out these networks across the entire US, just the continental US right now, not—not overseas. But building this network of all these local businesses and customers. And the way you can think of it is if, you know, the—I hate plugging, but there’s this coffee chain that’s very large, has about sixty thousand locations in our country. They have

billion-dollar budgets. They’ve got this app that everybody loves to use and gives them points, they can buy stuff. So you all know who it is. You all know who it is. I don’t like to plug the name. But the benefit they have is 60,000 locations. They are a real estate company. You know, they’re a monster. And local small businesses, there’s by far more of them, but they don’t work together. So they are all like crabs in a bucket fighting each other. Collectively, they do have a big budget, but independently,

they’re all competing and don’t have much of a budget at all for going after customers. And then we as consumers, you know, just in the Austin area alone, which I’m in right now—I know you’re in Chicago, but just in the Austin area—there are 46,000 local small businesses. Wow. None of—we cannot manage forty-six thousand different apps. And so if you want to work with all these local businesses, that’s the heart, is have one app, all cash rewards, so you don’t have to worry about, you know, like,

“I got this many points because I did this, carry the two, divide by seven, sell my child,” and then somehow you end up with a discount somewhere. You know, there’s none of that. You actually get cash rewards for every business. You know how cash works. You can withdraw it to your bank account or Venmo. Really easy, and connect with local businesses. And the big part that we’re adding on to there is we’re—about everything we’ve been building up for is now going to this new release we have, which is stepping in

back in to help those same investors I’ve been helping for a long time. I’ve been in real estate a long time. And

everybody’s talking about this AI and how it changes. And if you look at most of the software, it’s clunky old software with a search bar that they call AI. That’s not helpful at all. This is an actual assistant that’s going to help manage all your properties. And not only is the software going to be free, but now landlords can earn money

from their software. What that means is if you take the symbiotic environment of what’s going on, you—you take any map and you draw a circle, and what you’re gonna find is a whole bunch of rentals and a whole bunch of small local businesses.

Those local businesses would love to give your tenants rewards, cash rewards for paying their rent on time, renewing a lease, or filling out an application. And so you as a landlord,

by having the opportunity to put this together, you’re like, “Wait, I get rent on time. My tenants are happy because I get rewards to local businesses. Local businesses got to find my local tenants.” And all of a sudden, they’re paying for your software. And so landlords will get a portion of that as that goes around and those tenants earn cash rewards. Tenants are gonna have lower rent because they’re actually earning actual real cash rewards. And this can equate to, you know, four to five bucks for every rent payment pay—

paid on time. I mean, that is—that’s—it builds up over time. So you’re talking about able to go and actually check and spend money at local businesses. And then the local businesses are now able to find new customers. So it’s a great symbiotic opportunity that really, you know, builds in a lot of community. And so that’s really what we’re working on, and it’s—it’s coming live here and we’re—we’re working on its launch. So

Freddie Steen (07:32)
I love it. You know, what caught my attention about you, Joe, was the way you’ve been able to leverage a career as an ideator, a visionary, a founder, and even your financial relationships with the US government, being sought after as a thought leader in multiple markets while maintaining strong margins. And that’s not easy, especially in this climate. What’s been the key

to keeping that machine running smoothly?

Joe Edgar (08:00)
Hmm. That’s a hard one, because you’re talking about how do we touch government, touch a private market. They work in two very separate functions. But the one thing that is unique across them all is everybody, if you really hone into it, everybody’s trying to grow some type of local job. And that’s actually pretty good. And so local businesses, landlords, even though they don’t think about how it equates to jobs—on the one side, the government, like,

you know, it’s true, the word “job” is like crack cocaine to a politician. So everything they build out is really trying to react towards a job. Every program they establish is trying to produce jobs. And in the private sector, we don’t think about it as, “I’m not trying to create a job.” I create a job because I have revenue. But that symbiotic relationship comes together as you, you know, you pull together companies. As you grow, you need employees. And as you need employees, they need places to live.

And as you need more places to live, that brings its own economy. So that symbiotic relationship is really what I’ve focused on, and it’s the heart of it. So if you really take—a landlord is a local business. A local business can be anything from you’re doing tires to selling food, and all of them are—are germane. They’re very local. If you think of all marketing and what it used to be, say, fifty years ago, all marketing was local. All of it. Radio, television,

newspaper, billboards—all of that. That’s how you did marketing. It was very local. And if the big boys wanted in, they had to go and, you know, pay a local advertiser to do it. The digital world changed everything. The digital world made the world around us closer, but it made the community that we’re in farther away. That’s unfortunate. Which means all of a sudden, you know, radio is not working, newspaper doesn’t—they—it doesn’t even exist.

All the ways—billboards, if you happen to look it up, but all the ways that they—you use—local business used to be able to get our attention doesn’t exist anymore. And so now those local businesses, which include landlords, which include anyone who is local, and it’s not the big boys—it’s really about location. So the big monster corporations, they have lots of locations. That’s what makes them a benefit, is they can use digital marketing. It helped them more than anyone because they’re like, “I don’t have to market on a location, I could just market on a

specific message.” I can say, “Do this.” But then if you go local, you have to market on a message like, “We have great food, but we’re also—we only have one location, and it’s right here.” You know, if you live—if you live 10 miles away from here, you’re never gonna come. 80% of customers for local business live within a four-mile radius. And so they have the caveat of having to do the location as well. And so that’s what’s unique, is that real estate, local businesses—they are the same.

I’ve been able to keep that theme throughout everything I’ve ever done. And I’m just keeping that theme now again with Loca, is that really it is about community. Those communities are made up of local businesses, and those local businesses are very diverse from everything, like I said, from landlords to shoe repair.

Freddie Steen (11:00)
Definitely. Now every operator I know has a moment where things got real. Maybe a deal that went sideways or a time they had to pivot fast. You mind sharing one of those moments for you?

Joe Edgar (11:12)
I’d say the—the worst one was when I was building TenantCloud and we had two things come together at the worst moment. Two terrible events come together at the worst moment. One of—is one of our investors skipped a capital call. He wouldn’t respond to a phone call. He said he was gonna wire it, and then we waited for the wire to never happen, then he wouldn’t respond, nothing. So—so we weren’t gonna get a capital call.

And then the worst is we got hit with fraud. We were using a product to transact rent payments, and we—he had been abused and a bad actor had gone in and set up all these ways to take payments. And so we had lost $120,000 overnight from fraud. And there’s nothing that makes you like shut down shop when you know you’re literally almost near out of money and investors aren’t funding you,

you know, you’re trying to build software for—for landlords, and then, you know, you know, you just get robbed. And it was very hard. There’s no one—you find out there’s no one there to help you. There’s not like there’s an insurance that covers it. There is no like super police that come and say, “We’ll investigate and here’s some money while you wait.” There’s nothing like that. You’re just out of luck and, you know, people don’t return phone calls. The—in fact, the FBI told us like, “Well, tell us if it ever hits to three hundred thousand.”

So as a local business, we were just hit. We were hit really hard. And that was—that was where you really go—you know, if you think of, you know, The Godfather, that’s when we went to the mattresses and we said, “We’re—we’re gonna have to fight for this market.” And, you know, a lot of the team members had to take almost no salary and just believe in it. Some left. But those who stuck around, we just had to,

you know, get dirty for about six months and really grind it out and figure out. First thing was like, “Okay, let’s stop all this. Let’s hunt all the fraudsters, let me build this and make sure we’re starting clean.” So we built a lot of fraud tools that ended up benefiting us later, because everyone got hit when they were a little older, but we’d already known about it. So we’d already built those tools in. So we never got hit with fraud again, and so that turned out to be a benefit.

And just going through that forcing us to squeeze and be small ended up benefiting us as well, because those hard times meant that we had to build a lot and try to get to market really fast. And a good investor of mine has a great saying that he says, that a paycheck is the worst thing for an entrepreneur. And that is really—it’s not so much that paychecks are bad, it’s really talking about what you do when you’re pressed up against a wall. That’s really what,

you know, is the difference. When things are really hard, you

Freddie Steen (13:50)
That’s right.

Joe Edgar (13:51)
are hungry. What will you do to survive? Will you figure it out? And that’s really the magic. They’re awful. Everyone—anyone who has ever gone through, they’re awful. I don’t recommend them at all. But they are the times where magic was made. It was just you—you didn’t think about it, you just did it. And yeah, that—that

probably is also—even though the—the worst part for TenantCloud is probably really how TenantCloud became such a market leader, that it was—was having to build and listen to customers and figure that out during that time.

Freddie Steen (14:20)
Wow, Joe, I mean, that’s the kind of stuff that people don’t talk about enough. And honestly, it’s what separates the folks who just dabble from the ones who stay in the game long-term like you. Joe, let me ask you this. What are you most focused on solving or scaling next? What’s the next real goal for you?

Joe Edgar (14:38)
Yeah, I mean we—we really want to now dive into this DIY landlord space. So we’re bringing them tools. If you think of software and the elevation—evolution of where software has gone, right? First it was like Excel. Excel was amazing. It’s like Excel and Craigslist. Excel was, “All right, I wanna automate, I have process,” and then Craigslist was like marketplace. And then everybody started building companies that were basically Excel spreadsheets

and versions of Craigslist, right? And those became large companies because they—they said, “We’re gonna—we’re gonna segment this market and just build an amazing tool that’s built around that.” That’s when TenantCloud really got its existence. It was property management software. You either could build it all in Excel, but it was a pain and nothing was connected. So we connected you with your tenants. We made where you can collect rent,

and we keep track of all your accounting online and we’d help you file your 1040E really easy, all in one simple way. And you can get maintenance requests, and it’s automatically in your accounting. So it was a very fancy, nice way of doing a spreadsheet. The truth—

you know, it’s so nice. Airlines, they should know to wait for us a little bit, because they have so many flights, so many routes, everything. But now with this new AI compute power, they can, you know, process the—the most optimal solution so fast. And when that happens, we no longer want us—we’ve never wanted to spend time in software. The one reason we were there is because it was that or a spreadsheet. So we’re like, “This is easier than a spreadsheet.” We’re

Freddie Steen (16:08)
So true.

Joe Edgar (16:09)
decision-makers. If you have a real estate investment, you’re a decision-maker.

You are not data input. And so the next evolution of software, if you’re looking at your software and you’re like, it requires me to like input information and it requires me to tell it what to do, you’re in some archaic software. You shouldn’t be doing it. So the next evolution that we’re passionate about really bringing is something very simple. Your property management software should not be complicated. You shouldn’t have to play with it. It’s a conversation. You can have a conversation by text.

By text, you should be able to tell your property management software, like, “Hey, are all the rents in?” And it’ll be like, boop, just spit out yes or no, and then tell you who. It’s like you should be able to easily have a very fluid conversation. You don’t need lots of buttons. If you’re looking at all kinds of stuff, it’s archaic. You’re a decision-maker, your software should be asking you, say, “Hey,

John Doe over at 2817 has a broken faucet. I found James, who can go fix it right now for two eighty-five. Is that good?” And you’re, “Yes” or “No.” That’s where you are. You’re making decisions, and that’s really the future of software. So that’s what we are now bringing to the table to real estate investors.

Freddie Steen (17:16)
Joe, I know our real estate pros are clamoring to ask this question: when is it coming to market?

Joe Edgar (17:21)
Yes, we’re about—if you’re interested in the beta, message me now. That’s—you can find me easy at Loca.us. But in the next two weeks that will be live, and it’s open for anybody to play in it. Like I said, not only is it gonna be free, but you’ll earn money. So the first version will be totally free, and then the rewards will start building on. We have some partners that’ll bring stuff on that, but you’ll be able to use that in the next two weeks. One of the big questions that I get are,

“You know, this is going to be so disruptive to property managers. How can you do this? It’s gonna put—” And I—I—I have to argue back and say this is actually gonna be one of the best things for property managers out there. So if you have a small property management office or you’re running anything like that, you’re—you just have to rethink what property management is. And property management doesn’t have to be—like, think of the most expensive, hard things to do as a property manager. Unfortunately, it’s all the trust accounting.

It’s all this back-office stuff that you actually don’t get paid very much for, but you have to do that as sort of a waste. Imagine if you could take that off the shelf. And then you also think about the properties you manage. You’re like, “I got all these properties, these are all I have. I try to win more,” but who—who’s your biggest competitor are DIY landlords, as you all know. So they turn off and say, “Hey, you’re too expensive, I’ll manage it myself.” And so you’re in this constant battle. Well, imagine

managing way more properties than you even know what you manage. And what I mean by that is when all of a sudden you have an agent that is managing properties on your behalf, because when we did TenantCloud, we found that the normal office could manage about a hundred properties per property manager. And that was the top scale. To really bring in software and get it, we’d get it to about 125,

but it was really hard. You—that’s—that’s the number of scale employees you need. But what if I could tell you you can now manage infinite—infinite number of properties? That’s—that’s what’s coming to the table is infinite amount. So then you’re like—and that’s where people are saying, “This is too disruptive for property management. How do we change?” But this is where you have to think about what property managers are. There are some things that you can automate, really simple. And fortunately, they’re the things that are the most expensive

and draining to your business. They are the back office. The things that can’t be automated are so important, and there’s so many DIY landlords who need it but don’t have it right now. And those are the basic things like, “Okay, I need a 30-point inspection every six months. I need to winterize my house. I need a turn.” Well, property managers are—have this special talent for turns, because if you look into a turn, how many different contractors do you have?

I gotta go have somebody do an inspection. Then I gotta go hire a paint person to go look at all the paint. I gotta fix all the plumbing. Then I gotta patch the roof. I gotta—you gotta carpet clean. You got all these. Whereas a property manager is a natural-born coordinator to say, “Actually, we either work with someone—they have it on staff already, so they say we have a turn crew, or they work with a number of contractors who they do it all the time. Like, I gotta turn, do it. I already have set pricing, I can do it.” So these are all their value-add things that they can now do

and don’t have to worry about the messy. So it could be they’re like, “Hey, I’m gonna do one a turn for this customer. I’ve never met him before. We’re gonna do a turn, and then I probably won’t see them again for a while, you know, and one in six months.” So all of a sudden, you’re bringing in way more customers than you think you had, but you’re making larger revenue because the things you’re now doing are the things that provide you a larger margin. And the things you’re not having to do are the things that are, you know, sucking on your costs. And so that

exchange is what really is going to propel property managers. So in the market, property managers only make up about 30% of the market. So their largest competitor is the DIY, the 70%. But what if you could do a lot less and make more at it, managing a much larger portion of that 70%? And that’s really where the magic comes in, is being able to get exposure to that. And that’s what they’ll be able to have. So as a DIY landlord, all of a sudden it’s like, “Okay, well,

I have this site. I’m still managing my property. I’m using Loca to do it. But now every once in a while, every six months, I get my inspection, goes and—” ’cause they’re managing an asset. And when you manage an asset, there’s—you can’t just let it sit and not ever get any repairs. You want someone proactively watching your asset. And that’s where property managers are going to step in. So the way property managers really need to reframe the way they see the market, and there’s actually going to be a huge opportunity for them.

Freddie Steen (21:46)
And now I know a lot of people listening are either earlier in their journey or looking to level up like you, Joe. And I think they’d benefit from hearing this: when it comes to building relationships and growing your network, what’s made the biggest difference for you?

Joe Edgar (22:03)
Ooh, you know, taking the underdog’s call. So it sounds strange, but you know, it doesn’t take long in real estate before you’re like, “I’m such a pro at this, I’m not gonna waste my time with other people who are trying to learn something.” And I have made it an act, because, you know, I grew up on a reservation. I’m one of thirteen. We really had nothing.

My entire—I was very young getting in this game. My first investment property I bought was fourteen. And when you’re a young kid,

Freddie Steen (22:32)
Okay.

Joe Edgar (22:32)
people really don’t want to hear from you, because you just piss them off. So I didn’t realize that then. I was just like, “Listen, I’m trying to get—I’m trying to learn, I’m trying to do stuff.” But you just make ’em mad, because they’re like, “You’re too young at this, you know, da-da-da.” And there were a few that saw it as like, “Hey, this is an ambitious kid. I’m gonna—I’m gonna help him out. I’m gonna take it.”

And I’ve always remembered that. So in my own, when people reach out, I do have a time in my calendar—and I run it every month—where I say, “Anyone who can reach out, I’ll take a call, we’ll have a meeting, we’ll do a coffee, whatever you want.” And I have a time blocked out and I meet. And why that has been beneficial is, at first you think like, it’s such a nice thing for you to do to the community, to like give back to help those who are growing, right? But then over time you learn that everybody out there comes from a different

area, a different market, and they have a whole different network. And they’re all coming to this as new, but it turns out they’re actually pretty good in other spaces that you may, you know, be new to. And so I have found an investor through one of those meetings. I have found a number of different organizations and networks by just, you know, supporting those who are coming up. They know lots of people.

And there’s all—it’s the gold that nobody digs for. It is those who are trying to learn and trying to do stuff, and by, you know, giving back and helping them, you’re gonna find there is a lot of seeds that get planted that, you know, end up proffering a lot of, you know, benefit later. So

Freddie Steen (23:59)
Yeah, you can’t fake that. I mean, relationships are everything in this space. All right, before we wrap, if someone wanted to reach out, connect with you, maybe collaborate or learn more about what you’re doing, what’s the best way for them to reach you?

Joe Edgar (24:56)
So I’m easiest if you look at Loca US. Anywhere on Loca.us, you can find me. So that’s easy. You can also find me on Twitter, it’s @Joe_Edgar_. But I’m on all the other social medias. Very easy to find. But you know, Loca.us is the easiest way to find me.

Freddie Steen (25:13)
Perfect. Well, listen, Joe, I appreciate your time, your story, and your perspective. We need more people in this space who are doing it the right way. Thanks again for being here, Joe.

Joe Edgar (25:23)
My pleasure. Thanks for having me, Freddie.

Freddie Steen (25:25)
And for those of you tuning in, if you got value from this, make sure you’re subscribed. We’ve got more conversations coming with operators just like Joe Edgar, who are out there building real businesses. We’ll see you on the next episode.