How Zach Garfias Built and Sold a Real Estate Software Company From Scratch

Zach Garfias (00:00)
I will say real quick a little piece that I wanted to add to what you said. I think there’s a big distinction. And the same thing that made you successful is the same thing that made me successful and vice versa. It is the difference between people who do and the people who say. And it’s action. You can ask questions all day long. You can go to seminars. You can go to networking groups. And those are not bad things to do. But the difference between the people that succeed and the people that talk is action.

Dylan Silver (02:02)
Hey folks, welcome back to the show. Today’s guest is a Colorado based serial entrepreneur working across real estate and construction who’s also ventured into real estate software. Please welcome Zach Garfias. Zach, welcome to the show.

Zach Garfias (02:18)
Dylan, hey, thanks for having me. I’m excited to be here.

Dylan Silver (02:20)
It’s great to have you on here, man. And I typically like to start off by asking folks how they got into the real estate space.

Zach Garfias (02:28)
Yeah, thanks for asking. So I would say this started back in high school, like junior year, late junior year of high school. I had a neighbor of mine who was a mentor, obviously much older, but he had kids that were around my age, but a neighbor, mentor, someone I really looked up to, like a role model. So he was a full-time real estate investor and had a Metro Brokers franchise. wasn’t…

It was more so just for him to be able to hang his own license. And I always looked up to him. My parents came from the medical background, medical space. So it would have been traditional for me to follow that same path.

And I decided that I wanted to pursue something different. I knew right around that junior year timeframe that I wanted to to get into real estate because I saw that Billy, my neighbor, role model, etc. was very freedom. He had a lot of freedom of time. He’s rich in time. And I really I was attracted to that. I wanted to be able to go and do dirt bike trips during the week or take off and go wherever I wanted to go. And I knew that in the medical

space, it’s a little bit more difficult to do that. So I wanted the freedom of time, obviously the freedom of money as well, but you can get that in different industries. And so I knew that real estate was going to be a solid industry to chase that goal. So in junior year of high school, late junior year, I

started to connect with Billy more from like the little neighbor to the little neighbor that wanted to get into real estate. So I met with him and I asked him, hey, what would you do if you were me? What would be your first step? And he said, if I was you, I would get my real estate license. And I knew that I didn’t have to have a college degree to get into real estate, get my license. So I decided that in lieu of college, I would get my license. So that’s what I did.

Dylan Silver (03:55)
Yeah.

want to ask you, was there any pushback? You mentioned parents in the medical field. I don’t know if they were thinking, Zach’s gonna go be a doctor. Was there any pushback from anybody about taking a different route?

Zach Garfias (04:22)
Absolutely, yeah, lots of pushback.

Dylan Silver (04:24)
That’s one of these things, right? Because I don’t have the same story, but I have elements that I can relate to. When I got into real estate, I was in my late 20s, and everyone that…

was in my friend group, everyone in my social circle, my family was like, you can’t buy homes with no money down, what are you doing? And I was like, well, I don’t actually know, but I’m gonna go to this course and they’re talking about potentially flipping the contracts, I don’t know exactly what that means. But yeah, right, but ultimately I fell in love with it. And it wasn’t just about.

Zach Garfias (04:51)
Wholesaling.

Dylan Silver (04:57)
the money, you mentioned the economy of time, but also for me too, what I loved about wholesaling and as I’ve transitioned into a realtor, you kind of have to give up certain elements of being a wholesaler ⁓ to some degree. But what I really loved about it is you were really solving hard, hard problems, thorny problems that were really significantly impacting people’s lives. And I think when people think about wholesale in general, they don’t necessarily think about that. But I was walking into

Zach Garfias (05:08)
Cheers.

Dylan Silver (05:27)
heavy financial distress, emotional distress, deaths in the family, divorce, people losing their homes, and having to come up with solutions like where is this person gonna move to if they do sell their home to avoid a foreclosure situation? And also getting family members on the same page who may have just had a death in the family and needing to decide what they’re gonna do with their home. I’m curious.

Zach Garfias (05:32)
Totally. Yeah.

For sure.

That could be the hardest part.

Dylan Silver (06:38)
It’s as much a therapist as you are an mediator as you are a transaction coordinator. I want to ask you about your first years in the business. What were those first years like?

Zach Garfias (06:42)
Yeah. ⁓

Yeah, so after I got licensed, I was 18 when I got licensed, so I was young. Actually, I was the youngest person to ever close a real estate transaction in Colorado, so I was very young. ⁓ But it was difficult, I mean it’s difficult. When you’re 18 years old, you’ve got people, you’re competing essentially against people who have been selling real estate for as long as you’ve been alive or longer. So.

Dylan Silver (07:00)
Yeah.

Zach Garfias (07:10)
Ultimately, you’ve got to find people that already have that level of trust and willingness to invest into you. And that runs out after you kind of get through your immediate network, right? So.

Dylan Silver (07:21)
Right.

Zach Garfias (07:21)
So I did my first transaction and that actually caught some buzz from some investors in my brokerage I was with a brokerage here in Denver called your castle real estate and Your castle it’s a large brokerage and they had a company meeting that they announced kind of this news and there were a few investors that That were attracted to my story and kind of that I was young and wanting to get after it so to speak so I

I ended up partnering with a few and we went to foreclosure auction and started to buy and sell distressed property from auction. So we did that, had a few successful investments and ended up getting into a really sticky deal, I suppose is a way to label it, a sticky investment at foreclosure auction. We bought into a secondary non-performing lien by accident.

There was a first mortgage that was defaulted for like years by that point. There had been HOA lien, child support lien, IRS lien.

You name it, any type of lien you can have was on the property. so I knew very quickly after purchasing this investment that it was going to be a long period of time before we either had to accept our loss or recoup our investment or in reality, ended up happening 18 months later is we made some money on it. I it was like 18 % return on investment. yeah, over 18 months, which is not bad. It’s actually pretty good. But there was so much risk involved that it

Dylan Silver (08:39)
Nice.

Yeah.

Zach Garfias (08:47)
It shouldn’t have worked out as well as it did, thanks to God, but it worked out in the way it did and it forced me to start my first solo startup.

Dylan Silver (08:56)
What was that process like? I think a lot of people when they see ⁓ success, they are unaware, or maybe not unaware, but they gloss over the pain that can be involved in starting it. You mentioned a sticky, thorny deal that was really the impetus for you to venture out on your own. So already starting from a place of challenge, what was that first startup like?

Zach Garfias (09:18)
That’s a great question. It was do or die.

Dylan Silver (09:22)
I can only imagine. I can only imagine. I’ve thought myself about where I would start a business and I’m a podcast host, I’m a wholesaler. So I’ve often thought about which verticals would be best for me. Walk me through that first year in business. Also, was it specifically targeting those type of deals?

Zach Garfias (09:41)
Yeah, that’s also a great question. So I wanted to try to find the delta between what I knew, what problem that I knew how to solve, and people that I was able to serve. And so since I had spent so much time at foreclosure auction, as a competitor of a lot of these investors, they knew me, and I knew them, at least on a very surface level.

And it was consistent enough to where there was some level of trust that we had. Just by virtue of showing up. Okay, so after this whole sticky deal, I was in bed one night and I kind of told myself that I wasn’t gonna go to sleep until I had a solution to a problem, unknown solution to an unknown problem. But that kind of forced me to

to come up with what became Alliance Demo. It’s a demolition company. It’s actually, thanks to God, still around 11 years later today. ⁓ And it’s funny because I was thinking in my head, what problem can I solve? And I said, okay, I can service demolition to foreclosure auction investors because number one, it’s the first thing that you have to do.

Dylan Silver (10:32)
Yeah.

Zach Garfias (10:48)
and renovation or even trash cleanup. We were cleaning up like feces and squatter houses and all nasty stuff. ⁓ So I was like, I’ll do it. I mean, like I’d rather clean up poop off of the ground than not make money. And so I decided to just, I had two costs involved.

Dylan Silver (10:52)
Sure.

Yeah.

Yeah?

Zach Garfias (11:09)
I had the cost of business cards and I made sure that they were nice. I spent like 60 bucks on those. And then I had the cost of my first month for my Squarespace website, which I built the next day. And I went to foreclosure auction illegally. This was not legal. I mean, can’t sell services.

Dylan Silver (11:20)
Yeah.

Really? Okay. All

Zach Garfias (11:28)
on government property, or

Dylan Silver (12:04)
right.

Zach Garfias (12:04)
in, I don’t know, there’s some sort of law where it was not legal to be inside of a government building and sell services, like private, whatever. But I was like, I don’t care, what are they gonna do? Tell me to leave? I’ll leave.

Dylan Silver (12:12)
Okay. Yeah.

Kick me out. Yeah.

Zach Garfias (12:17)
no one said anything and I was pretty discreet. I hung outside of auction, outside of the auction door and I would keep an eye on all the people who won bids or who won the bid for different properties. And so I said, okay, that guy won, boom, that person, that lady, boom.

And they walk out and I’d say in a very discreetly, cause again, you can’t be like, you know, not setting up shop, but just this kid just, Hey, good to see you. Congratulations. Demolition and trash cleanup. Congratulations. Demolition trash cleanup. Ended up getting my first two jobs and, ⁓ and I used my, my, my dad’s trash cans, residential trash cans from his house. I used his, his tool sets and a lot of this stuff. I was just so under,

Dylan Silver (12:38)
Yeah, yeah, yeah.

Zach Garfias (12:59)
under-resourced to…

Dylan Silver (13:00)
I know how

difficult this can be. I’ve had to do this myself ⁓ with three quarter ton trucks and hauling trailers and then filling up multiple trailers and then being like, dude, we’re not even halfway done with this. What in the world? I mean, you know, the business is still there. So I can’t imagine doing it without that stuff.

Zach Garfias (13:04)
Yeah, for sure.

Yeah, no, it’s like trying to start an auto shop with like a paintbrush and a wrench. But it’s like, you know what? Yeah, right? But if you are willing and determined and persistent, you will eventually figure it all out. And that’s what happened.

Dylan Silver (13:27)
Yeah. Literally.

I want to pivot a bit here because it’s an interesting juxtaposition. You’re coming from getting your real estate license, doing a deal, then thorny deal, and you see, well, there’s this niche that I can get into in demo work and cleaning up some of these properties that people snag at the foreclosure auction. But then also, you have had a big exit in the real estate software space. It is a totally different world.

Zach Garfias (13:56)
100%.

Dylan Silver (14:03)
So how did it connect the dots for us? How did you come from that background into real estate software?

Zach Garfias (14:09)
Yeah, I was really tired of physical work and a lot of the pain and struggles that go along with construction-based businesses. I mean, very much babysitting a lot of the time. There’s a lot of, mean, drink the night, your employees will drink the night, not all of them, by the way, and I’m not giving a bad name to construction. There’s some amazing people and I still have them. They’re amazing people and I love them.

Dylan Silver (14:26)
Yeah.

Zach Garfias (14:36)
⁓ Yeah, especially in that space, you know, you’ve got people who might drink the night before. I say this because I’ve lived it, but you you’ve got a big project, right? So you’ll have your trailer and all your stuff and you show up right on time or even early to the work site and you’re waiting for men that are sleeping and their phones off. And now it’s on you.

Dylan Silver (14:36)
Managing people is tough.

Zach Garfias (14:58)
And you look like an idiot because you are ready to start demolishing a bank. I’m talking from a real example. Show up demolishing a bank and the owners, investors, property managers are all there to get these ⁓ demolition guys started. And this 19, 20 year old kid shows up by himself and his guys are drunk, hungover, sleeping in bed.

Dylan Silver (15:04)
Yeah.

Zach Garfias (15:21)
That kind of stuff can happen. And I was like, first off, that is just not what I want to do for the rest of my life. And second off, was on my first real estate showing, believe it or not, I was rear-ended by a semi. And yeah, the red light, and it screwed up my back. So I had a hurt back and…

Dylan Silver (15:26)
Yeah, no.

God.

Zach Garfias (15:39)
And people that weren’t showing up and I’m just like, okay, I’ve proven to myself that I can start a business. I can do this. What can I do that’s more scalable? Maybe has an employee base that doesn’t get drunk on weeknights and not show up for work. Okay, well, software, tech, what can I build? Well, what have I, kind of the same thing as before, right?

Dylan Silver (15:54)
Yeah.

Zach Garfias (16:01)
What problem have I seen? What could I solve? And who could I service? And at that point, I had already been a real estate broker, at least here in Denver. And I knew some of this on a very small level at the time, a number of leaders, including the owners of the real estate brokerage I was at, who I had built a really good relationship with. And I’m like, hmm, could I build software?

to sell to them. Yes. Okay. What would that be? What have I used? What is the problem that I’ve had to, what’s the problem I’ve encountered? This one product, CTM Econtracts. Wow, that was a pain in the ass. That thing was clunky. It was dated. I mean, it certainly had a lot of functionality, but I’m like, and I’m very, very naive, very naively, I decided to take on this.

Dylan Silver (16:32)
Yeah.

Zach Garfias (16:49)
monopolistic figure, we’ll call it just like a very strong market share, very dominant presence. To put it lightly, a very dominant presence in this market. You can kind of call it like a solo provider of contract and transaction management software services in Colorado. And I’m like, well…

Dylan Silver (16:53)
Yeah.

Yeah.

Zach Garfias (17:05)
I’m gonna do it. And I was stupid in everyone’s eyes except for my own. And even if somebody came to me nowadays and was like, hey, I wanna do this, I’d be like, that’s kind of stupid. But sometimes ignorance is bliss. And ⁓ after seven and a half years of struggle and building and getting my butt kicked by life and people that were building this for me,

Dylan Silver (17:17)
Right

Zach Garfias (17:30)
was able to build a product that became acquired by the parent company of CTM E-contracts, which is MRI software. MRI software is a…

the largest privately owned real estate software company in the world across 180 countries. They’ve got like around the same, like 185 different products within the portfolio. CTM is just one of them. And thanks to God, I was able to work out a deal. We were acquired by MRI Software back in December of 2020.

Dylan Silver (17:43)
Mmm.

Zach Garfias (18:04)
Three.

Dylan Silver (18:05)
That was a great year for me too, ironically. Yeah, that was that was the that was yeah, exactly. That was the year that I decided that hey, I got to go check out other places and I had never really used my passport at that point in time. I think I had an expired passport and I just had to say that again.

Zach Garfias (18:07)
Yeah? Alright, well, boom.

Hmm. Never been out of the country?

You’ve never been out of the country by that point?

Dylan Silver (19:06)
I had, I was, I believe 28 or 29 years old. I had when I was 18 years old and I’d been outside of the country as a kid, but I had never used like my own autonomy, my own money to say, Hey, I’m going to go here. I was studying abroad in school when I was 18. And then as a kid, of course, I’m just, was tagging. That was 18 years old. I was in Melbourne, Australia.

Zach Garfias (19:13)
Okay.

was that?

Alright, that sounds like good place to be.

Dylan Silver (19:31)
It was an interesting, a little aside, we’re getting off the beaten path here, but Melbourne at that time had a minimum wage. I wanna say it was like national, I could be off here, but it was something like, this was 2013, around $20 an hour, or maybe it might’ve been 17, but either way, I was like, this is an expensive place to be. Like I can’t afford anything here. So it was a tough time, but I digress. But December 2023,

Zach Garfias (19:34)
Yeah.

Whoa.

Dylan Silver (19:57)
I had got my passport renewed and I had decided I’m going to go check out other places. And so I went to Santo Domingo for the first time, Dominican Republic, Caribbean country, and I live here now. So it’s a great year for me. So kudos on December 20, 23. But I want to I want to pivot back and ask you about scaling to an exit. And if I understood the chronology there, you were effectively acquired by a company that owned your competition as well.

Zach Garfias (20:12)
better.

That’s correct.

Dylan Silver (20:26)
What was that like and do you think that that’s a strategy for folks is to kind of build something that’s enough competition out there to then they have to buy you otherwise they have to face you down?

Zach Garfias (20:35)
Well, that’s a very compelling way to show up to a competitor and look, I’ve got signed contracts with some of your biggest customers. You want to talk?

Dylan Silver (20:43)
think a lot of people when they’re thinking about maybe doing what you’re doing, you mentioned that ignorance is bliss kind of a thing. They may talk themselves out of it with all the data and they may say, well, I’m gonna be a small fish in a big pond and there’s other people who have the entire market share and how am I gonna come in and have any impact at all?

Zach Garfias (20:50)
Yeah.

Dylan Silver (21:05)
What would be your advice to these people? You mentioned earlier that like, you know, maybe I would dissuade an earlier version of myself, but is there anything that you can tell folks who might be starting out and are saying, you know, where do I start?

Zach Garfias (21:16)
Well, you start with the message that’s in your heart. Intuition.

Dylan Silver (21:20)
It’s a big thing. mean, I can give you an example in my own life. When I was deciding whether or not I was gonna move out here, I moved out here two weeks ago, I had moved from San Antonio to Dallas actually because of a connection that I made from a wholesale deal. You mentioned your deal that kind of went awry that ultimately made you start the demo business. I had a wholesale deal in West Dallas in a town called Azel that ended up going awry.

Zach Garfias (21:24)
Yeah.

Yeah.

Mmm.

Dylan Silver (21:47)
And the deal didn’t go through, but I had an investor who I became buddies with and he was like, hey, you should come up and check out Dallas. It’s better than San Antonio, stronger for investors and so on and so forth. He turned out to be 100 % right. But a lot of that was intuition. And a lot of that was me having to kind of fail my way forward. And I was kind of hard headed and I was like, I’m going to gut it out in San Antonio and kind of figure it out.

Zach Garfias (22:11)
Yep.

Dylan Silver (22:11)
I’m curious

to get your perspective on when it’s right to make a pivot. Because in your own example, you had the accident with injured back, you had people not showing up to job sites, and then you had a conglomeration of factors that made you say, gotta make the move. Do you think you kinda need that kind of fire in your life to make a move, or do think you should maybe see the tide before it comes out, so to speak?

Zach Garfias (22:16)
Thank

Yeah.

Yeah.

Well, I think you’re asking amazing questions. So thank you for asking such good questions. And hopefully I give half of us good as an answer.

So following intuition, I think, is the start. And then the question is, when do you decide to pivot? And I have an interesting answer because, well, the answer kind of is the same. You follow your heart. Because it took me seven and a half years to make $1. Well, I made multiple millions of dollars, thanks to God. But it took me seven and a half years to make that.

Dylan Silver (23:01)
Ryan.

Zach Garfias (23:04)
During that time, I spent all the money I had ever made. I had a fairly successful demolition company, but I was living with my parents. I had employees on my payroll who were living with their wives and kids and their bosses living in their mom or dad’s basement. mean, think about that. Do you say, after a year, do you say I’m done? After two years, do you say I’m done? After five years, do you say I’m done? Or do you pivot?

Dylan Silver (23:18)
Yeah. Yeah.

Zach Garfias (23:28)
And it really comes down to intuition.

Dylan Silver (23:30)
I just had this conversation with a previous podcast guest and I could be misstating the wrong facts here, but I forget where I heard this, but that there’s neurons in your brain, there’s neurons also in your gut. And so when people are saying like, trust your gut, that literally means like you’re having some type of thought that maybe you should give some credence to. So I can relate to this. When people, haven’t scaled and exited a company.

Zach Garfias (23:47)
Yeah.

Dylan Silver (23:52)
But when I can talk, I can talk about making big change in my life. I’ve done that several times, whether it was moving from San Antonio to Dallas or moving from Dallas to Santo Domingo. I can say that like, similar to you, I kind of had to, I don’t wanna say get slapped, but I had to have things happen that forced me to realize like, hey look, you need to make a move, you need to make a pivot. And I knew I wanted to, but it was also life circumstances that convulged that really.

propelled that forward to where I was like, okay, every waking moment of the day, I’m gonna focus on getting to Dallas. I’m gonna focus on getting to Santo Domingo, because otherwise, what am I working for? kudos to anyone who’s on that path, right, Zach? Because you mentioned you have employees that are on payroll, they’ve got families, wives, homes, and you were toughening it out living with family yourself. It’s not easy, and you can give up so many.

different ways along the way. You mentioned seven years. That’s enough to see an entire real estate cycle go up and down as we did. Exactly, right? I wanna ask you, if folks are, we are coming up on time here, if folks are in the greater Colorado area, I you’re in Denver, so greater Denver area, or maybe if they’re anywhere in the country and maybe they’re thinking about starting their own,

Zach Garfias (24:51)
Yeah, there was one, and that’s the truth.

Dylan Silver (25:08)
business in the real estate software space, or maybe they’re looking at creating their own demo business and they’d like some feedbacks from someone who’s done it before, where can they go to reach out to you?

Zach Garfias (25:18)
That’s nice, thanks for asking. I’m on social medias, so they can generally find me at my name, Zach Garfias. And yeah, and I’d be happy to help as much as I can. Of course, you know, I stand to defend my base, but I also am more than happy to give back in terms of people who are non-competitors to me. I’m happy to give as much value as I can.

Dylan Silver (25:34)
Yeah. ⁓

Zach Garfias (25:43)
will say real quick a little piece that I wanted to add to what you said. I think there’s a big distinction. And the same thing that made you successful is the same thing that made me successful and vice versa. It is the difference between people who do and the people who say. And it’s action. You can ask questions all day long. You can go to seminars. You can go to networking groups. And those are not bad things to do.

But the difference between the people that succeed and the people that talk is action.

Dylan Silver (26:12)
100%, 100%, do or die. I’ll leave it on that note. Zach, thank you for coming on the show here today.

Zach Garfias (26:18)
Thank you so much for having me. It was really cool talking with you, Dylan. Thank you.