Stop Rental Property Disasters Before They Happen with Smart Home Technology

Keith Flores (00:00)
Your utility bills. I mean, all the way down, and it in every aspect, we can cover everything within your home. When your roof leaks, the only time you’re you know when your roof is leaking is when you have that big bubble on your ceiling.

Cody Crabb (00:13)
Yeah. When it’s already way too late.

Keith Flores (00:16)
Too

late. Way too late, right? Or you have a flood in your basement.

Way too late. Your water heater already went out. We’re telling you all this stuff in advance, you know. ⁓ which has never been done before.

Cody Crabb (01:59)
Hello and welcome back to the Real Estate Pros podcast by Investor Fuel. I’m your host, Cody Crabb, and today I’ve got Keith Flores with me. Keith is the founder of HG Home Guardian, which is basically a dashboard for your house, helping homeowners, landlords, and property managers catch problems before they turn into expensive disasters. Keith, thank you so much for hopping on the show today.

Keith Flores (02:20)
Thanks for having me, Cody. I really appreciate it.

Cody Crabb (02:23)
Yeah, so let’s let’s ⁓ get into this a little bit. ⁓ before we start, I’d love it if you’d give us a little bit about your background, because I think that kind of tells the story of kind of why this product exists and why you’re selling it and why people are interested in it.

Keith Flores (02:39)
Great. You know, I’ve told the story so many times lately and it’s been, you know, because people want to know why did I start this project? I’ve been in I grew up in the trade second generation in heating and air conditioning, construction businesses. ⁓ you know, by the age of twelve, I was already going out and doing little side jobs with my brother-in-law and worked my way up. And by the time I was, you know, twenty

See 26, started my first company, sold by the time I was 29, did pretty well, went to work for one of the big boys. ⁓ they ended up selling. I left, st started doing my own acquisitions and buying little companies here and there and did pretty well for myself, had a few, you know, debacles and losses, but I’ve always done really well for myself. ⁓ not college educated, so blue collar through through. I don’t dress like a blue-collar guy. Everybody always goes, dude, you’re dressed really nice.

⁓ so I always throughout my the trades I always thought there was should be something better for clients and contractors to for one stay connected, two give feedback to homeowners so they can understand what they’re purchasing. So you know that’s kind of a fast forward through my life. ⁓ you know, I’ve owned five heating and air conditioning companies. ⁓ actually six.

No. ⁓ one terrible exit. Terrible exit. Had a partner. ⁓ the rest of I did rip very well with. I do a a lot of and A for private equity. ⁓ it’s it’s been a fun ride, but I started a technology this technology company we’ll say nine years ago. I started thinking about it and I, you know, put some money into it, wasted a half million dollars nine years ago with some

young guys that said they could build this certain technology to tell me what efficiencies were real time ⁓ for heating and air conditioning and which is SEE rating Seasonal Energy Efficiency rating very simple miles per gallon that’s the easiest way to put it and that’s all I wanted to tell clients. I wanted clients to know what they were actually purchasing because there’s never been a way to tell people what they’re actually purchasing. And there’s a thing called HERS Testing that California implemented and now some of the other states are doing, but it’s a one shot deal.

You pay a company to come in, they do duct testing, they do blower door testing, and they kind of tell you a basic an analysis of what the system’s doing at that specific time. And then they pull all their equipment out and that’s it. And it’s mainly for duck leakage. That’s mainly what it is around.

Cody Crabb (06:04)
Well and it’s ki it’s kind of like a it’s kind of like a doctor’s appointment, right? Like you g they they say, Well, you know, does it hurt when I do this? Well, it’s not doing it right now, so I don’t know what you want me to do. Like it’s yeah, if if there’s a problem, it’s not happening right now.

Keith Flores (06:16)
Yeah, so I ⁓ the whole thing started off with that. I wanted to know, you know, I had a client ask me, he was an engineer, wanted at wanted to know why he’s spending thirty two thousand dollars on this top line system. And I told him, Well, the little yellow sticker, like when you buy a refrigerator, says it’s the best one. This is the best one. So yeah, but how do I know in six months? Couldn’t tell. Couldn’t tell, couldn’t tell. So I went home that night and started like doodling and you know, went to town and

Then after, you know, six months of messing with these guys, I shelved it, didn’t I didn’t get nowhere with it and waited a few years and I sit on a board of another startup company and I met a engineer that ⁓ I told him the product the idea I had and he’s like heating and air. It’s like a not that glamorous compared to what we were working on. ⁓ he went home, thought about it for we’ll call it

Two, three weeks, came back to me and said, Did you know that’s a ninety billion dollar industry? I said, it’s about half of that. ⁓ you’re about halfway there. Sorry, ⁓ it’s a lot larger than that in the United States. And so he was like, I’m in.

Cody Crabb (07:25)
He’s all right, cool.

Keith Flores (07:28)
Then

I I proceeded yeah, I gave him a little chunk of the company and gave him a million bucks to start going. And we got got a ways in, he did a you know, pretty much a proof concept. And as we’re going through it, we’re like, well, why don’t we add water quality? Why don’t we add air quality? Why don’t we add, you know, ⁓ humidity, why don’t we like everything was why we add, why don’t we add so we can’t

Cody Crabb (07:57)
It is one of those ideas where you start like it it starts to give you thoughts of like, actually, you know what would be really nice here? Or someone mentions to you, ⁓ I just wish your system had this or this.

Keith Flores (08:07)
We kept on getting that. And so at some point I had to cut it off. So we have gen 2 and gen 3 already working on, but those were those are just gonna be add-ons. You don’t have to buy new new units, you don’t have to buy, it’s just new nodes. But at some point I had to go, all right, hold on. We got to get it to market because this is draining me. Yeah. ⁓ so like picture your car, your car tells you everything real time. Right front tires going low.

20% left on your oil, turn signals out. The same time that’s happening, typically, depending on what type of car you drive, it could be a Ford, because my Ford does it, my wife’s Mercedes does it, you know, ⁓ some of our Chevies do it, my Navigator does it. ⁓ when something pops up, my dealership calls me or sends me an email, tells me the health of my cars, for one, but also tells me it’s time for a service. Something’s happening.

Cody Crabb (09:06)
Yeah.

Keith Flores (09:07)
My app tells me the same thing.

Now tell me this, what does your house tell you preemptively before you blow up your engine, before your air conditioner blows up, before your roof caves in, before you know you have a flood?

Cody Crabb (09:21)
And I’m I’m thinking about it. I can’t think of ⁓ like as you were we were talking about this beforehand, and I can’t think of a single thing like in my house that’s like preemptive or like reactive, you know what I mean? Like other than systems that get installed later, like secure some kind of security system with a water sensor or something.

Keith Flores (09:37)
about those water sensors is what like I’ll show you a little node. Here’s a node. This is a very basic, basic node. This is water sensoring. So this little thing right here, every system has those two little dots on the bottom. Every water sensor. Those sit about, you know, an eighth inch off the floor. But once those two things make a connection, you got a problem. But by that time, your house has already got a layer of water on the floor.

Cody Crabb (10:01)
Yeah, yeah.

Yeah, of course. That that’s my that’s always been my gripe with those. It’s like, well yeah, they’re telling me that something flooded, not that something’s going to flood or flooding.

Keith Flores (10:47)
Ours

takes outdoor and indoor humidity. And when there’s a little spike, it sends a signal, a yellow little alert pops up on your phone, on your wall, a text message, an email. But at the same time, the in the installing company gets the same alerts. So now the contractor is calling you saying, Hey, something’s going on with your rental property, something’s going on with your personal home, something’s going on. And you’re getting it too at the same time because you can opt out.

That way they don’t, I spilt, you know, water. If the cleaning lady spilt a bucket of water in the kitchen, don’t worry about it cleaning it up. Or ⁓ think about your filters on your heating and air conditioning systems. Filters have timers. Everybody says, no, no, no, no, no. They’re not timers. It tell the thermostat will tell you when it’s time to change. That’s a timer. Ours is taking static pressures. So it’s taking a pressure above the filter and below the filter. So it actually you might not need to change it for a year.

Or you might not need to change it every two weeks. There it every house is different. It doesn’t matter.

Cody Crabb (11:51)
So and the reason they say to change it every every 30 days is because everyone is different, and that’s like the safe safe way to do it, I Yeah. Yeah.

Keith Flores (11:59)
So what ours takes these these and we’ll get the alert as a contractor and we’ll get the alert as a homeowner, hey, filter needs to be changed. And you can just go up to your app or your dashboard that’s on your wall and touch it. And it says ⁓ drop ship filter. We have a manufacturer that will drop ship the filter to your front desktop.

Cody Crabb (12:20)
Awesome. Yeah. Okay. So I’d love to get into so obviously our listeners, our real estate investors, and they’re listening to this and they’re like, this sounds like the greatest thing of all time, especially if you’re a little bit removed from from your property. Maybe this is one that ⁓ is not right next to your kind of current residence, or maybe even like across the country, across the world. ⁓ so I’d love for you to kind of go. I’ve obviously those those benefits are obvious where it’s like you can you can

monitor things and kind of keep bad things from happening. But what kind of other benefits? we were discussing a little bit about ⁓ you know, what’s some what are some other benefits that ⁓ property owners can get ⁓ from this system.

Keith Flores (13:01)
Well, there we’ve talked with quite a few property owners lately and a lot of big benefits for, you know, real estate type guys that have multiple rental properties. You might have a lease where you’re paying the utility bills on that property. So you can see the real time utility bill at that property because you know, remember when crypto harvesting was big, Bitcoin harvesting. Those guys support I mean, and they were guys were renting, you know, little small offices and packing them.

you know, with harvesting equipment and it it people couldn’t figure it out. Or grow grow rooms and that type stuff. ⁓ so you’re we can tell you real time utility bills, which is great. We can tell you water quality, which is great. And the water quality is great because we’re being preemptive because people don’t understand what water quality does to the inside of the pipes. If you have bad water quality on the inside of your pipes, it’s rusting them out quicker. ⁓

So your pipes will burst faster. You’ll start having those leak leaks inside the homes. there’s just you name it, we’re doing it. Like, think about this. You can start setting, and this is for people that are in their own homes. You can start setting, like, if I’m I I’m in California, Newport Beach. If I want to go to ⁓ let’s just say,

Palm Springs. And I have 20 bucks in my pocket, half a tank of gas. I’m not gonna be able to go to Palm Springs and back. Right? I drive a big F 450 dually. Now, same thing with your home. If you want to budget, you’ve never been able to budget for your home the utility bill. So our

Cody Crabb (14:49)
Just

like use less, hopefully. That’s like the best you can do.

Keith Flores (14:52)
That’s that’s the best you can do, and you don’t know if you are or not. So basically our app will start telling you if you set a budget of 250, it’ll start telling you, hey, you’re at 210 and it’s the 20th, start shutting this off, start stop using this as much, stop like it’s true smart home AI technology. And that’s what you know we were talking about earlier, those are always buzzwords right now. But it each individual node is its own technology, it’s its own smart. So each individual home is its own.

So, what it’s doing is it’s taking the home atmosphere and figuring it out what it is real time versus bouncing it up to the cloud. The cloud kind of takes an idea of the averages in that area and then shoots it back down saying what it should be doing. So each home, each individual home is that. And then on top of it, for landlords or rental property owners and that type of stuff, this will reduce your insurance, your home warranty.

Cody Crabb (15:39)
Mm-hmm.

Keith Flores (16:32)
Your utility bills. I mean, all the way down, and it in every aspect, we can cover everything within your home. When your roof leaks, the only time you’re you know when your roof is leaking is when you have that big bubble on your ceiling.

Cody Crabb (16:45)
Yeah. When it’s already way too late.

Keith Flores (16:48)
Too

late. Way too late, right? Or you have a flood in your basement.

Way too late. Your water heater already went out. We’re telling you all this stuff in advance, you know. ⁓ which has never been done before.

⁓ like literally, we have the patents on four different things. ⁓ we just filed for two more. We have international patents on this. We are looking at doing something here. ⁓ this is actually in beta right now. We’re launching Q1 ⁓ of next year. We have

literally talking to everybody in the in the atmosphere of homeowners, including Airbnb and that type stuff, is, hey, what’s the best and easiest way we can help you communicate with your tenants and so forth? This is being proactive one hundred percent instead of reactive because if you’re a landlord, you know you get that call in the middle of the night, that’s the worst thing you can get. Mm-hmm. Or

All of a sudden you didn’t budget for a brand new air conditioning system. We can start telling you months in advance, hey, it’s starting to draw high abs. There’s something going on. You’re seeing it, and you can so whatever a contractor sees, the homeowner gets to see at the same time. It’s fully transparent. All the information is on your dashboard itself. It’s telling you. So most of the people that we have in currently right now are calling us, telling us, why aren’t you changing out ⁓ our fourth system?

because we should have changed out all four, or our fifth system or our second system, because we’re looking at the app and the new system is a 17 sears, you know, miles per gallon. And this one’s a four miles per gallon, our old one. We’re like, we told you, but and they’re like, all right, just get out there. Or water quality or you know, water heaters and you name it, we can we can even start telling you as the technology advances so fast like it is.

⁓ right now it takes about I’d say 90 days for it to understand your home. By the time of Q1 next year, it’s gonna take probably two days, three days. That’s how fast technology is moving. But we’ll be able to start telling you what before your TV goes out.

Cody Crabb (19:01)
That’s awesome.

Keith Flores (19:02)
Like it’s

never ending. We’re trying to our whole idea behind this is not only for the contractors to stay connected to the homeowners and be proactive, but homeowners being able to in a commercial setting as well, commercial buildings, being able to start budgeting properly. Because like right now, my current contracting business, we have a client that’s so upset with us, but we told them, you know, a year ago, hey, we don’t have a crystal wall, but this these systems are gonna go out.

And it’s a massive commercial building here in Newport. And they’re looking at a million dollars right now. They have to spend today. They didn’t budget for that. We told them it, hey, in a year to two years, it’s probably gonna go up. What are all those tenants doing now? All those tenants are out of they’re they’re not they’re not working. So what they’re doing is they’re having to pay those people a certain amount of money back per day, plus they’re paying us to install it.

Cody Crabb (19:48)
Yeah. Yeah. Well yeah, yeah, of course.

Yeah. Wow. Yeah. I’m even I’m even thinking of benefits like the contractors, th there’s no argument whatsoever because it’s like, here’s the data, should I do it or not? Like it’s I’m not it’s not my opinion. It’s literally going to go out. So should I do it or not? And so it eliminates that kind of back and forth and the trust part and all that.

Keith Flores (20:21)
And it’s not fudging anything. We can’t fudge anything because there’s we’re FCC compliant, UL compliant. We had to go through all these hoops, you know, to do this type of technology. We’re, you know, I’m more than happy to bring on all the lawsuits that I think a lot of the manufacturers are gonna be coming after us, only because I think that the manufacturers really aren’t telling the full story to homeowners. You know, when you buy a TV and you or refrigerators have that little yellow tag on the back of it that says it’s this efficient.

Like nobody realizes they only test one out of a hundred of anything that has a yellow tag, and then that’s factory conditions, perfect settings, clean rooms, and everything. Then they’re testing it. Huh? They get it out to the real world, ductworks different sizes, homes are different sizes, different windows, different. It makes no sense. ⁓

Cody Crabb (21:13)
Yeah.

I’m sure you have. Yeah, I was gonna say I’m sure you could have.

Keith Flores (21:22)
What

we know, and I think it’s more than anything, it’s us ripping the band-aid off and telling people really what they’re getting versus what they think they’re getting. And then being transparent. Contractors, at first, when we first started talking to them, they’re like, people are gonna be mad at us. Shouldn’t you be happy about that? Shouldn’t you be happy that you can go and fix it now? Because we did it at my own house. We put a top line force systems in my own house, installed them, then we installed Humbarding it, and we’re I was like, guys.

We’re only getting 10 sear. What’s going on? These are 20 SEEr systems. What’s going on? And I’m looking at the back end, it’s telling me, all right, you’re losing this much stuff, the thing’s overamping, you don’t have enough efficient like ⁓ return, like all this other stuff. So I installed one out there and adjusted it all. Now I get 18. I’m I’m good with 18.

Cody Crabb (22:11)
Yeah. I mean it’s certainly at least better than better than it was. So yeah, I think any anybody listening to this that has I mean, this could even be a selling point for tenants. You could say, I’ve got this system that’ll make sure that it’s not nothing’s perfect, but it could make it so that we don’t have as many outages and the service stuff gets done really quick. I mean, the amount of money you would save on the same repairs just like several months earlier, I can’t even imagine what that what that is. So really, I mean, ⁓

This sounds like it’s gonna be amazing. You mentioned that you’re in beta right now. ⁓ so kind of tell us about that and kind of what launch looks like for you.

Keith Flores (22:45)
Launch looks like for us right now, we are ⁓ we have almost close to six hundred thousand free holders already. ⁓ we’re trying to ⁓ adjust that right now because I don’t wanna I we’re the company that we hired to do all the manufacturing for us does all of Apple and Dell’s manufacturing here in the United States. So and they’re looking at this like

Cody Crabb (22:52)
Thank you.

Wow.

Keith Flores (23:12)
They love it. They’re I mean, they are just all over because they don’t have to depend on Apple and Dell, which are like two of the largest in the world. ⁓ and they are very difficult to deal with, I’m sure. ⁓ so they’re looking at us as their next next biggest thing. And they they have 35 locations here in the US and about fifty fifteen across the world, all over the world. some of the stuff we can’t build here in the US, of course, like chips and the screens.

But everything else is being built out of Houston. We are ⁓ looking at Q1 launch next year, 30,000. ⁓ and then we’ll everybody thinks that’s a slow rollout or ⁓ too fast of a rollout, I should say, all my a team. But I’m like, dude, we’re I’m getting bombarded right now. Next week we have people from all over the country flying in to meet and we’re gonna have a strategic alliance meeting, basically, is what I’m trying to call it. And

Like hey guys, what where do we sit? What’s what what are your what are your guys’ thoughts and so forth?

Cody Crabb (24:16)
Yeah. Well I mean like I said, like it’s it’s gonna be you or it’s gonna be someone else. So might as well just jump right in. Yeah, it seems like one of those ideas that once it’s there it’s just it’s necessary. So

Keith Flores (24:26)
We’ve had LG reach out to us. We’ve had ⁓ Google Ventures reach out to us. We’ve had, you know, all the big big big private equity groups reach out to us. We’re ⁓ we know what we have now. Now it’s just time to launch. And you know, Peter Dragone, he’s the founder of Keurig. he does all my financials. He’s flying in next week to sit down with everybody and explain to them, you know, a little bit more about where we’re at and what we need to finalize and finish up everything. ⁓

I mean, I didn’t even know this packaging, since we’re packaging technology, has to be rated by the government. So like some of the things that just kind of blindsided me, I was like, crap, I didn’t even know that. So yeah, yeah. So it’s ⁓ launch is exciting for us. You know, we’re not gonna be onesie twosies. We’re eventually, I’m sure it will be onesie twosie type things, but we’re looking at ⁓ a minimum order of twenty-five at a time.

Cody Crabb (25:06)
All right, I guess we’re doing that now. Yeah.

Keith Flores (25:25)
And we’re going from there, you know. It it really we’re excited because the technologies that we’re using has never been used before, you know, ⁓ besides the real time air quality and the real time water and the HVAC, it’s being able to stay connected all wirelessly for three years for one, ⁓ and nine hundred feet away through concrete, subterranean, it doesn’t matter. That’s that’s one thing that

Why like when you hear about Crestron control for turning on pool lights, music, your TV, that’s a dumb home. I don’t care about those guys. You know, that that just makes no sense to me. That’s not a smart home. ⁓ and you’re paying a half million dollars to have that installed at your home because you have to have all this cabling inside your home. Ours is all wireless, takes two hours to install. And when I say two hours, that’s worst case scenario. That’s some you know, guy that’s never installed anything in his life.

I’ll say I’ll just say Marc Katz, he’s on my board like my team. Marc Katz this was the CFO of Burlington, took him to an IPO. He doesn’t even know what a screwdriver is. If I put it in his hands, he can install it in two hours.

Cody Crabb (26:37)
See now that’s the number I want to hear, because that’s me. I’m I’m not handy at all. So that’s if if someone says two hours, I’m like four hours. But when you say it like that, yeah, I believe you now. Yeah.

Keith Flores (26:47)
He

and Marc laughs about it, but I can tell him it all the time. I mean, he was one of the most successful guys on Wall Street. He did very well and ⁓ actually how he got involved was he’s a client of my ⁓ service business and we were cleaning up a flood across the street. He lives ⁓ on the ocean over here and next thing we know, he’s standing outside it and comes over and goes, Hey, my house has a water leak. I don’t want it to happen to that. Like what’s so

One of the guys went over, started talking to him, adjusting his water and goes he goes, Man, his wife and him are sitting in the living room. Man, I wish somebody would invent something to pick this up real time and be proactive. And the guy goes, You should talk Yeah, he goes, You should talk to my boss. He’s working on something like that. Next thing I know, he’s in my office the next day going, How do I get involved?

Cody Crabb (27:29)
Interesting that you say that.

Well yeah, I mean like I said, that’s a that’s not a bad situation to be in when it’s that good of an idea and you’re already, you know. well, I this is fantastic. I don’t even have to I feel like it’s one of those things where I don’t even have to really spell out why it would be helpful because it just obvious so obviously would be for so many of our listeners. ⁓ if someone wants to ⁓ you know, we have plenty of of listeners that have

could easily do twenty five plus orders at a time. So I I’m just curious, like how could someone if they do kind of wanna do something like that, how can they reach out to you and get in line? I I guess I should say.

Keith Flores (28:09)
Basically just go to our website, you know, it’s hghomeguardian.com.

Cody Crabb (28:15)
Awesome. Well, thank you so much, Keith. I I’m excited to see where this goes. I’m excited to see what this does to stuff like, you know, prices on utilities or even just prices on like appliances and stuff now that we have to we’ll know exactly what we’re getting and stuff. So this is gonna be fantastic. Thank you again. ⁓ and thank you listeners for joining us as well. If you liked what you heard today, go ahead and give us a like, subscribe, comment, all those things, and make sure you don’t miss another episode.

So you get great conversations like this one. Keith, thank you so much for hopping on. Yeah, have a good one.

Keith Flores (28:46)
Appreciate it. Thank you.