Revolutionizing Real Estate Through Modernizing Transactions – Andrew Borovsky

Tired of paper checks and surprise fees? There’s a better way to manage real estate transactions. This episode features Andrew Borovsky, Co-Founder and CEO of Visible, a fintech company revolutionizing the industry with a focus on simplicity and transparency. We’ll explore Visible’s innovative Rent App, an all-in-one solution that streamlines rent payments for tenants and simplifies property management for landlords. Discover how Visible is leading the modernization of real estate. Join the conversation and learn how you can ditch the headaches and embrace the future of real estate

Learn more: https://rent.app/ and https://property.app/

Get in touch with Andrew Borovsky

LinkedIn: https://www.linkedin.com/in/andrewborovsky/ 

Website: https://visible.xyz/

If you are interested in learning more about passively investing in multifamily & Build-to-Rent properties, click here to schedule a call with the CPI Capital Team or contact us at info@cpicapital.ca. If you like to Co-Syndicate and close on larger deal as a General Partner, click here. You can read more about CPI Capital at   https://www.cpicapital.ca/.

#avabenesocky #augustbiniaz #cpicapital

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Watch the episode here

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Important Links:

• Visible
• Rent App 
• Twitter – Andrew Borovsky
• LinkedIn – Andrew Borovsky
• Andrew@Rent.app

About Andrew Borovsky

Andrew Borovsky is the Co-Founder and CEO of Visible, a cutting-edge fintech company revolutionizing the real estate industry. Andrew Borovsky is the Co-Founder and CEO of Visible, a cutting-edge fintech company revolutionizing the real estate industry. With a team comprising industry veterans from Cash App, Square, Apple, Adobe, and Dropbox, Visible aims to transform the analog and fee-laden real estate transactions into a seamless and efficient process. Their flagship product, Rent App, facilitates direct bank-to-bank transfers for rent payments without fees or limits, while also offering the opportunity to build credit. Andrew, a seasoned product designer and entrepreneur, brings a wealth of experience from executive roles as well as his previous ventures, 80/20 (acquired by Square) and Cadre (acquired by Yieldstreet). The motivation behind Visible’s inception stems from the mission to modernize real estate transactions, making them faster, more accessible, and technologically advanced.

Revolutionizing Real Estate Through Modernizing Transactions – Andrew Borovsky

Our guest is going to be chatting about some pain points that exist in the real estate ecosystem as a whole. He’s got the solution to a lot of pain points that exist. We’re going to go over to a lot of great companies that he has been part of. 

A couple of things that our guest has in common with us is he’s Canadian, but he also is American. Our son who was born four months ago, Atlas, we’re so in love with him. He’s American, and we’re also Canadian. We are on fast track to get our dual citizenship as well. Another thing that Andrew has in common is that he has launched many startups. CPI Capital was a startup. We know what it’s like to build a company from the ground up.

We’re excited to talk to Andrew because it’s not easy building a company from the ground up. Andrew has taken it on. He has done some incredible things. Our guest is Andrew Borovsky. He’s the Cofounder and CEO of Visible. It’s a cutting-edge fintech company revolutionizing the real estate industry. We are going to dive into everything that he’s done. Welcome to the show, Andrew. Thanks for being here.

Thank you for having me. Nice to meet you guys. 

The fascinating world of startups and it’s how they come up with ideas, problem solvers, and the disruption they cause in some industries. We’re going to go over some of the parts that we’ve been involved with in our city here in Vancouver that we’ve lived in for a long time, but also some fintech companies that were involved with, with our company, CPI Capital, FrontFundr and TokenFunder, which are market dealers that allow retail investors to be involved and participate in an institutional type of investment. We’ve been somewhat involved hands-on with CPI. I wouldn’t call it a fintech company. It’s more of a real estate private equity firm. I’ve always found this space fascinating. We’re excited about our guests.

Origin Story

One of my good friends, Jilliene Helman, the CEO and cofounder of RealtyMogul, we had a fascinating conversation over dinner in Miami. We spoke for about two hours. It’s such an exciting space, the fintech space. We’re excited to learn more about it. Let’s start with some of the questions that we have for you. Talk to us about the inner workings of your brain when you realize that there is a problem and a pain point in the industry. Did you go out there looking for the problem, or has the problem revealed itself to you through your experience in the business? Talk to us about how everything came about. 

It’s interesting you say that. To start us more broadly, there are people attracted to the idea of a startup and there are people attracted to solving a problem. I always try and steer people towards the latter because there’s a fair number of people who started companies first, and then they go search for an idea that’s very challenging. Ideally, the idea finds you first and you build a company. The best ideas usually occur to you in your day-to-day life. You stumble into something that frustrates you about something you were trying to do, and it could be something super benign.

There are people out there building vacuum cleaners after they’re frustrated with the vacuum cleaner that they bought. Other people build financial technology companies because they’re frustrated about some transactions that should have been very simple and become very complicated. Everything that I’ve been interested in has been a firsthand problem I’ve experienced. I felt like it shouldn’t be this way. I think some of the best companies out there all start the same way. 

Your start was in startups. Give us a little background there. Tell us about your start.

You guys are Canadian. I can go a little further back and I could say I grew up in Toronto. My interest in technology was primarily driven by animation. I wanted to get into special effects. There’s a great college in Toronto called Sheridan College, which is famous because it is one of the greatest classical animation schools in the world and all of the best animators at Disney. Disney traditionally hired all its animators from Sheridan College. If you’re in Toronto and you’re interested in fine arts through animation, that tends to be where you go. I applied four times and got rejected every time because you have to be an incredibly fine artist first. 

I was better with computers. At some point, I shifted. I got to go to college. I got to go pay for it. That’s when I moved to New York. I applied to a school in New York and moved away from Toronto. I couldn’t afford college so I had to get a job. This was 1999. I was very lucky because it was the rise of dot-com. Anyone who knew how to build a website could make a decent amount of money. I stumbled into it, trying to do this, and ended up doing something else, but then it’s something that came naturally to me. 

I enjoyed doing it. I was very fortunate to land at a couple of great companies doing what is now known more broadly as product design. At the time, that was a vertical that was in its infancy effectively. There were not a lot of opportunities. It’s a pre-iPhone and pre-App Store. It wasn’t easy to design software in the early 2000s. These jobs were far and few in between. If you knew how to do this, how to design effectively, computer interfaces, you could make some money. That’s where I got started.

I caught the first dot-com wave. I was very lucky to be, and luck is half of everything. The second wave was the iPhone. Once Apple launched the iPhone in 2007, all of these opportunities became available to people who had experience in interface design and particularly, in mobile design. A lot of stuff moved to the cloud. I was very much working for large companies like Adobe and Apple in the first half of my life before switching to entrepreneurship in 2010. 

Were there any of the companies in the start-up phase? I think you’ve worked for Cadre, which we’re somewhat familiar with, which is a fintech real estate, private equity, and all of it combined company. 

We started a company first in 2008, which was basically in the mobile space. We sold the company to Square. We are very fortunate at the right time that Square was in its infancy. They were a Series D company. It was four years before they went public. That was great. It’s one of the greatest startups of all time. I think certainly home to some of the most talented people. Many people who are ex-Square are fantastically more talented and more successful than I am, I should point that out.

Some of them currently work for you at your current venture.

Some folks, yeah. There are some great companies that emerge from it. A great example is a company called Fai. You may have heard of it. That’s an ex-Square group. There is a notion now of a Square mafia. It’s been written about to some extent, but I’m not mentioned. I was doing some other things, but the thing I’m trying to highlight is giving an opportunity to be around some of these incredibly talented people, be somewhere very early stage then I caught the bug. I’m like, “I want to do this over and over.”

Square is fundamentally about payments. I learned about how the banks work, how payment networks work, and all this plumbing. Money is the blood of the economy. By knowing how that plumbing works, it exposes you to a lot of these other things. To your point about Cadre, after Square, I had the opportunity to join that company. It’s a tech-enabled real estate, private equity firm, but to me in 2015, I’d never even been close to somebody who worked in “private equity.”

All of a sudden I was told about this world that most of the world’s assets are not on public exchanges, that most of them are private. They’re completely illiquid. The wealthiest people invest in things that most people can’t even dream about. I love this shadow world, but at the same time massive world. I wanted to go deeper and learn more about how that works from a more technical standpoint. That was my foray into Cadre. 

Visible

Let’s talk about Visible. We love to make the connection between Visible. There are a bunch of different companies that are either currently being built or that you have plans for. Talk to us about Visible. 

Give us an overview. Who are you? What problems are you solving? Maybe your long-winded elevator pitch and business model would be great. 

Hopefully, I could make this pitch very simple. I got together with folks, some of the best people I worked with, some folks that I originally worked with at Square and Cadre. The team is everything. Especially in startups, you want to be with people that you enjoy being around. The problem is at the intersection of the stuff I’ve been working on, which is payments on real estate. The pitch is very simple. Fundamentally, all financial processes related to real estate have not changed since the ‘50s.

It’s more like many 70 years now. You guys are new to the US. It’s like that in Canada to some extent as well. It’s a little bit more centralized. These simple things, on the one hand, you have real estate, your home. If you’re an average Canadian, that’s their most valuable asset. That’ll be the most valuable asset they own their whole life, yet if you think about all these processes, buying, selling, investing, borrowing against, maybe fractionally investing, even monetizing rent, all of those things are complicated. Fundamentally, there are three things that I focus on. Speed, they’re slow, expensive, and they’re complicated.

The idea behind Visible was broadly let’s look at all of these transaction types, understand why they’re slow and expensive and complicated, and try and fix it from first principles thinking. Some of it is some of it is process innovation. Some of it is writing some software that fixes some things that get in the way. It’s a big problem space, which I love. If you look at it more broadly, the idea behind Visibles, look at it more broadly, build a foundation, which we’ll call a financial network for real estate. If you build that, then you can start enabling these use cases one by one. I mentioned rent as a use case and half of all rent in the United States is collected in cash, which is an insane statistic. We’re like, “Let’s go build something to fix that.”

Why choose the Rent App from all the other services? I believe there is a title services one, you’re talking about mortgages and what have you?

As a startup, going back to how you succeed in a world where most startups fail, you have to pick your battles. We were building the bulk of that product in 2023, which is characterized by having very high rates and very expensive real estate. If you compare transaction volume and broadly realistic, let’s say buying, selling, even home equity loans, not to mention mortgages, compare that volume in ‘23 versus ‘21, it’s very different.

What happens is the industry is old and very risk-averse. When we evaluated for example, “Let’s innovate in the home equity space. I want to take out a loan home equity.” A very simple thing, “I own a house. I want to take out a small loan at a decent interest rate so that I can renovate my kitchen.” A lot of banks were not doing those loans in ‘23 because it’s based on the value of your home. If every bank believes that the real estate is overheated and is imminently going to collapse, they’re not doing loans because they can’t get the value. They can’t underwrite it the right way. They don’t do those loans. If we, as a small startup were to spin our wheels trying to build a home equity product, we wouldn’t get anywhere. 

At the same time, what happens when the real estate transaction volume dies down, if you can’t buy a house, you’re going to rent. If you can’t sell a house, you’re going to rent it out. It is parallel to if transaction volume is going down, home ownership is going down. The opposite of that is also true, which is rentals go way up. That’s the calculus, but it’s a good time for a product like this.

A question touching on that still. You were picking and choosing the cycle of real estate you want to be in. We know that real estate goes in cycles, recession, recovery, expansion, and hyper-supply. You felt that you were in that expansion hyper-supply phase. That’s not the right phase to be able to launch a mortgage app, rather rent efficiency would be a better time to get into it. 

It’s like everybody’s being priced and being able to afford a home because interest rates are high and everything else. They don’t have any other choice but to rent. 

It might be 100 days today. It’s technically January 1st, and now we’re April 9th. We’ve had four rent cycles. We’ve collected rent four times. It’s very brand new.

It is functioning. It’s not theory.

It’s been at the theory stage probably since last summer. We’ve been doing a lot of close beta stuff, but it’s up and running. In earnest, we have a partnership with Barstool Sports. They talk about us nonstop. We have a partnership with BiggerPockets. They’re a big name in that landlord space. We’re investing in those relationships because, with fintech, especially imagine, rent payments, it’s big check sizes. The average rent is about $2,000. You’re not going to hand that over to a company you’ve never heard of. We’re in this brand-building phase right now, which is interesting. We’re trying to build awareness, and then through awareness, as people become more comfortable with the product they engage with it. It’s been good. We’ve been doubling month over month. I expect that to continue. 

Real Estate Transactions: We’re trying to build awareness and then through awareness, people become more comfortable with the product and engage with it.

Rent App

Andrew, talk to us about how the process works when somebody uses a Rent App. Are you targeting tenants to utilize the app? Are you targeting homeowners?

Talk to us a little bit about how that works. Tell us the mechanics of the Rent App. Talk to us about what it is, what problem it solves, and all the whole mechanics of it. 

This is how you go about it broadly. It’s probably illustrative of how I think you go about trying to solve problems and build companies, which is we looked at the space and we collected some data. In terms of like, “How do people pay rent?” for example. We stepped back and said, “What are the problems in this space?” The reason I mentioned that is because we were like, “Are there problems making leases and renewing those leases?” By the way, there is that problem. It’s not as big. For example, how do you negotiate leases? Can you create a product that makes it easier for you to get out of a lease earlier or maybe to extend a lease earlier? 

Is there some arbitrage, some negotiation, some price differences that we can play with in that space? We started there, but then when we went deeper, we found this insane statistic of the vast majority of rent being paid in cash and check. Seventy percent of rent is paid that way, but we realized that it’s primarily the smaller owners. If you are somebody with 2 to 3 properties, that’s how you collect rent. That makes sense because if you want it to go digital, you’re going to have to adopt some type of property management software.

When you have three properties, it’s overkill because these things are designed for somebody who owns fifteen properties. We found this nice space with this long tail of owner-landlords that primarily have this problem with payments. That’s all they need to solve. I haven’t bothered with anything else because it was too expensive or too complicated. We’re like, “Let’s do this.” We loved it because it’s a lot like Square if you are familiar with Square’s story.

That company is built right on this crazy thing, which is in 2010 there were 25 million small micro-merchants in the United States, which were small business. It’s a business with one employee. I’m sure you know a lot of businesses with one employee. If those guys went to the bank and you’d like to talk about that aspect of it in these entrenched industries, I’m sure you’ve tried this. You go to a bank and you send, “I’m an employee of one.” People show you the door like, “You’re not a business. You can’t be a business with one employee.”

The most basic thing that those people were missing was access to credit card payments. It’s 2010. Jack Dorsey’s big idea at the time was that, “W we have this iPhone. We built this small white reader that allowed anyone to take credit card payments. We wrote some software, and we enabled this long tail of what are called micro-merchants to take credit card payments. It turned out that there were a lot of them and that most banks pretended that they didn’t exist. They pretended to their own detriment because Square ended up having twenty million merchants doing this. As those merchants grew, Square grew, etc. There’s a very similar dynamic with real estate ownership where you have the vast majority of real estate. I’m not even talking about payments.

Sixty percent of all real estate is owned by individuals. We think about this like, “Wall Street is buying everything.” They are to some extent, but the long tail is still individual homeowners. It’s that the way that our financial system is built doesn’t like to go out there and help find all these individuals, and help them individually. They don’t know how to aggregate this. They all prefer to work with the largest owners of real estate, and largest landlords and build tools and services for those people. Where software shines is by providing tools and aggregating that long tail. Rent App does that similar to how the Square credit card reader did it in 2010 by creating a very simple elegant, free way for people to both pay and collect rent.

Real Estate Investing Demystified: The way that our financial system is built is it doesn’t like to go out there and find all these individuals real estate owners and help them individually.

Let’s break it down a bit more. The first question I always ask about the topic of a startup, particularly in tech is who’s your competition? Is there another group or company? 

Cash and Checks. 

Let’s talk about, Zelle, e-Transfer, or ACH in the US.

We’re built on ACH. We have a lot of e-Transfer in Canada. e-Transfer and Zelle are very similar. They’re both products built by banks to compete with peer-to-peer payments like Venmo and Cash App. As a result, they’re not super elegant. They’re a little tedious to use. They’re meant to be Jack of all trades, like Master Card. The biggest issue that they have is because of Jack of all trades cards, it gets into fraud and everything else. The limits are very low. Whether you’re in Canada or the US, the biggest issue you have using Zelle for rent payments is that you have to make two payments a month.

That’s very typical. You make a payment. You have to wait a week or two weeks, and then you make a second payment, which people hate. It’s interesting because Zelle is free and it’s instant, but because of this limits problem, it pushes people back to checks and cash because it worked. Zelle is the most successful of all of the digital payment services, and they still account for under 10% of the market, which is shocking.

What we add on top of this is we’re free like Zelle or e-Transfer. We have high limits. You can send your full big check. If you’re living in a nice house in Naples, you can pay your rent or collect rent, using us like anything else. Your other option would be wires effectively, but they’re not free. We support autopay. It sounds stupid, but there are no products out there that allow you to say, “Move money from my bank account to the landlord’s bank account on the first of every month.” The final icing on the cake is, we build credit. It’s important for renters as renters are renting longer. You’re worried about how are you going to buy that first home.

The biggest payment you make every month, you don’t get credit for, it’s insane. We created integrations with the credit credit bureaus, and it’s very simple. If you pay using the Rent App, using autopay for free, you get free credit reporting. It’s a very big area. There are companies like Zelle, maybe you’ve seen. They are massive. There are companies out there that will charge you $10 a month, to not pay, but just to report that you pay your rent. You get it for free. 

How difficult was it to get that with the credit bureau type of institutions?

To their credit, they’ve opened up to this. They now accept rent payments, even bill payments, electricity payments, they now accept as a form of contract that you’re paying “on time,” that’s how they count it. As you can imagine, the verification piece is important here because they don’t want people to fake this type of stuff. It’s like the process to get certified by them so that you’re moving data and the data is verified to be properly formatted. It is a fairly long process and a separate process with every agency. To get all three is hard.

Does it build your credit to just pay, or does it build your credit to pay on time and not get ping by the landlord?

It’s in its infancy. We report successful payments, rather a simplistic definition of it. It’s probably going to get more sophisticated over time. It’s up to the agencies, but right now they’re looking to us to report, “Is there an autopay? Is there a ‘contract’ and is that contract being paid regularly?”

Incentive For Rent App

Incentivizes renters to use the app. How about landlords? What incentivizes landlords? 

This is the key to the service. Everyone who’s tried to build anything in the space has tried to acquire the landlord. Think about it. There are eleven million small owners in the United States, if you try and get them to use a new piece of software, most of them are over 50. It’s like being a door-to-door salesman for Salesforce. Imagine the speed of that distribution channel. It’s tough. What we rely on is we target our product entirely to the renter. We acquire renters, which 80% of 25-year-olds in the United States rent. 

It’s very easy. If you grab a 25-year-old guy or a girl, they’re probably renting. We say, “Use this product to build your credit. No brainer. It’s free.” They recruit the landlord. The way that it works is they send the payment to the email address or the phone number of the landlord. The landlord gets this beautiful receipt. We took some of those queues from Square and the receipt says, “Andrew paid your rent. To accept it, type in your routing and account number.” That’s it. They can also use a plot to connect it. They establish this connection between the two banks, and then they never have to do anything again. They don’t have to download anything. 

You don’t have to create an account. You never have to link your bank account ever again. If you have other tenants, they’ll automatically go to that same bank account. You accept the payment once, you set it and forget it. If you look at that demographic, most of our customers are on the landlord side, I talk to a landlord a day, they are either playing golf or at least want to be on the beach. That’s the image, “I have rental properties. I can retire. I can generate income.”

We let them do that because the way the service works is streaming money rather than having to check your Zelle balance every month or deposit checks or that stuff. You make this connection once the money lands in your account and you get notifications when it happens. There’s nothing to do. It is passive income in software form, which I love.

Is it fair to say that you’re getting the tenants who are your main clients to behave as affiliate marketing agents for you and their perks are a streamlined process of transferring rent and the fact that they’re building credit that they’re getting those bonuses? 

We’re working on a couple of other things. Now that we go deeper into the brains of renters, we realize there are a lot of things you do on a month-to-month basis that are very interesting. We have a lot of people asking us for flexible payments, for example. You probably remember yourself. I remember myself in my early twenties where you’re like you didn’t get paid on the day before your rent was due. There are a lot of people looking to split their rent into two payments, like pay on the 1st, and pay on the 15th. That’s an interesting space. We now have enough customers that people are like, “What if we did this?” We’re in that fun phase where you’re adding things to your product because people are asking you for it. 

Landlords are also talking to their friends saying, “There’s this new app. You got to get your tenant to pay for it.” Let me ask you, where’s the incentive for Rent App? How do you guys make money? It’s free for the landlord and tenant. 

Let me give a quick backstory on this particular question. When we first started CPI Capital, the majority of the profits in real estate private equity was made on the backend through promote or carried interest. I have a very close relationship with my mom. She was one of my first investors who invested with me and what have you. When I was trying to describe the business to her, she had a very difficult time understanding that you’re going to be putting all this money, so you get this acquisition fee that, you’re explaining, but to build your company, you’ve already incurred costs that are much more than the acquisition fee, and you’re not going to get paid for another five years till you sell this property.”

It does not make any sense.

“You then get a percentage.” That makes no sense because their different generation mindset is if you do your work, you get paid today. You have taken this and this is listening to some content that was online before our show. We were researching about you and we heard you talking about how are you guys making money when the service you’re offering is free. It’s incredible and there’s so much work, resources, brain power, and organization that has gone into building this. I don’t think anybody could have done it if they didn’t have the experience you had. What is happening is preparation meets opportunity. With your background and experience, you were able to come up with this idea. It’s not an easy venture, but talk to us about your grandiose future plans of how to make this profitable, then we’re going to get into investors who are investing with you and how to convince them of this. I would love to know this part of it. 

First of all, I want to say I’m at my mom’s house in Toronto. She asked me that question, “You’re telling me, you built this amazing piece of software that lots of people use and no one pays.”

She’s probably like, “At least charged $5 per transaction.” 

She does not understand this. It’s a venture-backed business, which is that classic as we talked about Uber very briefly. This is a business that to get scale, you do need capital. It is easier to do this. It’s very difficult to bootstrap a business. Ideally, you raise some money so you can offer things, build some exciting things, and offer them at a discount effectively for some time until you find other sources of revenue. In this case, the good news is the core Rent App services will always be free. 

The reason for it is almost as a payments guy and briefly paired Jack Dorsey here a little bit, he’s always talked about the fact that transactions should be fundamentally free. It’s one of the reasons why he’s obsessed with Bitcoin. Bitcoin transactions are not free, but they have the capability of being free. I believe that I think our first principle of thinking here is transactions should be free. The good news is in the US moving money over ACH rails is not that expensive. It’s pennies effectively. It’s not credit cards. If we were running this on credit card rails, this would be done in about a month. 

It’s a fairly low-cost business to run and to offset it, you need to add a few other sources of revenue primarily for premium features. There are things like instant payments. Money settles in two days. If you look at Venmo and Cash App, I was a Cash App before starting Visible. That product, we ran at a loss for like the first four years, and then we turned on instant payments where you can get the money the next day or you can get it the same day for same day, we charge to this day 1%. That’s how Vemon and Cash Up make money. That’s how they pay for the free service.

With Rent App, it’s the same thing. There are opportunities to go, “Do you want more?” It’s usually like, “Do you want them to go faster? Do you want more optionality?” I love real estate. Real estate is awesome. On some levels, in terms of broadly, it’s a great way to build intergenerational wealth. As a result of that, there are a lot of opportunities to extract value, beyond taxing the transactions, which is what a lot of people do. For us, for example, lending and real estate are interesting. For every single landlord that joins us, we’re giving them free rent payments that are super convenient. 

When they go to buy their next income property, we’d like to be there with a loan for them and make that seamless. One-click, no transaction costs. You just pay interest on the loan. You can do similar things on the renter side. You can monetize if somebody loses their job and they need to hold over. For a month, you’ve all probably been there. I’ve been there. The recourse right now is to go to a predatory loan place and get a payday loan with a 600% APR. We could have a product like that for a few bucks to help somebody be late on their rent. There are lots of opportunities. 

This is in the rental space. Broadly with Visible, we want to tackle all sorts of things. We want to go out there and help sellers and buyers enable fractional investing. One of our investors, we’re backed by Thrive Capital in New York and Coastal Ventures in California, but the Coastal’s Prolific Investor. He talks to me about this all the time, which is like, “Young people are having a hard time owning real estate.” It’s the greatest source of intergenerational wealth. How do you get people into real estate when it’s unaffordable? The answer is fractional investing.

Going back to your friend. You had lunch with RealtyMogul. We struggled for it, not because it was a bad idea. I think it’s because of the regulatory environment and entrenched players and it’s tough. We’re pretty close to the idea that like our children are probably going to inch their way towards ownership probably through fractional ownership. That’s a hugely interesting area for us as well. 

Revolutionizing Real Estate

How do you connect all of these? Rent App itself is the catalyst to build this ecosystem to bring people in and get them used to using this software, and then eventually introduce more products. Will those products go hand in hand? Will they service a broader demographic and clients, or will it be mainly the people who already use the first? Masterminding that part and putting all of that together and architecting that part of it of what comes next. I’m sure you’ve spent a decent time on what should come next. How do you figure that out? How do you say what comes next to be stacked?

I’m going to use a very clichéd example in some ways. Sometimes what’s nice about clichés is everyone’s familiar with them, and everyone can understand them. The cliché in this case would be Elon Musk and Tesla. He wrote down a plan and he said, “This is how I’m going to do X, Y, Z.” He created the Roadster. He said, “I’m going to build a very expensive car. It’s going to be the Roadster. A bunch of nerds are going to buy it for $200,000, and that’s going to fund the first phase of our company, and we’re going to take all that money from selling Roadsters.

We’re not going to sell a lot of them. We’re going to build a nice Sedan,” which will still be expensive. That was a Model S. He said, “We’re going to sell that to next-gen kid, not the hobbyist, but suburban parents are going to buy Model S because it’s going to be this nice car. We are going to take the money from that and we’re going to build a cheap car Model 3, and that’s going to be the mass market car.”

He said that’s what he would do, and that’s what he did, and it worked. I want to point everyone to it and say, “There it is. That’s how you do it.” You find your beachhead. You can’t possibly be everywhere at once. you find your beachhead, you establish it, monopolize it, and dominate ideally that particular group of people, and then you use that as the jumping-off point to the next one.

What I’m saying should be obvious. For us, it’s the same basic theory, which is let’s own payments for small landlords. That’s half the real estate market in the United States. The real estate market in the United States is the most robust in the world, and the most sought-after asset, and then we’ll use that to build Rent App Pro. We own the Borrow App. We have all these other apps in the wings waiting. It could be something completely different or connected. You don’t always see the connections yet. Generally, you build until you know the critical mass point, and then hopefully, you shift. Every time you shift, you can make the wrong step. There are a lot of risks in that.

Rent App is predominantly in the United States. Do you have any plans for expansion to Canada?

There are silly reasons why people go and don’t go to different countries. Canada is very small. The reason people build in the US and they don’t build in Denmark or even the European Union is we have this amazing massive 300 million person market with an amazing real estate market behind that. This is the natural place to start everything. The reasons for going to Canada have to be good. I have the same questions about Australia. In Canada, you do have e-Ttransfer, but it has these issues that Zelle has, which is that you have to split payments.

Real Estate Investing Demystified: The reason people build in the US is we just have this amazing massive 300 million consumer market with an amazing real estate market behind that, so this is the natural place to start everything.

I think there’s an opportunity to do something there. Going back to how you determine what your next step is, I don’t know if going through a 300 million consumer market to a 30 million consumer market is the top priority for any company. As a Canadian, that tends to be the issue. That’s why Canada is run by three corporations.

One more thing is that the US has the highest rent-to-value ratios in the world when you compare the rent to the value of the property in the US. As far as our research, I haven’t found anywhere else in the world.

The opportunity in Canada exists. There has to be a good reason why.

Overcoming Hindrance To Progress

We are on time. Let us get a couple of quick things here. We talked about Uber a couple of times. Let’s talk about pushbacks and hurdles that exist in this space. You were talking about disruptions coming into industries here with the Rent App. I don’t foresee any of those difficulties, but as this ecosystem grows, and then you’re talking about going into other spaces, even lending, talking about predatory lending, but having these connections with the renters and the landlords. You could offer them a better debt, but you are also talking about, as far as title insurance or other services that are provided through the transaction of other property. 

A quick story about Uber. When Uber was trying to come here to Vancouver, it was already available in most metropolitan cities around the world. Vancouver was a big pushback. That was being done by the taxi cab lobby that exists here in Vancouver. The taxi caps here are unusually run by one Ethnic demographic background is mostly Indo-Canadian, as we call the people of Indian descent, either born here or immigrated here, but mostly in the taxi business. They’re also in the construction and the transportation as well. The taxi cab is huge. They’re prominently controlling it.

They were able to single-handedly push back Uber for six years or something before Uber came here. We were complaining to everybody else that anywhere else we traveled to, there was Uber. In Vancouver, there was still no Uber. Wwe were stuck with cabs, which I have my own personal issues with. Aside from a system that is archaic, how do you deal with groups that are going to push back and be a hindrance to your progress? 

I won’t comment on Uber specifically because I think everyone generally knows this story, so I probably can’t add too much value to it. I’ll talk about maybe broadly fintech. I don’t think I’ll be particularly controversial or partisan if I say that the Biden administration has been cracking down hard on the financial innovation space. It’s your typical situation. It’s the government. The Biden administration is currently the one doing a lot of this enforcement. A lot of it is timing because of the FTX blow-ups, and all the crypto blow-ups.

In these schemes, people’s fortunes and certainly money were stolen from them. These are real big problems, but it’s a classic situation where on the run-up when everyone is going like, “Clearly something is wrong and the government is sleeping at the wheel,” and then after everything blows up, they step in and they completely overreach with a case in point being Gensler and not still not having any clarity around what our securities, Ethereum security, all this stuff.

Some brave work is being done by amazing American companies like Coinbase and Circle that are trying to truly create innovation in this space and put America ahead of a lot of other countries around the world when it comes to modern ways to move money in an efficient and cost-effective way. That’s the tough one right now. I don’t think it’s malicious. It’s one of those things where the government tends to come in late and then hit everything with a giant hammer. It’s usually about regulation.

Who’s going to be your biggest enemy on Rent App aside from the government?

Let’s go back to sellers. What’s the problem in real estate? It’s the title. Everyone is talking about it like, “This has to end.” There’s something that came out where people were talking about putting in some new regulation that bans you from charging for title insurance. The idea that we are charging thousands of dollars to get a piece of paper that says “This house probably belongs to the person selling it” is somewhat ludicrous.

There’s no title insurance in Canada. There’s no such thing in Canada.

In Europe as well, but it’s weird. It’s a consequence of those countries being much more centralized, which causes its own problems going back to the regulatory piece. The title insurance is a consequence of the United States being conquered going West and systems being built as the country was growing early in the days. Decentralization in the United States is what makes it an incredibly vibrant place. The competition between the states, but within the title space, there are huge players, that lobby, states, and federal governments to maintain these crazy systems that cost homeowners, not banks, all the way up to 5% of a transaction, which by the way, you don’t find out about until you are closing. 

That’s what’s insane about it. You’re like, “I thought I bought a house for $1 million.” There’s $50,000 you have to generate because of the 9 people that entered the room at the 11th hour to put some signatures. That industry is massive and it doesn’t want to go away. That’s the chief. Think about changing ownership of a piece of real estate. You’ve seen Excel. You pick a cell. You erase one person’s name and you type in another person’s name. It’s like, “Really?”

I wish it was that easy.

Why does it take 30 days and $50,000?

The last thing we want to touch on is the ability to invest. We’re excited to have you on our show at this point because I’m excited about your great mind and the companies you’re building. I’m excited about it. How are you currently funding your company? Can retail investors be involved? Do you have any plans to allow retail investors? There are some companies that even Elon Musk is involved. I think Box Bowl is one of them that retail investors can invest in. Talk to us about that whole side of things. 

Unfortunately to some extent, we’re pretty traditional venture-backed companies. We have two VC firms that I knew the founders for some time. It’s very much like a relationship I’ve cultivated for more than a decade where I said, “I want to build this company.” “Here’s some money. Go and do it.” It goes back to it being a very regulated space. There are companies out there that are built on top of things like AngelList, which I’m sure I’m a huge fan of AngelList. That’s a great example of how you can build a company and make it publicly accessible to retail investors

It’s not like you don’t want to do it. It’s not like you don’t want to be able to raise money from the “crowd,” but the regulatory hurdles are insane. We didn’t get the chance to talk about Cadre much. Going back to RealtyShares, RealtyMogul, Fundraise, and Cadre, it’s not like they didn’t want to have retail investors. It’s just that the cost of operating a retail investment business from a regulatory oversight perspective is prohibitive. It’s complicated to set up those funds. The reporting and the taxes are so complicated that you’re incentivized not to do it. That’s why you don’t see a lot of participation from retail in companies like ours. We’d love to have them. 

Thank you so much for sharing your story and everything else with us. Let’s move to the second segment of our show. 

Championship Round To Financial Freedom

It’s the 10 championship Rounds to Financial Freedom. I’m going to ask you a series of questions. Whatever comes top of mind. First question, who’s been the most influential person in your life? 

My first boss probably. I was very lucky. My first boss was great. When you’re in your late teens or early twenties, you’re looking for direction. I had somebody that believed in me. 

Next question, what’s the number one book you would recommend? 

One of the good ones that may helped you in your journey. 

I’m going to go with Animal Farm. It’s such powerful concepts and elegantly put together in a tiny book. Everyone should read it. 

Next question. If you had the opportunity to travel back in time, what advice would you give your younger self? 

Buy real estate. 

It’s either that or buy Bitcoin 

Next question. What’s the best investment you’ve ever made? 

I’m going to be cheesy and say, my children. 

The investment you’ve made into those relationships you had, which now you brought on from those companies into the company you built.

The first thing that comes to mind is people. The assets are secondary to the personal relationships for sure.

The next question is what’s the worst investment you’ve ever made and what lessons did you learn from it? 

National Bank of Greece. Remember when Greece went under and that bank was trading for pennies? I bought a bunch. It was down 99% and I bought it. It went down another 99%. It was a fun trade.

That was the precursor to GFC. Isn’t that what started? 

It feels like it was the original GameStop. The Greek banks.

It was a precursor to the GFC. That’s the first thing that went down, then it was the Euro.

Next question. How much would you need in the bank to retire? What’s your number? 

I know the answer because he’s like a startup builder, and those guys’ brains never shut off.

It’s somewhere around being able to not work so that you can think, then once you thought of something, it’s to be able to bootstrap it ideally. If you’re building a company, you lose most of that value in those early stages. People who have enough money to bootstrap something are well off. There are great examples. I don’t think it takes much, to be honest with you. I’d say somewhere between $5 million and $10 million, you can be very comfortable and you can generate more value out of that. 

Look at the PayPal Mafia, and what they all did with their money. 

Elon had hundreds of millions, but he put it into big ideas, but if you have $5 million lying around, you could start five things. 

If you could have dinner with someone dead or alive, who would it be? 

Freddie Mercury, for sure. 

Next question. If you weren’t doing what you’re doing today, what would you be doing now? 

I betrayed myself with the Freddy thing, but I’ve always loved music. I probably love to play guitar. I go back to being a designer in real estate. I love the idea of building houses and designing houses. It’s pure pleasure. Being able to live in the thing you design is amazing. 

That’s what August did for thirteen years.

You’re lucky. Maybe I’ll get there one day.

I built a brand new house we started dating. Ava came in, we got engaged and she moved.

It’s insane, being able to go around and pick and custom build every corner. It’s incredible. What compares to that?

This is my favorite question, book smarts or street smarts?

Street smarts, 100%.

Coming from an educated guy.

I like books, but I’ve also met some incredible people who haven’t read a single book in their entire life. 

They were probably very successful.

Massively successful. It’s a thing. It’s not like this. It’s foundational. It’s vertical. It’s like giving first aid. You could somebody that reads a lot of books. It doesn’t make you you. 

I think our 4-month old has read about 100 books so far. Read to him.

It’s great to read about other people’s experiences. I like those types of books, but I don’t think it’s a requirement. 

We have tons of academics that come on our show and they all say street smarts. It’s amazing to get the perspective of somebody who went to college and everything else. Last question. Here we go. If you had $1 million in cash and you had to make one investment today, what would it be? 

Semiconductors. It’s probably not something new. Everyone has been talking about semiconductors ever since Nvidia went to where it is. I think the future is more semiconductors. What I like about it is it both incredible growth, but it’s relatively safe because we’re not going to need less of them. It’s like when people say, “Invest in the S&P 500 and you’ll be fine.” The next step from that would be, “Invest in the NASDAQ and you’ll be fine.” I think semiconductors are that next level like, “Invest in semiconductors, you’ll be fine.” 

How do you invest in them? Is there a fund that holds them in there?

There’s a lot of ETFs. I wouldn’t bother trying to pick, “Is it an arm or is it on video?” Buy ten semiconductor stocks through an ETF and you’ll be fine. Everyone should buy that for their kids, set it, and forget it. Look at that account in twenty years and you’ll be fine.

This has been amazing. Let everybody know where’s the best thing they can reach you.

I’m on X Twitter. You could pretty much google Andrew Borovsky. I’m on LinkedIn. Send me a message there. I don’t have any weird LinkedIn blocks for people. I’m Andrew@Rent.app, which is to say if you’re paying or collecting rent, go to Rent.app. Learn more about what we do. Try the product. That’s amazing. Tell me about it. Why don’t you try it?

Thank you so much for being here. Thank you for sharing your wisdom and knowledge with us. We’re excited to see you grow. You have to make one promise that when you go big, you have to come back on our show.

You are a two-hour drive from me. I’ll drive over there. We’ll do it live. Thanks for having me.