Ali Nichols - Partnering to Expand Property Ownership

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Welcome to the Real People Real Business Show. My name is Stephanie Hayes, and I'm a business strategist who helps experienced business owners design asset-based business models that help set them up for growth and exit. I love to speak with like-minded entrepreneurs who share their real stories in the gritty details on how they've navigated their own way through. On this show, you won't hear about the glamorized entrepreneurship journeys that you see online. And you won't be told how to make six figures in six weeks. Instead, you can expect to hear real, vulnerable and inspiring stories you can relate to that have helped create the foundation for each of our guests businesses today. I'm so excited to welcome Ali Nichols. Ali is the co-founder of Getaway. An innovative real estate financing platform that offers co-investment opportunities to real estate investors, helping them meet their down payment requirements for D S C R loans, with as little as 5% down. Prior to founding Getaway, Ali spent over four years and as an executive at Bungalow, a technology enabled residential real estate company. Welcome to the show, Ali. Thanks so much for taking the time to share your story today. Thanks so much, Stephanie, for having me. Excited to be here. Okay, so we've got a lot to talk about. Just before we started the show, we were chatting a little bit about about what's going on in the company and that sort of thing. And I to, I can't wait to get into it, but back up first and kind of tell me the story as to how you got to get away. Yeah, great question. Sometimes I ask myself. No. So I think my whole, my whole life I always dreamed of starting my own company and didn't quite really know what that would look like as I was, you know, starting out my career. But had always had. This idea of I'm gonna start something on my own. And then on the other side of the coin, I've always been really, really, really passionate about the real estate space. And so all of my interests and extra time and things always gravitated towards real estate. And had the opportunity really throughout my career working at other companies to enter into the, you know, the startup world and this. The tech scene and see what it, what it looked like to build a tech enabled or VC backed company. And then that's when it clicked. Like, I think it was during my time, I actually, before I was at the startup Bungalow, I was at Uber and saw like the rise of. A company that you know, could grow so quickly and bring a new product into the world. And that's when I was like, okay, this is all making sense. Like I want to do something in this tech space but really blend it with my passion for real estate. And so, you know, during my time I. At Bungalow, which was a real estate startup, I learned so much about the space and how to build a company from, from truly zero to one as you could say, and then to 10 and a hundred and so forth. And so decided, you know, now is the time I have the skillset, I now have coalesced around, you know, the space and industry, and got obsessed with the idea of like, how can I help? Create more real estate investors in the world because I believe it's the best asset class for an individual to invest in over a lifetime. So that's where we got to today. You're probably the third person I've had on the show that used to work at Uber. Really? Yeah. I dunno. Uber seems to cultivate a lot of entrepreneurs. Yeah, right. Well it, it is so funny 'cause it like really was that type of environment where you're so inspired by your coworkers. Everybody's like so smart, working so hard, like, so excited about what they're doing. That I can see why so many people have gone on to start their own businesses. Okay, so you didn't just kind of decide you're gonna start up getaway and then it happened. So tell me about, tell me the gritty details. Like, so you, did you get funding? Did you go for funding right away? How did it all pan out? Yeah, so actually had worked previously with my co-founder and on the weekends we were kind of, You know, playing around with a few different ideas and finally, you know, one really, really, really stuck. Stuck with me and we, we both started to get obsessed with it. Then it was like, okay, well how do we test that? There's something here. So we started testing demand and running all of these different, you know, small campaigns and things like that. And when we started to see traction, we both looked at each other and we're like, it's time. And so at that moment, we. Through a deck together. We went out and we actually started pitching the company to a bunch of different early stage venture capital firms. And we're super fortunate enough to raise capital at a pre-product stage of our company. And that gave us kind of the oxygen to go out and start building. So I was just speaking to somebody yesterday who's just, just in the early idea phases, and one of the things that I talked to her about is like, go, go and prove the demand side first. Like go and understand the demand side first, and how did you guys go about doing that? Tell me a little bit more about the details, because I think that's one of the things that entrepreneurs missed, right? They mm-hmm. They wanna go into building a startup or they have an idea and they are assuming a solution. And when you go and you immerse yourself on the demand side, then you start to learn some pretty interesting things, right? Yeah. And it's so funny, they always say like first time founders wanna build a product. Second time founders only care about distribution. Because really you can have the best idea in the world or the best product in the world if you don't have a go to market. That makes sense. It's not a business, it's just an idea or a product. And so, you know, for us, and even in our first year of operations, we've gotten so much better at this in terms of what we're building and the features we're building. But for the early stages, how we approached it was kind twofold. One was. Tons and tons of user interviews. So talking to people that we thought were our core segment and core customer that we were going after, and really on trying to understand their pain points, not pushing our product at them and seeing how they react, but actually understanding what are the, like, what are the issues they're facing today and does our product. Or could it, like, does it solve it or could it solve it? Is one like key, key way of testing. And then for us, because we are a consumer product, we have the ability to also pretty easily start testing. Concepts via like paid advertising specifically around like social advertising. So you can see very quickly if the value prop resonates with folks and how expensive it is to bring a customer into the funnel and then have a conversation with 'em there. So what, what did you arrive at? What is the value proposition? What is the problem that you really wanted to solve? Yeah, so. As you think about the, the real estate space today there are, there's a core group of folks that are really trying to build portfolios. For their future retirement or their future self. And I think a lot of us can resonate with that. It's like, you know, by the time I'm 50 or 60 years old, I would love to own 10 properties and that produced enough passive income that I'm not worried about continuing to work. You know, my corporate job or my W two job and that can be my retirement fund or that can be my kids' future college fund, or I can pass that down to my family and so forth. So we've met with a ton of customers that that is their goal. They all had the same goal of creating this passive income or wealth, you know, generation stream through real estate. But then you've got, you get back to like, okay, so why aren't you doing that today? What's holding you back? And where people were at was like, well, I've set aside, you know, X number of dollars. Oftentimes it would be like, I've put aside, you know, $75,000 towards buying my first property, buy my fifth property, or whatnot. Where do you think I should buy? What do you think I should do with that? And the conversation I'd have every time would be like, okay, well that's fantastic that you already have this fund going towards this new project. But with the cost of real estate today and the financial products available for you as an investor, buyer, and not a primary home buyer, that's just simply not enough. You're not there yet. And so it, and people would be shocked. It's like, wait, but I should be able to buy that house, you know, that investment property with this. But it's like, as when you become an investor buyer, the, the opportunities in terms of financing are just so much more limited than your primary. That we saw a huge opportunity of like, huh, well if we could actually solve this segment for folks in terms of financing, investment products, We could help more and more, more people reach that dream of owning a larger portfolio for their retirement. And so how does that work? And, and I, I would say like, you know, you immediately triggered me with like, I live in the Pacific Northwest where it costs Yeah. You know, 1.2 million for a, a little tiny. Townhouse. Yeah. So, you know, the, the, the cost of getting there even to your first home is astronomical. So I'm assuming that what getaway has created is a way to sort of close that gap. Exactly. So what we do is we would, for investors looking to scale their portfolios, we will actually partner together with you and come in and invest in the equity or the down payment side of a deal. So let's say you identified a little, not little, but like a four unit, four family home. Building that you're hoping to rent out and build up equity in and in today's world, you'd likely only be able to to get like a 65 or 70% mortgage on that. And so we would come in to, now you're looking at bringing 30% down. Plus closing costs plus CapEx plus all of these things it it takes to actually run that property. So we would come in and actually partner with you and, and say, Hey, we could bring 50% of the down payment alongside of you, so now you're bringing 15% to the deal instead of 30. And then we stay on and help manage the asset until you're ready to buy us out or refinance us out of the property within five years. That's brilliant. That's absolutely brilliant. And so tell me about the journey, sort of, you proved the idea, you, you knew that there was a market. You went to get funding, you got funding, then what? Yeah, so It's been an interesting journey for us because this, we've actually pivoted into this new idea and this new structure I'm talking about. Originally, we had approached the idea of creating more real estate investors by fractionalizing that investments and so where you could go out and buy. A hundred dollars worth of a real estate property and then earn cashflow and appreciation from that. And what we found with that model was our customers over and over and over again said, this is cool, but I really wanna own real estate myself. And so that's, that's been a huge pivot for us is in that shift towards how do we build a product that allows our customers to own a property outright. And so now we're in this new phase and we feel like we really hit the, the nail on the head in terms of, of building for the actual problem, like I was mentioning earlier, versus just the cool idea. And so now the journey we've, we, you know, we've launched and we're actively working with with our customers, investors today to help them scale their portfolios, but it's definitely hasn't come with, you know, all up to the right. There's been a lot of up and downs to date. So what, what has growth kind of meant for you? Like what have you found has worked for you in terms of growing your, growing your customer base, growing your audience? Yeah. So, you know, for us, we, we do still reach out to customers through social channels and paid social. But where we're seeing a ton of traction and, and what's unique and what we're building up is partnerships. And so we're working with brokers, agents, property managers Even lenders on partnering with their customers as a solution so that they can continue to keep scaling. And we view that as, as we continue to grow, as like going to be our biggest channel as well as repeat customers. So the customers that we've already worked with are actively looking at acquiring their next property with us. So we view that as a really exciting trend and, you know, amazing flywheel as we, as we continue to scale. That's super interesting. So is there a different, is there a different approach for the folks who are reengaging with you? Because they now have asset, obviously they have an asset that's grown in value and that they can leverage. So are you sort of onboarding them in a different way? You know, it's very similar in terms of from the product perspective, that's not shifting as much. But in terms of the relationship and ability to service them, it's obviously like, They already are pre-approved, we already know what to do. We know their buy box. We're able to curate and use our product to specifically ensure that they're seeing opportunities that match exactly what they're looking for. Mm-hmm. So I would say more so it's more curated from the product side. And we can be more effective'cause we already have all of this information around the customer. So you did a shift, did a business model shift, what was the, like, what was the catalyst for recognizing that you needed to shift? Because this is a real sticking point for a lot of business owners, is they get entrenched in their business model and they've made all sorts of commitments and developments around, you know, their original business model to change that. Is very confronting. Right. And there I, from my experience, they're always looking for some type of, you know, indication that that's the right decision and it gets them stuck. So what was the catalyst for you? What was the trigger for you to know that you needed to shift? Yes. A couple things. I would think, and they're, they're pretty intertwined, but for one, it was our. Our conversion from, you know, interest to actual investment. And like I said, I think this goes back to like first time founder syndrome of like, you get obsessed with your product or your idea. And so it's like, how do I make this work banging my head against wool? But what we found is, you know, through our sales cycle, folks that came into the funnel were super, super interested and, you know, at least were. Engaging and saying they were interested in the product and, and we got a ton of positive feedback. But when it came time to transact and actually, you know, make a sale we saw a huge drop off. And we tried so many different avenues at unlocking that piece and just couldn't find something that really stuck. And so it was, it was this moment of, you know, is this a really cool idea, a really cool concept, but you're not actually solving a problem or a pain point for the customer because if you were, you would be converting. And so after a couple months of like really coming to terms with that you know, my, my co-founder and I looked at each other and, and. You know, I think the beauty of us as a team is we make decisions fast and keep running it at the next thing we just said. You know, this is not working the way we thought it would. Let's go back to talking to users and like going back to that piece around like, what is the pain point and how do we solve the pain point for them? So that's where we ended up today. And do, and has your has your, your, your kind of ideal customer, has that shifted at all as you've learned more? Yeah. So I would say our, our core customer today is a real estate investor that already owns one to 10 doors. And they're looking to scale their portfolio. Whereas previously we were really trying to convert folks that have never invested in real estate before. And so what we've now found is like, actually no, there's this huge core group of customers that really. They're missing products that just don't exist in the market today. How do we service them? How do we build products for them? And, and that's where we are and, and we feel like we've really like hit on something. So you advise oh, I, I advise most of my customers or most of my clients, that one of the most effective marketing strategies is through partnerships. And so what it sounds like you guys are also kind of following that, that strategy as well. So tell me a little bit more about how you sought out partnerships and how you convinced your partners to partner up with you. Yeah. For us it's, it's a very easy sell. Because partnerships, it all comes down to are, are our incentives aligned and can we both win? And the way that our product works and how we can service our customers oftentimes means that we can actively service our partners in terms of growing their business and or, you know, increasing their sales and so forth, or helping them convert to. To win an opportunity. So it's, it's an easy sell. It's more now around distribution in terms of getting, you know, the word out that we exist and we're a partner and, and it's an opportunity for you to use with your clients. So, for example, as you think of a property manager property managers want their. Their landlords to buy more properties.'cause that means that they have more properties to manage, which increases their top line revenue and their business. So for us it's like we're a way for their landlord customers to increase their portfolios faster. So it's just like, it's just a very easy and simple incentive alignment. And so for us it's now more of distribution in terms of just getting in front of more and more partners. Yeah. And I, I imagine that you know, as, as the industry has been quite cyclical in the last, I mean, it's been very interesting in the last few years for sure. You guys are having to stay kind of on top of that, right? Yeah, for sure. And it is interesting for us and the segment that we're focused on is with real estate investors and investment properties. It really comes down to the numbers. Like, do the numbers make sense? Does the property cashflow, does it meet my investment objectives? If yes, your, your interest rate agnostic in a sense because. When you know, interest rates are right now for investor products are like around 8%, eight and a half. In some cases, if it cash flows today and makes sense today at eight and a half percent, I know as an investor within the next, you know, five to 10 years, I likely will have the opportunity to refinance at a lower rate. So now all of a sudden, in that period of time, this property becomes. Much better in terms of an investment. And I was able to get it in at today's prices versus the future price. I love that. And I, I think that you're right that, well, I know you're right because this is your industry, but I would imagine that You know, people who are, are investing for their sort of their residential property and their first time home buyers. It's a very different economic model than for folks who are investing. You know, I've, I've purchased a number of properties myself in my lifetime, and I'm I'm turning 50 in two years and I don't have my 10 investment properties, so maybe we need to talk. That's for sure. But I think, you know, I, I imagine that the, the economics look very different for an investment buyer as opposed to, you know, a, a residential home buyer. A hundred percent. It, like I said before, it really just comes down to, you know, when the property is rented. You know what, how much can a property be rented for, you know, how easy is it to rent that property and then when it is fully rented, does it cover all of our expenses and does it produce additional cash flow? Right, right. I know a lot of people have gotten stuck here. Like we have a hundred percent occupancy in the tall, in Squamish where I live because it's such high demand and it's so expensive to buy real estate here. And rental rent rates are like just through the roof. So I, I think if you're an in. Investment buyer. There's some gap there, there's some opportunity there. But I know that the folks who were investing, you know, a couple of years ago, and you know, my place was $850,000 when it was first being built three years ago, and now it's worth like 1.3, which is great. You know, you've, they've built some equity in this place, but you know they signed up for a variable rate mortgage and now they're just getting. Screwed because they're, you know, they, they're at like 7% now, which is unheard of. And, you know, 25 years of buying real estate, I, I never was above 3% as a, as a, you know, mortgage rate. So it's like there's. Certain opportunities, but there's also, you know, other risks for sure. Right? There's risks in everything. So I will put that caveat, like even with real estate investing, you know, everyone should go in eyes wide open and really have an understanding of the downside risk, especially if you're locking yourself into a adjuster rate mortgage, because rates don't always just go down like that is. We had a good 20 years of rates constantly going down, and then that is not the truth anymore. For sure. And you know, when my parents bought their first house, it was 12%, right? It was, oh yeah. My parents were like, at, I, I believe it was like close to 15 when I heard that in the, in the eighties or something like, yeah. Crazy. Right? And you know, they've long paid it off and everything but that same house, they now have like a 2%. Where you done. Oh, I know, I know my, you know, my, my parents are, are in their eighties, so, you know, it's a long, been a long time since they even had a mortgage, but it just, yeah. So you have to take that longer term view, I guess. And I just, I think it's such an interesting perspective to be, you know, it's very similar to what I do on the business side that we, we, we actually have people who were in real estate investing now looking at business investing because you can treat business properties like you treat real estate properties. Definitely not quite the same investment because there's no guarantees and you're not in a, a stable market and all that sort of thing. But, you know, we're, we're flipping businesses and we're renovating businesses in that respect as well. And so you can kind of treat businesses in the same way. Let's talk about you as a business owner. So are you, are you in partnership? Do you, did you start this thing on your own? So I have a co-founder. Okay. Who, we started this, the company together 50 50. So it's been, it's been really nice to have someone who's, you know, in it as an and as invested as you are. I couldn't imagine doing it by myself. I, I like give huge kudos to all the business owners out there and, and founders that are solo. Wow. That's hard. Like it's already hard enough, but two people I can't imagine solo. Just 'cause you're always questioning yourself all the time. Yeah. It's a journey for sure. Yeah, I can attest to that. So. So partnership can be hard, right? It can be, it can be. It can have definite upsides and it can also be really, really tricky. And I think the number of partnerships that end up not successful with each other are much higher than the ones that end up good. So, you know, have you guys been able to sort of navigate that? Yeah. It's funny you say that. I joke all the time that the co-founder relationship or business partnership, it's like a marriage, like truly, because you tie up so much. You know, I work all the time. I'm so obsessed with what I'm doing, and now I have this other person that's part of that, and it's your ego and your pride and all of these things are wrapped up in, in the business. And so, yeah, for sure it's like a marriage. But for us it's, it's gone well. I think the biggest thing in terms of a successful partnership for, for our type of company is really understanding who's, who's good at what, who runs, kind of what, who makes what decisions and complimenting each other's skillsets. So for, for us, you know, I, I run the business side. I'm the real estate, you know, person. And then my co-founder is, Does everything technical, like he runs engineering hands. The data, like anything, systems, product process, like around the, the tech side, he has, and that's a skillset I don't have at all, and like worse than my mom at using a computer. So I'm very fortunate to have you know, this o this other half in that sense that that compliments what I can bring to the table. I'm so glad that you said that. I, I had to think myself for a minute. You know, I have a software company and we've been together for. 12 years, I think like something 12 to 14 years. And I, I have to wonder like how have we we're, we just, we've been such great friends for so long and we actually worked together for a long time before that too. And what has made that partnership so easy? And I think it's exactly that. We're very, very clear on whose roles are what. So my other two partners are both nerds, like they're both technical and they, I'm technical, but I'm not technical. Like they're, yeah. Technical there. I would never sell myself as a technical resource. I understand enough and I can do some of it, but I, that's not me. So they're very clear that they're, and even between them, they've really sort of defined their own rules and who owns what and whatever. And then I'm like everything else. And so it's just been really like everybody just sort of leaves each other to do. What's best and there was a time where some of the work that I had taken on just wasn't my bewick and I was really struggling with it because I don't do it well. It's not the way my brain works. And so we had a little readjustment and they took on some of that stuff and it's worked out really nicely. And so I think that's so much where partners struggle is when you have this lack of clarity around roles and responsibilities and and areas of expertise. And when two partners come together that have like very similar. You know, experiences and expertise that gets really, really tricky. So I think the great advice there is, is be very clear on who does what and who's an expert in what. I have a question that I ask all of my guests and, you know, this show we're all about being real. Like what's, what's real in business? And we know business can be very, very real and lots of reality. So what's the difference between kind of what we hear out there in the world, in the online business world or just in the business world? What's the difference between what we hear there and what's real about being a business owner? That's such a great question. I was actually having a very similar conversation the other day. In, especially in, in my space in this like, you know, tech and VC-backed world. I think that, that everybody views being a founder entrepreneur as very glamorous. Like, oh wow, that I wanna do that someday. And what I don't think is talked about enough is like, How much of the like grind and grunt work and all of the non-sexy things that come with it. It's not like you get to sit around and like strategize all day long about this big vision and, and picture and you know, kind of the consultative version of the world. When you actually start building from zero to one, like you're doing everything and that means. Every single function, every single like level of it from like data entry to, you know, trying to go talk to a bank and like pitch them on why they should either give you a loan. So it is just, I don't think that people really realize how much grunt work is involved and just making it happen and it never turns off. Like there, your, your to-do list will never, ever, ever end, ever, ever. But here's the thing, here's the, and you're totally, but here's the thing about the grunt work. You have to do it because that's what gets you familiar, like intimately familiar with your business, your industry, your clients, your customers. Like I am about to buy a business and we'll transfer the assets as of August 1st. I helped, I helped design and build it. So like I'm, I have a lot of familiarity. I ran it for a while. Like I have a lot of familiarity with the business, but right now I have to be in there coaching all of the clients that have signed up for our program. And, you know, I. Right inside all the systems because they've changed since I first built the business. And you know, so, but that's the kind of stuff that gets you so close to and intimate with your business that when you finally do get to step back a little bit, and then I'm inheriting a team, so that's great. They'll continue to do the work that they'll be doing, but it leaves me to be able to. Fill in the gaps where they aren't quite as familiar. But also I can step back and start looking at this from a higher level perspective, but I still have to understand what's happened and what, like, the functioning of the business first. So that grunt work is actually a really important part of your growth. And yeah, you just can't make good decisions without having been through it. No, it is totally necessary and it's so needed. I just, oftentimes, I've talked to other friends that are founders and things and they've come from, you know, being a director, a VP at a different company, and your day to day changes a lot when you're starting your own company because like I. You're not sitting in meetings all day making decisions with, you know, folks that have presented materials to you. It's like you're, you're building, like you're making everything happen. And so I think anyone who's thinking about it needs to go in eyes wide open. To all of, you know, every aspect. Not just the glamorous of like, I started a company side. Yeah, yeah. I mean yeah. I like you gotta get down and dirty for a little while, at least a little while before you can even know who you need to bring on to support you. Right? Yeah. What's so, so what's the future looking like? Where, where are you going from here? Yeah, so we're, we're super excited. We're hoping to scale extremely quickly continue to help more and more customers buy more properties, and then you know, with that hope to, to continue to then be able to fundraise and, and scale this to something really quite, quite large. Are, are you just in the US right now? Yeah, so we are just in the US I think for. The foreseeable future will stay US based. The market opportunity is just so large here. One, the opportunity we're excited about though, is enabling foreign investment. Mm-hmm. Co-founders actually Canadian. And so a big, a big thing we've been, you know, putting on the roadmap and trying to figure out is like, okay, how can we help Canadian buyers look at US real estate as well?'cause there is. A huge opportunity in that sense to, to help more people get into real estate here in the states. Well, when you figure that out, let me know.'cause I Sounds like a great idea. Yeah. I lost all my assets in my divorce, but I would love to be buying again. And I like the idea. I'm not sure that it makes a lot of sense to buy here as a residential. Mm-hmm. Buyer anymore. Like the cost of living are so astronomical and it almost seems like less of an investment to rent. But I would absolutely. Invest in real estate in a different market as, as an investment as opposed to somewhere to live. So, yeah, I'd love to love to hear about that when you figure out what foreign investment looks like. Yes. I definitely, you'll be one of my first calls. Well, you, I know, I know. You can buy real estate. No, you totally can. It just comes, the financing becomes more difficult as a foreign buyer. So all of the programs that exist here, Don't quite exist for international hire. Right, right. Oh, interesting. Okay. Well, we're gonna we're gonna, we're coming up on time. Can you let our listeners know where they can find you? Yes. To check out the company check us out at getaway.co. So just.co and then if anyone wants to reach out or connect best way to do it is through LinkedIn. So you can find me at Ali Nichols, a l i Nichols, and then if you type that in getaway, you'll find me. Awesome. We'll put all of the links in the show notes to both your LinkedIn profile and the website. And if you are in the US and you are even considering real estate investment definitely check out getaway. I would be there in a heartbeat if I lived in the us. Alright, we're gonna wrap it up. I'm so happy we had the opportunity to chat with Ali today to hear more about how her business came to be, her experiences along the way and what the future of her business entails. And thank you for tuning into this episode of The Real People Real Business Show, where we get the real entrepreneurial stories and journeys that you can relate to. The show notes, resources, and links from this episode are available on my website and social media platforms. If you've enjoyed today's content, I would love for you to give us a review on whatever platform you're on to help us share these genuine stories with an even bigger audience. Until next time, keep building. Keep dreaming and keep being real.