Real Estate News Radio with Rowena Patton
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Ready to navigate the complexities of real estate with ease and confidence? Tune into our podcast, hosted by Rowena Patton, best selling author of "Find Your Unique Value Proposition" and the insightful "CashCPO." Rowena, a seasoned expert with a history on the live radio show since 2011 'Real Estate News Radio', brings clarity and simplicity to the often overwhelming world of real estate.
It's Rowena Patton and Friends, as she is joined by guests from around the country each week.
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Real Estate News Radio with Rowena Patton
Real estate is still a people business in a digital world.
The real estate industry stands at a crossroads where technology and traditional practices collide. Matt Miller, founder of Fairtrade Real Estate, joins us to reveal how his company has carved a unique niche as a local iBuyer with actual boots on the ground – a critical distinction that has allowed them to succeed where tech giants like Zillow have stumbled.
Matt explains Fairtrade's powerful three-sided marketplace connecting agents, distressed property sellers, and real estate investors. Unlike algorithm-driven platforms, Fairtrade agents physically inspect properties, understand neighborhood dynamics, and comprehend local economic factors to make accurate offers that benefit everyone involved. This human-centered approach proves especially valuable as market conditions continue to flatten across the country.
As we explore the broader economic impact of distressed property investments, Matt highlights how these transactions create numerous jobs – from contractors to landscapers – while transforming previously uninhabitable homes into opportunities for families. For agents seeking to thrive in challenging markets, the message is clear: develop expertise in "higher-hanging fruit" by mastering specialized transaction types rather than competing for diminishing easy deals. Those who expand their problem-solving toolkits will find themselves equipped to provide value regardless of market conditions.
Whether you're an agent looking to better serve distressed property sellers, an investor seeking reliable inventory sources, or simply interested in understanding how local expertise continues to matter in an increasingly digital world, this conversation offers valuable insights into the future of real estate. Ready to elevate your approach to challenging properties? Listen now and discover why real estate remains fundamentally "a people business that's very personal and very local."
I am thrilled today to introduce Matt Miller of Fairtrade Real Estate. Hello Matt, how are you?
Speaker 2:I'm doing fantastic. Thanks for having me.
Speaker 1:Tell us about your organization, because it's fascinating.
Speaker 2:Absolutely so. Founded Fairtrade in July of 2020 with a couple of very close friends. We'd always been in the investment and wholesale space and we founded it as a two-sided marketplace. So we have a group of sellers that we serve that need to sell to a local cash investor from the individuals to mom and pop, and even institutional, who want a consistent inventory source for distressed assets that they're going to renovate, to resell, renovate, to hold.
Speaker 1:So your key audiences. Who are you working with and you touched on it there for a second so people that you actually get belly to belly with, rather than the people in the big group. Who? Who are you helping there? Definitely so we have three audiences.
Speaker 2:So it's the real estate agents that work for our company, the home sellers and then the real estate investors. And the agents work with our company, work with a lot of local real estate operators as their local iBuyer boots on the ground, being able to provide a very concise cash offer from an expert to perform for that seller. The real estate investors come to our marketplace to find access to exclusive inventory that's priced under market. And then we've got say that again.
Speaker 1:So you're not 19, which I love. I mean you're at least in your 20s I'm kidding, obviously You're not 19 like me, and it's very interesting what's happening in the iBuy marketplace now and really what's just happening in real estate. Oh, Zillow's taking over. Ai is going to take all our jobs. Something you said then fascinated me. You said you didn't say belly to belly, but you said boots on the ground, Right. So real estate really is finding those opportunities and often in your business, finding somewhat distressed opportunities or people that just want out right. Talk about those opportunities for a minute and why it's not just online. How are you better than just online? Because there's plenty of iBuyers online.
Speaker 2:Yeah, I'd say the reason you've seen so many iBuyers exit the space including very good operators like Zillow is that it's incredibly local, it's incredibly difficult and it's hard to do at scale without the local knowledge. So when I say boots on the ground, I mean we have six offices in Southern California. Our agents are physically going out, walking these properties, understanding the scope of work, understanding the neighborhood properties, understanding the scope of work, understanding the neighborhood, walking in the other competitive active properties, knowing what commercial development's going on, knowing what's going on with that local economy, whether they're bringing in or losing jobs, and able to make a very accurate offer to the seller that we're going to be able to perform on so that we can bring in more inventory for these fix and flip investors we serve on our marketplace.
Speaker 1:And.
Speaker 2:I think, especially in today's market, not just the local knowledge but the local presence. And this isn't trading paper like stocks. Real estate's more complex in a lot of ways and I think that you really have to understand that it's a people business that's very personal and very local.
Speaker 1:It's a people business that's very personal and very local. I think you know, I think agents there's a lot of real estate agents out there that haven't been really well. They may have been involved with iBuyers, where you know you fill in some form online and that's about it and don't know very much about it. And as the market flattens in almost every area of the country. So we're going to see three and a half in my humble opinion according to Clement Juglar from 1860, three and a half to five and a half years down now. We crested in most markets two years ago. So as that happens, and as other models are coming in like Zillow and now doing seller leads as well, and lots of you know real estate teams are just happy to pay that 40. Well, they're not happy, but you know it's like great, we'll pay the 40% or the money upfront which I believe is going away in that model. Instead of looking at what I call higher hanging fruit, every member on my team I say higher hanging fruit go find out how to deal with the more tricky properties, because that will keep you safe for life when things are rocking and rolling and there, multiple offers and you put a sign out a lockbox on the door great, but go find out about the more tricky stuff.
Speaker 1:This morning I was with a gentleman who's 59 years old, lost his mom two years ago, lost his brother a year ago. Lots of siblings. The house was built by dad I'm sure you've heard lots of these stories typical and you know he cut all the wood for the wood burning stove last year and he doesn't want to do it this winter to keep the house even saleable beautiful views, some young family could come in there, or an investor or someone, and turn that around and turn it back into something habitable again where some young family could get a start in life. And I think that's the bit we miss. This is about people. Even if we're selling to an investor and they can make a buck, at the end of the day you're giving somebody an opportunity for a roof over their head or even an end buyer to come in and be able to do it themselves. What would you say to that, matt, because I know you're a boots on the ground person with that philosophy and also recognizing that, like models like ours, is the investor buyer.
Speaker 2:We provide like an interesting piece of liquidity to this marketplace because the houses that we buy, the sellers have equity and motivation and it's physically distressed, oftentimes it will not qualify for financing so that owner-occupant buyer, that new family, they wouldn't be able to purchase that house with a conventional loan anyway. There has to be this segment of the market that brings it up to current standards, provides liquidity and of course they're all running businesses. But at the end of the day that unit turns into something that people are going to move into and live in and you know the neighborhood improves. All these things happen.
Speaker 2:I think one thing with investors that it's hard to appreciate is they create a ton of jobs. Right, we're not just paying like local transfer taxes, city state escrow fees, title fees, but the construction aspect and the fact that it drives local labor force and creates this improved product that then ends up going on the open market relisting and selling to an owner-occupant. A loan officer gets paid escrow title, everybody. It's sort of a win-win. And it really does drive the economy, especially around the existing home sales, which is like the area we play in right. Older homes, functionally obsolete, need a ton of work, aren't ready for the open market, and we come in and provide a solution that hopefully is great for the seller and the real estate agent that's coming in to represent them and also ends up good for that local neighborhood after they have an updated home that can sell to a family or whoever's going to be moving in.
Speaker 1:I love it and it's so heartwarming not to be nothing wrong with being a big box buyer, right? Nothing wrong with that's a business model. But it is heartwarming hearing somebody talk about the human aspect of it and when we as agents or investors respect people in a whole different way. The guy to me said this morning he's like I can't believe you're here. I've been listening to you on the radio for 13 years. You know most agents would have come up here and turned around on the pothole road and I said I'm here because this is my job, this is what I do, and you know it's fulfilling for me to be able to help you through this. And just like you said, matt, it creates so many.
Speaker 1:Whether it's the dumpster guys bringing the dumpster to get all that furniture out, or the guy who mows the lawn each week, or all those other people that come in, the cleanup crew that come in, it creates so many jobs and a new home for somebody that's really been sitting there in disrepair for so long, and I know what a common story that is. So I love what you're doing and I love that there's that heart in there, because I do believe where you've got that, the money flows. What about agents that aren't in fair trade? Your brokerage? I know you work with agents outside of that. So there's the agent that goes out there, like I did this morning, and they're just like I have no clue what to do. What does that agent do? Who do they turn to like?
Speaker 2:I have no clue what to do. What does that agent do? Who do they turn to? Well, what I hope is that the agent understands that we are the local iBuyer that they can rely on. Normally they'll have one or potentially two contacts at Fairtrade and they can go into that appointment and have a local performing cash investor offer not from a big company like Opendoor, that's very impersonal, you can't get decisions on and they can go in for a solution with that seller that has. Maybe they have two or three solutions for them.
Speaker 2:And one could be just. Here's the simple, as is cash price from this local investment company in California, fairtrade Real Estate and the agents. We love working with them. You know we're able to pay the commission if the seller's not interested in paying a commission, which you know. That's a big challenge, even in pivoting markets, for agents to demand the compensation that they deserve for providing services. But for us it's very easy to add it to the math equation and the underwriting and make sure that their commission is secure, even if they're just representing us as the buyer's agent.
Speaker 1:And I want to say you're in California right now and you're thinking about going nationwide in the future, but you're basically in the Bay Area and Southern California, is that correct?
Speaker 2:Correct. So we have six offices in Southern California, one in the Bay Area that serves kind of Bay Area greater Sacramento Metro. It's been really important for us over the last five years to establish a very strong foundation, including in our proprietary technology and our private marketplace clarity that we've built so that when the time is right to expand nationally we are set up to be able to do it with the right systems and processes and support for both the agents and investors that we serve.
Speaker 1:I love it. And Matt and I have talked about putting a program together to help you agents. You, as agents, understand what a non-functioning house is. I mean, obviously you know what a non-functioning house is, but all the factors of that and what it looks like, so you can have more of that language to talk about with your sellers. And I really want you to think as real estate agents.
Speaker 1:We all have these big databases. Some of you have fellow. You know where you're getting hand raisers 40 to 60% in most markets. So you build this big database. You've paid for pay-per-click leads four years. Almost all of them are buyers. When they come in as buyers, 40 to 60% of them live elsewhere.
Speaker 1:If I looked on my database now in North Carolina or I'm going Northern California now, northern Carolina, I love it, north Carolina I've got 60,000 people. Many of those people, especially through Fellow I'll give Fellow a shout out here are raising their hands and saying I need to sell my house in California. So that's something that I could refer over to you or an agent real estate agent in California if it's a traditional resale and help them with CPO or traditional CPO or a cash CPO or if it's distressed and they just want their money out. That's something where you could help. So, agents I want you to think about. You're handling referrals all the time in different areas, so it doesn't matter if you're in georgia or new york or new jersey or wherever you are. A big portion of your database actually is in california, especially with you know the, the movement from california.
Speaker 2:Sorry, matt, all you people will leave in apparently we do see a huge opportunity with, especially around probate and inherited properties. Oftentimes these sellers have their lives out of state already and they are dealing with already a tragic situation. That's tough, but they need local expertise. They may come into town for a day or two or we've been able to handle it where they're doing everything through mobile notaries and still able to disposition the house while not disrupting their lives, as they're serving as the administrator of an estate, which isn't. It's kind of a thankless job and really challenging.
Speaker 2:So we're definitely here to serve, whether it's local agents who are having people relocate out of state or properties that are inherited and you're not in California. We experience, you know, situations like that all the time and have the boots on the ground to be able to be the local buyer for those folks.
Speaker 1:That's amazing. Thank you so much, Matt. Do you have any closing thoughts for everybody listening out there on the app?
Speaker 2:I would say that buckle up. It's going to be a challenging market for the foreseeable future and the professionals that have the most solutions and are the most creative and solution oriented professionals are going to be the ones that are going to be able to continue to provide value to everybody in this marketplace.
Speaker 1:Thank you so much. You nailed it right there. The ones who survive and most CEOs of real estate companies are saying this all the big ones too you need solutions and you need to understand the other solutions. That's what I mean by higher hanging fruit. We've been in a marketplace where you could pluck the lower hanging fruit quite easily. Now you've got to get your step ladder, you've got to go out, you've got to learn more. You've got to learn about iBuyer programs.
Speaker 1:Where are they coming from? Are they individuals with boots on the ground? Are they, you know, homewood? That isn't in all places now. Where are they? Where are they operating? What does my database look like? Where are my five feeder markets? Know that as an agent. Where are my people coming from? You can't say, oh, everybody just moves here and you know moves in my market, not true? So that's where someone like Matt could come in in California. I love it, matt. Thank you so much for your help there. Today. The platform's out there to elevate agents' knowledge about what's going on in the market and other solutions. So thank you, it was awesome.
Speaker 2:Thanks so much for having me. I'm looking forward to working with any agents and recognizing that we're all going to have to get better and smarter, yeah that's what we're in it for.
Speaker 1:We're not going to be one of those, those people in the business I'm not going to say agent, but those people in the business who are not around anymore, because the smartest will win, like you know any other industry. So it's time to buckle up and start picking those high hanging fruit and climb your ladder right. We'll, just we'll.
