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Max Nussenbaum, co-founder of Castle and a Venture for America fellow based in Detroit. Max and his co-founders are revolutionizing property management in one of America\u2019s most opportunity-rich property markets. Tune in to hear what Max is doing differently, why he defends splitting equity evenly with his co-founders, and why you should be investing in Detroit.

Famous 5:

Favorite Book? \u2013 Anything You Want
What CEO do you follow? \u2014 Henry Ward
Favorite online tool? \u2014 Instapaper
Do you get 8 hours of sleep?\u2014 Yes
If you could let your 20 year old self know one thing, what would it be? \u2014 Relax a little bit

Time Stamped Show Notes:
01:27 \u2013 Nathan\u2019s introduction
02:04 \u2013 Max is based in Detroit
02:20 \u2013 Castle manages rental properties for owners - they find tenants, collect rent, and coordinating repairs
02:29 \u2013 They make money by charging a flat fee of $79 per month per rental unit
03:00 \u2013 They want to simplify the pricing structures associated with regular property managers
05:30 \u2013 Founded in late 2014 and launched in 2015
05:47 \u2013 Currently managing 530 units, all in the Detroit area
06:10 \u2013 \u201cOur target market is the regular-person property investor\u201d
06:43 \u2013 First year revenue was around $100k last year
07:14 \u2013 The metric Max focuses on is MRR - the subscription model is similar to SaaS
08:12 \u2013 Raised around $3 million, most recently $2 million in a seed round
09:17 \u2013 Team of 10 people
09:35 \u2013 \u201cStructurally we\u2019re a lot like a SaaS business\u201d
10:00 \u2013 Monthly RPU is $174, as the average customer has 2.2 units
10:35 \u2013 Switching costs are very high in terms of time and energy, so monthly churn is only around 1%
11:51 \u2013 \u201cThe bottom line is that we just don\u2019t know lifetime value yet...we haven\u2019t even been around for 2 years\u201d
12:18 \u2013 They consider acquisition costs on a per-unit basis - and they\u2019re willing to spend around $200 to acquire a unit
12:55 \u2013 Most customers are investing less than $1 million in property in Detroit in their lifetime
14:30 \u2013 There are a lot of cheap properties in Detroit - but generally you can\u2019t get a mortgage for them
15:50 \u2013 The percentage of properties that have been vacant for more than 30 days is around 5%
17:17 \u2013 \u201cThere are still 700k people in Detroit and they\u2019re regular people who just need places to live\u201d
21:45 \u2013 Connect with Max on Twitter
20:04 \u2013 The Famous Five

3 Key Points:
Don\u2019t stress too much when you\u2019re young. There\u2019s plenty of time in life.
If you can simplify a complicated process, there\u2019s a good chance you\u2019ll make money
You don\u2019t have to be bullied away from splitting equity evenly with co-founders - what each of you brings to the table is less than what you achieve working as a team
Resources Mentioned:
Host Gator \u2013 The site Nathan uses to buy his domain names and hosting for cheapest price possible.
Freshbooks - The site Nathan uses to manage his invoices and accounts.
Leadpages \u2013 The drag and drop tool Nathan uses to quickly create his webinar landing pages which convert at 35%+
Audible \u2013 Nathan uses Audible when he's driving from Austin to San Antonio (1.5 hour drive) to listen to audio books.

Show Notes provided by Mallard Creatives