259 – How To Start A PropTech Company with Perry Zheng

Synopsis

Perry returns from Episode 154, where he discussed syndicating over a hundred units while working full-time at a large tech company.

He is the founder and CEO of Cash Flow Portal, a platform for real estate syndication. Previously, he was an engineering manager at Lyft for about six years, and before that, he was a software engineer at Twitter and Amazon. Currently, he is working with a whopping total of 850 units.

In this episode, Perry discussed how he started his company and how those who wish to start their own may do the same. He also shared some tips on when to leave your day job to concentrate on your business.

Key points

Reaching 850 Units

When asked how he went from roughly 100 units to as much as 850 units since his previous guesting on the show, Perry said that after obtaining the first 100 units, the hardest part was done, and he was already about 80% finished. He added that generating funds was not difficult since some people recommended him to their family and friends, who then invested with him. When it comes to brokers, Perry’s firm has a strong reputation for closing on time and smoothly, so brokers recommend them.

Leaving His Full Time Job

Sean asked Perry why he decided to quit his job despite being in a high-paying position. Perry said that he was very risk averse. He had been moonlighting for a year and a half and had invested around $500,000 of his own money into the firm before they decided to raise additional funds. Perry understood that the product would take a year to two years to develop, so quitting his day job to focus on the company full-time would be unwise. With this, he decided to put all of his financial resources into the business, and if it doesn’t work out, he’ll go back to his day job.

They didn’t have many clients at first, but customers began to pour in as word spread about them. During this period, he decided to quit his day job and focus on the company.

Perry advises those who want to establish their tech startup not to leave their day job right away and divide their time between managing their startup and their day job at first. They can do this until they are confident that their business will succeed, and they will not lose a lot of money in the end.

Cash Flow Portal

Cash Flow Portal is a real estate syndication software that can help streamline syndication, equity raising, investor management, and connecting with new investors.

Perry founded the company after raising $4.3 million for 70 investors in his first real estate syndication, which required him to prepare 70 documents. The investors sign the forms and email them back to him, after which he enters the investment amount into his spreadsheet, countersigns it, sends them an email with wire instructions, the investors send the wire, he checks the bank, and finally sends an email verifying receipt of the money. He felt the whole procedure was a lot of work from a technological background, so he looked into various methods to simplify things. He found some software on the market, but they were costly, and he knew he could create better software.

He ended up creating a real estate syndication software that helps syndicators raise money and acts as the first point of contact as soon as their letter of intent gets accepted. Essentially, Perry’s organization is the first vendor with whom the syndicators speak, and as a result, they have a ton of access to what happens next. They also function as a marketplace for both vendors and investors alike.

Building The Company

When asked whether he was the one who codes for the program, Perry said that he did not write a single line of code. He had previously worked as an engineering manager, so he was used to dealing with people. He used this skill to find professionals who would work for his company. His first hire was via the online job site Upwork in 2020. Following that, he began recruiting individuals here and there, and they started suggesting others they knew, so it was only a matter of time until they had a fully functional team.

Competition

According to Perry, he is not concerned about the competition since he recognizes that they are still a new company with much room for improvement. However, he is confident that they have brilliant engineers who graduated from Ivy League universities to help the business succeed. He also said that they are proud of their excellent customer service.

Final Advice

It’s reasonable, according to Perry, if you want to start your own company but are afraid to do so.  However, he says that once you find the confidence to quit your job, it’ll be the best decision you’ll ever make. When it comes to launching a company, investors are typically intrinsically driven; therefore, they always find a way around the hurdles that will allow them to expand their business. On the other hand, Perry believes that before quitting your work, you must ensure that you have made some kind of strategy for the future of your business since once you go, you will no longer have a fallback.

References

More from our guest

• If you are a syndicator looking for a platform or a startup founder interested in chatting with Perry, feel free to contact him at perry@cashflowportal.com.
• You may also find him on LinkedIn by searching for Perry Zheng.
• You may also join their Facebook group, Techies in Real Estate.