Sean O’Toole is CEO & Founder of PropertyRadar, the property data and owner information platform real estate pros have trusted since 2007 to do billions of dollars in deals.
Sean got his start with data in Silicon Valley during the dot-com boom. After the dot-com bubble, Sean flipped properties for five years, and with data-informed insights, got out right before the housing bubble burst.
Sean launched ForeclosureRadar in early 2007 before anyone had heard of the foreclosure crisis.
In 2013, he relaunched ForeclosureRadar as PropertyRadar, a greatly expanded property data and owner information platform serving a broad audience of real estate professionals and property-centric businesses.
Today, PropertyRadar remains the go-to platform for data-driven real professionals intent on leveraging comprehensive property data and owner information to grow their business directly.
Episode:
Narrator This is The Norris Group’s real estate investor radio show the award-winning show dedicated to thought leaders shaping the real estate industry and local experts revealing their insider tips to succeed in an ever -changing real estate market hosted by author, investor, and hard money lender, Bruce Norris.
Bruce Norris Thanks for joining us. My name is Bruce Norris and today we have a very special guest Sean O’Toole. Sean O’Toole was CEO/Founder of PropertyRadar, the property data and owner information platform real estate pros have trusted since 2007, to do billions of dollars in deals. So, I’m gonna start with data in Silicon Valley during the dotcom boom, after dotcom bubble burst, Sean flip properties for five years getting out near the peak. Sean launched ForeclosureRadar in early 2007. Before anyone heard the foreclosure crisis was coming. In 2013 he relaunched ForeclosureRadar as PropertyRadar, a greatly expanded property data and owner information platform serving a broader audience of real estate professionals. Today, property radar remains the go to platform for Data Driven Real Estate Professionals intent on leveraging comprehensive property data and owner information to grow their business directly. Sean, it’s been a long time. How are you doing?
Sean O’Toole I’m doing great. Yeah, yeah, things are really good for us.
Bruce Norris That’s good. I’m glad to hear that. You know, it’s funny. I thought about you and lunch that we had with somebody a long time ago. You remember Eric Jensen?
Sean O’Toole Yeah. Oh, yeah, for sure.
Bruce Norris Yeah. And I just opened his book. And it has a lot to do with talking about inflation and all the policies and things like that. And I was I even looked up online to see if he’d written a sequel. Do you know, do you still are you in contact with him at all?
Sean O’Toole I am. And he’s actually the founder now of a pretty innovative virtual reality company. And we’ll still talk a little bit of economics, but he’s not putting the time and effort into that, at least publicly as he was before.
Bruce Norris Okay, well, I know we’re gonna cross into some of that word, that world too virtual reality. So, let’s, since you brought it up, how does that create revenue for him? And what what does that entail? I’m just curious.
Sean O’Toole So, he started off with a, an exercise bike, and that, that was gamified. So, you put on the goggles, the virtual reality goggles, and transports you into a different world, and you’re on a bike. And then he had different games and like, you know, like, but for example, you could fly and, you know, the faster you pedal, the higher you go, and, you know, things like that, and, and kind of trying to gamify exercise and make it fun. And but you know, I still think they do that. But they have a really innovative, one of the hard parts in virtual reality is, is how do you move around, right? Because you’re, you’re usually stuck in one place or in a small room. So, how do you pretend like you’re running across great areas or things like that?
Bruce Norris I’ve seen some funny videos where people actually attempt to do that or smash their, you know, their TV off the wall.
Sean O’Toole Oh, totally happens all the time. You know, for the Facebook, the Oculus one, Bruce, there is an amazing boxing game that I think you would absolutely love and you can box with friends. So you and I, across the country, put these things on and have a boxing match just for fun. I think people would pay to watch that.
Bruce Norris Oh my god, you know what’s so funny about? You know, one of the things that I remember most about you and,you and my interaction is every time we got into, we’re going to the the event at the Nixon library, and we’re in the limo. And, I, you’re just talking and you bring up stuff I’ve never even heard about, every time. So, you’re talking about 3d printing. Now, this is this is a long time ago, a long time ago. And I’m like, what? You tell me what it is. And I’m just going and I get home that night. And I remember I have to look this up. And there was already an example of, there was this kid that was born with a defective heart and they took a scan of his heart and printed his heart. So, the doctor could hold the defective heart and know exactly where to fix it. I was like, Oh my God.
Sean O’Toole Yeah.
Bruce Norris You know, it’s just crazy stuff. Now your son is involved in something that’s connected with 3d printing as a business, right?
Sean O’Toole He has a 3d printing business and he’s in school for mechanical engineering. And so yeah, definitely has done a lot there.
Bruce Norris Well, what was cool about that that was well thought out, because I remember, you go back to your being young, your dad bought you a present when you were 10.
Sean O’Toole Yeah.
Bruce Norris And what was that present?
Sean O’Toole It was an Apple II? Yeah, early Apple II?. So, 1978, I was born in 67. But I still 10 and 78. And, yeah, and it really, you know, changed my life. I went out and did sailing and did normal kid stuff during the day, but my bedroom was on the other end of the house from my parents. And so I would stay up till 2, 3, 4 In the morning, you know, playing with this computer, and there wasn’t much to do with computers, and there weren’t a lot of games and stuff. So, I learned to program and it just, it gave me every real opportunity. I’ve had an adult in my life.
Bruce Norris Well, you also improved an entire industry. I mean, actually, there’s no doubt about that, because that’s one of the things that ForeclosureRadar, you know, when you know, after, after the.com stuff, and you kind of how did you get into the property buying business, by the way, because that’s a, that wasn’t an easy transfer of, you know, what you were doing to that?
Sean O’Toole Yeah, you know, it’s a little bit long. So, I’ll try to make it super short. After the dotcom crash, I left Silicon Valley, moved to my vacation house, took a year off, but started hanging out with a buddy, who had all this I was not working my, this guy across the street had all this free time. He was a commercial real estate developer, but he was making a few million bucks a year, or maybe more, right. And he had all this free time. And I was like I was really like… What do you do? And he introduced me to a friend of his that was buying foreclosures and literally like, writing stuff down on Polaroids and keeping these things in a shoebox to kind of organize and I’m like, he’s like, you gotta go write software for this guy. And, you know, we talked about in California, the 40, thieves, and I’m like, I’m not writing software for 40 people. I’m gonna write software for millions, right?
Bruce Norris Right.
Sean O’Toole But then he gave me his deals, and I saw the profits he was making. And I did okay in Silicon Valley. And I’m like, Well, if I can make that kind of money, and have my friend’s lifestyle, that sounds better than going back to Silicon Valley and killing myself at another startup.
Bruce Norris I remember the yield was some ridiculous thing. I remember you asked him for basically his annual yield. And it was like 70, or something percent.
Sean O’Toole 80, 80. And he didn’t know, right?
Bruce Norris Yeah I remember.
Sean O’Toole Yeah. And so he finally said, Well, here’s all my files for last year. And yeah, these meticulous file folders, each one like an inch thick. And he said, Why don’t you take all of my deals for the last year? And because what I wanted to know, I can see how you can make money on a deal. But can you keep your money invested often enough that if you have a pool of capital, that you can make a decent return on that, right? You know, you got 2 million bucks, but you only keep you only do two deals in a year. And you make a really good return on those two deals, but it’s just as it may not make a very good return on the money. So, I want to say you have too much capital.
Bruce Norris Right.
Sean O’Toole Including when it sat in the bank, and it was an 80% annual return on his pool of capital, even with the time it sat in the bank.
Bruce Norris Yeah.
Sean O’Toole I was like, Okay, I’m in.
Bruce Norris Yeah, well, when you got in, there wasn’t really a reliable source of data. It was treacherous, and it was always wrong. And inaccurate, you spent so much time going to sales that never were going to occur that day. It was tough. And there was not it wasn’t inexpensive, either. The data wasn’t inexpensive.
Sean O’Toole The data that was available wasn’t inexpensive, for sure. And, you know, and that’s just my nature, right? I’m a software guy problem solver. And so, I faced that problem early on, built a system for myself, and then in 2000, you know, took that and made it available for, we had to rebuild it. So, I made it for myself as for tech folks that there was single tenant, I needed to rebuild it as a multi tenant solution. In other words, handle lots of customers rather than just one me
Bruce Norris Yeah.
Sean O’Toole Rebuilt the whole thing and, and that’s what I went to market with in 2007.
Bruce Norris You change the cost of getting the data by I mean, probably 90% It was crazy.
Sean O’Toole What was kind of dumb, you know, so you had the RealtyTrac and Foreclosure.com folks out there that charge 50 bucks a month for notices, but you couldn’t really use those services to go bid at the trustee sale auctions, and the services that did help you get data that was, you know, more timely, more accurate cetera, that you could use for that. Still didn’t include like, transaction history, title history, that kind of stuff. You know, we’re very expensive. And that’s kind of what I built, had built for myself. But the only pricing out there was these, you know, low end, you know, foreclosure notice services, RealtyTrac and foreclosure.com. And they charge 50 bucks. So, I charged 50 bucks. I probably could have charged 5000.
Bruce Norris You ever had, you’d have less of an audience, but you the guys that paid the five grand that did it full time would go and recognize the value. That’s for sure.
Sean O’Toole Yeah. I got so many phone calls from the long term players going well, what are you doing? You’re not charging enough for this?
Bruce Norris And that’s right.
Sean O’Toole You had many competitors. And you know, we’re angry that you’re not charging enough.
Bruce Norris Well, that’s interesting, they that that is sad, because when I went to the trustee sale business originally. I mean, if there were three people there, including you, that was a lot. Yeah. So when you have, you know, have an audience now like it’s like a, it’s a public auction? It’s like, oh, my gosh. So, yeah, it definitely, definitely made it easier for many more people to participate, that’s for sure. Again, while we’re in that limbo, there were a couple of things that came up. And I’m really trying to think about, one of the things that you said to me, and I always thought about this is that one of the main problems that we’re going to have to think about is how to have society when we have 50% unemployment. And, you know, if I didn’t know you’d I’d blow that off and go, Okay, well, that’s ridiculous. But then I start looking at some of these things. I like if I watch Elon Musk’s factory, build cars, there’s an element that’s missing. It’s a human being. And then you look at the self driving cars making progression. And you and I talked about that I had never even heard of that concept until I was in that limo one year. So, that was, you know, you knew that a way, way before that was that was coming.
Sean O’Toole You know, they don’t talk about this much. But go look at the stats on McDonald’s, and the number of people they employ. So McDonald’s has been deploying more and more and more technology in their stores. And I think their total employment, I don’t have the stats right in front of me, but something like 50%. And that’s not because they closed half their stores.
Bruce Norris Wow.
Sean O’Toole And I could be I could be off there. Because I you know, I haven’t followed it that closely. But there’s lots of examples of this in places that you wouldn’t think in places where you don’t see.
Bruce Norris Well, yeah, that you know, just happened to watch some things about Elon Musk because one of the articles or programs I just saw is that he’s, he’s reduced his robots by 80% in the front part portion of building the Tesla. And you’re going okay, they eliminated all 100% of the people on the front end, and now they’re replacing the robots with more efficient. So, I’ll just kind of shake your head and go, Okay. Wow. Bruce, I was just watching an episode of the Mandalorian last night. And they were in this world where the robots were doing all of the work. They had voted to have the robots do all the work. They had some rogue robots that were like hurting people. And so the question was like, Well, why don’t you just turn the robots off? You’re in control? Oh, no, we can’t do that. Because then nobody would be able to do anything. They really couldn’t do anything, because the robots had taken over every aspect of labor. And everything in this world is funny.
Sean O’Toole So I just looked up the McDonald’s stats, so number of McDonald’s locations in 2022 is 40,000, right? 2012 was 34,000.
Bruce Norris Okay.
Sean O’Toole And in 2012, they had 440,000 employees, and today they have 150,000.
Bruce Norris Oh. Are they selling less burgers?
Sean O’Toole Well, no. And they’re their revenues are up as well. And their profitability was one of the like, I think in 2021, it was one of their highest profit years in a long time. So, yeah, I mean, it’s just, it’s one of so well, here’s their annual revenue was 23 billion in 2022. It was 27 billion in 2012. So, the revenue is down so but you know, revenues down about 10% and employments down about 60, 60%.
Bruce Norris Wow, that that’s really interesting. Okay. When we talked about originally talked about this self driving cars, you were trying to explain to me, because I said, I remember saying this almost exactly. I said, Oh, yeah, I can’t wait till I’m driving next to an on man to car base. Again, and and you said to me that, well, that car will be driving safer than you can. And you tried to explain to me that simultaneously, that computer is making the best decision not just to avoid something with me, but to avoid something with everything at the same time. And then you did remember the Rock Paper Scissors example, you use that, that if you play that game against his computer, you get beat 100% of the time, because it picks up what you’re going to do. So how far is that progressed? And the reason that’s, what industry? Does that disrupt more than anything?
Sean O’Toole Yeah, you know, I think, you know, so I’m gonna just backtrack just a little bit right.
Bruce Norris Okay.
Sean O’Toole One of the things on like self driving cars, is I believe in that statement in the long term, and in most scenarios, right, it the reaction of the computer is faster than our human reaction period, right, that that’s true. What gets hard is all the things that happen in the real world, right? Like, I live in snow country, and right now, most of the lines are missing from the roads. I kind of know where those lines used to be, I kind of have a feel for it right? Like, and computing, you know, I have a car that has a self driving mode and it the lines go away and it goes, Ah, you know, it can’t do any thing. So training, you know, that I guess there’s a difference. So the reaction times better than humans right?
Bruce Norris Right.
Sean O’Toole But the best computers are nowhere near our brain, right? So, there’s this balance of things, and it’s getting better and better. Moore’s law, computer power continues to increase, these models continue to increase, you take something like chat GPT I don’t know, if you’re following that large language models, they have way more information than we ever personally can. They’re the computers that are processing that information still aren’t as powerful as our as our mind. So, there, there is a balance there, where you know, and the last 1% 2%, like getting most of self driving workings really pretty easy. Like you can do that as a high school kid if you go dive into this stuff.
Bruce Norris Okay.
Sean O’Toole But getting that last few percent right, which really is what’s going to ultimately make it safe is really, really hard.
Bruce Norris Okay. All right. It’s funny, because I wrote down, I wrote down by from memory chat, C, D, K, and then I looked it up and oh, yeah. GPT. So yeah, I’m an expert on that. But I was one of the things I was going to ask you about that. Here’s what came up recently, and it kind of blew me away. So, John Burns, you know who he is?
Sean O’Toole Yeah. So absolutely, yeah.
Bruce Norris So I asked him, I said, I wonder what the value of $11 trillion of mortgage debt is, that was written for 30 years that, you know, 4%, let’s say, I, within 15 seconds, I get a response. And he copies what chat GPT said. And it was an explanation. And then a formula that looked like it was crazy if some calculus formula and gave you a book value of all of that. And of course, it probably was done in three seconds, and 67 cents on the dollar. Now, that was kind of an aha moment for me, because I’m thinking, well, if he can respond to something that technical, instantly, what the heck is it doing to some other industries?
Sean O’Toole I mean, yeah, I mean, it can write software. I’ve seen it. It’s, it’s really, it’s very impressive. But here’s the before people get too scared, here’s what you have to remember, right? So it’s gone out in it’s consumed all this information, basically, on the internet, right? And so you have all these code repositories like you know, git hub and other things that have example programming, and it’s eaten all of that right. And it kind of understands it, and it can start putting it in context and it’s incredible. But if you ask it something where there’s no information about that thing on the internet. It can’t answer, right? So, when it can’t think of new things that don’t exist, yet, it can’t think of data that doesn’t exist on the, you know. So, for example, if you ask it about real estate statistics, if somebody’s published, that particular statistic you’re looking for, it will be able to essentially quote it or rephrase it. But if that statistic you’re looking for, it’s just in the raw data, it doesn’t have access to all that raw data. It can’t be It can’t answer. So, there’s still major limitations in what it can and can’t do. But, you know, you want to ask about, you know, which liens are wiped out in a foreclosure in Louisiana, right? Like, it’s going to, if it can find some references to that, it’s gonna give you a pretty good answer, probably a better answer, than most humans.
Bruce Norris Bruce, two questions for Sean really quick. One on the driving does, does access to the internet, or, you know, being able to stay, you know, connected, have anything to do with, you know, the car, still being able to function like I go out to the desert, now, there’s no cell services, it’s still going to be able to continue to service and how, you know, with the society and how reactive everybody is to media, you know, how long before somebody gets run over? It gets in an accident, and oh, it was the unmanned car.
Sean O’Toole Well, so keep in mind that we as humans, kill people every day with cars, right? So, the unmanned car kill somebody is the wrong measure. The right measure is does it kill fewer people than human drivers do? There’s a lot of really bad human drivers on the road, right? I personally know some that I’ve just been waiting for them to kill somebody. Because they’re such bad drivers right? So see, this is one of the problems and it’s also one of the promises to media, right? Like the soundbite headlines, right? Oh, you know, self driving car kills somebody, oh, my god, self driving cars are bad. But self driving car kills one person, you know, 1000 fewer than people killed today. Oh, okay, that looks pretty good, right? So we need to be careful about how we consume that that kind of information and how we think about it, self driving cars are going to kill people. There’s no question. Right? The question is, do they kill fewer people? And then on the connected thing, right. So. one of the you know, one of the things that gets really powerful is you can take a large set of information, and compile it down to algorithms that can be executed on very quickly. So. this is, you know, like the large language models and other things is, is how do you take large pieces of information and turn them into your $11 trillion, $11 trillion mortgage question, right, and then write out a formula, right? So, that’s taking that question and, and, you know, you could go do line by line data analysis, but you can probably, you know, turn it into a formula that gets you an approximation pretty quickly based on the existing data and what the trends we’ve seen and all the rest. So, the cars, big picture, what I’m trying to say is, we’re going to see these things. That self driving engine lapse into algorithms that can live in the car and don’t require connectedness, they can be improved with connectedness, and they can improve from learning from the cars around them. And this is where it gets really interesting is when we start having the cars talk to each other, right? So, we could have everybody traveling at 200 miles an hour, six inches apart, if all the cars are talking, right. And the car in the front, you know, maybe has a lead car that’s even farther, whatever and like and they know everything that’s coming because it’s all happening in real time. And if there’s any disruption that instantly gets communicated back so like there’s so much that’s possible but the right now all these cars are self driving by themselves. We get them talking to each other it becomes even safer.
Bruce Norris Since Elon Musk came up what do you think what do you, do have an opinion on his warning about pausing the AI learning?
Sean O’Toole Um, you know, it’s not, it’s a debate we should definitely be having and it should be the most important things, Democrats and Republicans, that kind of thing should be the most important thing Democrats and Republicans are talking about it Congress is talking about and we we don’t elect people smart enough to talk about these things. There’s probably 2% of our elected officials that are smart enough to have real conversations about the things that matter for our future.
Bruce Norris I remember when the when the mortgage crisis hit. And there was discussion at the Senate and in Congress, and, you know, they were trying to comprehend how the mortgages were funded and all that and you realize, holy cow, you’re making policies and you haven’t got any clue.
Sean O’Toole And politicians still haven’t taken enough blame for the 2008 crisis, right? Like, it was the Gramm-Leach-Bliley act that repealed Glass-Steagall, we still didn’t put Glass-Steagall back in place. We didn’t fix that after you know, and that was Gramm-Leach-Blile all Republicans but signed by Clinton a Democrat, right. You have Commodity Futures Modernization Act, allow these mortgage backed securities and allow these fake insurance products that had no backing behind them, right. And that has that still really hasn’t changed. And again, Republicans and Democrats voted for that. I mean, it’s, and we didn’t fix any of it.
Bruce Norris Hey, that’s gonna do it for this week’s episode of The Norris group, real estate radio show and podcast. Be sure to join us for part two of our conversation with PropertyRadar’s, Sean O’Toole.
Narrator For more information on hard money, loans and upcoming events with The Norris Group, check out thenorrisgroup.com. For information on passive investing with trust deeds, visit tngtrustdeeds.com.
Aaron Norris The Norris Group originates and services loans in California and Florida under California DRE License 01219911, Florida Mortgage Lender License 1577, and NMLS License 1623669. For more information on hard money lending, go www.thenorrisgroup.com and click the Hard Money tab.