Intro: Broadcasting live from the Business RadioX studio in Atlanta, Georgia. It’s time for Atlanta Business Radio, brought to you by Kennesaw State University’s Executive MBA program. The accelerated degree program for working professionals looking to advance their career and enhance their leadership skills. And now here’s your host.

Lee Kantor: Lee Kantor here, another episode of Atlanta Business Radio. And this is gonna be a good one. But before we get started, it’s important to recognize our sponsor, CSU’s executive MBA program. Without them, we couldn’t be sharing these important stories. Today on the show, we have Ari Milrud. He is the co-founder and CEO with Hive. Welcome.

Speaker3: Hey, Lee, how are you doing?

Lee Kantor: I am doing great. I am so excited to learn what you’re up to. Tell us about hive. How are you serving folks?

Speaker3: Yeah. So hive or hive site is the website name. Hive is a contractor marketplace that we’ve been building for real estate investors, specifically fix and flippers in the Atlanta area. This is our first market that we’re going after. And when it comes to contractor marketplaces, oftentimes people think about ones like formerly known as Angie’s List, now Angie and Thumbtack, but those are built for homeowners, and we’re just trying to build a tool that’s great for fix and flippers and all real estate investors.

Lee Kantor: So what’s the backstory? How did like, where did you realize this was a problem and you could solve it?

Speaker3: So I’m still in high school. I’m a senior in high school, but I got into real estate. I got interested in real estate when I was a freshman in high school, and I kind of picked up on on real estate wholesaling, which is a low barrier to entry way of getting into real estate. It’s pretty saturated now. But, um, that’s when I first found an interest in real estate. And then last spring that just interest carried on and I wanted to get into my first flip. Flipping my first house. And and I came across this problem when I started talking to contractors in person for the first time, walking properties with them, learning the pricing. And I just found that there’s a big gap in what it costs them versus what they charge people who they think sometimes don’t know or don’t speak construction. Because let’s be honest, in the first two minutes of speaking with you, they’ll know exactly how much construction knowledge you have. So oftentimes I see even experienced flippers get maybe taken advantage of. And it’s just a super relationship based industry. And that’s when I first that’s just when it first really hit me and I didn’t I looked for a tool that could solve this problem, or I could just post a deal and have contractors bid on the work. And there wasn’t one. And I’m like, I’m only going to be this young with this low responsibility again, so I might as well just go for it. Try to make it.

Lee Kantor: So educate our listeners on how this works. So like, what if somebody says, okay, I’m going to flip a house. What does that mean? And what does that entail typically.

Speaker3: So you’ll look for a deal which already in Atlanta that’s pretty hard to find a good deal. But yeah, you’ll look for like a distressed property. That’s usually the route people go distressed property and and find, you know, a contractor for it. You’ll you’ll purchase.

Lee Kantor: But are you. So first you’re like first you have to find the property that is in your mind undervalued. And you know that if you fix it up, you can make money selling it, right.

Speaker3: You’re looking for an RV after repair value that that leaves you enough margin for you to make, uh, you know, your buck.

Lee Kantor: And then is there a rule of thumb when it comes to that? Are you looking for something that I can double or triple like? Is there a number that you’re kind of aiming at when you see a property for?

Speaker3: For fix and flippers, the typical number tends to be around. I think it’s 25% of the the RV is what they’re looking to make.

Lee Kantor: Um, so you got a quadruple. So you. So if you buy a house for 100 grand, you want to sell for 400 grand.

Speaker3: Um, I mean, I mean, it differs like, every, every flipper goes for their own margin. Like, there are people who are pretty greedy when it comes to it. And that’s why they they lowball on a lot of deals. Um, but, you know, like, let’s say you’re selling a house for 400,000, um, or that’s where it’ll sell for after you’re, you’re a lot of flippers will aim for that. You know that 25%. They’ll aim to make close to 100, 100 grand on that.

Lee Kantor: Um, is that what they want to pay for the property or or.

Speaker3: That’s what they want to. That’s what they want to make on the on the.

Lee Kantor: That’s what they want to make on the deal.

Speaker3: Yeah. So so paying for the property, um, what they pay for the property ultimately is, is decided from how much, you know, renovation work it needs so that that those numbers.

Lee Kantor: Okay. So that’s where the contractors come in.

Speaker3: Right, right.

Lee Kantor: And so you. If you don’t have a stable of contractors you can trust and can give you kind of predictable pricing, then that could blow up your deal in a blink.

Speaker3: Exactly, exactly. It’s everything after the purchase. And it’s it’s actually doing the work and getting the the the renovation.

Lee Kantor: So do you have to have that? Do you have to have that kind of in your pocket before you even buy the property, like you have to, or else you’re taking a big risk that you’re going to be able to get, um, contractors at a price that you think is reasonable.

Speaker3: Right? Exactly. And you can walk the property with contractors before, um.

Lee Kantor: Is that what you recommend?

Speaker3: Um, I mean, I’m not I’m not a super experienced flipper. Um, as I was gonna do my, my first flip last spring, and then we were. And then this is where I kind of found the problem that we’re now trying to solve. But, um, um, I won’t go ahead and, like, recommend. Hey, do this this way. Um, there’s so many ways to.

Lee Kantor: Right. But if you have Contractors that are going to give you. Okay. In order to, you know, get the house in a shape that you can get that 100 grand from, it’s going to cost you X, and you got to be able to trust that it really is going to be X. And it isn’t two x.

Speaker3: Right? Right. It is. It is definitely risky. You could run into problems in the renovation that you didn’t see before that, uh, when you were first looking at the deal, maybe under the, uh, floorboards or something that, you know, right.

Lee Kantor: All of a sudden there’s asbestos and now it’s game over. Like, now you’re just you’re going to lose money or you got to sit on it for longer.

Speaker3: Exactly. So yeah, it’s a big risk. And, uh, especially since here in Atlanta, there’s a lot of newer flippers since it’s just becoming more and more popular. Um, they don’t have all those, you know, connections to, like, a stable, uh, source of of contractors that super experienced, uh, flippers would have now that they’ve been in the game for so long. Um, so, you know, what you’ll do is you’ll probably when you’re looking at a deal, you go on Google and you search up contractors near me. You’ll click the first couple that have a bunch of fake Google reviews, and you’ll kind of just trust that and then, um, trust that they’re giving you a good price and then trust. Even if you’re getting three different quotes you still have, there’s still a lot of trust and a lot of risk involved.

Lee Kantor: Yeah. I mean, look, I’ve never flipped a house, but I’ve worked with kind of contractors over the years in my own house. And I know that every time you hire one, it’s an adventure because, you know, sometimes they don’t show up. Sometimes, you know, they get another job that pays a dollar more. So now you’re not a priority. Like it’s a very kind of dicey world. And if you don’t have people you can trust, it becomes adds a layer of risk.

Speaker3: Right. And that’s the same problem that we’ve heard, uh, that has been echoed to us this entire journey of creating this platform. Um, that just the problems that people run into with contractors. It’s it gives me a headache just listening, listening to it.

Lee Kantor: But yeah. So so you say, okay, I can see there’s an opportunity here. So if we can create a two sided marketplace on one side is not homeowners, it’s not people that just want, you know, a new light switch or, you know, a ceiling fan. These are people who want to flip a house. So they’re a different kind of customer, and they’re going to hire a different type of contractor.

Speaker3: Exactly. Yeah. Very different type of consumer on on our platform. Um, it’s not smaller jobs like you said. Um, these jobs are upwards of $50,000. And the main thing is that these are going to be returning customers because.

Lee Kantor: Right, if you’ve got a good one and you can keep them busy, they’re, you know, that’s kind of a repeat business built in.

Speaker3: Right? Exactly. Yeah. There’s only so many um, you know, if you’re a homeowner, you own one home. There’s only so many times you can fix one roof, right? Uh, yeah. And then also the, the, the other thing with homeowners that when it comes to contractors wanting to work with them, is, you know, there’s a lot of delays with flippers who’ve done it maybe once or twice before. They kind of know how it works. Now, the the order of things. And, you know, they don’t need to check with a spouse on if this color is good or not.

Lee Kantor: Right. It’s a different they’re doing things that look the same, but they’re not the same.

Speaker3: Exactly.

Lee Kantor: So now okay. So you say okay there’s an opportunity here. So I got to get both sides of this marketplace going. If I, if I make this platform successful. Right, I got to have people that are going to hire contractors and I got to have contractors that are going to be good. So how do you kind of vet the contractors and and do you do any vetting on the other side of the, uh, the flippers.

Speaker3: Right. So yeah, that’s one of the main things because, um.

Lee Kantor: Because Uber, Uber checks me, you know, I get rated too. So, you know, both sides got to be I.

Speaker3: Yeah. And I was I was about to bring up Uber because um, you know, let’s be honest here, if Uber had come out today and you need to go somewhere and, um, this platform just came out and this person has zero ratings or reviews and this is a new platform. You’ve never heard of this. You’re most likely not going to get in the stranger’s car. Um, so since we’re a new platform, we want to build credibility. So this, this, you know, first round of contractors that were, uh, manually were manually vetting each one, uh, making sure that, you know, we don’t run into major problems and they have, uh, experience of reliable and quality work. Uh, and to do that, we check, um, another thing I’ll add here is that, um, flippers tend to work with unlicensed, sometimes work with unlicensed contractors just so that they can get a good price and, and grow their margin. Uh, and that’s one thing, you know, we found out more into the idea phase when just like, talking with contractors. So we had to, um, kind of adjust uh, for, for that. And so the way we vet contractors is it’s like. It’s like an application they, they put in all their basic information. What types of work. What type of work they do, uh, their timelines for like basic stuff. And then we ask, are they licensed? And if they’re not licensed, then we’ll ask for their general liability insurance, uh, and then their surety bond information if they have that, um, and we kind of look at everything together and we at the very end, we ask for at least, uh, at least two references on and then the project information of projects they’ve done with those references. Uh, and then I’ll go I’ll call those those references, ask them questions. Um, and then we’ll, we’ll, we’ll that’ll create their initial score on the platform, which we have ratings for each contractor out of ten from, from 1 to 10. Um, and those references kind of help come up with that initial score. Um, and. Yeah, that’s that’s how we’ve been vetting contractors.

Lee Kantor: Now, how do you vet the flippers to make sure they’ll pay on time? You know, all that stuff to.

Speaker3: The flippers were just asking for for, you know, um, projects they’ve done in the past. Um, but it is kind of a more of a trusting flippers because some of our, uh, the, the customers were going for are newer flippers because they don’t have these, these relationships yet with great contractors that they use every time. Um, so on that part, it’s gonna, it’s gonna be more of a trusting thing, just kind of making sure they’re, they’re, they’re good people. And a lot of flippers were initially gonna have be posting jobs, these flippers that I’ve worked with in the past or that I already know just from being real estate these past couple years. Um, and so that’s kind of where we’re at with that. But yeah.

Lee Kantor: So, um, how did you kind of take it from the idea stage to, um, you know, the platform stage? Are you a Technologists. Do you know how to code?

Speaker3: So I’m I’m a non-technical, uh, founder and but my co-founder, Louis, um, Louis singer, he goes to Mount Vernon, uh, school in Sandy Springs. Um, he, he had some coding background. And when I was looking for a co-founder to work on this with, um, I didn’t want to just, you know, grab the the know it all guy who could build the whole thing in a week and and, you know.

Lee Kantor: So you didn’t want to go to Fiverr and just say, hey, build me this thing, right?

Speaker3: Totally could have done that. Um, but I wanted to find someone who was young like me. Uh, obviously ambitious. Uh, humble is another very key thing. Like, I want to make sure they they’re not just gonna, um, make it all theirs and then take the idea and run with it or anything like that. I want to make sure it’s humble, willing to grow, and then, yeah, the most important thing is willing to grow at the same rate that I am. Um, and I feel like Louis was just had all those attributes And, um, and he had some coding experience. He built a website for, um, I think it was Furman University and then the startup museum of Atlanta a couple years ago. Um, and then, yeah, he worked on another startup before, but it didn’t really go that far. Um, so that’s where I kind of found my coding, my, my coding expertise.

Lee Kantor: And did you know him before?

Speaker3: He’s like in the same he’s a year younger than me, but he’s in the kind of the same social circle. So I’ve I’ve knew his name, but I’ve never actually known him. And then I reached out to him, um, in the summer and we got to working on, on hive.

Lee Kantor: So, um, in your peer group, are there other entrepreneurs that are doing stuff like this?

Speaker3: Uh, and do you mean peer group in.

Lee Kantor: In other high schools, you know, friends of yours, or are there other kind of budding aspiring entrepreneurs like you?

Speaker3: Um, I mean, there’s, uh, Every now and then. Maybe you’ll see one from a different school or something. But it is hard to find kids who are like, building, like super ambitious, like projects like this. Um, but I do see, like, some entrepreneurial kids in my school, and, um, and I love to see, like, them going after their own thing, like, there’s, uh, these two kids in my school who are working on, um, this, uh, service based business where they connect high schoolers, uh, with, uh, local businesses and give them internships. And that’s something I love to see. So I do recognize it, um, when it’s there.

Lee Kantor: And is there any kind of, um, place for you to gather and meet and interact? Is there any kind of group or, uh, that you’re a member of that kind of encourages that?

Speaker3: Um, not really. For, for high school, we kind of had to expand to, to college to find the group of builders that we were looking for. We we ended up joining a program at Georgia Tech, um, last semester in the in fall and through atdc. Um, no, it’s not that one. It’s, uh, startup exchange, uh, the Genesis program at Georgia Tech. Um, and that was like a 5 or 6 week program where it’s just, um, all it’s like all Georgia Tech kids who, uh, just came together and went through like this, the idea phase and all this. And, um, and then it ended with a demo day at the Startup Exchange Summit in, um, in, in at Georgia Tech, uh, where the fellowship teams pitched. And then the Genesis teams did their demos and there was a competition. We actually ended up winning second place, which was really cool. Um, and that’s where that’s where we found some, some really cool people who are building really cool things.

Lee Kantor: And then that was, was that the first time you felt like, okay, this is something that could become real, like or did you feel that beforehand?

Speaker3: Um, felt it more beforehand. We just wanted to be. We wanted to be more involved in an environment where this is like the norm we’re building. We’re building cool projects. Is is is normal. Like, everyone’s doing something, right. Um, and I feel like I couldn’t really find that in, in a high school setting. Um, but at Georgia Tech, that was everyone was doing something really right.

Lee Kantor: If you get into that world, that’s that’s normal, right? Everybody has been in the startup, has their own startup, you know, worked on one internal. They’ve done it five times by the time they graduate.

Speaker3: Everywhere there it’s everywhere there. Um, big ecosystem there. Prize picks went through there. Um, the founder of reptile just did a talk there that we, that we went to and listened to him big, big names from there.

Lee Kantor: Yeah. There’s no shortage of entrepreneurs in that area around Georgia Tech, that’s for sure. Um, so what do you need more of? How can we help you?

Speaker3: Um, just follow the journey for now. I mean, we’re we’re we’re we’re building our founding group of contractors. We’re vetting them. We’re we’re having a ton of fun with it. Um, but.

Lee Kantor: So you need more contractors, and you need more flippers to know about hive.

Speaker3: Yeah, yeah. For now, it’s it’s contractors. Um, mainly because a lot of the contractors that we speak with over the phone and stuff, it’s, um, they, they, they often they get calls from, like, lead gen companies and marketing companies trying to help them with get more leads, or so when we call them initially like they think it’s that and they’re immediately like, no, we’re not interested. Or what we’ll run into is, um, a lot of primarily Spanish speaking contractors. So one of the things we want to do with hive is make it completely like multilingual so that we can allow for these, um, these, contractors who don’t speak that much English to still get business. Um, so, like if we run into someone who’s Spanish speaking, I’ll have to break out a, like, a script in Spanish to explain what hive is. Um, and but for the main part, it’s, you know, contractors that aren’t super open to, like, new technology or they know Angie’s List, um, or they know thumbtack and they don’t want to be charged for leads. And we have to explain, hey, we’re not charging for leads. Um, you just go on here, you select what types of jobs you’re looking for, and then when the flippers start posting jobs, we’ll notify you. Um, and even then, there’s some who are like, oh, no, I’m okay. And it’s just like, kind of blows my mind. Like, we’re not charging any of you at all just for the sake or right now for the sake of, you know, growing the website and, uh, you know, so.

Lee Kantor: Well, it just shows you how much distrust there is in the kind of internet stuff. So that’s why you got to really be super buttoned up when it comes to credibility because they’re looking for a reason to say no, they’re not looking for a reason to say yes.

Speaker3: Right, exactly.

Lee Kantor: Um, so if somebody wants to learn more and connect, what’s the website? What’s the best way to kind of get them on your radar?

Speaker3: Um, yeah, the website is hive site. Um, and if anyone wants to reach out to me for any questions or anything like my, my email is reactive site, um, or you can find me on LinkedIn. It’s just my name. Um, and yeah, I’d love for people to follow the journey. I think we’re building something really cool, and then we’re going to grow it all throughout the southeast and hopefully eventually nationwide.

Lee Kantor: Cool. Well, congratulations on all the success, man. You’re you’re doing a hard thing.

Speaker3: Yeah I appreciate it. Thank you. Lee.

Lee Kantor: All right. This is Lee Kantor. We’ll see you all next time on Atlanta Business Radio.