Litan Yahav is a tech entrepreneur and co-founder of Vyzer, a secure and automated platform that tracks your entire investment portfolio, tailor-made for investors. Discover his insights on risk, passive vs. active investing, and the birth of his innovative company.
Connect with Litan Yahav on LinkedIn https://www.linkedin.com/in/litanyahav/
Connect with Ben Fraser on LinkedIn https://www.linkedin.com/in/benwfraser/
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Transcription
Ben Fraser: Hello, Future Billionaires! Welcome back to another episode of the Invest Like a Billionaire podcast. We’ve got a really cool episode for you today. I interviewed Latanya Hoff, who is a co-founder of Vyzer and has a really cool story. So Latanya is actually a tech entrepreneur who sold a company and had a liquidity event and had to learn how to turn that liquidity into investments and create an investment portfolio, and he really did a lot in real estate and the kind of private alternative space.
And we talk about that journey of how he went from buying some rentals to investing more passively in syndications, how he views risk working with other operators versus doing things actively and the trade off of the return on your time and doing that. And then.
He actually ended up as he’s building his own portfolio, seeing some of the challenges of creating more work as he’s doing more investments, trying to consolidate all the information, tracking performance. And he ended up building another software platform called Vyzer, which we talk about, and it’s really cool.
It’s designed for high net worth investors that are investing in syndications and to be a one stop shop. to be able to have a simple consolidated view of all the investments you’re making in the private alternative space and actually creates really cool transparency in the space. So you definitely want to check out this episode if you’re just getting into investing in syndications or you have been for a long time, a lot of invaluable insights that he shares and a really cool platform you’re going to want to check out.
So we’ve got some links down in the show notes. You can check it out. Hope you enjoy this episode. This is the Invest Like a Billionaire podcast, where we uncover the alternative investments and strategies that billionaires use to grow wealth. The tools and tactics you’ll learn from this podcast will make you a better investor and help you build legacy wealth.
Join us as we dive into the world of alternative investments, uncover strategies of the ultra wealthy, discuss economics, and interview successful investors. Looking for passive investments done for you?
With Aspen Funds, we help accredited investors that are looking for higher yields and diversification from the stock market. As a passive investor, we do all the work for you, making sure your money is working hard for you in alternative investments. In fact, our team invests alongside you in every deal, so our interests are aligned.
We focus on macro driven, alternative investments, so your portfolio is best positioned for this economic environment. Get started and download your free economic report today. Welcome back to another episode of the Invest Like a Billionaire podcast. I am your host, Ben Frazier, and very excited to bring our guest on today, Natan Yehav.
Who is the co-founder of Vyzer, which I’m super excited to talk about, which is an automation and a platform for passive investing. And their whole motto is keeping passive investing passive, which is awesome and exciting to dive into what that means. But let’s on, thanks for coming onto the show.
Litan Yahav: Thanks Ben. I’m super excited to be here. Thanks for having me on the show.
Ben Fraser: Yeah. So we actually connected just a few months ago at another conference and I heard you present. Tell about your story and share about this really cool platform that you’re building. Yeah, I was like, man, I got to get him on our podcast because this is so interesting.
I think it’d be really valuable. So before we get into all that stuff, let’s, I want to hear your background and how did you get to where you are now? It’s a fascinating story. So share a little bit of that.
Litan Yahav: Like where to start. Personal background. I’m 41 and married. I have three kids born in the States.
When I was nine years old, my parents took us on a trip around the world. First stop was Israel. Then they said we’re staying here and we’ve basically been in Israel ever since. Not the best time to talk about what’s happening. Just bad all over the place, but that’s a whole different podcast, whole different conversation.
Anyway, I grew up in Israel, served in the Navy for six years, then went to school and founded a startup my last year of college and I was in Israel at 24. I went to college and I found this and I was 28. And a very weird industry. wE built a machine and technology for photographing diamonds in 3D.
And that went well, scaled it and sold the company in 2015. Where we had our first windfall and had some money. Didn’t make tens of millions, but made enough. And my co-founder and I just decided to deploy capital on our own. Into a lot of small syndications, private equity deals in the US and Europe.
And doing that, over the years. It was good, but then it became a whole mess and our own model was like, I want to invest passively and focus on building products, spending time with my family, traveling. And at the same time for the money we made for it to continue to grow and not deal with it too much.
But then, when you deploy capital to multiple investment products, multiple private equity funds, it’s like, all right, you have these emails coming in and documents and cash coming in and now that good problems to have can’t complain. But at some point it was like, I was, we were losing our minds and our money was just all over the place and spreadsheets were breaking and we decided to build a software for us to manage our own stuff.
And that just turned into something a lot of people around us wanted. An even broader audience would turn into this startup, which is called Vyzer. So that’s the quick rundown of my background.
Ben Fraser: Yeah, no very cool. And so helps being someone with a tech background, right?
You can create different softwares that suits your own needs, but it sounds like it was born out of. Your own desire and need for just simplifying some of what you’ve been doing. So talk a little bit about, cause it’s interesting to me, you jumped right into, yeah, we made a lot of money and we started investing in private equity and real estate.
That’s, there’s usually a pretty big gap there for most people. That’s a newer thing to where it’s more accessible over the past decade. But what was like, was that just second nature to you? Did you like to have a period of time where you were learning more about alternative investments and did you try to be an active, real estate investor for a while?
What was that kind of journey? Because I think it’s really important to hear for people that are maybe in a similar spot that are maybe newer to alternatives and getting familiar with it.
Litan Yahav: Yeah, a hundred percent. Great point. So we may, we have this windfall. And it’s like, all right, what do we do now?
We got approached by a lot of wealth managers and financial advisors that wanted us to give them our money for them to manage it for us. But the thing in Israel is that retirement is mandatory. So when you work as an employee, you and your employer, by law, need to allocate money into a retirement account.
The 401k or an IRA. Sure. And so every excess cash you have, usually you think about, all right, Where am I to deploy this elsewhere? So this will be, this will grow exponentially. And that created a whole mix of people in Israel that actually do investing, active investing in the U S and Europe and raise capital from Israelis.
And so everyone knows a guy, it’s like such common practice that anyone, everyone’s going to, everyone’s, it’s the, we joke about it that if you have 50, 000 free, you’re going to go and buy an apartment in Berlin you’ve never seen before through a guy, who does it. And all right, so we met with a lot of people, a lot of people that do this and did different aspects of real estate investing.
And our first actual investments were two single family homes bought directly by me and my co founder Tolmar in Ohio through a guy we know. But these were like direct investments, long term rentals managed by a property manager in Ohio, suburb of Cleland. And at the same time we deployed a hundred thousand into this multifamily syndication, just to test the waters for both these types of investing strategies.
And those single family homes just became a whole mess, evictions and damage and municipalities coming at us to fix this and fix that. And at the same time, this multifamily passive deal is like generating more cash without doing anything. And we’re like, why would we want to do this anymore?
Let’s just do more of those. And it took us like four years to get rid of these single family homes because they were really bad. And we just kept on, pushing more capital into passive deals, into syndications, GPs. That does these more passive stuff and raises capital from investors like us.
We did it at the beginning with just Israelis who did that in the US because for us it’s really important, it was and still is, to invest with people we trust. We can look them in the eye and know these people will not lie to us, these people will not cheat us, will not scam us. Because it’s really hard to do that remotely for us and easier because you have these low hanging fruits of Israelis that are doing that anyway.
But at some point, your friends and friends of friends, you’re out of those people who do those types of deals and you only get one or two deals a year max. And we started, I started personally to go and look more into the market in the U. S. and how do I connect with people that I can trust and invest with.
And so that’s just I went further to the point you asked, but we can dive into that as well if you’d like. But that’s how we got into passive real estate investing.
Ben Fraser: Yeah, not very cool. And so you started with some of your own rentals, which I feel like is a lot of the path, the common path for a lot of people where, they get the long term rentals, even if it’s sold as being passive, it’s not always as passive as you expect it or want it to be.
And investing in the syndications where you truly are an LP, a limited partner, and you’re working with general partners that are, this is their full time thing. In that scenario, it was less involved from a time standpoint and just a headache standpoint.
Litan Yahav: So one of the things you find when you dive into this rabbit hole, which is called real estate investing, is that each person thinks as a real estate investor differently.
Like what’s a real estate investor. What does that even mean? Is it a flipper? Is it a short term rental guy? Is it? It is someone who actively does GP, does LP. If I buy a REIT, a traded REIT, am I a real estate investor? Like essentially I am because the underlying asset is real estate. So all these are this whole spectrum of passiveness that we, you know we learned our own way but it’s such a mind blowing aspect.
Once you dive into it, it doesn’t mean the same to everyone. The passiveness levels, the risk levels, the so many things intertwined within that phrase, real estate investor.
Ben Fraser: Talk about that a little bit. What. Obviously, you’ve been doing this for a while, you’ve invested, I’m assuming, in a lot of different types of syndications and probably different asset classes even, what, where do you see the spectrum, how do you fit it all together because you’re saying, hey, if I go and buy a REIT, am I a real estate investor?
Maybe, because the underlying asset is real estate, but you’re also buying a lot of other fluff you’re buying what we call the liquidity premium, which is you got to pay up a little bit, on the book value of the assets to get premium of being able to trade it on a public market and have access to liquidity.
Then you can go buy rentals and be a landlord, but that’s creating more work. And so within kind of the more syndication. Where do you fit all the kinds of frameworks for the different types of investments out there? So I think it’s
Litan Yahav: What is the mark?
What is the added marginal cost or risk to the added marginal work? And what’s the expected return on that? So if you just take a short term actively managed rental property that, or that’s just a flip. If I want to buy a flip, I say I buy a real estate property, I can hold whatever I’m on.
I flip it. And so that’s probably it. The highest potential return, the highest risk, the highest activeness, everything’s really high there. And so if I, and then if you go like next, let’s just say a short term rental. There’s work there and there’s a risk there. There’s not as much risk and there’s not as much work as there is in flipping.
And the potential profit is exponentially lower, right? And then you go to whatever long term rentals, which is lower and lower syndications, which I’d argue might even be the same as, long term rentals to some extent with a lot less work and then REITs. So REITs or tradable REITs.
Where I see it, yeah, there’s liquidity, but by the way, I personally think liquidity is a term that needs to be used very specifically, right? Because everything’s liquid at a price. Everything I can, if I own a house and I wanna sell it today, there’s a price I can sell it for today. It’ll probably be 30 percent below the market, but I’m sure someone’s going to buy it today.
Yeah, I have a stock portfolio and it’s liquid, but if the stock just, the market just fell by 30%, am I going to sell it? It’s liquid. So it’s yeah, liquidity is a whole different ball game. We can dive into that. But. It needs to be, the differences need to be exponentially better or worse across all those three aspects in order for that decision to make sense for me.
I don’t know if that makes sense?
Ben Fraser: That makes sense. You said something else interesting there that I think is a really helpful tool for people to think about because naturally, especially entrepreneurs like yourself that are really good in one area and have made a lot of money in one area.
And generally like to be in control, right? It’s natural to go into the more active role of real estate, right? I can just, I can go buy some rentals. I can be a landlord. It can’t be that hard, but you’re basically creating a new job for yourself, right? And to your point, what’s the marginal risk that I’m taking by giving the control to someone else that’s a professional managing the investment?
Versus, the time that I’m getting back and the lower brain damage that I’m doing from having to deal with these headaches that I’m not doing on a professional level. So how do you find that sweet spot? Because there is an element of you giving up control.
I think it’s a hard thing for some people that are newer to investing in syndications where you’re not the lead decision maker on this investment. Where do you find that sweet spot, right? Where you can give up some of that control, but you get a better return on your time and maybe even a better general return anyways.
Litan Yahav: It’s hard to say, call this like a numbers game, but essentially it is a numbers game. So if I’m an active real estate investor and I go buy properties that I rent out and I spend X amount of time managing that Y amount of profit, expected profit. And then I compare that to a real, like a LP and a real estate syndication.
I think it’s probably a 10th of the X of time to be put in, or even a fifth and, the potential profit is maybe, 70 percent of the Y that I expected from an active, right? Or even, it doesn’t matter, even if it’s 50%, it’s all a matter of how much time they put in. I can spend that time doing something else versus how much potential profit I can make from this.
That’s the way I look at it, right? It’s the same thing also for deals, syndications that you do. It’s not even comparing active versus passive or the different types of involvement. It’s also different types of asset classes within syndications, right? Because you invest with an operator who does.
Value add multifamily stuff, another operator that’s going to do development deals. Development deals have substantially more risk than the value add, because this has ongoing income and this doesn’t have anything. So the potential return should be exponentially larger than the value add. So if someone is pinching me a deal saying, Hey, yeah, this development deal is 12 percent IRR, I’m like, Hell it is, go find someone else that’s going to give you that money for 12%.
So that’s what I mean in terms of comparing.
Ben Fraser: Yeah. That makes a lot of sense. And it sounds like from the math you were saying, if you’re getting, you’re, if you’re saving 10, no 80 to 90 percent of the time that you would get actively managing a deal, but you’re getting, pretty close to the same or better returns, that’s a pretty good trade off.
So in your mind, there’s not a, there’s not a big marginal trade off between. Giving up the control and getting a return on time and return on.
Litan Yahav: Hold on. So I agree, except for, I don’t believe that overall being passive can generate, has the potential to generate better returns than being active. I just don’t think it’s worth that marginal.
So the Segal family, like a long term rental, for example, the potential, if it’s a good, it’s a good deal, right? If the potential on profit will always be better than the potential on a similar type of deal. That I’m doing passive, right? I’m not talking about compared to oil and compare this like single family deals of passive versus single family deals active.
It can never be on paper better from a return perspective, right?
Ben Fraser: Because you have to have another partner involved if you’re passive in it and they have to take fees, they’ve got to get their profit on the back end. So there’s. The net returns apples to apples will be less by sheer function of having another partner.
But what you’re saying is that the margin of what you’re giving up, if you value time, might be worth doing it.
Litan Yahav: What are you saying? Exactly. So let’s say it’s 90 percent less time, but only 10 percent less profit. That’s what I meant. Yeah.
Ben Fraser: Talk a little bit about the liquidity piece.
So you gave some interesting tidbits there on, yes. Real estate is more illiquid than buying and selling a stock on the New York Stock Exchange. But, there’s a price that I could sell my house for today. How do you view liquidity, at a portfolio level as an investor? Where do you see liquidity being an advantage?
And how do you think about it when you’re constructing and building your own portfolio of investments?
Litan Yahav: So I think there’s cash. And there’s liquid, there’s the liquidity for investments because cash is immediate, right? Cash I go and I do an ACH transfer. So there’s cash. And then there’s all my investments and their liquidity parameter for that investment.
And every investment has a liquidity parameter which is based on what is that price worth if I need to liquid, if I need to liquid today, right? For stocks it’s easy because you know what the price is if you have to liquidate it today. And for real estate, yeah you can essentially, you don’t, this is, I don’t go into defining this on a daily basis.
It’s an overall general approach to the way I view liquidity is that every asset in my bucket of net worth and assets has a price for, to be liquid, today or tomorrow. And obviously each, this is like an NLA, each one, it’s each one of those has a different leading metric for that but overall they all can be liquid immediately or today based on the right price.
But I’m sure that if I, again, if I have a single family home and I want to sell, I need it. And I want to sell today. If I put it online and Zillow even for 40 percent below the market, 50 percent below whatever it is, I’m gonna get bombarded by phone calls with people and I’m gonna just do it by cash.
I don’t, I can sell it. So is that a liquid or is it liquid? So it’s just the price. Like you look at your brokerage portfolio, it might be a million dollars today, which is late, essentially liquid, but tomorrow it might be 700. It could happen. Is it liquid? I’m sure a lot of people won’t agree with you, by the way.
This is like my approach. I’m not sure it’s like the common approach to it, but that’s the way I see liquidity. So
Ben Fraser: Does that impact how you are making investments? Does it allow you or get more comfortable taking more, say, liquidity risk where A larger portion of your personal portfolio is invested in longer term investments because you’re not as worried about having to generate liquidity if you need to, right?
How does that impact what you’re investing in if at all, it might not, I’m just curious if it does.
Litan Yahav: So again, when I look at, all right, how much dry powder do I want to have in order for opportunities to come up and for me to be able to seize a lot of opportunities, that’s like the cash equivalents.
Like a money market account is a cash equivalent in my mind. And so when I look at liquidity the way you’re explaining it, How would I need a liquid in order to deploy capital when things come up? That’s what I look at. I’m not going to, because anything else, again, as a stock, as a brokerage account, like people look at a brokerage account as liquidity.
Yeah. When an opportunity comes, I’ll just liquidate part of my portfolio, but that’s stupid. What if it’s down 50%? You’re still going to liquidate the So it’s not liquid in a sense as cash is liquid. So there’s two different, I separate those two.
Ben Fraser: Yeah, I’ve talked about this a lot in past podcasts, but it’s a double edged sword liquidity because it makes investors feel better, right?
Cause if, Oh, if I have to get out, I can, but it’s also the worst thing when the market’s down, right? Cause if you’re selling when everything’s down it’s not the good, not the best time to sell. And so I’ve had some research from some consulting companies that were. Showing that too much liquidity actually could hurt your portfolio performance because we’re emotional investors, right?
And so if we’re, buying and selling, throughout the roller coaster, yeah, you actually end up doing worse off. So there’s an interesting trade off with liquidity because you want to have enough liquidity, one, to have reserves for your operating expenses just personally and opportunity that might come up, especially, right now as we’re going into this unique part of the credit cycle but too much liquidity or having access to your investments can actually hurt you a little bit, which is an interesting way to think about it.
Litan Yahav: Yeah, I love that. I do. Yeah, I feel like real estate investing sometimes is good for the emotional, like people that make emotional decisions because it protects them from making the wrong decision. Cause it’s not that easy to look within. So I agree with that.
Ben Fraser: So as you were building your personal portfolio, you’re making these investments, you tried out single family rentals, you started investing in syndications Hey, I like doing this a little bit more.
I’m going to do more of this. So you started building. A portfolio of passive investments, but then you said it became a mess. So talk about that. What were the headaches that were being created that ultimately drove you to now spend time and create a whole software platform that serves people like you, people like those in this podcast.
Litan Yahav: So I’m going to start and I’m going to say this multiple times throughout the podcast. These are good problems to have. All right. But like, all so when you invest and deploy capital with multiple operators, and remember I put Relatively, I don’t know, small, whatever the objective, I put checks into multiple operators, 50, 000, 100, 000 checks with multiple operators.
Because for me, it was about the operator, not about the asset class. And so when you, then, and then, so each operator, each general partner, each syndicator has their own investor portal, right? Has different definitions of when they. If they’re distributions, if there are distributions, if there are distributions, how often are these distributions, what are they supposed to be?
I’d get emails from GPs I’ve invested with and I’m like, oh damn, when did I invest with this guy and how much did I invest? And I’m like, wait, is this distribution coming in what I expected? And even if I did remember, then like a week later, my bank account will have a ping of alright, there’s money that you just received.
And I’m like, oh, what is this? And so these are good problems, right? But I started to, once a month, reconcile all these transactions from different bank accounts. All these emails, try to categorize, this is from that person, this is from this person. And I could have gotten hired, probably a personal assistant.
But it just didn’t seem like enough, it didn’t make sense for me to go pay someone that much money. When, this is, these are like, alright, it’s a spreadsheet, I’ll just spend a few hours a month updating it. But then tax season comes around and lets out, let’s locate the K 1s and let’s log into all these investor portals.
And oh, I forgot the password. It became a mess, right? And we looked around, we just couldn’t find anything. So we built, we by the way, we are not, like me and my co founder are not tech people. We don’t have a, we don’t know how to code. Like both of us like business operations. I was six years in the Navy, he’s six years in the Air Force.
Like we’re not, but we are an engineer. We built this for us. And then that’s when it spiraled out. So that’s like the problems that we had. And another thing is, you might be, you might have money and again, here’s a liquidity or cash perspective when it’s all deployed.
You, you then, oh, damn there’s a capital call here, or there, like an expected capital call, or there’s, my cost of living. I didn’t take that into account. I don’t want to, I don’t want to sit on too much cash. I want my cash to be deployed, but I also don’t want to sit on too little.
Oh, I need to start laying out what the, what is the future going to look like from a cash flow perspective. And so we just built this out for us to be able to, all right I see what my cash is going to look like in the future. We added in the scenario planning aspect.
Sorry, what happens if I invest in this deal? How would that look from a cash flow perspective combined with everything else I have? All the other expectations from a cash flow perspective. And now it trickles down this graph so we can then plan accordingly and all that stuff. No, it’s so cool.
Ben Fraser: And I’m going to give a little plug for going to Vyzer and checking out the platform. See if you can get a demo because we did it in person at some screenshots and it was just, it’s so cool. Some of the biggest challenges you have are, we just said, you have these different portals.
You have to remember all your logins. You have to remember, every portal is going to be a little bit different and how to navigate the different portals, how to pull the information. Every sponsor is going to be probably sending different information. It’s not going to be homogenous across every deal.
And then to your point. So many investors think that the work stops once you send that first check, right? Okay, I’ve done the due diligence, which is very important. The front end due diligence is very important, right? But you gotta keep. The pulse, you gotta keep checking in at what’s going on and, is what I’m getting aligned with what they told me I was going to get or what the expectations were, or am I getting at least explanations for why it’s different, right?
And most investors are not tracking the performance along the way, and so what your system can do is actually match up. I believe you can just put in pro formas or you can upload here’s just some basic pro formas of what’s expected from a cash flow standpoint. And then, on a full cycle deal, you can even measure IRR, right?
And so you can actually measure your personal IRR of when cash hits, it leaves and hits your account versus, the, at the fund level or syndication level, which might be slightly different. So talk about those contents a little bit. I think it’s so interesting how you can consolidate all this information, but then create a really.
Simplify streamline way to be able to track what’s going on.
Litan Yahav: So like you mentioned at the beginning, we’re all about keeping passive, right? And so we add as much automation as you just want, as you can see possible. Into the tracking process. So for example, we’ll link in your bank accounts and all the transactions that appear in those bank accounts will automatically be linked to the investments.
I expect $3,000 a month of distribution from this fund. So we’ll look, we’ll find that distribution or we won’t. And that means that they missed it and we’ll raise a flag. That is derived from the performance versus plan, like you mentioned, and it was an interesting thing. We noticed also, and I’m not saying this is wrong.
I’m just saying we need to, you people need to be minded to this. When you log into the investor portal and you see your performance many times, what the GP reports from a cash flow perspective is when they deploy the capital into the deal. So let’s just say I invested a hundred thousand dollars into a deal.
Okay. As an investor, all right, that cash left my bank account. I don’t really care as an investor that it took a month to deploy that capital, right? And distribution, same thing. I look at the cash in, cash out. I calculate my cash on cash in my NRR based on the actual numbers. Many times you will see in investor portals it’s different.
And there’s going to be a discrepancy between both. And to be honest, what’s right from an investor standpoint is what actually appeared in their bank account. I’m not saying the GP is wrong. I’m just saying you can’t really compare those two because it’s hard for the GP to even take account of when I distributed cash like a week ago.
The fact it took a week to reach you isn’t really my problem, right? So it’s not wrong or right. Just I guess from an investor, that’s the way I look at it. So that’s an example. For metrics. Yeah.
Ben Fraser: And as an investor, that’s the number you care about anyway, right? Because what am I getting? What am I seeing?
And you’d expect, obviously there’d be discrepancies if you’re calculating it based on actual cash hits your account because there’s other things that can go into that. But it’d also be interesting, if there is a big Delta that might raise some yellow flags or at least some questions or concerns of yeah, I’m calculating 11 percent IRR, but you’re saying I got a 16 percent IRR.
Yeah. Yeah, we’re missing here, so it can alert or bring to the fore, some things that you might need to, get more information on and talk a little bit about too, how you’ve integrated with some of these like platforms and how you’re consolidating to where, instead of, it’s easy to log into Schwab or Fidelity and have all your stuff there, it’s hard to remember all these platforms and all the different ones that sponsors are using.
Yeah. How does the system work where it’s pulling information from all the different
Litan Yahav: yeah. So we. Yeah. It’s an important question. So we took a family office approach and we’re like, cause not all of these platforms, these investor portals have integration that you can pull in data.
Most of them don’t. And so the family office approach we’ve taken is that our clients basically appoint us an interested party. So we, our clients enter the argument, appointing us an interested party, we reach out to the fund, and then we have access, read only access to the, to that client’s investor portal, and then we just retrieve everything for them, all the documents, all the data, so it doesn’t really and that creates a situation where it’s endless automation from an, from a client standpoint, because, They don’t have to log into portals anymore.
We just do everything for them either via API or via entry to party nomination or whatever it is.
Ben Fraser: Yeah. So you just log into your advisor portal and then that’s pulling all the other information from portals you’re pulling in like investor reports, PPMs, all those kinds of things as well. Like it’s, you can everything
Litan Yahav: in your portal.
Yeah. K1, K1s, like everything disappears in one place. Like again, essentially you do not need to log into any portal again. Yeah. There’s a, there’s always work to be done and improvement to be done in the connectivity aspect. So that’s like our objective is to become as automated as possible for an investor.
Ben Fraser: I love to like the scenario planning piece of this, cause what’s, what I think is a challenge for some investors where you get, you’re starting to make investments, right? You’re dipping your toe in, you’re just seeing how these things are going and you start, you made a few investments, it’s going well.
So many times investors are looking at, what’s the IRR, right? Or maybe what’s the cash on cash or average cash on cash. And they’re making investment decisions based on the return metrics. But are you adjusting that for risk? And then also, are you adjusting that for timing, right? I could see a big IRR heavy deal, say 20 percent IRR, but it’s a development deal and a majority of that cash coming back to me happens two or three years down the road.
It’s very different than. A lower IRR deal that’s getting cashflow right out the gate, and I’m starting to get checks pretty quickly after. And from an investor standpoint, and as you’re building your portfolio, you need to be aware of maximizing total return in IRR, but you also need to be aware of cash flow and timing.
And your system can forecast and create pro formas based on these projections that you’re getting and investments you’ve made, and can create the cash flow planning. And can show, Hey, you might have some gaps here and you might need to, reserve more cash. And those kinds of things are so valuable because if you look at a snapshot over time, it’s yes, this was, this is a profitable deal or I’m going to make money.
But if you don’t look at the ups and downs, between the two time periods, then you’re missing some of the key parts of, maybe I need to reserve a little extra cash, or maybe I should. I’m going to be doing less, development heavy investment because I need more cash flow or vice versa, right?
I’ve got a lot of great cashflow coming in. I’m set. Maybe I should go up the risk spectrum a little bit and try and get some higher total returns. So talk about that piece of it. Where’s kind of the functionality of that piece of it as of now? Now, and where are you trying to take that to? So
Litan Yahav: I think the lowest level of investment management is on the specific investment, right?
That, that syndication that you’re in the expectations from a casual perspective of that specific syndication or deal, whatever it is, oil, and it doesn’t matter what it is. And then you go, one level higher, it’s like that holding entity. That holds multiple investments under it or that asset class.
You want to understand, all right, what’s the cash flow that I expect from this? Because there are also tax implications for all this stuff. And that’s also important. Then you look at the highest level and that’s your overall, my cash flow. And that’s already, that, that becomes really hard to stay on top if you don’t have, if you’re not on top of it, right?
Cause, cause that’s where, Oh, this one requires capital. This one gives me capital, but overall I’m under or two over my goals. And so I think that’s a really important aspect of. Any type of investment management and cash flow management is understanding your high level cash flow and what it’s going to look like in the future.
Ben Fraser: Absolutely. I remember to some that this is probably the wrong term, but You have a magic box or something or you can just drop information in and you have some AI that goes and tries to pull it out. What’s the use for that again?
Litan Yahav: Yeah. So again, this is also that family office approach.
If I went out today when I got an email from a GP, an update or whatever, a K1 or anything, a statement. Vyzers already cc’d on that email or I forwarded the Vyzer and it reaches our magic box, which is basically this feature that analyzes all that information translated into data and either sets up new assets or updates existing ones.
And this can be within the platform itself, just like a spreadsheet you currently use to track your stuff. You just throw it in and analyze it. And the AI does that, but we also have a team that supports part of that AI, because it’s not perfect yet. But the idea is to create the approach, like I just throw everything in here and then it takes for you, just like a family office would do for you, but just not like a family office.
If we’re already touching on features, there’s another really interesting thing that I think, which I think is personally from an investor standpoint, one of the most interesting ones, which is showing our clients where other people are investing anonymously. Yeah. Yeah. Talk about that. Because one, you asked about challenges at the beginning.
And, yeah, there’s the administrative part of it, which is a mess, but then there’s decision making. Who do I want to invest with? It’s all about, and then where we were in Denver yeah, these are people that get together to help share information between each other about their experience investing with specific operators, GPs funds.
And so what we’ve done is we show all of our clients where everyone else is investing anonymously and how they allocate their assets overall from an asset allocation perspective. But in each asset class. Which funds, which products are people investing in? Anonymously, but how much money has been invested in each of these?
How many investments have been done? We don’t show this information yet, but we see behind the scenes, which have stopped distributions. Which had unexpected capital calls. Which are performing above or below what they expect. There’s all this information that… LPs should be shared with other LPs so that people can make better decisions, and that’s just non existent online.
Yeah, offline in all these groups and communities, but online, there’s no one to really incentivize me to do which I think is a really interesting approach to private, the private, and bringing more transparency into this private world.
Ben Fraser: A hundred percent. It makes so much sense because you’re already gathering all this data, and now you can create the consolidated view of…
What does the portfolio pie look like at a higher level, and then within those parts of the pie, who are people investing with, and then you’re seeing the real cash, trading hands. So which ones have paused distributions, which ones are performing above or below.
So obviously that’s very valuable data. And from an LP standpoint, you’re right. One of the biggest challenges you’re getting into space is who to trust. And sometimes the best marketers aren’t always the best operators, learning due diligence as a passive investor can be challenging.
So having some, a leg up, these investor communities are taking off and likewise with this platform, you’re getting an inside look of people that have done things, for years before you, you can learn from their potential mistakes or even good decisions. And you can leverage that to shortcut your process.
So that makes a lot of sense. Tom, this is super cool. Love what you’re doing. I think it makes so much sense. And, what’s the best way for folks to learn more about the platform, maybe run through a demo or just see if it fits in. How do you charge? I’m assuming this is like a software as a service type model where it’s a monthly or yearly fee.
Is that how it’s broken down? Yeah, we have
Litan Yahav: a really straightforward fee structure. So it’s free to try. You can try it with up to a limited amount of assets, I think three private investments and three, fiduciary accounts, you can sync at the platform for free for as long as you want.
And then it goes up to 350 a year or 950 a year and unlimited for everything is 1800 a year. Just like the whole suite of services that we provide. So it’s all about, providing value to every step you’re in on the investing process. And so that’s, yeah, that’s the fee structure.
Ben Fraser: It’s a lot cheaper than hiring your own family office for sure, right?
Litan Yahav: Yeah. I have a lot of respect for family offices. We are not, we’re not there yet. We don’t touch money, we don’t actively manage any portfolio, right?
But we do a lot. The equivalent at the end of the day probably is a personal assistant and a spreadsheet. We have clients that their personal assistant just uses Vyzer instead of their spreadsheet, but. But, that’s, again, that’s the main alternative and we’re always open to, speak, talking with other LPs or potential clients, potential investors, just to communicate and show like what we have to offer and the website is Vyzer, it’s a weird name, but it’s https://vyzer.co/, and you guys can reach out to me on Facebook, LinkedIn, Twitter, I’m super happy to speak with anyone interested in talking about investments, LP Investments Advisor.
Ben Fraser: Awesome. We’ll put all these links in the show notes. And yeah, I really appreciate you coming on and sharing your journey and experience and what you’re doing. Love it.
Litan Yahav: Thanks man. Really fun talking with you.
