How These Brothers Have Processed Hundreds Of Millions In Loans Through Their Platform
The founders of InstaLend are Saurabh Shah and Sohin Shah. We started the company in 2016 and have since bootstrapped it to originate hundreds of millions of dollars across close to 1,000 loans. At InstaLend, we oversee all aspects of business development, from customer acquisition to closing to draw management.
Saurabh is a frequent speaker at industry events and has been profiled by leading publications such as Forbes, Inc, AAPL, and industry-leading real estate podcasts.
Our efforts helped InstaLend rank No 1,848 on the 2022 Inc 5000 list of fastest-growing companies in America.
We are related as brothers and are also the co-founders of InstaLend, which is a tech-enabled lender for real estate loans providing fast, affordable and convenient capital to residential real estate developers.
As a non-bank real estate lender, we provide 12-24 month short-term loans on single-family and small multifamily properties for acquisition and rehab. We also provide 30-year long-term loans on stabilized rented properties. Our technology streamlines and automates manual workflow, payments, and reporting.
We offer flexible financing solutions for residential real estate entrepreneurs. Our common sense approach to lending allows us to make decisions quickly.
The biggest lesson we learned was that people are willing to help. It was important for us to get out of our comfort zone and ask for meetings, demos, introductions, and assistance.
What's your backstory and how did you come up with the idea?
We both have dual engineering degrees in computer science and financial engineering. Post-graduating, we worked in investment banking and at real estate debt funds.
We identified that there was a need for reliable, sustainable capital for real estate. It took banks up to 90 days to provide a loan, and that meant property developers were scrambling to raise funds from private investors.
Banks require a ton of paperwork, including W2 and tax returns. They are slow-moving on ordering appraisals and reviewing paperwork. They are riddled with regulation and are risk-averse, given they are lending funds from what are typically customer deposits.
We decided there was an opportunity to streamline this aspect of financing while offering better leverage than banks can offer.
Take us through the process of building the first version of your product.
Our technology streamlines loan applications, credit and background checks, risk metric calculations, construction draw reviews, and customer notifications.
Our product was stitched together as an MVP (minimum viable product) which was just good enough to support transactions.
We bootstrapped the business, collected client feedback, and iterated on the product to further improvise. This helped us keep our costs down and focus on building a product that could support revenue generation.
We considered a disgruntled client to be the best source for product innovation, helping us understand what needed to be prioritized and built. Eventually, these small efforts helped us compound our growth efforts.
As a business, we maintained D&O, E&O, and general liability insurance.
Do not get distracted by the massive financing rounds other companies in your industry may raise - it comes at a cost that only reveals itself when it's time to raise the next round of financing.
Describe the process of launching the business.
Our initial customers were identified by attending real estate events, networking, and asking for referrals.
We spoke to our potential clients to understand the product they expected and built technology that supported such a product. It was important for us to get as much customer feedback as possible to iterate on our product.
The biggest lesson we learned was that people are willing to help. It was important for us to get out of our comfort zone and ask for meetings, demos, introductions, and assistance.
Since launch, what has worked to attract and retain customers?
We tracked detailed analytics such as burn rate, customer retention, unit profitability, and more on the health of our business, unit economics, and customer retention; and allowed these metrics to steer our growth efforts.
The single most important measure that drives growth for us is customer retention. Should a client come back to us for another loan, it serves as validation of we have provided a product that is in need and service that was satisfactory.
Weโve created a spotlight interview series to share customer stories. We share these interviews with our entire network through our weekly Mailchimp emails, which are sent to our existing customers. These help with collaboration and eventually stir new business our way. Our customers appreciate telling their stories and share them in their networks as well.
Saurabh is a great spokesperson for the business and has been featured on many prominent podcasts in the real estate industry.
- The M.O.R.E. Podcast
- Mission Matters
- Entrepreneurs on Fire
- Buzzsprout
- Up My Influence
- Jason O. Myles Real Estate Network
- Red Knight Properties
How are you doing today and what does the future look like?
Our business has grown organically through referrals. We have bootstrapped our company and were named in the INC 5000 list of the fastest-growing companies in America for 2022. We are excited for 2023 to show continued growth momentum for the business.
We are also working on building technology in the form of a community portal that can connect our customers and allow the exchange of ideas, best practices, and resources.
Through starting the business, have you learned anything particularly helpful or advantageous?
- The biggest lesson we learned was to get to revenue ASAP. Do not get distracted by the massive financing rounds other companies in your industry may raise - it comes at a cost that only reveals itself when it's time to raise the next round of financing.
- It is OK to outsource product building early on.
- Reach out to anyone and everyone that you think can benefit from your product. The worst outcome is they will not respond to you. The best is they will give you feedback (either by buying your product or by passing on it)
- Be a generalist early on and be slow to hire. Keep your costs low. Get to product-market fit and then consider specialists for jobs.
What platform/tools do you use for your business?
- Airtable is the best project management tool out there
- Gusto has streamlined payroll and vendor payments for us
- Square is our preferred payment processing platform
- Bench takes care of all our bookkeeping needs
What have been the most influential books, podcasts, or other resources?
The most influential books have been:
- Don't sweat the small stuff, itโs all small stuff by Richard Carlson โ Helped us realize that eventually, nothing is worth sweating over.
- Sapiens by Yuval Harari โ Great book on understanding human beings, civilizations, and commerce.
- Zero to One by Peter Thiel โ Must read on getting to product-market fit.
- Why Nations Fail โ Read this book to understand why America is the land of opportunity. How did Democracy evolve? The importance of a vote - what that means for businesses with shareholders/partners.
- The Cold Start Problem by Andrew Chen โ Must read on scaling tech marketplaces with dozens of case studies.
- Einsteinโs Dreams by Alan Lightman โ Will challenge your sense of reality. Easy read.
- The Pathless Path by Osho โ Question your purpose. This book will teach you to understand you cannot connect the dots today, but they will eventually connect.
- Rich Dad, Poor Dad by Robert Kiyosaki โ Enjoyed this book on real-world financial literacy.
- Founders at Work by Jessica Livingston โ Key takeaways were how many founders bootstrapped or hustled to get their first customers.
- Tools of Titans and Tribe of Mentors by Tim Ferris โ Must read on the routine of high-achievers.
- Napoleonโs Buttons by Penny Le Couteur, Jay Burreson โ Influenced us on recognizing the power of certain elements on the shaping of our world, commerce, and civilizations.
- India After Gandhi by Ramachandra Guha โ Indiaโs political struggle to unite multiple cultures, religions, and princely states to build a nation during and post-independence. The political identities that emerged from the same made India what it is today.
- The Happiness Hypothesis โ This book is packed with scientific insights on the meaning of happiness with parables from ancient wisdom
Podcasts:
- Listen to this interview of Naval Ravikant on The Knowledge Project. We listen to it a couple of times each year. To get book recommendations and sometimes to get guidance on how to declutter our thinking.
- Listen to this clip from Osho on the purpose of life. Itโll make you feel lighter. Life has no goals, no purpose.
- Angel podcast by Jason Calacanis is helpful to understand how to view your business from an investorโs perspective
Advice for other entrepreneurs who want to get started or are just starting out?
- Focus on getting your first customer. Document the sales process, and what worked and what didn't. Use the learnings to make the process of closing your second customer more efficient.
- Do not worry about building tech, no-code tools can be used until you streamline your processes. Try and then build tech to standardize these processes.
- Bootstrap your business if you can. Trying to raise money is a distraction and you may find your KPIs misaligned with long-term growth in trying to show short-term acceleration.
Where can we go to learn more?
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Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
