Sean O’Toole is CEO & Founder of PropertyRadar, the property data and owner information platform real estate pros have trusted since 2007 to drive billions in deals directly.
Sensing another change in the market in 2005, Sean sold all his real estate investments and set out to build his “dream application” and satisfy his desire for better data and easy-to-use software to find, analyze, and manage deals.
Sean launched ForeclosureRadar in early 2007 to a market that had no idea what was coming. The credit bubble burst shortly thereafter landing Sean on 60 Minutes in January 2008. Host Steve Kroft concluded in the interview that “to get a real overview (of the market), you need to look at a map from Sean O’Toole’s web site, foreclosureradar.com.”
In 2013, Sean relaunched ForeclosureRadar as PropertyRadar.
Today, PropertyRadar remains the go-to platform for smart real estate, mortgage, and title professionals, but now also serves a broader base of residential and commercial property focused businesses intent on leveraging comprehensive property data and owner information to grow their business directly.
In this episode:
- Impact of AI on Culture and Media
- Evolution of AI and potential pitfalls
- Economic Cycles and Market Predictions
- Recent market trends and the impact of interest rate increases
- Future Economic Forecasts
- AI in Real Estate
Episode:
Narrator Welcome to The Norris Group real estate podcast, a show committed to bringing you insights from thought leaders shaping the real estate industry. In each episode, we’ll dive into conversations with industry experts and local insiders, all aimed at helping you thrive in an ever-changing real estate market. continuing the legacy that Bruce Norris created, sharing valuable knowledge, and empowering you on your real estate journey. Whether you’re a seasoned pro or a newcomer, this is your go-to source for insider tips, market trends and success strategies. Here’s your host, Craig Evans.The Norris Group, proudly presents, I Survived Real Estate. industry experts discuss evolving industry trends, real estate bubbles, inflation, and opportunities emerging for real estate professionals. We want to thank our Platinum partners. uDirect IRA Services, San Diego Creative Investors Association, White Feather Investments, MVT Productions, Inland Empire Real Estate Investment Club, and Realty 411 Magazine. See, isurvivedrealestate.com for event details, information on all our generous sponsors and to connect with our speakers.
Craig Evans So, let me ask you this, um, and I think we probably both agree. I mean, you know, AI, large, you know the large language that it’s here to stay, right? And it’s gonna have a major effect on our culture. What do you think are the biggest pitfalls of that now coming into our culture?
Sean O’Toole Well, you know, I think it’s going to be a lot like the internet. There’s just a quote from Zuckerberg around, you know, in creating Facebook, he saw all the opportunity, or maybe it was Bill Gates, you know, Bill Gates talking about interconnecting computers and personal computers, and he’s now saying he should have realized how they could be used, you know, in ways disinformation and spread of conspiracy theories and all those kinds of things. And he didn’t see that originally. You know, we got all that coming with AI, you know, especially around deep fakes and all the rest. I think we’re going to quickly find ourselves at the end of, you know, this content marketing, like we’re doing right now, you know, podcast right when AI can generate an endless amount of this stuff, and we’re all just so flooded with it, I think it’s possible we just collectively all tune out like we hit a point where there’s just everything on tiktok is it artificial? Is it real? I can’t tell who’s generating these stories. Why are they generating them? We’re already having a loss of trust in media and stuff. And I think this advancement in technology that how quickly things spread and, you know, and we’re our own worst enemy, right? Because we provide an instant feedback loop to those media companies that click bait works and that, you know, this kind of, what’s the word, reactionary marketing, like these, try to get your blood to boil, that works, that drives views. And so we get, we were getting what we’ve asked for. We blame the media, but we’re the ones clicking right. They’re just treating us what we want. So I think that gets a lot worse, really fast, here with large language models, like, like you were talking about with SEO, and like, coming up with an SEO strategy and then having large language models build all that content that you put on your website. Well, when everybody can do it, then what gets optimized?
Craig Evans Right.
Sean O’Toole So the easier that becomes, the less effective it becomes. So early on, right now today, you should totally be doing that, and you’ll that’ll work for a week or two, or a while, maybe a year or two, right? But definitely as more people just like Facebook was amazing for small local businesses to market on at first, and now it’s really hard for Small Business on Facebook, because they’ve optimized more and more for big business one, right? Because that’s where the money is, and big business has gotten in there and gotten better better at it, and small business is losing. This is why, and this is really kind of my mantra now, and bring this back to PropertyRadar, right? Like, fortunately, investors figured this out before everybody else, which is that targeted outbound marketing is the best chance small local folks have of competing, right? Because if I call somebody, Google can’t insert themselves in that call and, you know, take my customer from me, right? If I send somebody a piece of direct mail, Zillow is not going to send them a piece of direct mail, right? OpenDoor still is, but Zillow is not, because for 10 million bucks they can buy a super full Ad, but to send every home in America postcard, you know, is $60 million so they’re way better off with the Super Bowl ad, right? Um, so doing these direct, targeted outbound marketing, email, direct mail, calling, door knocking, like this is how you survive as a small local business in this big business onslaught, playing SEO games, PPC, all the rest, like the big companies, are going to get AI first. They’re going to deploy it first, and it’s just, it’s really, really going to be hard to keep up, even for the big companies.
Craig Evans We’ve all you know, you not been around long enough to see ups and downs swings in markets and where that comes through. But I’m just face it, the stuff that’s happened over the last four years is been some things that a lot of people are like, Well, I never saw that one coming.
Sean O’Toole When I was running around talking in 2020 about what I thought was going to happen in the rest I saw what we were doing, you know, in terms of the kind of some of the policy reactions and stuff, as you know, being what the Fed monetary policy and Congress on the fiscal policy side always do. And, you know, they were slow to do it in 2008 but ultimately did it and it brought it, reflated the economy and brought things back around. You know, the faster the next time, like, so this has been kind of this cycle we’ve been in, starting in 2000 they were slow, but they got to it in 2008 they were a little faster. And then right, so going forward, and so that all felt good, and like we’d hit reflation without hitting inflation. And I think what I missed, and clearly the Fed missed was the supply chain side of that. So okay, we fixed people’s incomes, and to a degree, at least, right? So there wasn’t this big income hit and but now they still have the income, but there isn’t the stuff to buy, and this creates this major imbalance at the same time, you know that we had tariffs and not too much earlier tax cuts, both of which are very inflationary. And I don’t think people fully understand that.
Craig Evans Right.
Sean O’Toole So, yeah, yeah, that’s supply. 100% agree with you that supply piece was the piece I didn’t think through well enough.
Craig Evans With all the stuff we’ve seen over the last four years between all of that interest rate increases and and again, you know, I remember 18% interest rates. So I try to, you know, and I remember that, you know, what’s that?
Sean O’Toole The 18% interest rates my parents finished their dream home right as that happened, and back then, your construction loan didn’t roll over into your finished financing, so they had to go refinance out of the construction loan because it was due right when interest rates hit 18% they almost lost everything.
Craig Evans With all of those things that have happened over The last four years. In your opinion? Where do you think, where do you believe the market is headed?
Sean O’Toole So, anybody that’s listened to me over a while, right? Will say that I think we largely bounce from crisis to crisis, right? So, and I call it, you know, kind of a crisis cycle economy. And you know, we are slow after a crisis to or we tend to leave our foot on the gas a little too long after crisis. We certainly did the last time, and that’s part of the inflation, right where we’re we were too, too conservative, and we put we kept pushing, we kept rates too low and stuff too long. And that a lot to do, besides the fact that, Oh, wow. Now remote work, I can move, let me go buy the place where I whatever I want to buy it, right? And so we had this mass, you know, kind of relocation that pushed home prices up really quickly. At the same time, we kept rates way too way low, way too long, because of just a very conservative monetary pro approach. And so if we look forward right, we will have another crisis when that happens, or why it happens. You know, the deck I had in 2016 had pandemic on it. I had a slide that says, here’s, you know, we’re going to have another crisis. Here’s all the possible things, right? So, a terrorist attack, you know? And honestly, black swan events aren’t all terrorist you know, 911s, pandemics, the internet was a black swan.
Craig Evans Right.
Sean O’Toole Large language models, mark my word are Black Swan, right? You’re going to have huge disruptions throughout the economy that we haven’t really understood yet and haven’t really felt yet. And so that it may be just that one that really drives the next recession, or in this technology curve that we’re on, as much as it may drive a recession, what it drives even more as a wealth gap. And so by all objective measures, our economy is awesome right now, yet you hear a lot about, especially from one party, like how bad our economy is. And I get it because to a lot of people, it doesn’t feel great, and they see this wealth because this wealth gaps growing, and neither party really has any great plans for how to address it, right? One party wants to steal the wealth and redistribute it. And you know, the other party, I don’t know what their plan it’s not clear to me what their plan is on, but neither plan, neither one has a good plan in my own opinion. And so I think that’s the underlying feeling there, and I think that’s going to get a lot worse before it gets better. So, and I think large language models are one of those things. So do we get into a place where people just react and go, I’m going to start pulling back. I’m worried. Sometimes recessions are just self fulfilling things like, we just all like, you know what? I’m going to tighten up for a while. I’m a little worried, right? That can cause a recession as much as a crisis. So is it a pandemic? Is it a terrorist attack? Is it large language models? I don’t know, but I do know we’re going to have another one, and what I also know when that happens, we have a dysfunctional government in the United States, and so we only have monetary policy, so they’re going to lower rates. And, you know, I was on record back in 2020 saying, I think it’s more likely we’ll see 1% rates than 6% rates. I was wrong. You know, we saw 8% rates, but I think we will have the next crisis, and we will see the same reaction we’ve had for the last three crisises, which is to push rates down to near zero try to keep the economy going. They don’t want to see housing prices fall, right? We have unprecedented home equity, which is one of the reasons that those at least, who have a house are incredibly wealthy right now, those that don’t have a house are pretty pissed off right now, like harder than ever to buy one, right? That’s that wealth gap again.
Craig Evans Yep.
Sean O’Toole But we don’t want to see house prices decline 50% like they did in 2008 we may want to as investors, but as as the larger group, we don’t want to see that happen. So we prop it up. We’re going to prop it up with lower rates. And I think, I still think in the next crisis, we’ll see interest rates, maybe in the ones, certainly back in the twos.
Craig Evans There was one lever, in my opinion, that I thought, if it had changed, it would have swung that and that, in my opinion, I thought it was the unemployment lever. If the unemployment lever had switched, I thought we would have probably seen 1% rates. But obviously, you know, when COVID hit by March of 2020, I remember we were thinking, I mean, we were, I was having meetings with DR and Lennar and Pulte and and a lot of the big nationals and the large regionals, you know, we were having, I mean, there was a conglomerate of us that got together and we were having meetings. And never forget that the first one, the CEO of Lennar, was on talking on this Zoom meeting, and he’s saying, Guys, we don’t, you know, he was basically kind of fretting, we don’t know what’s about to happen. Like, are we all going to be, like, is this thing going dark in a matter of weeks? And and it was so interesting that, literally, six days later, it was like somebody popped a cork, and then the entire construction industry went berserk. And within 30 days, I mean, we, you couldn’t build enough, build fast enough, you know, right? It was insane.
Sean O’Toole Those areas, we’re starting to see some of those areas that people went off to, like Tennessee, in certain areas like we’re starting to see pretty big, like, people are rolling out. This wasn’t really for me, etc.
Craig Evans That’s right.
Sean O’Toole …like it, you know, pendulum is always swinging. Is the, one of my mantras, you know, change is the only constant, and all opportunity comes from change.
Craig Evans Yeah, yeah. But it was, I always felt, and I think that’s one of those things again. Like I saw the labor numbers last week and they came out and I’m looking at, I think, you know, I think it was two months ago they had to come back and reverse the one from a few months before that. You know, of what I’m seeing on the street now, I think we’ll probably see that that labor number is reversed again, but based off stuff, that’s my gut, you know, but I think that labor number is one of those things that could would be a big push at continuing to drive that number to where we could see those lower numbers again.
Sean O’Toole But, you know, I don’t think labor will be enough alone to get us back to two. I actually think it would be monetary policy to go back that low, but you take higher unemployment together with any kind of crisis or recession, right, and a incompetent, incapable Congress, and monetary policy then becomes the only thing so the Fed’s going to do what they can to try to keep things rolling and, you know, and potentially do a lot of destruction. A lot of people want to see the end of the Fed, but I don’t think they’d like to see what the US economy would look like with is they screw up. And there’s no question like they let inflation go too fast. They’re probably, you know, they make mistakes, but compare their mistakes to the mistakes in Congress and I think…
Craig Evans Regardless of which side of the aisle you’re on, right?
Sean O’Toole Yeah, yeah. Like, you know, yeah, we’re not we. We, as the population in the United States are not electing the best and brightest.
Craig Evans What would you recommend for a new investor to look at which, which direction would you look at? Tell them to go?
Sean O’Toole So my advice actually is no different now than it’s been in the bottom of the bottom and the tops of the tops right, which is, you know the there’s kind of two sides to the real estate, right? There’s the flip side, in which case, right? You do the flip right. Like, it’s like, turns on inventory at a grocery store. You know, grocery store may only make a couple percentage points on a thing that you’re buying. But if they can turn the entire inventory of that grocery store once or twice a month right in the total dollar volume, that one point a month becomes 12 points, right, like it expands and so and same thing by by doing the flip quickly, you reduce your market risk. You know what it’s worth today. It’s pretty obvious, right? And so the quicker you get in, the quicker you get out, the better you buy, the more margin you have in the deal when you buy it, the better the deal it is. And that’s true at the top of a market, at the bottom of a market, you know, even when I decided to get out in 2000 at the end of 2005 and I had won, my worst one. I got stuck with for a while because it’s a meth lab, and I had to do lots of work to it. And that one ended up, you know, down. Well, I thought I was going to sell it for 320 when I bought it, I ended up selling it for 260 that’s a big decrease, right? And it hurts. That house sold for $45,000 on the courthouse steps two years later.
Craig Evans Really?
Sean O’Toole So, but I had lots of time, right? I got hurt a little, but I didn’t get hurt bad, right? And I think so long, if you’re on that flip side, just move quickly, all right? And there’s not gonna, there’s not a lot of market change that happens overnight. That foreclosure crisis from 2005 when I first sa it to probably 2009 when it really hit bottom. You know, you’re talking three or four years.
Craig Evans Right.
Sean O’Toole It really took the cycle all the way down, right? It’s, it’s one of the benefits of the real estate business. It takes quite a while to cycle. Um, the other side is longer term, right? If you bought in 2006 you have quite a bit of equity today.
Craig Evans Right.
Sean O’Toole Doesn’t matter at all. And if you bought in 2006 on good fundamentals, where that had good cash flow and a good return or provided you a home that you loved and could afford. Who gives a shit what the market did between then and now doesn’t matter till you go to sell doesn’t matter at all, right, so that’s kind of the two things, and that works in every market, all the time, and if you stick to those fundamentals, like, okay, it’s long term. Is it a good investment today? Where you get yourself in trouble is like, I’m going to buy this thing on the hope that the market’s going to go up another 10%, the market’s going to go up another 20% it’s not a good deal today. I’m buying I’m now. I’m not an investor anymore. I’m a speculator, right? I had a friend buy a rental with a 2% cap rate in 2006 right? 2% return on his money. Paid cash for a rental property, 2% return on his money. I’m like, What are you doing? And he’s like, Well, you know, went up 100 grand last year. I’m gonna make 100 grand a year. You know, that kind of thing gets you in a lot of trouble. The Robert Kiyosaki crowd and all the folks like leverage, leverage, leverage, leverage, well, they finally learned, I think there was a long period of time where I’m a guy. I don’t like debt. I don’t have a lot of debt. And, boy, I felt like an idiot for quite a long time there, right? There was a long period of time from probably 2007 till interest rates spiked, where really being heavily levered, I could have made a lot more, you know, maybe an order of magnitude more money than I made by not being heavily levered. Right? It was, you know, over that period of time, it was a huge mistake, but I had no debt when interest rates changed, right? I didn’t get caught, like a lot of folks got caught, um, especially if they’re doing commercial, because in commercial you can’t do 30 year financing. So you know, great if you, you know, did residential 30 year financing and locked in those low rates. Good on you. I probably should have done more of that myself. But otherwise, you know, these things are just swinging. And so if you play by, you play by these basic rules. You know, is it good investment? Does it give you a good return for a long term investment? Or can you get a good return if you quickly flip it in today’s market? And you know, if the market goes down 5% you know, for markets to move more than five or 10% in a year, even back in the 2006-2007 time frame, you know, is a lot.
Craig Evans It is.
Sean O’Toole …make that mistake again, where we don’t that much inventory that quickly, it just won’t happen, right?
Craig Evans Well, listen, you’ve given me a lot of time. I’ve got just a couple more questions for you, if you’ve got a few minutes for me. So what is your favorite I Survived memory?
Sean O’Toole Oh, wow. I love the whole event. You know, some of my favorite time, though, is in the limo with the other panelists coming and going that, you know. And that’s obviously something that not everybody gets the chance to be a part of, um, you know, the content is really great, but you know the piece that, when I talk to people about the event, and I tell them about the event, it’s the cause, right? It’s the raising the money and the things for St. Jude’s and make a wish, and, oh shoot, the cancer one that Susan G. Komen, you know, really got started around Aaron mom, Bruce’s wife. You know that is the thing that the you know, feels the best. And then, of course, seeing all these old friends every year is amazing, too. So, yeah, lots of good stuff.
Craig Evans Was there ever anybody or a time on the panel that you were just like, man, that’s just wrong, you know? And, I guess even more so. And I say this because Bruce is a different was it ever Bruce?
Sean O’Toole Oh!
Craig Evans I mean, you know, all kidding aside, but I mean, you know, it’s one of those things, because I know that I’ve been there and I’ve heard things, you know, the last several years. I’ve heard things like, oh, I don’t know that I would agree with that one, right? But…
Sean O’Toole Christopher Thornberg and I like it, people always bring up when he and I butted heads, right, you know? So that’s the one people probably bring up to me the most. I think one thing is on, like, the wrong thing, like, just my worldview is less about right or wrong, but why is it right for them? Why do they think that right? I disagree with it, but I’m more interested. I’m less interested in whether they’re right or wrong, and more interested in what led them to get there, right? And why are other people coming to that same conclusion, which I disagree with. You know, only history will tell us who what was right or what was wrong, and and even then, Doug Duncan is, he’s like, Well, the way to be a really good, you know, analyst, or what’s the right word, but you know, person out here talking about these things is to say, Well, I think this is going to happen, but it’s possible this is going to happen, right? And you always leave yourself the back door, and then you’re always right. And so, you know, Doug is is particularly good at that. I think most of the panelists are relatively good at that. You know, I probably should have remembered that when I said I think two or, you know, ones is more likely than six. I should have said unless, you know, some other factor plays like, you know, we’re gonna give everybody a lot of money with nothing to buy, and they’re all gonna go compete for the same stuff, which I didn’t foresee, you know.
Craig Evans If you got a second, I want to ask one more question.
Sean O’Toole Yeah.
Craig Evans So we got a, just an awesome group next week. I mean, we got Mark Palim, you know, that’s taken over for, yep, taken over for Doug. We got Selma hep from Core Logic.
Sean O’Toole She was with California Association Realtor. She’s awesome.
Craig Evans And we’ve got Bill Allen with 7 figure flipping.
Sean O’Toole Yeah.
Craig Evans Mark de Lautour with SBD Housing Solutions. Super, great guy.
Sean O’Toole He’s great, yeah.
Craig Evans And of course, Bruce right. And so, if you were in the crowd next week and not on a panel, what would you want to learn from the people we just talked about?
Sean O’Toole Well, from some of those folks, you know, it’s, they’re out there, active, you know, investors, you know, making stuff happen. What’s working for them? Like, I think we get a lot of investors in the crowd, what’s working for them? What, where are they getting their deals right now, that’s always a question I get, where our customers getting their deals? What’s working, what’s not, you know, I think that one is, you know, particularly useful? I think you know, interesting to see, like, where are they using or not using, you know, AI large language models yet is so where, right? Like, I think, you know, not everybody’s doing it yet. Not everybody’s even embracing that yet. So, you know, some folks probably won’t be yet, but the others that are like that, I think that’s a super fascinating question I have for pretty much everybody these days. Are you using it? If so, how? How is it helping? You know, in your life, I think that’s particularly good. I have a, I’m sure lots of folks would like to know, you know, economic forecast, where are things going to go? Where is it headed? We’re in such a, you know this, you know, I don’t know what Bruce is saying right now. I need to go find out. But, you know, this is broken, Bruce’s chart at this point on the affordability side. And I would think, and you know, so I think we’re in very uncharted territories. And I liked Charles Munger, you know, of Buffet a number of years ago, said, you know, in these kinds of times, anybody who thinks they know what’s going to happen next is a charlatan.
Craig Evans That’s right. That’s right.
Sean O’Toole I don’t think we know. So I think you know, like, what’s working today is, I think, a lot more valuable than trying to predict the future right now.
Craig Evans Sean, I really appreciate your time. Appreciate your thoughtfulness and your care for our organization and what we do, hopefully you’ll be able to be back with us next year for I Survived.
Sean O’Toole Yeah, awesome event. And really sorry I’m missing it. And hi to everybody that I’m going to be missing there that’s watching here. So Craig, I really appreciate it.
Craig Evans Absolutely. Thank you for everybody. Yeah, yeah. Thanks for Joey for all he does that. Nobody sees him in the background.
Sean O’Toole Absolutely.
Craig Evans That’s it so well, listen everybody. Thank you so much for being on. I look forward to seeing you soon. Take care.
Sean O’Toole Thank you.
Narrator We’d also like to thank our Gold Sponsors, Inland Valley Association of Realtors, Keystone CPA, NorCal REIA, NSDREI, Pasadena FIBI, PropertyRadar, The Collective Genius. See, isurvivedrealestate.com for event details.For more information on hard money loans, trust deed investing, and upcoming events with The Norris group. Check out thenorrisgroup.com. For more information on passive investing through the DBL Capital Real Estate Investment Fund, please visit dblapital.com.
Joey Romero 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 to thenorrisgroup.com and click the hard money tab.