Itay Elyasof on Protecting Real Estate Investors from Fraud and Title Risks

Steven Weinstock: [00:00:00] Hi everybody, and welcome back to the Wealth Clock with Steven Weinstock. Today's guest is itay Elyasof, I hope I said that correctly. He is the co-founder and CO CEO of Alefy, a prop tech company that monitors us real estate assets. After closing his mission, help investors spot legal risks like liens, title transfers, surprise mortgages as soon as they happen. This episode is brought to you by my company, we Capital and the Goethals Capital Fund. This fund is buying assets in cash where we are getting significant discounts, and we keep the properties mortgage free for the first year to eliminate lots of risks to our investors. Then we refinance later on in order to scale. itay let's dive in. I know you're coming all the way from Israel. Exactly. , I hope you're not in a bomb shelter right [00:01:00] now. Itay Elyasof: No. We are doing okay. We're living our life here. Steven Weinstock: Okay. We get used to it. Okay, good. Good. Yeah, my my daughter's in camp over there she's having the time of her life. We're keeping her safe. My son was in school there this past school year. He had a great time. Every time we'd call him all nervous, he would say, what's the problem? I'm here with my friends. We're having a burger. Relax, mom and dad, Itay Elyasof: right there is her shelters anywhere. So we're good to go. Steven Weinstock: Talk to me about Alefy. What inspired you to launch Alefy? How'd you get that name? Is it for Olive? As in the first letter? Itay Elyasof: It's, first of all, here in our family. I have four kids and we all, our letter Alef in Hebrew, we all start with the same letter. Also, my, my my family name start with Alef, so that's one part of the issue, but it's coming for the word alert. So that's where we coming from. Basically I used to work, I used to work for a real estate company for an American [00:02:00] real estate company, which in. In the past few months, we found out, the past few months of the company life cycle, we found out that they committed all kind of fraud toward investors, toward banks, towards all kind of companies in the us the company had an American investors and also Israel investors. They had family offices, they had investors of all kind, also institutional investors, and. We as an employees, we've been told that the company needs to shut down. There is high interest rates and things happen in the States, so we have to shut down our operation in the States and also in Israel. Okay, that's happened. Companies getting shut down every day, so that's okay. But after receiving more than one phone calls from. Angry investors that's saying that things happening with the real estate in the us the story isn't what we've told all over the past few years. And the company [00:03:00] was working around seven years, 3000 doors, more than $300 million in in their portfolio work. So that was a shock. Also, I was invested in some of the properties. So when we started to find out what really happened, that's where the idea to, to establish alefy came from. Steven Weinstock: So this platform, tell us about what it does. Yeah. It sends alerts. It you tell me. Itay Elyasof: So we're connected to all the 3,100 counties in the States. As each and every one of them has his own website, looks like. Established in the eighties or something very old, in each and every website, you can need to search following your either an address, the LLC, the guarantee. You have all kinds of different searches in order to find something, it's very difficult. So we connected to all the 3,100. Different counties, more than 600 MLS systems, and we brought all the data into one [00:04:00] dashboard, into one platform. And what we are doing there is lots of platforms that provide data from the county records and other records. What we are doing is we are monitor, we are using AI agents to monitor those. Those counties, those specific properties, and alert if there is any change. For example, if someone took another mortgage and now there is a second position lien on the property, we'll alert if there is a change in the mailing address. So that means that maybe something changing the LLC, if the ownership change, if anything happening in the title itself, in the county records itself, we will alert the clients our, and we have. Quite a wide range of clients from lenders hard money lenders regular lenders investors, and also GPS that works with us in order to give their investors transparency to their portfolio, to our system. Steven Weinstock: So you, you would have [00:05:00] a potential client who is not necessarily the owner of the property, but if I'm an investor in a property, I might call your company. And hire you to, watch over my investment. Am I correct? Itay Elyasof: Yeah. It's a SaaS software, so it's based on the subscription. All you have to do is give me the address and that's it. You don't have to onboard. The onboarding is very quick. It's, I only need your address. I don't need you to prove anything. We all based on public records. So legally wise, all I need is a, is an address and I will give you all the data on that address. Everything. I'm guess also from legal aspects, foreclosure, prefo, closure, land, a watch, all kinds of different aspects. On the property we had the guy use the, using our platform for dd. He is having four or five different deals he's inspecting, so let's monitor those and see what their mortgage is like. If they're in some kind of trouble, maybe I can make a move on them [00:06:00] using our platform. Steven Weinstock: So your platform takes publicly available information curates it puts it neatly and, delivers it to your clients. Am I correct? Itay Elyasof: And again, the major aspect here is. I guess that your listeners and every other professional real estate guy will know that you can obtain those records. The county records, first of all, of course, from the county itself, but also from all kind of other platforms. You can obtain this kind of data. But the thing is, it's not only the data is the ability to alert if there is any change, the ability to monitor the portfolio itself. One of the problems that many people don't talk about I'm, and I'm doing it daily, so I know that everyone is saying that. No, I have title insurance and I doing title checks and everything is clear. The title is only valid to the day of the closing. If the title will have something come up. The [00:07:00] upcoming months or years after you close the deal, but the originate of the, this problem was before the title checks. So yes, the title of insurance will cover it, but the title won't cover. If there is a tax then and now there is a tax foreclosure on an asset. The title won't cover that. So the title is only correct to the same specific day that he made the title check and he signed on it, and now he can insure you on those things he check, but it doesn't cover you. From now on, no one monitor. And again, from conversation I having daily with people, no one is monitoring the platform. The assets during the life cycle of a deal. They're only monitoring the p and ls, the financials. How, what's my rent? If our, what's my expenses? How much I paying for the management company? Everyone is monitoring those aspects, but no one's checking. If someone took my land. I had a [00:08:00] guy, another story that we had a guy that had a land in Miami and he wanted to sell the land. And when he approached the broker said, look, I checked and you're not the owner of the land. So he had a fraud. Someone made a fraud, change the LLC in the records and took control over his assets. So it took him a year and he gained the control back, but he paid for lawyers for a year in order to even know that he is the rightful owner of the land. Wow. In my, in the company I used to work for. Apparently that they sold an asset six months prior to saying that to the investors. The investors thought that they're still the owners of the property, but six months later, they found out that the property was sold, and now six months after tried to find the money. Wow. Wow. Steven Weinstock: Walk us through how Alii Alefy. Alefy. Yeah. Yeah. You're doing it. Great. [00:09:00] Walk us through how Alefy actually works from the signup to the receiving alerts. You mentioned it's an easy onboarding process, but just give us a little yeah. Itay Elyasof: It's very quick steps and the whole purpose was because we came from that. Field of the real estate profession. We know that no one likes to do onboarding to a very difficult or problematic CRM systems or investor relations platform that there are in the market. So all you need to do is to sign up with an email, to write an address. Choose a plan monthly, early. That's it. You are in the system from now on. Of course we'll give you all the data and from now on if there is any change, you will get a weekly alert. The weekly alert will say, we scan your portfolio, you're all good, or we scan your portfolio, we found something. Check it out in your dashboard in order to do to know what to do next. So from now on, you are under alefy [00:10:00] monitoring platform and you are saved. That's why I said it's very easy. All you need to do is sign up with an email with a Google email. And put an address and that's it. You don't have to prove that you are the owners. You don't have to upload documents or any other data, just an address. You want to use it in order to to track deals, in order to monitor you said that you're just entered to the multifamily sector in the past few months or so. So with a multifamily, lots of the time people searching to buy multifamily in the same neighborhood. In order to reduce expenses, management expenses and to manage it as a portfolio in the same neighborhood or in the same area. So you are targeting two or three other multi-family next to you. It'll be just a few dollar for each one in order to keep it under monitor and to see if there is a chance here, so I can go ahead and grab it. Steven Weinstock: Yeah. So yeah, just [00:11:00] to back up we entered the multifamily space about eight years ago. It feels like a few months, but it's eight years ago. My bad. It's okay. We own some assets. Even though I'm based in New York we own some assets in Kentucky Ohio. A little, some parts of New Jersey and then we're also investors or cogs in some other deals like in parts of Texas and Pennsylvania. But who is your ideal user for this property? Is it a high level investor? Is it the gp for the most part? Who are you targeting? Itay Elyasof: Yeah, that's a great question. We have, as I said. All kind of types of different clients to the platform where the regular one, the what we call B2C is the regular ILP get invested in your fund or in other people fund a hundred K, 50 K retail investors. That's just invest in a couple of different, with couple of different gps. That's the the basic [00:12:00] customer of our platform. That's the mass market. Above them. There is the guys that investment, the investment more like a family offices or other investment houses that invest in couple of different funds or with couple of different gps, and they have investors behind them. So they are, they need professionally to monitor their portfolios, not only for them, for their gain to, for their profits, but also for their investors behind them. By the way, same about hard money lenders that raise money from investors and invest money. Now, hard money lenders working as, in a different kind of way from other more, let's say other lenders, hard model lenders, that's another type that we are targeting because they have, most of the time they're just couple of guys in their company and they sometimes with a $5 million fund, can put a hundred K in each deal. They have now 50 [00:13:00] deals under management. They need control need, they need to gain control over the portfolio, and they won't know. People think that if they have first position mortgage register in the county, that's it. We're safe. Nothing can happen. Now, that's not entirely correct. Even if you have a second lien position, you can affect the deal. Now, there is a chance that the deal will go to foreclosure. Maybe there is a tax name. The city and the county are before the lender. All those are potential clients, pot potential customers. As I said, the GPS that we're working with at the moment are the ones that wanted to give users to their investors and say, Hey, we use a third party company. It's not of our own. Now you have full clarity, full visibility into the properties itself. You know that I won't do anything because you will be notified. By a third party. And what they said [00:14:00] to us, it's helping them to raise more money because in the selling pitch, they're mentioning our platform and say, Hey, check it out. You can do it on yourself. We can give you users of our own. But at the end there always, there is a question you based in Brooklyn, but invest in Kentucky, for example. Same here from investors that lives in New York, but invested in Texas. It's far, they're not going there daily. They're just receiving reports every quarter or every every year they're getting reports with p and Ls. We want to have, we want to sleep better at night. We want to know that everything is correct. Everything happened, as you said. I'm not saying that everyone is committing fraud, but first of all, frauds happen. And it's it's happening every day. I see articles every day about those those things. So it happens and you need to be on top of it. Steven Weinstock: Let's back up a minute. Where you're from, how'd you get into this business to begin with? Take us back. Itay Elyasof: Yeah. As I said, I'm [00:15:00] from Israel. I based in right next to Tel Aviv. I am from my background, I'm 35 years old. I was lots of here in the Army in the past couple of years, just reserved. But I was lots of here in the Army. And when I retired from the army, I joined this real estate company that I used to work for the American Real Estate Company. And I did, I raised money from investors. I did investor relations here. Basically getting the reports from the American entity and delivering it here in Israel. I did it for three years. That's where I got to know American real estate really very well. I visited Kentucky and Ohio multiple times and other places in the state we, we invested in. So that's what I did for three years, and as I said in the, I think it was in the end of 2024. When they told us they're shutting down operations in Israel and in the States [00:16:00] and things started to happen very fast. We came up with the idea with Alpha, and we started that in February. Steven Weinstock: Wow. What's the biggest risk that you're helping people to avoid? Is it liens? Is it fraud? Is it title dispute? Is it really everything? Is there something specific that you're telling? A potential client you know what's the big sale? Itay Elyasof: Yeah. So what I always say that when you're looking at a real estate deal or investment, you're always looking at the percentage, the yield you're looking at, if I will get a 6% yield, 10%, 20% yield, wherever. That's always the, you are aiming for the highest yield. Of course, you need to d the GP and the guy you invest with, but you are always targeting the highest yield. What I'm always saying that the biggest threat in the deal isn't if you're gonna do fixed or 10% yield on a deal or [00:17:00] returns. The biggest the biggest risk is to lose the principle. That's what we're doing. We are helping investors not losing their principle. If I put a hundred K into a deal and the owner change ownership without letting me know, and that's it, I'm not the owner anymore of that specific asset. That's it. I lost the principle. It doesn't matter if it was six or 10, I lost it. If the lender foreclosed the asset because the GP didn't pay his interest. That's it. I lost the principle. So the biggest thing we are doing with investors, we are helping them not losing their principle. That's the first thing. So maybe it's not the best deal in the world, but at least you get something out of it. When I used to do sales for real estate, I used to say that there is always risk in an investment, whether it's stock or real estate, there is always a risk. But in real estate, the risk is lower because there is four walls. [00:18:00] There is a land, eventually, there is something with with value. But when you are dealing with all kind of different things that happening in that field, you understand that even those can just disappear. So that's the biggest thing that we are doing. We are helping helping LPs, gps lenders not losing their principle. That's the first thing. And the second thing is really. I learned it firsthand when I lost a hundred K in one of the deals that I want to sleep better at night. I want to invest. I want to earn money. I want to do big things, but I also want to sleep better at night and knowing that everything is under control, and I will be notified by some platform that will allow me to understand what happened with my deal. Steven Weinstock: What's a common mistake real estate investors make after the closing? Itay Elyasof: Another good question. Basically most the biggest thing they're doing is [00:19:00] relying only on the investor reports of the p and ls. What we saw in so many different use cases is that you can change those. I can provide you a p and l that looks perfect and even distribute money. I will distribute you the funds. And it looks very good on paper, but there is nothing behind that. As I said, there is an asset that we provided to reports here in Israel to investors that the property was sold. So that's a very intense use case, but. There are things that they're relying more and more on the p and l. Second thing is that they're not doing the checks on their own. They're just relying on the presentation. They're not doing their dd, so that's another huge thing that you need to do. And third thing is, after you closing the deal, after you're closing the deal, you need to make sure that everything is signed and registered as it should when you've been told that you [00:20:00] invest in an LLC or an lp. You need to see that this is what registered in the county records. So you will know that if something goes south, you have some kind of security with your deal, you need to make sure that everything registered. We saw just two days ago we demoed some lender. The platform we uploaded is is properties, and we saw that there is a mistake, a typing mistake with a lender name. So that's another risk for lenders. He invested, it was $60 million mortgage on a building in New York and they misspelled the name of the lender instead of omi. It was omi. So just one letter typing error. And eventually that's a human error. Someone type it wrong. It's a risk for the lender. If there is somewhere, someone by the name of. LC or something like that, he can [00:21:00] claim something in front of the of, in front of the authorities. So those kind of very simple mistakes that no one knows about because they closed the deal, they end the title, check everything did everything as it should. They paid patron, escrow account, everything went by the book. But typing mistake could lead to losses. Steven Weinstock: Wow. What do you do to gain awareness for your company? What are you advertising? Are you and I, I've seen you on LinkedIn. What's your, yeah. What are you doing to get more business? Itay Elyasof: Yeah. We are Boots Drive com company. We are, we started immediately with sales without raising any capital. It was worth the risks. We started immediately with sales from. Ear to mouth where people just keep sending us leads. This is my friend, I'm a subscriber. Tell him that you talked with me. So we are doing that quite a lot and [00:22:00] we are just launched the platform. Today or tomorrow, I dunno where it will be broadcast, but this podcast. But today or tomorrow, we are gonna have we're gonna launch our B2C platform so everyone can just subscribe on their own without the need of going through a demo or a sales meeting with us. So it'll be I guess it will be faster. We will start working with all kind of investors, communities that's what we're beginning on doing now. Steven Weinstock: Where do you see the biggest opportunity for prospect innovation over the next three to five years? Itay Elyasof: Wow. I saw so many property companies in the past few years trying to pitch us and trying to, and again as a guy that was in that field as. Most of the innovation I saw in the real estate AR arena was taking the Excels and make it digital or combining some kind of very simple [00:23:00] AI on those Excels. So you take an Excel sheet with your investors and there are location in the properties. You put it in a very nice dashboard, you give it a name, and now you have a property company. But basically it's not innovation, not yet. What I'm seeing and what we are aiming to do is we are aiming to map using, really utilize AI to do all kind of things from sourcing deals, so you won't have to dig through all kind of data. There are platforms today that you can bring them all kind of parameters and they will suggest deals for you, but really be able to monitor and see, for example. If there is 4, 5, 6, 10 different assets in under foreclosure in the neighborhood that you're looking to invest in, now you have a chance to close the deal or in a pre foreclosure. It's not a foreclosure yet, it's in pre foreclosure. Now you have a chance to do it or by [00:24:00] entering I won't say your name because I'm not wishing you that, but someone name. Just put it on our platform and you will know which asset he has under management and where he has. Problems. Now you can maybe buy more than one. That's as, as I can see, a real innovation and it will save so much money in DD and legal expenses just to be able to get the same guy buy three, four multifamily from in a very good prices because he is in trouble and you won't know it without someone to tell you that. Steven Weinstock: So this is a new feature that Alefy will be rolling out. Itay Elyasof: We are in our roadmap. This is where we are going through, we are going to be serving more GPS in with that feature, guys that are tracking, sourcing deals sourcing deal flow. This is where we are going in the upcoming months, I hope. It'll be very, again, simple to use. That's [00:25:00] our main our main thing is to do it simple. It'll be very simple to use and it'll give you lots of data without you needing to dig in massive data points. Steven Weinstock: What advice do you have for a smaller retail investor? Maybe somebody who's putting in a minimum of, $25,000. Maybe they'll do one deal a year. It could be they don't make that much money, they just don't like the stock market. Maybe they're investing with their retirement account. Could they afford to pay for a service like Alefy? And if not, if they're a small investor what other options do they have? Itay Elyasof: So when we started when we started, we aimed to those investor. That's how we priced our platform. Where the pricing is starting for one investor is paying $15 a month. So we see it as something is very logical to pay $180 a year in order to sleep [00:26:00] better at night with those 25,000 or 50 K he put in a deal. So pricing wise. In my personal opinion, I'm biased of course, but in my personal opinion, I, we think it's logical. But other than that, I will say that make sure that the guy you invested with has a very nice track record. He made full cycles. That's another important thing. It's not only what you have on paper. Let me see. Full cycles. Let me see some exits. Let me see what you've done in the past. So the data is very important, but as we always say that you need to keep. Monitoring, even if you're not doing it with Alefy, you need to be on top of the game with what's coming. Not just the p and Ls, not just, we're always aiming for the big stones, the ownership, the mortgage, the thing that can risk my principle, not just my returns, not just the yields, just. Aim for those big stones that can risk those 25. By the way, for someone [00:27:00] for a big family office or institutional investors that invested million dollar in a deal or $10 million in a deal, if they will lose it, it's not the end of the world. Okay. They will, they will return to the market. They will keep investing. They will sue the guy. They will do whatever they have the power and the means to do the guy with the 20 5K that invested, this is the only money had to invest. So that's a huge risk, is taking with that investment. That's why he needs to, he needs it more than those institutional investors, in my opinion, at least. Steven Weinstock: Yeah, itay, you definitely gave us some interesting food for thought. I appreciate it. I appreciate you coming on, especially all the way from Israel. My Itay Elyasof: pleasure. Steven Weinstock: Tell our audience where they could where they could call you, where they could talk to you, where they could reach out to you. I'll put it in the show notes, but just tell us. Itay Elyasof: Great. So you can reach on our website, it's Alefy tech.com. Also put the link [00:28:00] in the description, and you can always reach through LinkedIn. I'm available there, so feel free to reach out if you want a demo, if you want to schedule something to see on your own, maybe see your own properties. I always like to put your own houses when I'm doing demo just to see what we know about you using the platform. So feel free to reach out. Steven Weinstock: This is just for a USA audience, correct? Itay Elyasof: It's not for USA audience, it's for everyone that invested in the us. It doesn't matter if you're from Israel, from Singapore, from Japan. If you're invested in US real estate, feel free to reach. Steven Weinstock: Okay. itay, thank you so much for joining me today. If anyone who is listening please reach out to itay. All his info will be down below in the show notes. Thanks again for being on the show. If you enjoyed this conversation, subscribe to the Wealth Clock with Steven weinstock, share it with someone in your network. itay, thank you so much for coming. Israel is in a [00:29:00] precarious situation these days. I have a lot of family there. I visit there. We definitely wish you luck and stay strong. Stay safe. Thank you so Itay Elyasof: much. Appreciate that. Thank you.