Why Nobody Wants Full Automation w/ Adrian Gutierrez

Adrian Gutierrez

I came back and I just hit it off. I mean, I I went to talk to Seamus, and that's the CEO. and he and I had like thirty minutes. We ended up talking for I think like an hour and a half, just full product there. came back in for the next interview, did a whiteboard, ended up talking to him more. I think total process, I was there for like three, four hours just talking. Like we were just diving into everything. And so it was kind of a no brainer.

When they made me an offer. and I went and worked there and I led the whole entire embedded finance side of everything. you know, when I got there, they had moved like really no money by the time I left. We had moved more than like I think we were hitting like two billion dollars annually of like rent. We were making, you know, like more than three hundred thousand dollars a month just off like the embedded finance product line. pretty much owe my career to that. And I was able to talk to thousands, I mean

thousands and thousands of real estate like owners, investors, property managers. And so that gave me that experience that I needed of like, okay, if I'm gonna have my own portfolio, if I'm gonna go through this whole entire process that's from simple all the way to complex. I got all of that from them. and during my time there, and I I went long winded to explain this. during my time there, I always said I went to build accounting and bookkeeping just because of like how

like how minutia you need to pay attention to all the details, like all the minutiae of the details. and so we partnered with another company called REI Hub. John Carrier was the co founder, CEO there. really brilliant dude. I remember telling him on the call, I'm like, I get your product, which is probably the first time I've ever said that about accounting and bookkeeping software, 'cause you jump into QuickBooks and you're like, what the heck?

Jeff Albaum

It's the worst.

Adrian Gutierrez

It's the worst and everyone complains about it. So that's why seventy percent of the market is still doing, you know, like Excel sheets, or pretending to at at the at the end of the day. and I told like your product makes sense for even someone like me. but it looks like someone did it in Microsoft Paint. so like so like we had kind of like this just sparring back and forth around it. But we partnered with them and really we were able to sell that so easily.

Like everyone has that bookkeeping accounting need. and even if you had to do it in REI hub, which was still pretty manual, you still it still made sense because the workflows made sense. and so TurboTenant bought them. And that kind of launches this journey of like I left TurboTenant. I went to Livable, I was head of product there, you know, we're focusing on lending so that people could split their rent payments. Livable's done fantastic. They've been bought by RealPage, it's been a

great outcome for that whole entire co-founding team. I was just obviously one of the employees. but like fantastic people learned a lot there. But during my time there, I saw that REA Hub was getting bought by TurboTennant. So like the wheels started turning, you know, my head and I was like, they're the really sole provider in this space. And AI is now becoming something that can execute these workflows. So we can take away of this kind of like manual need of people to be like mini accountants or mini bookkeepers.

And so that just kind of like churned everything in my head to the zoo. I I left Livable early. Those guys were great. They advanced my equity. Like they're like, we understand it. We know you want to do something of your own. And so I jumped out and I I got involved in it. And with our first probably the first year, I was doing everything by hand, right? just doing people's bookkeeping by hand, the county by hand, putting it back into like the software to make it look like you know something was actually happening.

and that that's that was kind of it. So that I could really understand the AI and like where we could plug things, where we could build it. and so that that's what brings us to current day, I guess is is the best way I can give you all the background to get to today.

Jeff Albaum

Dude, that's amazing. So a a coup a couple of things I I want to kind of pick apart a little bit more is like, okay, so you mentioned a couple things. So you were at TurboTent, you went to Livable. Can you explain for I think most people listening have a pretty good understanding of real estate investment, but for those that don't, can you explain the the core problem that you're solving with Ledger?

Adrian Gutierrez

Yeah. it's really most people would probably think it's productivity that I'm trying to solve for trying to save real estate investors the hours they might waste on on crafting the the Excel sheets, on crafting QuickBooks. it's really not that. it comes down to scale. When you have all these properties coming in, and you also maybe have a confounding or compounding problem building there because you haven't separated out things into different LLCs or you don't have multiple.

bank accounts, what have you. what you end up having is a blind spot in your finances. and so that becomes a problem the minute you want to bring on other investors, right? That becomes a problem the minute you want to start getting better deals from banks and stop running things through your personal name as well. But it's just that it's getting your actual insight into your financial performance, right? Not only income statements, but also being better for tax time, saving money on tax like tax returns.

Jeff Albaum

Mm-hmm.

Adrian Gutierrez

Cause real realistically the money you should be spending is on having like your CPA or an enrolled agent helping you scale out by taking better advantage of the IRC, right? Taking better advantage of those tax strategies versus just having one chance, you know, per year to talk to them and the thing you're doing is passing over a shoebox of receipts. And then you're like, wait, why didn't you save me all this money that you could have? And it's like, Well, I didn't realize that you just bought a property that you could have done a cost segregation study on.

and depreciated this a lot better, right? Like you didn't tell me until today and guess what? Like it's April. Yeah, it's March 30, like like I can't strategize with you when we're talking about something that pass nine months, you know, like that happened nine months ago. so it's really that. It's give the financial insight into the portfolio and and take out the cumbersome workload of, you know, everybody knows they need this, but most people don't want to do it. Or it's like a news resolution. You go to the gym for five days, right?

Jeff Albaum

Right.

It's March thirty first. Yeah.

Totally.

Right, right.

Adrian Gutierrez

And then you come back and it's the end of the year again. You're like, wow, what happened at three hundred and sixty days?

Jeff Albaum

Totally, totally. And so from when did you kind of have you said you were doing, you know, doing it by hand, so to speak, for the first year or so. What what was that timeline? Was that like 2024, 2025, 2026? Like, and then when did you start to kind of implement the the software component of it?

Adrian Gutierrez

Yeah. So September twenty twenty four is when we when we really got started. I would say it was all the way up until around October of twenty twenty five that it was really by hand that I was doing things. We built software, right? We still put like components in front of users. We still built like the connections to bring in like their information from plaid, analyze spreadsheets and stuff like that. But it was still very much like, okay, I'm gonna look at all the information we just ingested.

Jeff Albaum

Mm-hmm.

Adrian Gutierrez

And I'm gonna figure out where does it need to go, right? Like if they're uploading property closing documents, you know, what have you, like I need to know where it goes because I need to see like from the the ambiguity that comes in, how do I get that mapped before I ever try to put like an actual logic layer in there? because if not, it's just gonna be wrong. and I mean, I think most real estate investors know this is like there's a mentality shift that happens when you have a couple properties to when you have a lot of.

Jeff Albaum

Mm-hmm.

Mm.

Adrian Gutierrez

Right. Like you're still thinking you're a hobbyist more than a business owner. And so like I get the most random documents sometimes. Right. Or I get like I get half complete documents or I get half complete financial details. And then all of a sudden, two months later, someone's like, No, these books, these books are a little bit off. And I'm like, Well, I'm seeing I'm seeing like these transfers to this account that ends in, you know, I don't know, 72.94. What is that? that's my other bank account where I also have other things. And I'm just like,

Jeff Albaum

Mm-hmm.

Garbage in, garbage out.

Adrian Gutierrez

I'm like, I need that one. Yeah. Yeah. And I'm like, I need that one. But it it it led to this really interesting insight is that you would think that as like real estate investors, we know like all the inputs we need to give to like our financial people. but realistically we don't.

Right. Until we see those context cards come back and we're kind of like, hey, yeah, I told you I have five mortgages, but I never actually told like I never gave you the mortgage document to understand how these split out, right? Or the terms. and so it's like this interesting thing of like real estate investors know some of the inputs. They don't know all of the inputs to get to where like someone could get like clean books out or clean reporting. And then it's also on the output side is like.

Jeff Albaum

Mm-hmm.

Right. Right, right, right.

Adrian Gutierrez

They mostly know that they want an income statement, they want to, you know, see schedule E, stuff like that around tax time. But, you know, they don't realize that you can then start doing reporting on like ARR or there's other reports, you know, when you're doing like financial forecasting to tell you like, hey, it might be the best time to sell your property now, right? Versus like keep it going. Like it might just be

Jeff Albaum

Mm-hmm.

Adrian Gutierrez

great for you right now in the market. And then you can go to another mid market and buy another pro, you know, whatever. There's so much different, there's so many different tools that can really help you if you have the foundation right of your books are good. Right. We know what you're doing. We know where you can go. and so that's kind of like that was everything from doing these things by hand and hating every single minute of it. But at the same time loving it because I knew like it's getting me to where I need to go.

Jeff Albaum

Mm-hmm.

Totally.

Totally. And so how many people have you signed up for this so far?

Adrian Gutierrez

So we have a before and after. we did it by free. We did it free for quite some time. and free wise we we passed over, I think like fifteen hundred people.

Jeff Albaum

Okay.

And was was the prop just like, Hey, I I'm gonna look at your books and give you some feedback for free.

Adrian Gutierrez

The prop was selling the software still. It was selling like, hey, we're gonna automate your books, do it. Realistically, it's just Adrian and, you know, the other co founders behind the scenes doing it, but it's gonna feel fast enough to where it gets done. and it was still trying to sell like a core value prop. and it was for free, right? Or it was for a trial until X date. and then we just never charge people. and then once we got confidence in

Jeff Albaum

Right.

Adrian Gutierrez

You know, probably to answer the second question or to ask is when do we start charging? When did that change? it was when we realized that we were doing these things really fast, when we already saw these workflows and we saw the repetitive like natures come in and we we understood it's not gonna take us hours to do this, it's gonna take us thirty minutes to do it, right? And so these are the inputs we needed from you. Once we started doing that, that's when we started charging. And that's when we started charging either

Jeff Albaum

Mm-hmm.

Adrian Gutierrez

you know, a flat annual fee, you know, for like four hundred and something dollars a month, or we're charging a few hundred dollars a month, and then bringing them across the finish line. and so, you know, that was that was an interesting time period, but we we we made that shift to paid. We're like, we need to make sure that people are gonna pay this 'cause that's the only way to build a real business at the end of day. and so that's where we are today. And that really that initiative started launching

Jeff Albaum

Right, right.

Adrian Gutierrez

December of twenty twenty five.

Jeff Albaum

Okay. And how is it going from cause I mean, I'm a I don't want to assume, but I'm assuming that like if you're going to a real estate investor, like, hey, this is the value prop, you know, and to a real estate investor it makes total sense. I'm like, yeah, sure. I want to look at your books and streamline some your processes. I'll do it for free. Yeah, who wouldn't take that deal, right? Like, that's awesome. Then when you come back, you're like, okay, cool. This is all the time I'm saving you. I'm gonna start charging you money now. How what was the conversion between people who were like, Yeah, take my books for sure, versus actually took out their wallets and and paid?

Adrian Gutierrez

Yeah.

So that conversion, last time I checked and last time I checked, I think last month, was thirty-nine percent trial to paid conversion. yeah, it's it's really insane. and that's where it's like been that's w that was our light bulb moment, really, to be like, okay, we we have something that's not, you know, I don't know, it's not

Jeff Albaum

Dude, that's pretty good.

Adrian Gutierrez

a couple million dollars that you could ever grow it to. But we have something that like if we pair this correctly with software and we pair it correctly with like the right people, like now we're talking about a business that's really, really highly valuable, right? a true software play. So

Jeff Albaum

Totally. Totally, totally. Dude, that's amazing. And and who you like when you refer to as we and co founder obviously is is part of your title. like again, I don't want to assume, but I'm assuming you're you're kind of the product guy here. so who are the other folks involved and like what are what are their backgrounds?

Adrian Gutierrez

Mm-hmm. Yeah.

so the other folks, it's two more co founders. they came in honestly after me. I was always in touch with one of mainly 'cause like we've known each other for how old am I? Thirty two years. We've known each other for thirty two years. He's my brother. you'd see it. Joseph Gutierrez is his name. he he's very much product with me, but he's on the technical side. so his background has been he was

Jeff Albaum

Okay. Okay.

Ha ha ha.

Adrian Gutierrez

He was doing AI L. He was studying his PhD over at SLU St. Louis University. and then he got poached by the government. so he started working for the Defense Department, he started working at Boeing, he worked for the NDA, he's worked in like cybersecurity startups. and it's all been in in that same veil veil of AI ML. And I'm not talking about, you know, Claude, you know, Claude Co dropped May 2025, right? I'm not talking about like what people are now.

experiencing, but I'm talking about the reason why there's people at ChatGB, you know, open AI and Antrophic making a million dollars in salary. Talking about like the true AI ML people of the world, which there's very far and few. I'm lucky enough to be like in a position where that's my brother. And I'm lucky to be in a position where he's willing to not make that much money just to to work with me. even though like I stress him out a lot because I'm just like this is what we need. This is how we need to get there.

From like the business side, I'm like, I need you to understand this. I need you to push back on it. And he does. And I'm like, and then I need you to be the one that goes out and builds, you know, 70, 80% of it, and I'll build the rest of it. and so like he loves me, but I think at times he hates me. but he's he's a great guy. and he's really he's really dove duh like duh dove into this of like he's read the internal revenue code, he's read so many accounting books, he's read so many real estate books.

Jeff Albaum

Yeah.

Totally.

Adrian Gutierrez

he's just gotten full full tilt. even though like he we have properties. This is like he he went above and beyond to really understand the problem space more because I'm usually the finance guy that runs it all. so like he's he's just more along the lines here's my contribution, let's go buy another property kind of guy. and then we have another one. I've known Max O'Rourke for I think we met 2022, maybe 2021. I forget when I started working at Turbo Tennant.

Jeff Albaum

Okay.

Adrian Gutierrez

but he was one of the other PMs that started with me at TurboTenant. so he was on the more of the like marketing and screening applications side of things for property owners, building out all that, building it out for the tenants as well. his background's been in like investment banking, he's worked at Abrego, for the past few years he's been working at his own like consultancy firm.

for like go to market on like e-commerce and and stuff like that for brands. and so he's the other co-founder. He handles a lot of like the go to market s type stuff. and then obviously like it's all three product people pretty much there. But that's primarily my role outside of like the operations side of things. But we're pretty we're pretty solid team, domain expertise all around. Everyone has properties as well, like is is super into it. and so it's

At the end of the day it's a little selfish because we're eventually like we're just building something for ourselves too. So

Jeff Albaum

Yeah, yeah, yeah. Dude, that's awesome. I love that. That's so cool. is does anyone have a CPA background? Like

Adrian Gutierrez

Yeah.

So I I do in part my I ended up going back to school to do my MBA in accounting. so I I have like that huge I have that knowledge there. realistically like I never sat for the CPA exam. So like I I was like I'm not gonna do it. but what we pulled on board was I was able to find quite a few, funny enough, through like different conversations with different people, a lot of other property owners that are CPAs.

Jeff Albaum

Okay.

Yeah.

Adrian Gutierrez

and so those are the guys that are actually on our team that end up being involved in our funnel that end up doing and reviewing like the outcome and the books and closing them for people. so right now, like we have one that's fully contracted with us. and then we have like three more that are sitting there just waiting for volume to fully pick up. but the better that we've been making the automation, the less people we've had to actually like worry about employing because

Jeff Albaum

Got it.

Adrian Gutierrez

you know, our CPA can handle our CPAs can handle about like I think it's like two hundred clients each, like once as we've been building out everything. So

Jeff Albaum

Dude, that's incredible. And where, like, as you think about growth, like where where do you see the future? Like to you, what is what does success look like?

Adrian Gutierrez

you know, there's there's always the dream of like you're building a huge two hundred, three hundred million dollar company, you know, or even larger. I think I would I think I'm probably gonna like annoy my investors at this point, but I'm even fine building one that's, you know, smaller but profitable and like you're you're bringing in a really high margin game and your your team is tight, and small and you're, you know.

Like most the money just goes back to like profit sharing, what have you. but I think there's all there's two sides to it. We can either go that route or we can go really large and and and pretty much open this up to the masses. my research and the amount of bookkeepers and accountants that I've talked to here, most accountants don't want to do bookkeeping, right? They want to be in that advisor type position, doing the strategic

kind of just planning the aspect and you know obviously taking care of the taxes, but taxes is a a numbers game for them and a minutes game for them. You know, if they can file tax returns ten minutes faster, they're happier, right? They can close out that, they don't get as stressed. And then if they can they can spend the rest of the year, you know, maximizing their their their clients' portfolio, they're they're super happy. They're they're having a great relationship. the reason I say all this is

Jeff Albaum

Mm-hmm.

Adrian Gutierrez

The cost is kind of crazy, is like CPAs are fantastic and you should keep as you level up your portfolio, you should swap CPAs, right? And you should always like make sure that they're aligned with you. The person that does your personal taxes, you know, probably shouldn't be the person that files your tax return for 200 properties. if they don't have realistic experience. But I say all this because you have the cost aspect that pull into it. Property management, property ownership has a margin.

Jeff Albaum

Mm-hmm.

Adrian Gutierrez

aspect to it, right? Outside of just waiting on properties to appreciate and then selling them. and so, you know, paying a paying a CPA to be on your book roll or your pay your payroll probably isn't the best thing you want to do, you know, when you're small. so the thing I see vision wise is even bookkeepers that there's no licensure to be a bookkeeper. and again, if you don't have someone that's real estate specific, you're probably still, you know, correcting a bunch of those items anyways.

Jeff Albaum

Mm-hmm.

Adrian Gutierrez

and so the crazy thing, and I say all this again long winded, to say these bookkeepers can pull, you know, twenty-five or forty dollars an hour, right? CPAs, if you're doing hourly hour my god, I can't say it hourly rate is, you know, I would say median is like $120 an hour or more. It's really hard. It's really hard to have that when you only have a few properties or when you have twenty properties, right? Like once you

Once you start scaling and you're having like more than $250,000 in revenue coming in, that's probably where it becomes a little bit more realistic to have that cost. But at lower levels, it's not. And so that's where I see Ledger kind of sitting is the better automation we can do, the more clients we can have with the CPA, the less time a CPA has to actually spend on the book hours. and they can spend more of that time on actually helping the client strategize, right? and pointing out.

Jeff Albaum

Mm-hmm.

Adrian Gutierrez

those those areas of opportunity for a fraction of the price, right? our prices, we already know that we're gonna lose money on intake, right? Like bringing people into into it, getting them caught up to July 20th. and that's fine for us because the reality is after that, it's we're gonna spend, you know, a smaller amount of time doing your monthly bookkeeping, but you're gonna spend more time interacting with the CPA that's on your account.

to figure out like how best can I, you know, plan ahead or how best can I react to whatever's happening in the market. And you're gonna get the value out of your subscription on that front. And we're not gonna have to worry too much about like your books being out of date or anything like that. So we know that our insights are actually correct. so it's I won't say I'm on a mission, but I'll say like the vision is really can we can we open up access to as many real estate investors

Jeff Albaum

Right.

Adrian Gutierrez

from day one as possible, you know, whether you're small or whether you're really big, and get them that benefit of having, you know, their books up to date and that conversation and relationship with the CPA to help them out touch just tax returns.

Jeff Albaum

Mm hmm. And how do you run into because I imagine most people's response is probably like, no, I'm good. Like my system I know my system sucks, but it's working and I know what it is. And you know, I've wo I've been with my CPA for whatever 15 years. So how do is you're like, okay, yeah, fair enough. Like there's enough people waiting to get onto the platform that those folks might not matter, or like, how do you overcome that initial hesitancy?

Adrian Gutierrez

So the hesitancy of having a shitty system and not wanting to change it is one I don't like I don't I don't fight that objection. it's something I've learned. when people know that they're doing something really wrong and it's hurting them and it's costing them time, it's costing them money, but they don't want to fix it, either because they want they wanna spend a little bit more money to fix it or whatever the reason is, it's the same thing with investment.

is if there's an investor that doesn't know your market or doesn't fit the thesis of like your company, you're never gonna be able to convince them. so really it's I give them the advice I can give them. I usually it's just, you know, if you don't want to do this, the only thing I ask you is XYZ. and I walk away. And the funny part about that is you would think I'm losing deals, but reality is I've had a good amount of those guys come back to me after six months, eight months and be like, hey, like

Jeff Albaum

Mm.

Yeah.

Adrian Gutierrez

No, I yeah, let's try this out. on the second side, for those that already have a CPA, it's actually the conversation I keep having with Max is we're not trying to replace their CPA. Not yet. the reality is what we're trying to do is just make sure that their books are there. And in this game, it's still very much relationship driven. And so, you know, I can tell them, My software is gonna complete the books a hundred percent and they're not gonna believe me.

They're going to try it out. But then when they come in, then they're going to start asking questions. And we've seen this already when we tried out a pilot around like full automation. And people come in and then they want to break apart the books. They want to break apart everything. And they're not accountants. They're not bookkeepers. And so then it ends up just being more confusing for them. They spend more time trying to understand how ledger works than, you know, reaping the benefits of it.

Jeff Albaum

Mm-hmm.

Adrian Gutierrez

And so that's where like us dialing it back and being like, okay, let's put a CPA onto here that's gonna review all the output and close it out and put that stamp on it, that's where like we solve the trust. and so that's what I say is like we're not trying to replace your CPA. What we're trying to do is end up giving you the information that you need throughout the year to be able to have a better conversation with that CPA that you trust. and

Jeff Albaum

Mm-hmm.

Adrian Gutierrez

If it's the CPA that you've already had for fifteen years or it ends up being the ledger CPA because, you know, now you he already has access to all of it. He already has all the context and now you wanna go above and beyond that relationship and strategize with that. Cool, we'll accept it. But it's not our primary focus yet.

Jeff Albaum

Got it. Got it. Got it. Well, it also sounds like it's almost like a second set of eyes, right? You're like, hey, like we have we're gonna bring your books up to date. We have a CPA house that's gonna review everything if you want it. Take that back to the CPA you've been working with for fifteen years and like see what they say. Is that is that directionally correct? Okay.

Adrian Gutierrez

Yes. Yes. And that's and that's what we've been that's what we've been working on is is really honing in that messaging to be to be very much along that lines of like, why why leave it up to just one CPA that might have a different breadth of experience and a different part of real estate if you can get two eyes on that and kind of see the convergence, right? it's even this it's even the same way some people should use AI is like

Jeff Albaum

Mm-hmm.

Totally.

Adrian Gutierrez

People ask me about that. I was like, you worried about like claw clawed or or chat GPT taking away clients? I'm like, no, because I'm like, at the end of the day, we own we have the system of record underneath, right? Like we we know how things should map. if you upload all your financial data and stuff like that into Chat GPT or Claude Code or Claude, one, we really shouldn't. unless you're doing it in like a really private sandbox. but two

It's because Claude and and Chad GPT are great analysts, right? But it's not audible, right? Like they're not gonna go back and be like, yeah, it's because of this, you know, two, three years ago that I said it. because again, like they're they're working on a shifting context window. And unless you set up a whole entire system around it, like it's it's it's something that helps you steer versus s like the actual the actual functionality that gets you to there. So

Jeff Albaum

Mm-hmm.

Yeah, yeah. No, that that makes total sense. Can I ask some like definitional questions? I I I don't I just made up that word, but that's a word now. so okay, I I've heard this a number of times, like system of record. What does that mean if I'm a third grader?

Adrian Gutierrez

Yes.

Yeah.

Yeah. essentially how everything gets saved. So it's it's very much that like, you know, if you're a third grader, who where is it being saved that you attended school for the past 90 days, right? Like who's taking note of that? is it locked in, right? Is it is it is it evident, right? Like no one can go back there and then all of a sudden say that you were there on the fifteenth.

Jeff Albaum

Okay.

Mm.

Adrian Gutierrez

without some type of override or reasoning why you're backtracking three months. if you're not a third grader and you're a twelfth grader or you're a real estate investor, essentially we don't rely on QuickBooks. Most people, like other platforms, there's a really big platform called Pilot. And I was thinking about using them for like the the ledger side business. and when I went in,

Jeff Albaum

Got it. Got it. Got it.

Adrian Gutierrez

And I saw what they did, it's really great. Plug to them, right? They're doing something fantastic. But they've built everything on QuickBooks, right? Like their whole entire system of record is QuickBooks and then they do AI agents on top of it for the reasoning. Not saying it doesn't work, but I'm saying as a business, I would much rather own right how things get recorded into the ledger.

Jeff Albaum

Okay.

Totally.

Adrian Gutierrez

versus, you know, rely on a third party that can raise prices, take it away, change it without really any insight into it.

Jeff Albaum

Got it, got it, got it. Okay, so you're saying that ledger is that system you own your own system of record, that all the the data that you're putting in is owned and and kind of managed by you. Got it, got it, got it. Okay. That makes total sense. I didn't realize that other companies would build on top of like I didn't realize that that QuickBooks could be its own system of record.

Adrian Gutierrez

Exactly.

Yep. Yeah, it's I considered it. I think it's really QuickBooks as an accounting tool works fantastically. but if sucks real estate, but it understands, right? Like what a chart of accounts is. It understands how things get posted, how things get, you know, rewritten, it keeps that audit log, all that stuff. That is everything that for years upon years, if you rebuilt that, it would take you forever.

Jeff Albaum

Yeah, if it sucks for real estate.

Adrian Gutierrez

There's another company called Digits that did that. And they took five years to come out of stealth and launch, I think like a year and a half ago, with like that system of record and then agents on top of it. when I tried out the agents, it was a little bit less than what I wanted, but I know that they've been they've been pushing that hard as well. Again, they're more, you know, corporate enterprise, you know, small businesses kind of thing versus real estate. But it's the same thing. It's like

It's do you want to build that whole entire double entry system yourself or not? And with AI coding, and you know, actually understanding how it works and building harnesses, that's what we're able to do in a fraction of the time. so it really just comes down to that is like what do you need to own? Why do you need to own it? And then doing that matrix around it. And luckily with the genet coding, it became a lot easier to to define that and rebuild it.

Jeff Albaum

We got it.

Totally. Yeah, that makes total sense. Okay. Okay, can we do some rapid fire definitions? Income statement. Go.

Adrian Gutierrez

You can, yeah.

Income statement. essentially what's what money is coming in, what money is going out with your expenses for that time period. it excludes anything around capital improvements, or anything that would be really be more like balance sheet stuff, say hi to my fiance.

Jeff Albaum

Okay, but and does it does it include the mortgage or no?

Adrian Gutierrez

usually it won't include property, it won't include the principal payment to it. you usually shouldn't include the other stuff as well. there's some I guess that comes in. Some people will include the money that they're paying to the interest side of things, the property taxes, losses as well. you can you can't, you know, you shouldn't if you want like a pure kind of more like cash flowish income statement.

But it depends.

Jeff Albaum

Mm-hmm. And then a statement of cash a cash flow statement is something separate, right?

Adrian Gutierrez

Cash flow statement is something separate. So that is very much just looking at how much are is coming in during the month versus how much is going out in relation to one the time period, as well as again the things that are completely not like balance sheet related. and yeah.

Jeff Albaum

Okay. And yeah, perfect segue, balance sheet.

Adrian Gutierrez

Balance sheet. That's the whole entire shebang. whole entire shebang of it of you have your assets, then you have your assets, you have your liabilities, you have the equity. your income and like expenses will come into play when you're looking at like the equity. So that you're looking at like is it a net loss, is it not? and then going and and going through things. and so, you know, you'll have pretty much everything. You'll have your a like assets. Let's talk about it really simply.

Jeff Albaum

Mm-hmm.

Adrian Gutierrez

your bank account's an asset, it's a cash asset. your the accumulated depreciation from different properties and stuff like that is is technically like a like an asset account. and then there's also then, you know, the building of like you have one property. You have the building that's asset. And then you have the land portion of that property that's an asset. it's non depreciable. if you have tractor like let's say it's a farm, you have tractors, et cetera, those are assets.

Jeff Albaum

Mm-hmm.

Adrian Gutierrez

depending on how much you paid for like refrigerator or stoves and stuff like that. you could potentially put those as assets too if you do a cost seg study and and stuff like that. CapEx accounts can be there as well if they're holding. so it's like a whole entire thing. you can and then you get into, you know, your liabilities again, loans, credit cards, you know, all that all this type of stuff of where you owe someone money.

Jeff Albaum

Mm-hmm.

Mm-hmm.

Adrian Gutierrez

And so you you took out credit lines, et cetera. and you know, then you have a mortization that comes into play with like loan terms and stuff like that. and then the equity side is again, I think most people know what equity is, but it's you know how much money is kind of sitting there that is above what you what you have in like the liability side that explains the assets. So the equation is really simple. It's assets is equal to liabilities plus equity.

Jeff Albaum

Mm-hmm.

Adrian Gutierrez

and both sides have to balance. Hence the name. to be able to yeah. To be able to say, like, hey, like I know where everything is and where everything's accounted for. so that's like the whole entire shebang. You know, the income expenses side of things is a small little piece that gets inserted into that greater balance sheet to to explain everything that you have going on.

Jeff Albaum

Mm-hmm. Balance sheet, right.

Mm-hmm.

Got it. Okay. That was great. Thank you. Last okay, one one more definition actually. Schedule E. Go.

Adrian Gutierrez

Ooh, Schedule E. it's what everybody hears, but this is going to be attached to your 1040A. if you're running through as a Soulprop, a LLC, usually even partnerships, even though with partnerships you end up with like K1s and stuff like that. I think once you start getting into more of the high-level like corpse and and stuff like that, it changes away from Schedule E. if I if I'm not mistaking, I'm mistaken. but schedule E essentially is

Jeff Albaum

Mm-hmm.

Adrian Gutierrez

Three like one box that really is like three different things that go into it, but it's rents received for the property. So every entity within every entity, all the properties that relate to that entity, you have to do a schedule E. The schedule E allows up for I think like three properties per sheet. So you usually have to do quite a few, or you have to attach like more sheets. but essentially it's every property has to be reported on the schedule E, not units. So don't stress if you don't have everything tracked down to the unit level, but every property.

Rents received, and then under that it's all the expenses. The the expenses that you don't include here are gonna be like CapEx expenses, or it's pretty much anything that's depreciable, and or your principal portion of your mortgage. So your mortgage interest is gonna go here. The money that you've actually paid to property taxes, to to insurance, even if they've gone to an extra account and then got it paid out later will go here.

Jeff Albaum

Mm-hmm.

Mm-hmm.

Adrian Gutierrez

and then all the general expenses, right? most people end up with a really big list at the end of the year because other expenses is where a lot of things go. And then you have to attach a sheet that says, you know, hey, I spent $500, you know, at, I don't know, Golden Eagle or something. one definition I'll I'll I'll harp on is even if you have a property manager, your schedule E needs to if you have a property manager, your schedule E needs to reflect.

The expenses that your property manager pretty much booked that took away from the actual rental income. So it's not just your property manager sent you ten thousand dollars, you put ten thousand dollars there. It's that you're you actually charge twenty thousand dollars for rental income that year and then ten thousand dollars went out from expenses that your property manager did. That's a big mistake that I see a lot of people making.

Jeff Albaum

Dude, this is so interesting.

Adrian Gutierrez

I'm glad someone I'm glad someone else thinks it's interesting. I find it really interesting. So

Jeff Albaum

I l I love this stuff. All right. So let's I'm gonna I'm gonna switch to a philosophical question now. Let's say it's it's whatever time in the future that you insert number here and you've built up ledger to the the dream outcome, whatever that is. If that's if that's holding and going public, if it's selling, whatever it is, your dream outcome has happened, such that you've received a pretty large financial sum.

You get a huge, a huge check. And it it hits your bank account on a Tuesday night. You check your bank account. Boom, it's there. You wake up Wednesday. What do you do?

Adrian Gutierrez

It's gonna bug me, so I'm gonna go back to one thing. definition wise, income statement was what I said, right? cash flow statement. I just want to go back because I confounded it. Cash flow statement is essentially bridging from paper profits to actual cash. So that's where you would actually take out like the the financing, the the property acquisitions and all that stuff. Income statement, you want to put all that stuff in. Sorry, I just I had to go back, correct myself for it, but okay, I wake up to just a boatload of money in my bank account.

Jeff Albaum

Okay. Okay. Okay. Okay.

Mm-hmm.

Adrian Gutierrez

it really it really depends. So I'm gonna I'm gonna put it on a I'm gonna put it on like a cash figure. for me, my number, my minimum number has always been about like 10 million. I think I think I can honestly, I think I might be able to make more than that. But let's say it's just ten million is kind of my number. realistically, I look it as a number as

Jeff Albaum

Okay.

Adrian Gutierrez

It's bought my optionality, my freedom, versus, you know, like, I'm never gonna work again in my life. The thing is, it gives me the option to be like, I'm only gonna do this, right? Work wise. I'm very much a person that loves solving problems. and so like I always need something to tinker on. I made the mistake once and I took like a two month break. and I think after a couple of weeks, I found myself watching Big Bang Theory and I watched like I think like eight, eight seasons of like the twelve season thing.

Jeff Albaum

Mm-hmm.

Mm-hmm. Mm-hmm.

Mm-hmm.

Adrian Gutierrez

I'm not someone that watches TV. I'm not someone that watches movies. I read and I work and I go to the gym and I do stuff outside. And I got up that day and I was like, what am I gonna today? Big bang theater. And I like I turned it on. I was like, what am I doing? Like, I'm like, what am I doing? and that was the last time I think I actually like really turned on the TV. you know, so that's been like two years. but anyways.

It really it's something that I've always talked to my brother about too is philosophically, it buys our freedom. I would make sure that a majority of it honestly goes into just an investment trust that I can't touch. make sure that my kiddos are are good to go for whatever they're gonna wanna start in the future, whether that's, you know, going to school, whether that's starting their own business right out of it, whatever it is. Just make sure that they at least have that same financial freedom compounding while they while they're growing up.

Jeff Albaum

Mm-hmm.

Adrian Gutierrez

but outside of that, I wouldn't really I'll probably live off the interest. I would reinvest it as much as I could and I'll just take the option to to do whatever I wanted in the sense of work. start whatever I wanted, boot bootstrap it up. and and keep going. I mean, I already travel a lot. right now, for example, I'm in Buenos Aires, Argentina. I'm with my my I'm with some friends and I'm with my my wife's family. it's somewhere I've visited a lot for the past few years.

And I've I just recently came back from visiting friends and family in Spain for four months. and so like I already travel a lot. I'll keep it going. but that's that's kind of where I'll I'll leave it at. now if you gave me more than that, the thing I would love to do is I would love to actually start a small venture capital firm that's actually founder led. and actually work with people that the biggest thing for me is.

I didn't go live in San Francisco and I didn't build a startup when I was in New York City. So like the network is completely different. And the investors I've talked to in mid market are a little bit more risk adverse. even with people that have really great ideas, really gate great backgrounds, all of a sudden they're like, No, we want to see you hit a million dollars and like, well, it's gonna take me money to get there, or hey, I'm thirty five, I have two kids, like I could do this, I need to execute it, but I need you to pay me, like I need to have some money to live on.

Jeff Albaum

Mm-hmm.

Totally.

Adrian Gutierrez

versus trying to live out my savings and take away that. and I would I'd probably go that route of really working on a bunch of other people's ideas, giving them funding and then and then helping them out and working on it and bringing the expertise that I could. that that brings a little bit more money than you need for it. But that's kind of what that's kind of what I've thought about and I've solidified and like what my plans would be if if it happens.

Jeff Albaum

Totally.

When it happens.

Adrian Gutierrez

When it happens, there you go. Sorry. There we go. Optimist, pessimist, man. Well.

Jeff Albaum

When it happens. That's epic, dude. what what books are you reading right now? What's what's had a big impact on you?

Adrian Gutierrez

Honestly, nothing to do with real estate. I've really kept going back and rereading Ray Dalio's books on just the global economic cycles. so I'm a little bit boring around that. but it's really a bunch of that. just going back and rereading a lot of economic books. I haven't picked up anything in the past few months around it, but like I said, I just keep going back to Ray Dalios because I just keep seeing

Jeff Albaum

Mm-hmm.

Adrian Gutierrez

kind of those same markers in most markets across across the world. and and I think it's really interesting. outside of that, for pleasure, I read I still read comics. Like that's like that's the other thing is I just still read comics. Like I it's it's something I even got my son to start doing. He's eight years old and he he's really good at reading but he hates reading.

Jeff Albaum

Mm-hmm.

Adrian Gutierrez

And so I bought him the one piece, I bought him one piece manga manga and I got him reading that because like he has to do a summer reading for like thirty, forty five minutes a day. And then all of a sudden this kid was just blowing past that time limit, you know, like every time. And I was just like, Yeah. And like, you didn't even realize you didn't even realize it's been more than 30 minutes. So like his mother was super surprised, you know, and I was just like, I'm like, he doesn't Yeah, and he's reading like complex stuff. I had I tested him out.

Jeff Albaum

Okay.

Got

Adrian Gutierrez

I tested him out because like he wanted to play he wanted to play the thing like every eight-year-old does. It's like, I don't know no, I don't know how to read or it's too hard or whatever. And then I was like, okay, cool. I'm like, well, come here, read dad's text really quickly. So I like opened up a text message between like a business business partner and I and I had him read it. and I was giving him like a I can't remember what I was gonna give him, but it was like a it was a something he really wanted at the end of it. And like he read through like a very complex paragraph and I was like

Jeff Albaum

You can read.

Adrian Gutierrez

You can read. So I'm gonna buy you a book and then we're gonna go there. So like now, like even in the manga, he's reading like more complex sentences than he was before. He was trying to read like in my day it was Captain Underwear and now it's like now the books are is like it's what is it? It's like this dog or something like that. It's it's like it's it's very much in that same vein. I can't remember the name of it, but it's like it's it's like a dog like

Jeff Albaum

Yeah.

Adrian Gutierrez

like action figure kind of guy. Like it's kinda like Captain Underwear, but it's a dog. I can't I can't remember the name of the book or that I can like I can't. but like I read through it with him one night and I was like, this is way too basic for you. I'm like, like this is really basic. so we were able to switch his love and and get it over to one piece at least. So he might just want to be a pirate. That might be the only downside. So

Jeff Albaum

But it's dog, okay.

Sweet. Yeah, that's all good. That's all I still want to be a pirate sometimes. It's all, you know. what what are you looking for right now? Like if someone's listening to and like, man, I really want to help Adrian. you know, I know someone who does, you know, X, Y, or Z. What what would be helpful for you at this stage of life, this stage of building ledger, et cetera.

Adrian Gutierrez

Yeah. So

I think it's I'll keep it simple because I feel like I've I've had the pleasure of being able to go complex in this in this podcast, which has been fantastic. but I'm always willing to help out other founders. I'm always I always love to hear from other founders, whether it's real estate founders or someone working on a tech company. I think it's always great just expanding the network, either giving value or or getting value. so that's one.

if it's more in the realm of like someone that is in the real estate space, you know, the thing that we're always we're always trying to do is again, like come come over to Ledger if you have a bookkeeping problem, right? If you have an accounting problem of like being able to trust your books or like the time that it takes for you is way too long. Let's get rid of that, let's solve it. We'll solve it for a really great price. and and just get you get you up to date, get you going and and

Again, you'll be able to work with a CPA that you'll trust and and it'll be all good to go. but on like the partnership side too, is like if you if you know people that have a particular problem in the accounting space that, you know, is is interesting that, you know, maybe I can't solve it today, but maybe in a couple of months, maybe in a couple of years I can or what have you. I always love to hear that too. there's a lot of people that have unique businesses, they've structured it unique ways, complex ways.

That is always good having like like a ball of yarn is what I tell is what I say in my head is like it's like a ball of yarn of like even if you don't have it as the main problem, like whenever I'm relaxing and I usually scratch at something, right? I'm just like, that would be a really interesting problem to solve one day. So, that's really it. It's like again, if you have the bookkeeping accounting problem and you want to get it solved and you actually want to get it solved by a CPA as well, like ledger's open to you.

Jeff Albaum

Yeah.

Adrian Gutierrez

Or if you're a founder and you you want to just chat, you want a network, I'm open too.

Jeff Albaum

Amazing man. And where's where's the best place for people to reach out to? Where are you most active? Online?

Adrian Gutierrez

that's the other thing I'm usually not. LinkedIn, I'm active on. I think I think you saw it. LinkedIn's probably like the place where I'll respond to. outside of that, if you wanted to shoot me an email, it's Adrian at ledger.ai. that is probably my most active channel. and I even send personal people to it sometimes because I

Jeff Albaum

Ha ha.

Adrian Gutierrez

I don't wanna I don't wanna spell out my longer Gmail email, you know, that has like my middle name and stuff in it and my and my other last name. So it's like I'm like it's just go to just send it to l Adrian at Ledger dot AI and I'll end up seeing it and I'll end up replying to you. So

Jeff Albaum

Ha ha ha.

Totally. That sounds great. Yeah, obviously we'll link we'll link to everything in the in the episode description below. Adrian, thank you so much for being here, man. I really appreciate you. It was awesome to deep dive and thank you for for explaining all this stuff to us.

Adrian Gutierrez

Awesome.

thank you, Jeff. I appreciate I appreciate the invite. It was it was fun. So

Jeff Albaum

Awesome. Glad to hear it. All right, everybody. We'll see ya next time. Bye.