November 9, 2017

JF1164: Software Engineer & Investor Builds Amazing Tenant Screening Software with Nathan Miller

When 2008 happened, people were running away from real estate, Nathan ran towards it. His biggest headache was finding good tenants and being able to properly screen them. With his software engineer background, the solution was obvious, build software that anyone can use to screen their tenants. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!


Best Ever Tweet:



Nathan Miller Background:

  • President at Rentec Direct
  • Since 2009 has grown 100% organically & debt free, now a well known solution to landlords nationwide
  • Bought his first property at 21 and leveraged that first investment into a multi-million dollar company
  • Provides tenant screening and software solutions to over 13,000 landlords
  • Based in Grants Pass, Oregon
  • Say hi to him at
  • Best Ever Book: 4 Hour Work Week


Made Possible Because of Our Best Ever Sponsors:

Fund That Flip provides short-term fix and flip loans to experienced investors. If you’re looking for a reliable funding partner, their online platform makes the entire process super easy, and they can get you funded in as few as 7 days.

They’ve also partnered with best-selling author, J Scott to provide Bestever listeners a free chapter from his new book on negotiating real estate. If you’d like to improve your bestever negotiating skills, visit to download your free negotiating guide today.


Joe Fairless: Best Ever listeners, welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluff. With us today, Nathan Miller. How are you doing, Nathan?

Nathan Miller: I’m doing great, Joe. Thanks for having me.

Joe Fairless: My pleasure, nice to have you on the show. A little bit about Nathan, he is the president at Rentec Direct. He has since 2009 grown 100% organically and debt free, and he has created a well-known solution to landlords nationwide, which is Rentec Direct. He bought his first property at 21 years old and leveraged that first investment into a multi-million dollar company.
He is in Grants Pass, Oregon. I love interviewing Oregon people, because I rarely interview Oregon people. With that being said, Nathan, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Nathan Miller: Sure, I’d be happy to. Again, thanks for having me, and I appreciate being on the show from Oregon; it’s a hot day here. Like you mentioned there, I bought my first property at 21, and I was urged from a very friend of mine that I shouldn’t be renting anymore and I should buy a property, and that was my first foray into real estate investment. I’ve gotta say it was a really good piece of advice I got from him, because it gave me the experience to purchase a property, understand what the sales agreement process looked like, and what it meant to make your mortgage payments pay for repairs, do all that on your own.

That was the beginning. I leveraged equity that I built in that property over a couple of years into my second and third properties. Those properties were in the 2005 – 2007 era, and then 2008 happened, we all know about that… So that was challenging, to deal with the devaluation of those properties in 2008, but around that time I had to choose “Do I push forward or do I scale back?” and I decided to push forward at that point, by maintaining my properties when everyone else was doing shortsales and getting rid of their properties. I kept mine, leveraged that good credit into purchasing a bunch of foreclosures.

Joe Fairless: Wow, good for you.

Nathan Miller: Yeah, that gave me a good experience into the foreclosure market, I got some really amazing deals, built my investment portfolio, and then from that point I kind of called a good on real estate. I felt happy with what I had going on, and what I wanted to do was [unintelligible [00:03:17].29] I love software development; it’s been a passion of mine for so long, and one thing I saw that was necessary in the industry was software for landlords like me to be able to manage the rentals and find good tenants.

I searched and searched – this was about 2007-ish – and I couldn’t find anything that fit my needs as a small investor, so being a software developer, I started it. That’s where Rentec Direct came from and that’s where my focus is today – it’s almost exclusively on Rentec Direct, because all the investments… I still have them all, but they’re kind of on autopilot at this point.

Joe Fairless: I want to spend some time talking about Rentec Direct, but before we do, I just want to discuss a little bit about your portfolio. You leveraged the equity in your first one to buy properties two and three. Was that through a cash-out refinance?

Nathan Miller: Yes, it was.

Joe Fairless: Okay. Then 2008 hit, and you decided to hold on… What was that like? Walk us through what you were experiencing with those three properties when 2008 hit.

Nathan Miller: Well, that first property – I pulled all the equity out of it to buy the next two, so when 2008 hit, its value went way below what I owed on it. The same thing happened with my property I purchased in 2005, and again the property I purchased in 2007. I thought I was doing good with the 2007 property because the market had already come down, it felt like at that time a huge amount – this was autumn – so when I purchased that 2007 property I felt really good  about it, but then of course 2008 happened.

Joe Fairless: And just for perspective, you bought it at what and then the value went down to what?

Nathan Miller: Well, the one I bought in 2007 I bought at about half a million and it dropped down to about 300k.

Joe Fairless: That’s a big chunk.

Nathan Miller: Oh yeah, especially when you have a 450k loan on it.

Joe Fairless: Yeah, especially. How do you make money on that, when you buy it for half a million? Even if it stayed the same, how are you making money on that?

Nathan Miller: You don’t. [laughs] You might ask me at some point here about my mistakes, and… [laughter] So I still have it, and where I make money and where things even out is what I did after 2008. You hear it all the time, when people are running from an investment, that’s when you should be buying it… And around after everything crashed, everyone was running away from real estate. I had maintained a good position and was able to pick up some real estate at that point.

I look back today, and most of the stuff that I picked up after 2008 has made up all the difference for what I picked up before 2008, to at least give me positive numbers.

Joe Fairless: I don’t want to beat a dead horse, but that $500,000 property – do you rent that out? Do you try and get some money from that?

Nathan Miller: The $500,000 property is my primary residence…

Joe Fairless: Oh, got it.

Nathan Miller: …so it’s a little bit different there.

Joe Fairless: Okay. What about the other couple? The first one and the second one – how much were they?

Nathan Miller: Yeah, those are rentals. The first one was a condominium; it was my first exposure into real estate, and it was the smallest thing I could afford at the time. That was an investment I maintained all the way until late 2016, when I finally just sold that property.

Then the second one was a single-family residence. It was a purchase at about 300k, and at the bottom of the market I saw it in 220k(ish) is about what it dropped to.

Joe Fairless: That’s not that bad. Does it cash-flow?

Nathan Miller: It does now, yes. Finally, that property does, thank goodness.

Joe Fairless: Good. Okay, so that’s what you did before 2008. Then 2008 hit, people were running away, you were running to the fire… What did you buy?

Nathan Miller: Mostly single-family residences. One duplex, and the rest of them were all single-families. Some of them were in a distressed condition, where I was able to purchase them. This is probably my flagship property that’s done the best for me. It was built in the ’20s, and then some people bought it, they added on to it… They took a one-bedroom house, turned it into a five-bedroom house…

Joe Fairless: Wow!

Nathan Miller: Yeah, but they didn’t finish it. They got to 90%, they didn’t finish the permits, and they were at that point in their building process where they let the house go back to the bank. So I bought it from the bank at a sweet price, ended up basically getting a five-bedroom house at the cost of a one-bedroom house. All I had to do was work with the city to close out those permits… Very minimum work required to finish that off, and a five-bedroom house is extraordinarily desirable around here, so it’s never had trouble being rented.

Joe Fairless: That’s outstanding. How were you financing those properties in 2008? It had to be just cash, because there was no credit, right?

Nathan Miller: Well, there was credit, but credit only existed for very, very well-positioned people. I had to put down payments down, and aside from the down payment, which on the investment properties I think was about 30%, aside from that – really good credit; I of course worked a full-time job so I had income coming in to support those payments, and a long history of extraordinarily perfect rental income helped me finance all those.

Joe Fairless: Okay. So now, natural to segue, how do you manage those properties?

Nathan Miller: Well, today I let property management handle those properties. I managed every single one of them until about two years ago, at which point Rentec Direct was growing, it was needing my attention, and I just couldn’t afford to spend my time managing those properties anymore.

So property management takes care of them all; I found an amazing local property manager here that does everything, and he uses Rentec Direct, which I really appreciate also.

Joe Fairless: Well, so that’s why I said natural segue… So educate me – I thought that you said earlier it’s a software to manage rentals and find good tenants, so I thought “Well, he just uses his software to manage it.” So what does Rentec Direct do and what doesn’t it do?

Nathan Miller: Okay, you’re right, I did use Rentec Direct all the way up until two years ago; I used it to manage them all, and it worked exceedingly well for that. It just turned out the interaction between me and tenants — it became too much interaction, dealing with small repairs and everything, and that’s where I made the choice to have property management get involved.

Rentec Direct – when I thought the idea up in 2007, it was for investors just like me who managed one or a hundred properties, in order to make their life easier, to keep track of everything, file their taxes accurately, be able to screen their tenants, make sure they’re getting good people in there, and just do accurate and good bookkeeping.

So we worked exclusively with landlords for at least the first three years, but we were getting a lot of requests from property managers, because the property managers do exactly the same thing – they manage properties on behalf of investors, so we did add a second version of our software out there; we call it Rentec PM (Property Managers), and it adds the trust accounting components and a few extra bells and whistles that property managers need.

Joe Fairless: Got it. And how much does it cost?

Nathan Miller: The easiest way to explain pricing is it’s a dollar a unit. It fluctuates up or down about ten cents depending on quantity, but just count on about a dollar a unit.

Joe Fairless: And who’s the ideal customer for Rentec Direct?

Nathan Miller: Well, we love investors, we love people who are managing their own properties, so we work with investors that are anywhere from their first property — you know, we get apartment complex owners that can manage 400-500 units in-house, so that’s a sweet spot… And then we also work with, on the other side of the product (the PM version), with property managers that manage up to about 2,500 units.

Joe Fairless: Based on your experience as both a real estate investor and a real estate technology entrepreneur, what’s your best real estate investing advice ever?

Nathan Miller: Okay, my best advice ever is to put good tenants in your properties. There’s probably nothing more costly – other than 2008 – with your properties than having a bad tenant in there. What I mean by bad tenant is any tenant that’s gonna cause you to have to evict them, or be constantly waiting on them, or using up your time to manage a tenant versus manage your portfolio.

When you do move in a bad tenant, the worst-case scenario of course – and this happens thousands of times a day in the United States – is you have to evict them. Evictions these days are costing upwards of as much as $10,000 when you factor in all the lost rent you have, your legal fees, court costs, any damages that now this disgruntled renter does to your property, and then all the additional late rent that you’re not getting by dealing with this eviction when someone else could be moving in. So I think it’s extremely valuable to pay attention upfront, move in good tenants, and just eliminate the bad ones off the top.

What made this happen – and this is before I started Rentec Direct – is I was managing these properties, and the very first investment I had (that condominium I talked about earlier) I did all the showing and all the placements myself, and an example that always pops up to me is I had this really sweet mother and daughter, they wanted to move in there, and they turned in an application, the application looked great on paper, these two were the perfect tenants, they seemed nice in person, they marked all the boxes that they had no record, no eviction, all their past landlords loved them… So I knew from the get-go you need to check up on tenants, and with these two I did; I checked it out, and from what I remember they had over three evictions just in the last couple years. The daughter had a criminal record, and on their application they filled out past residential history – well, they skipped all the ones that would have given them bad references, and only listed a couple landlords that they didn’t totally do wrong by.
So fortunately at the time I knew how to get to this information and I was able to pull that and avoid what could have been a catastrophe for me.

Joe Fairless: Wow…

Nathan Miller: So that’s what gave me the passion now to empower all landlords throughout the country to have instant access to all this information. One of the main drivers behind creating Rentec Direct is it was hard for me to get to that information, and most landlords I know – or at least back then I knew – didn’t know that they even had access to look up credit, or criminal, or eviction history of tenants… So I just was driven to find a way to bring that information to all landlords, so they have the same resources that I was able to get to back then.

Joe Fairless: I wanna go back to something that you said earlier, when 2008 was happening and everyone was running away and you ran towards real estate… You’re a software engineer, and I know based on my conversations with my investors who are engineers, they ask the most amount of questions out of any other profession, period… About the underwriting, and everything. So I suspect that you had some sort of well thought out plan and there were some factors that led you to run towards real estate when everyone was running away. What were you looking at that you felt confident to buy when most people were selling or being foreclosed on?

Nathan Miller: I’m very analytical as a developer; I love math, I have a love/hate relationship with math, but when I was looking at running towards real estate, it was about cashflow. Prior to 2008 it was all about appreciation, and “Oh, you’ll make it all up on appreciation and you can refinance every five years”, that’s what they’d tell me. After 2008 I got more realistic and ran the numbers and made sure that every property, even in the worst situation, even with the high vacancy rate and ample repair budget, with all that, I just made sure that every property cash-flowed.

Joe Fairless: Simple enough, huh?

Nathan Miller: Simple enough, yeah. The numbers speak for themselves.

Joe Fairless: Are you ready for the Best Ever Lightning Round?

Nathan Miller: Absolutely.

Joe Fairless: Alright, let’s do it. First, a quick word from our Best Ever partners.

Break: [00:15:12].08] to [00:16:09].28]

Joe Fairless: Okay, Nathan, best ever book you’ve read?

Nathan Miller: I just finished the 4 Hour Workweek by Timothy Ferriss, and I appreciate some of the insights he gives.

Joe Fairless: Best ever deal that you’ve done?

Nathan Miller: I think it was that old house I bought that was five bedrooms in and almost completed; that’s been my best-performing property ever.

Joe Fairless: What’s a mistake you’ve made on a transaction you haven’t mentioned?

Nathan Miller: Good question. I think my biggest mistake is not exactly transaction, but I think my biggest mistake was not understanding market shifts. I was told by friends that had been through real estate shifts in the past about what happens and how there’s the ups and downs, but I didn’t believe it, and that got me in trouble with a couple of those deals that we talked about earlier.

Joe Fairless: And by “in trouble”, what’s the downside now, looking back on it?

Nathan Miller: Well, I guess had I not purchased those properties, I would have been in a better position to pick up more properties in 2008. However, in hindsight, I learned a lot from that, and when the next downshift happens, I’m gonna be prepared for it better than ever. Maybe there really was no downside, you might be on to something there.

Joe Fairless: [laughs] What’s the best ever way you like to give back?

Nathan Miller: There’s a couple foundations… They are local foundations here, and one of them that I really like is called [unintelligible [00:17:21].21] and we sponsored one of their students for the full year. That was really fun.

Then we also have a tech scholarship that we do. We do two scholarships twice a year, where we just give back to anyone that’s enrolled in a college institution that’s anywhere in the IT field… We’ll give you money if you send us a cool and funny essay.

Joe Fairless: Wow. For any engineers who are listening, where do they send it to?

Nathan Miller: Just go to

Joe Fairless: And how can the Best Ever listeners get in touch with you and learn more about your company?

Nathan Miller: Our website is the best place to get us, it’s

Joe Fairless: Nathan, thank you for being on the show, thanks for talking about your deals, how you got your first one, parlayed that into deals two and three, and then how the 2008 storm hit, but you made it out and you actually were thriving. You were the one selling the umbrellas during the storm, and you bought the majority of your portfolio at that time. You put about 30% down, had good credit, were well-positioned, and then have since launched Rentec Direct.

Best Ever listeners, feel free to check that out, Nathan, thanks for being on the show. I hope you have a best ever day, and we’ll talk to you soon.

Nathan Miller: Thanks, Joe.

    Get More CRE Investing Tips Right to Your Inbox

    Get exclusive commercial real estate investing tips from industry experts, tailored for you CRE news, the latest videos, and more - right to your inbox weekly.