From Innovating Airline Ticketing to Solving Multifamily Rent Delinquency

Steve Jarvis is the CEO of CredHub, and has an incredible background in travel, working for Expedia and Alaska Airlines. He’s always been on the cutting edge of technology in his sector, helping Alaskan Airlines be the first domestic airline to sell tickets over the internet, and again first to do mobile check in. 

 

Now he is at CredHub, a company focused on helping owners and operators reduce rent delinquency while also providing incredible value to the residents. They’re able to do this by reporting monthly rent payments to credit bureaus. 

In This Episode

Patrick and Steve discuss the following:

  • How reporting monthly payments to credit bureaus can reduce rent delinquency by 50% or more
  • Why the 10% of “credit invisible” US adults can benefit even more from this (30% among low-income adults)
  • How to increase rent’s priority among all of the resident’s monthly payments
  • What Steve has learned and transferred from his successes in the travel industry
  • Why you need to focus on the 90% of the customer base, not the remaining 10%
  • How to keep the pressure off of operators who feel like they don’t have the time to report to credit bureaus 
  • Why investors AND potential customers want access to credit reporting
  • Where credit reporting is going in regards to selecting prospective renters

Download the FREE Report

How to Reduce Rent Delinquency and Post-Move Out Collections

Download
Multifamily Innovation

The New Standard for Multifamily Underwriting is Turning 4 Hours into 4 Minutes

multifamily innovation article

Underwriting is all about assessing risks. That means a lot of paperwork.

Companies hire MBAs and other professionals to do multifamily underwriting. It’s expensive. It’s slow. And it’s worked for decades. 

Technology is getting more powerful, and jobs that have always been done by humans are being done by computers. More and more companies are realizing that these innovative technologies can take hours of work and finish it in minutes. 

Ten years ago, no one would have thought you could underwrite a deal in four minutes. Entire companies exist to help with underwriting so employees can focus on more important work. 

One of our clients, Parag Goswami led a company with dozens of analysts doing the same basic tasks every day. He realized that more analysts was the wrong answer.

The industry is changing, and billions of dollars of real estate deals are underwritten by artificial intelligence every year. Companies are starting to recognize that.

clik ai info

Clik.ai was an early software company that did the underwriting for deals. Parag Goswami, the owner of Clik.ai, had to teach companies what AI could do for them. It was new. No one was used to it.

That was five years ago. The environment has changed. When he talks with clients, they are often already aware of the benefits of the technology. 

Finishing deals faster and getting onto the next one. Enabling workers to focus on more important work. Being fast enough to get that one breakthrough deal.

Automatic underwriting is becoming the industry standard. Seventy years ago, “computers” were people who did simple math for a living. (They “computed” math.) It was basic labor. Computers were the standard then and are the standard now, but instead of a person it’s a device. A calculator.

clik.ai

Are your underwriters people, or an AI? The people doing your underwriting are professionals with degrees. They are spending their time doing work a computer could be doing instead. 

“Computers” did math by hand for decades. It worked. Businesses did underwriting by hand for decades. It worked. Now the industry is changing. AI is able to assess deals faster. Fewer deals are slipping through the cracks.

Clik.ai automates over $50 billion in real estate underwriting every year. That number is growing. The industry is changing. Are you?

Underwriting is Being Completed by AI

Watch Demo

Why Property Management Teams Need to Stop Depending on Emails

In this episode of the Multifamily Innovation Show, Patrick Antrim hosts Trevor Park, a specialist in multifamily and real estate development who now serves as the Head of Marketing for a software company called BetterBot. 

[fusebox_track_player url=”https://traffic.libsyn.com/secure/multifamilyleadership/Why_Property_Management_Teams_Need_to_Stop_Depending_on_Emails_1.mp3″ title=”Why Property Management Teams Need to Stop Depending on Emails” artist=”Patrick Antrim” background=”default” download=”false” social_linkedin=”true” social_email=”true” hashtag=”multifamily, #multifamilytechnology, #multifamilyinvesting, #multifamilyoperations” twitter_username=”inmultifamily” ]

BetterBot is based out of Seattle. Park’s goal is to connect people and to provide them with strategic solutions through world-class support and good data. BetterBot is a sophisticated AI chatbot. It aims to give people their time back and create more freedom in when, where, and how people can access their information. The company views itself as customer-centric.

Key Topics

(2:20) – Getting away from emails

“300 million emails are sent each day, and only 18% are opened,” says Antrim, turning things over to Park to explore why that is.

Park answers that the main problem is the sheer volume of emails sent out. BetterBot helps reduce the number of emails coming in, and ensures the emails that do arrive are better leads. That frees up lots of time for property management teams. 

Park says BetterBot can also help with resident retention, explaining, “By freeing up the front end, it allows you to focus on that back door.”

(4:40) – The way people consume information is changing

People want things instantly these days. BetterBot gives them instant responses, leading to a massive improvement in rent conversion times. Conversions started happening in about 13 days rather than 45.

(6:30) – Lessening touchpoints

Since BetterBot handles a lot of the preliminary questions, you don’t need to have as much back-and-forth over email.

(7:40) – The Handoff

BetterBot doesn’t try to trick people into thinking they’re talking with a human; it’s very clear and upfront that it’s a chatbot. With email nurturing, they also offer things people can do online rather than needing to connect with a human. 

Park believes the handoff between the automation and the human is one of the most important parts of the technology. AI doesn’t do things better, it’s just different, and Park wants to create a good interaction and workflow between technology and humanity.

(10:00) – Texting

People are already used to being on their cell phones constantly. That platform is similar to chatbots because you can send messages without having to worry about someone being active on the other side; you can even send automated messages. Some companies have AI guided text conversations to help people make purchases or get tech support. 

(11:40) – Prospect interaction

Almost 60% of traffic is coming after hours, Park says. When things come in during working hours , the leasing agents can handle it, but it’s the late-night hours when direct interaction is most valuable. The company that responds right away is more likely to get that person’s business. Plus, it’s expected! People want instantaneous results. 

(14:20) – Building a bot

It takes BetterBot 3 days or less to build a bot tailored to your apartment. Then, they can adapt that so you can have it across your entire portfolio.

“By having that level of data come through, you’re able to really evaluate where the trends are coming from, where are you seeing the best ROI from your marketing sources, where are you seeing the most traffic, what’s converting well? You can start to evaluate it on a much grander scale,” explained Park. “When you’re looking at isolated data points, you can really be blinded by initial results and skewed data.” 

(16:30) – Why trust BetterBot?

It’s all in the data. They’re at almost 100 million greetings. That’s 100 million data points and prospects they’re directly influencing. From those, they’ve had close to 50,000 conversions, which is an enormous impact in the market. 

They’re also very transparent about sharing data points, even when it shows disappointing news. Even bad news gives you insight into trends you can then remedy.

(18:00) – The evolution of BetterBot

The company was originally focused on natural language processing. They chose to go with guided conversations instead. Those conversations work like a choose your own story book. They built from there, integrating things like virtual tours. They also rolled out email nurturing bots recently. Now, they can map what best leads to good conversions. 

They want to evolve more to the resident side of things moving forward. Now, you can learn more about the resident experience even while using the chat bot. 

(23:30) – Why don’t more properties use BetterBot?

BetterBot focuses on the U.S. but does have some links in Canada. Park believes the only reason it hasn’t expanded even further is because of the cost. They don’t do per-unit cost, it’s by property.

“I would say if you take your total web traffic and take out 60%, that’s pretty much the miss you have right there,” said Park. “Not being able to answer questions for people who look at your website, that’s 60% of traffic that you’re losing. Then factor in the number of emails you’ve gotten and the ones you’re able to follow up with.” 

By factoring in the number of leases most properties miss out on, Park believes BetterBot pays for itself. When people try out BetterBot’s demo, they see how efficient it is.

Keep in mind, not all leads are qualified; some people are just checking out a tour or looking at the units. They might not be a lead worth nurturing off the bat, so BetterBot helps weed those out rather than leasing agents wasting their time.

(28:00) – How does this work with email?

Chatbots are limited to marketing links and websites. 

“Where email comes into play is pretty much everywhere else,” explains Park. That could include places like Zillow, where people might click a link to send an email. The property can’t always follow up, so BetterBot responds for them and instantly engages with the prospect, then driving the prospect to the chatbot to schedule a tour. 

BetterBot has tracked how response time influences successful signing of leases. More often than not, the first property to respond is the one that got the lead. 

(30:30) – The future of leasing

Park thinks virtual tours are going to dominate the digital space. As in, being able to see the 360 view of the space while online. 

“Then, when we start getting into when they’re about to convert and they want that tangible piece, this is where I truly value having a leasing agent being able to show me through a property and give me their elevator pitch on why this community is awesome,” said Park. “But I see the benefit in self-guided tours. I see being able to take yourself on your time after hours, before the office is open, what have you, and being able to actually tour the property without having to be beholden to a leasing agent’s schedule. That was huge.”

Park predicts those two will fuse, so people will be able to choose the time and day and that will determine whether it’s self-guided or not. If someone is available to host the tour, they’ll be there; if not, you can do a self-guided one.

(33:40) – Emotional vs. Logical buyers

Antrim points out that not all sales people or leasing agents are good at everything; some are good at details in the property, some are good at building strong relationships. 

Park worked at Greystar for a bit and knew people who were fantastic at building relationships. People would check in just to be friendly and chat, not simply engage for transactional purposes. A chatbot can’t do that.

(35:40) – What’s it like to work at BetterBot?

“It’s like a job I have yet to consider an actual job. I get to test out new things, I get to build things, I get to explore what works and doesn’t work,” said Park. He doesn’t have a fear of failure, because everything is a team effort. 

BetterBot has two different stakeholders: they have to evaluate what the consumer needs from a quality experience; but they also have to factor in their client and how they engage with the onboarding experience, reports, and so on. Those factors always have to be top-of-mind. 

(39:20) – Handling tough conversations

Park says being transparent and sharing data is the best way to communicate. That’s the best way to find solutions. Maybe the company’s website is outdated and isn’t a good platform for the chatbot; maybe the chatbot is sending good leads but the agents aren’t closing them. Better performance requires a better picture of what’s going on. 

Antrim points out that the multifamily industry has tons of smart people but has historically fallen very behind in technological advancements. For those that have been avoiding new tech, they’ll need to jump on soon. It’s a good time to do it, since technology is becoming more affordable and there’s more evidence to prove how automation pays for itself. 

Park points out that onboarding takes time and effort; by fixing the onboarding process early and understanding what it takes to do that gets the company over that hurdle.

(44:50) – Final thoughts

Be more open to new tech solutions. Adopt one that fits your company, not one that fits the exact immediate solution you need; that way, you can build on the tech moving forward. 

Multifamily Innovation

Apartments Are Not Just a Place to Live Anymore, But a Place to Work

multifamily innovation article

Apartments aren’t just a living space, not just a home. They’re a place to entertain guests, a place to relax, and more recently they are becoming a place to work.

58.6% of the American workforce works remote, and 41% are fully remote. Just three years ago, only 17% of the workforce was fully remote.

Working from home requires a notable increase in space in multifamily apartments. A small home office space at a bare minimum takes 20 square feet and can go up to 40+ easily.

Any work-from-home employee in an apartment, particularly a smaller apartment like a studio, is already making the most of the space that they have. They won’t have those extra square feet in their apartment without making sacrifices.

With 65% of at-home workers working from the bedroom and 31% saying they work in the bedroom more than anywhere else, it makes sense that the best place to add room would be in the bedroom or sleeping area.

Our client, Inova, is making working from home a painless experience even in small, 250 sq.ft. studio apartments. Those apartments don’t need to be 16% bigger to accommodate an office, they need to use their space 16% more efficiently.

With an Inova TableBed, an apartment is able to reclaim 40 square feet of space. The desk for a home office is right there, waiting for the bed to be put up to be accessible.

Copy-of-More-than-16-article-graphic (3) (1)

It’s difficult to have a professional space in small apartments. A bed does not make for the most professional setting, so a remote worker will often go to a coffee shop to meet with someone. It also discourages inviting guests over spontaneously.

Now there is a way to remove this problem. There is no bed in an Inova-enabled apartment during the day. This makes the most of apartment space, while keeping it more professional than ever before possible.

It’s hard to imagine an apartment without a bed. Often, it takes seeing the apartment in person to realize what this really means.

It-feels-spacious-article-quote (3) (1)

“It feels as spacious as if there was an attached bedroom somewhere. Then you pull down the bed, and it’s made, people's jaws drop. They get it.” -Richard Hawkins, Development & Strategy for New Land Enterprises.

The average cost per square foot in a studio apartment is $3.19 in monthly rent. To add a 40 square foot space to allow for a home office increases the value of a studio apartment by $128 monthly or more, without accounting for the bed, table, or the untold value that not having a bed in the way makes for a resident. It makes for a larger, more premium apartment without taking any additional space. This can increase occupancy and NOI.

Multifamily operators need to stay up with the new innovations and technologies available. Once, the dishwasher was considered a luxury for an apartment. Now, it’s expected. Space for an at-home office is becoming just as necessary. 

Multifamily Developers are Making Smaller Spaces Feel Bigger

See How They're Doing It
Multifamily Innovation

How to Get Smart Home Tech Without Breaking the Bank

multifamily innovation article

There’s a great misconception that providing smart tech for your multifamily assets can only be done with ease on new developments and lease-ups. 

Multifamily owners and operators think the learning curve is to high for staff, the startup and maintenance costs will be too high, smart tech only belongs in Class A multifamily properties, installation is a burden and you’re already understaffed, and there are too many providers without a single-source for cross-app integrations.

The list is long. The list is wrong.

Most multifamily owners and operators are thinking about the cost of utilizing smart tech rather than the cost of not utilizing smart tech.

Consider the cell phone in your pocket or on your desk right now. Remember how big and clunky they were in the 90s? Remember having to hit the buttons multiple times to scroll through the alphabet and numbers? They were a commodity. Something for rich people (remember when you had to pay per text?).

Look at where we are now. The sheer computing power of the modern mobile phone has grown exponentially year over year.

According to Pew Research Center, 97% of Americans own a cell phone now and that is because it has become a deflationary asset. As technology advances, cell phones become smarter, more powerful, and more affordable.

multifamily clients arize smart tech

Our research partner and client, Arize, states that by “2023, 53.9% of homes across the United States will feature smart tech (that’s 20% more smart homes than in 2019).”

Do you see that? That’s over half of all the homes in America that will be using smart tech.

Whether you like it or not, these smart devices are now a dealmaker or dealbreaker for your residents.

In fact, residents are expecting multifamily properties to have these features for security and cost-efficiency and will go as far as to rent an apartment based solely on those amenities.

Not only are residents choosing the smart apartment, they are staying longer and paying more for it.

According to Arize, “91% of renters believe home intelligence is a necessity, and 66% of current renters are willing to pay at least an extra $20/month for a smart device package.”

multifamily clients smart home

Certain smart technologies have the ability to perform climate control activities and avoid wasteful utility usage through water leak detection and other services.

This allows properties to distinguish where they are losing money on unnecessary expenses while giving them a tool to prevent this all together.

All of the sudden, those objections to smart tech in apartment communities become obsolete because of the necessity for this technology. 

Additionally, smart tech is a deflationary asset that is now benefiting stabilized properties. Most owners and operators think it is too expensive, but companies like Arize are coming up with innovative ways for operators to fund and get smart tech into existing apartments.

Arize believes that by providing a personalized experience along with unique services like competitive payment plans and customization, they are making it possible for all properties to have smart technology in their portfolio without breaking the bank.

Those multifamily owners and operators who choose to provide smart tech for their communities will scale faster, stay competitive, retain residents, and thrive through any impending real estate bubble pop.

Download the Report

This report on Smart Apartment Tech Trends will explain the statistics behind smart home technology and how increasing demand has moved beyond solely Class A properties.

Download the Report
Multifamily Innovation

Finally, Apartment Leasing Teams Can Do What They Do Best Without Missing Calls

multifamily innovation article

Properties are facing more challenges today than ever before with residents not paying rent, the struggle to keep up with the competition, and making sure units are fully occupied.

One problem seen today is that many leasing offices are currently understaffed, leading to record-breaking rates of missed calls at a whopping 49%.

Even offices that have full staffing still only have a certain number of hours each day that the office is open. 

One of our clients, LeaseHawk is a multifamily software company, and in a recent interview offered shocking statistics regarding tenant interactions: 87% of callers won’t leave voicemails and 52% won’t call back if you missed their first call.

Each missed call, LeaseHawk says, is a missed opportunity.

apartment leasing ideas

“Prospects typically begin their home search online,” explained Larry Gorman, President of LeaseHawk. “In fact, research shows that four out of five renters use online resources to assist in their home search. So, when a prospect decides to call, they are highly motivated and more likely to be ready to convert to a tour and sign a lease.”

But the software helps with more than funneling potential renters through to schedule tours; it also sifts out the 30% of calls to leasing offices that are NOT made by prospects. 

LeaseHawk uses data and artificial intelligence to change the way technology is used in multifamily. The company aims to benefit both the renter and the property owner by making the prospect vetting and lease signing processes more efficient.

That’s done with a virtual apartment leasing assistant that LeaseHawk calls ACE, which answers phone calls, acts as a chatbot, and automatically responds to text messages.

It’s the only software of its kind that answers prospects on all three of those channels. It also offers call tracking, call routing, and a full IVR system. 

Those interactions can lead to the collection of information about a prospective tenant and can even schedule tours. 

Gorman states, “The use of virtual leasing tools is now more widespread than ever. Some even say that 10 years of multifamily technology was created in just 100 days due to the pandemic. Prospects are more than willing, in fact they are seeking, to get instant answers and information from digital resources to make their rental decisions.”

leasehawk-virtual-leasing-quote

LeaseHawk says 73% of Millennial renters believe they should get a response within a day or less. And, as we mentioned, most are unlikely to call back if they don’t get through on their first attempt.

A vast majority of prospects are also intolerant of being placed on hold for a long time or having to repeat the same message to multiple representatives.

Responding to callers under those circumstances and time constraints is only possible with the use of AI software or some form of automated technology.

Tackling Missed Opportunities in Multifamily Leasing

Download the FREE Guide to AI Ebook to discover everything you need to know about how Artificial Intelligence (AI) is transforming the Multifamily industry.

Download Now
Multifamily Innovation

How Rent Delinquency is Affecting Profitability and Beyond

multifamily innovation article

Rent delinquency is increasing and as we all know, resident priorities are shifting as well. This is causing the multifamily industry a lot of uncertainty during a time of already rapid change. Due to these changes in wants and expectations, multifamily companies must start strategizing for the future to ensure profitability and continue to create places that residents want to live.

It is always important to listen to the customer, which is something that is often overlooked in this industry. Yet it is also important to make sure that they are following their agreements by paying rent on time and that they have the ability to do so. Everyone is looking to raise rents to meet certain revenue goals; however, there are other issues going on beyond the scope of rent increases.

We invited one of our clients, Lisa Strauser from CredHub to speak on what they are doing to alleviate some of these stressors.

CredHub is a service that companies in the multifamily industry incorporate to help reduce multifamily rent delinquency. It works by associating rent payments to tenants’ credit reporting agencies. For most tenants, that’s a great thing – it allows them to use their largest expense as a way to improve their credit scores, just as mortgages do for homeowners. For others, it’s the extra incentive they need to pay their rent on time, so their credit score isn’t brought down by a late or missed payment. 

Lisa Strauser is the Sales Director for CredHub. In this recent interview, she discussed some of the ways the multifamily industry is struggling, as well as how it can improve.

Strauser says the way to make sure properties aren’t bleeding out revenue to delinquent payments is to make sure their residents are truly held accountable for their rent. If they aren’t held accountable, there’s no incentive to make their rent payment a priority among their list of bills.

By implementing resident credit reporting, Strauser says that the accountability factor is put in place immediately. In fact, she says properties that implement CredHub’s technology see the delinquency rate lower within a period of just 60-90 days.

credhub-delinquency-rate (1)

“The delinquency rate naturally reduces when there is finally a consequence for not doing what one is supposed to be doing,” explained Strauser. 

CredHub also goes above and beyond by impacting credit scores for previous residents who still have an outstanding balance with the property.

“Impacting their credit for balances owed has a way of motivating people to pay outstanding expenses to remove it from their credit report,” said Strauser.

She says that although CredHub aims to ensure rules are followed, the company’s work isn’t about punishment – on the contrary, it’s about helping boost those who are paying on time, typically boosting FICO scores by 42 points. It levels the playing field between renters and those with mortgages who see improvements for on-time payments on their living space. Some people are credit invisible and can use this as a way to leave their mark. 

“For those with established credit profiles, the increase in FICO scores leads to an offering of better interest rates on credit cards and higher credit limits,” said Strauser. “For those without social security numbers, in assisted properties, or lacking social security numbers, it establishes for the first time a credit identity by rewarding them for their timely rental payments.”

Strauser also argues that CredHub can, in some instances, be the final deciding factor in where someone wants to live. It should be included as an amenity, just like a pool or gym, since it’s something intended to improve the residents’ lives. If a potential renter knows they’ll pay on time, they would see an enormous benefit in renting from a property that offers CredHub. Likewise, the usage of that technology would discourage those who know they may not pay on time, meaning the property gets a higher quality resident.

By using services like CredHub, multifamily properties can incentivize residents to pay on-time, increase resident retention and create a competitive advantage for their property. Services like these are paving the way for residents to get credit for one of their most costly expenses and to hold others accountable who may have fallen behind.

Ready to find out more?

Text "Credit" to 480-780-2611 for a free report with more information.

Download Free Report