Parag Goswami is the co-founder and CEO of clik.ai. He previously owned an underwriting company and saw the pain of the repetitive tasks being handed to college graduate professionals. Using his incredible background in technology and computers, he created a solution.
Adding Revenue Streams to Multifamily Properties with Electric Vehicle Charging
David Aaronson is the founder of Refuel Electric Vehicle Solutions (REVS). Having previously spent decades working within real estate, he now aims to help the industry adapt to the shift to electrical vehicles.
Tylenol for the Multifamily Staffing Headache
Kyle Burkett is the managing director of asset management at Nicol Investment Company. He helps define the company’s growth strategy and runs the operations and development programs of the organization. He started in real estate when he was 19 as a leasing consultant, and now has a focus in multifamily properties.
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
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How to Reduce Rent Delinquency and Post-Move Out Collections
What You Might Not Know If You Lease The Old Way, Leasing Trends Never Seen Before
Windell Mollenido is the Marketing Director for The REMM Group. He has nearly 20 years of experience working in marketing and website development for real estate companies. He has worked in-depth with using AI to help lease apartments online and alleviate staffing issues.
The New Standard for Multifamily Underwriting is Turning 4 Hours into 4 Minutes
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 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.
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
What You May Not Know About Driving Better Apartment Unit Economics
Today, Patrick Antrim interviewed Demetri Themelis, the co-founder and CEO of Knock. Knock is a software platform that efficiently attracts, converts, and retains customers for commercial multifamily owners & operators.
Apartments Are Not Just a Place to Live Anymore, But a Place to Work
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.
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 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
How to Get Smart Home Tech Without Breaking the Bank
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.
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.”
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.
How Rent Delinquency is Affecting Profitability and Beyond
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.
“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.