A new website helps tenants resolve eviction and repair issues with their landlords. Investors are pouring money into a start-up that helps home buyers make cash offers. And, phone apps that make it easy to prove which home is your primary residence for tax purposes. In this episode, we take a look at some of the latest developments in the world of proptech.
A group of law students put the “Hello Landlord” website together as a semester-long project to help prevent evictions and facilitate repairs. (1) It’s a collaboration between students at BYU and the University of Arizona for the Innovation for Justice program. The program encourages students to think critically about ways to help marginalized populations with the use of technology. In this case, they are helping tenants resolve problems by communicating with their landlords.
They came up with a website that will ask tenants a series of questions about their situation. The answers are then incorporated into a letter that the tenant can send to the landlord explaining why the rent hasn’t been paid or will not be paid, and offering a solution. Tenants can choose between English and Spanish.
A sample letter might sound like this:
I’m writing because I missed rent and received an eviction notice. I had an unexpected medical expense, which has made money tight. I’m sorry that this situation has affected my ability to pay rent.
I want to pay you, and I am working to get the money I need. I owe $1,700 in missed rent. I can pay $100 every month starting on November 1, 2019. These payments are in addition to my regular monthly rent.”
Kimball Parker, of BYU, said of the project, “We found that most landlords don’t want to evict tenants and are receptive to working with those who proactively reach out.” According to the National Law Review, almost 90% of the landlords who have previewed this new website have said they’d be willing to work out a deal with a tenant if they received a letter like this.
Parker says, most tenants don’t know how to tell their landlord that they can’t pay their rent on any given month. She says, their first reaction is to simply remain silent, and avoid the problem. The Hello Landlord website gives them a tool that helps them speak up.
If they want to report a problem with the rental unit, they can also ask Hello Landlord to generate a letter about needed repairs. There’s a long list to work from along with the ability to add something that’s not on the list. Hello Landlord is a free tool and can be used by anyone, regardless of location.
Big Money Raise for FlyHomes
A real estate startup called FlyHomes is flying high with investors. The Seattle-based company just raised $141 million in venture capital. That’s more than 8 times the $17 million it raised last year.
The high-flying company helps home buyers make cash offers, making it easier to compete with other cash offers. CEO and co-founder, Stephen Lane, says of the strategy, “We give any buyer that is able and willing to purchase a home an equal footing — our cash, which helps our clients win, but also helps sellers because they don’t have to sell their home at a discount to an investor in exchange for certainty.” (2)
FlyHomes uses its own cash to purchase a home on behalf of a client, and will typically close within a week. Sellers then have as much as 60 days to move out. In the meantime, buyers can arrange for financing. Once that loan is in place, FlyHomes transfers ownership to the buyer.
FlyHomes is a full-service real estate brokerage that earns a standard commission from the home seller, but there are no additional costs for the seller or listing agent. Buyers pay FlyHomes a “per diem” cost for temporarily owning the home, but the company says that’s typically less than the rebate that FlyHomes will give buyers — making the transaction virtually “free.”
FlyHomes does offer mortgage services but clients are not required to get a mortgage through FlyHomes. It also offers title and escrow services. In a previous press release, the company said that FlyHomes is the #1 real estate brokerage in Seattle on Yelp. The new money may allow it to expand, but currently it is operating in Seattle, Portland, the San Francisco Bay Area, and Boston.
Providing Proof of Primary Residence
If you own more than one home, you may want to claim the one in the lower-tax state as your primary residence. But, you also have to prove that you spend most of your time there, and that usually involves a lot of extra paperwork. Now, there are phone apps that can help you keep track, automatically.
One is an iPhone app called Monaeo that will track your location with the help of cellular signals, Wifi use, and GPS. It allows users to give access to their accountants, lawyers, and other assistants. It also costs $79/month. A cheaper option is called TaxDay. That’s only $10/month. The Wall Street Journal says, the app tracks users with GPS, and knows the rules for each state and some large cities, regarding your primary residence. (3)
(2) FlyHomes: HousingWire
(3) Proof of Primary Residence: Wall Street Journal