“Who uses Cozy?” is our series spotlighting landlords and renters who use Cozy in interesting and innovative ways. In this edition, we talk to Nick, Tyler and Devin of Entity Capital.
Where is home? What’s the most interesting thing about where you live?
The three of us are spread out across Manhattan – Nick is down in the East Village, Tyler on the West Side just below Central Park, and Devin on the Upper East Side.
What’s the most interesting thing about NYC?…where to start! We would have to say the food. It’s hard to live here and not learn to appreciate food. Eating in New York can be an adventure, from trying new restaurants, new cuisines, visiting new parts of town you’ve never been to and making friends with restaurant owners. And considering most apartments have kitchens the size of a closet, there’s even more incentive to get out and explore. We’ve each moved around a few times, and it’s always fun to find a new favorite sushi spot, burger joint, or bagel shop in the neighborhood.
How many rentals do you have, and where are they located?
We have one three-bedroom rental in DeLand, Florida. DeLand is a small, historic town located half-way between Orlando and Daytona Beach in Central Florida that is home to Stetson University, where Tyler and Nick attended and played soccer. Stetson is Florida’s oldest private university and has about 2,500 undergraduates. DeLand has also been called the “skydiving capital of the world.” Sometimes during soccer training we would look up and see dozens of skydivers falling out of the sky above us! We actually had a group of skydive instructors apply to rent the property.
How did you get into rental properties?
It started back in college. Underclassmen at Stetson were required to live on campus, but the university couldn’t stop you from living in your own home. So Tyler and his parents built a four-bedroom home about three miles from campus that he and his older brother lived in for a few years. Nick also lived in the house (and paid rent to Tyler!) his senior year. Tyler’s family built two more homes in the neighborhood which were all rented to Stetson students and soccer coaches.
Fast-forward 10 years…Nick, Tyler and Devin started Entity Capital, LLC (“N, T, D”…cheesy, we know) in the spring of 2013 to invest in rental properties in the Central Florida region (initially Deland). Real estate in and around New York City is obviously expensive, so we figured we would target another market that we knew well and where we could build our portfolio of rental properties for a fraction of the cost. Stetson also had ambitious plans to significantly increase enrollment in the coming decade which we felt would also be supportive of a strong off-campus student housing market. We did our homework and had a long list of properties we looked at last spring, but we found that it made more sense to build. So we broke ground in the summer and our first property was completed this past December.
What’s the average number of tenants in your properties?
What tools do you use to manage your properties?
We use Dropbox to store and share our financial models, lease agreements, legal documents, prospective property searches, etc. Since we would be out-of-town landlords and managing our properties remotely, and we all have jobs in finance that are very demanding on our schedules, we needed tools that would help us maximize efficiency and stay organized. We share the economics of the business equally, and decided that we all wanted to be involved with each decision in this learning phase. But we found out that sending emails and texts back and forth was a haphazard way to delegate tasks and keep on top of assignments. So we just started to use an app called Trello that allows us to stay better organized and keep track of projects we are working on.
What’s the single largest change to how you manage your rentals after using Cozy?
We can’t really say anything has changed after using Cozy because we’ve been using it from the start. Since we built a brand-new property, maintenance requests should be very limited (knock on wood!). We figured the majority of our tenant interaction would revolve around the initial screening process and then rent collection. We needed a product that would allow us to manage both these processes remotely, and Cozy fit the bill. As entrepreneurs ourselves, it was important to us to support a startup and be a part of that community, too.
What’s the craziest/funniest tenant story you can tell?
We can’t claim to have a crazy tenant story just yet, but the story of our current tenant is something we take pride in. When we began advertising the property for rent in December, we got interest from Stetson students and the skydivers like we mentioned, but our first prospective tenant was a self-employed plumber. Tyler was in Florida to get the house ready and show the property in December and was impressed when he met him. Once we started a dialogue, heard more about his story, and his references checked out, we were more comfortable. To reduce our risk, we asked for first, second, and last month’s rent up front and only signed him to a six-month lease (in Florida a lease term must be at least six months in order to be exempt from sales tax. Source: Landlordology). Because we were professional and honest with him regarding our concerns and were willing to work with his timeline, he was extremely appreciative. He even takes care of the lawn and landscaping himself (reducing our expenses) and he has already asked us if he can upgrade the toilets and install a water softener, all on his dime! It’s still too early to chalk it up as a win, but so far we’re extremely happy with the relationship – he’s been a great tenant.
What’s your goal with your rental business?
Our goal is to continue to build a portfolio of rental properties that provide sustainable cash-on-cash yields of at least 8%-10%. We’d like to have at least three additional properties by the start of the fall semester and finish 2014 with five properties under management. Right now we are using our own capital, but we are in the process of exploring other ways to bring on investment partners to accelerate our growth.
We are also very focused on creating a strong brand in the DeLand rental market. We want to differentiate ourselves by providing a professional rental experience for our tenants that utilizes technology to reduce landlord/tenant friction. And of course Cozy is a key facet in providing that service!