What’s happening with Rent in America right now. It’s the middle of a pandemic. Are people able to make rent? Let’s level set.
Abbey Wemimo & Samir Goel are the Co-Founders and Co-CEOs of Esusu, the leading financial technology company helping individuals save money and build credit. Esusu’s groundbreaking rent reporting platform captures rental payment data and reports it to credit bureaus to boost credit scores. The company’s mission is to provide financial solutions that pave a permanent bridge to financial access and inclusion.
Conversation
- Introductions
- What is happening with rent right now?
- How does this affect landlords?
- What is Esusu’s Rent Relief campaign?
- How does Esusu help to build a renter’s credit?
- What ways does this help renters and landlords?
- Why do this?
- Lightning round.
Links
esusurent.com
esusurentrelief.com
Transcript
Blake Miller 0:02
Welcome to the Future of Living podcast. I’m your host Blake Miller. Today we have two guests on the episode. We’ve got my friends Samir and Abbey from Esusu. They’re working on rent relief programs. You should check it out.
Samir and Abbey, how you guys doing? We’ve got a different type of podcast going on with two people today. I’m so excited to get caught up with you guys today. What’s going on?
Abbey Wemimo 0:24
It’s going well man, Blake. Thank you for having us. We’re very excited to share what we’ve been building at Esusu, particularly during these tough times.
Samir Goel 0:33
Thanks for having us, Blake. Excited to be here with you.
Blake Miller 0:35
Yeah, why don’t real quick you guys give each of your backgrounds that led you guys know what you’re doing because I think you’ve got some unique insights in your backgrounds that really led you guys to what you’re doing.
Abbey Wemimo 0:46
Absolutely, Blake. For me, one of the biggest inspiration behind co-founding Esusu with Samir is due to personal experience. For context, I was born in the slums of Lagos, Nigeria, lost my father at the age of two. And I was raised by my spirited and mother and two feisty sisters. I had the opportuniy to come to the United States, because I was afforded one of the finest education anyone can ask for. I mean, came to the United States, we didn’t have a credit score financial identity, walked into one of the biggest banks to borrow money were turned away. Because no financial identity, we didn’t think the banker in Minneapolis, Minnesota was racist, but it’s just because they didn’t have enough data to underwrite the risk they have in front of them. So consequently, we’ll walk down the streets and borrow money at over 400% interest rates from a predatory lender. And in addition to that, my mother sold my father’s wedding ring, and a bunch of her jewelry so we can get a fighting chance and starting points in this country. So the impetus for starting a Cisco corporate corporate experience working in places like Goldman Sachs, PwC, and the European Commission is really where you come from the color of your skin, and your financial identity should not determine where you end up in life. That’s the real emphasis here. And we continue to fight for folks along the way. But above all, make sure the multifamily landlords we’re also working with also profitable With that said, a pass it too Samir to share a little bit about himself.
Samir Goel 2:21
Thanks a lot, Abbey. And so like Abbey said, its history really stems from a personal place for us both. For me, my story is really my folks immigrated here from New Delhi, India, and frankly, thought we had made it they were chasing the American dream. And that just wasn’t the experience they had here. On my father’s first day in this country, he was mugged. We had a place to stay, or so we thought and that place wasn’t able to shelter us. And so my parents really started out with no money, no credit score, and nowhere to go. And so watching them work miracles throughout my childhood, the simple thought I was left with was, it shouldn’t be so hard for people who work hard every single day of their lives, to have a fighting chance. And that’s really the impetus behind why Abbey and I started the Esusu. Like Abbey said, no matter where you come from the color of your skin, your zip code, it shouldn’t determine where you end up in life. Fortunately, you know, I had an opportunity to get a great education and work in the public sector and private sector. But at some point, you know, Abbey and I, who have now been friends for eight years, pretty much work husbands at this point, decided that we wanted to use our as we like to say, our minds for business with a heart for the world to really do something that could impact the communities that we come from.
Blake Miller 3:27
Man I just love your guys’s background, and like kind of your vision just like your mission and what you’re doing. And you know, before we really hop into what you guys are doing, because I think it’s really revolutionary. And it’s such a need especially now is like I want to talk about what’s happening. Now we’re taping here, beginning of August, middle of this thing called COVID the pandemic. But we had a lot of, you know, social equity awareness. A lot of probably not doing a justice saying it that way. But you’re just there’s a lot going on in 2020, right? Talk to me about what’s happening with rent in America today. And kind of where people are at people paying rent, are they able to and what’s happening?
Abbey Wemimo 4:09
Blake, that’s a fantastic question. And thank you for acknowledging the hard history of the United States. For listeners a little bit of a context, the large income inequality we have in the United States in the United States today. It’s not an accident. It’s a derivative of systemic oppression that has operated since the founding of this country, just because the second group of people, particularly African Americans, were not considered as equal. And that has been an underscored in cases whereby the Federal Housing Authority from the 30s through the 1960s, fundamentally discriminated against African Americans and didn’t give them cheap mortgages, in some cases, when they actually went to go fight for this country, in different places across the world that has created the largest wealth gap in the history of the world, quite frankly. So where are we today, where we are is the average white family as 10 times as more wealth than the average black family, and the biggest driver of wealth is homeownership, which encompasses roughly 76% of individual wealth. So with that backdrop, what is going on from a rent standpoint today, the data we are seeing, because we’re very close to it as when we when we when we saw COVID-19 hit, for my data, we saw over 62% of folks were at risk of not meeting your rent obligations. Thankfully, the federal government stepped in and created stimulus programs to make sure people could stay in their homes. And have been trying increase that number to now around 93%. But, we see an impasse in Congress today whereby, you know, stimulus has not been passed, we don’t know what’s going to happen to unemployment benefits, and this creates a huge uncertainty particularly in the housing industry. So given that backdrop of systemic oppression, and the majority of folks this issue affects is African Americans and another minority groups, well, we do have a what we have on our hands right now is just a symptom of a larger disease of economic inequality, which permeates into the property technology space, or that property management space, whereby come August today, actually, August, people might not be able to meet their rents obligation reports out from the Washington Post, Politico, New York Times that quarter, a quarter, a quarter of Americans will not be able to meet their rent obligations, which is absolutely disastrous, when we think about the wealth of the greatest nation on the surface of the earth. So when we do that, as soon as soon to tackle this issue, add on was just to create programs called the Rent Relief Fund, which are let’s dig a little bit deeper into.
Blake Miller 6:59
Yeah, and real quick, before you hop into that. Now I want to kind of touch on, you know, what happens if 25% people don’t pay their rent? Right? You know, a lot of people do think that, you know, there’s a lot of huge landlords that can, you know, help sustain that for a little bit. And that might be the case. But, you know, 80% of rentals aren’t owned by huge landlords, or by small business people their own like by mom and pops. And so what is the chain reaction of these things that we don’t solve it? I do want to hop into the Rent Relief stuff. But if we don’t solve it, like what happens here in the next 30, 60, 90 days?
Samir Goel 7:36
Yeah, Blake. That’s, that’s a great question. And I’m glad you kind of brought that up. Because I think oftentimes, we look at these issues as one sided, right, there’s a lot of talk around the tenant, which is incredibly important, because what’s going to happen is, people not being able to pay rent is a symptom of losing their jobs. And now, because they can’t pay rent, the risk is that they get evicted. And because they don’t have a job, they can’t get a home. And then we have a massive homelessness process problem, which will disproportionately affect black and brown communities, right, that’s the tenant crisis. But at the same time, to your point, landlords don’t want to be the bad guy. Sometimes, maybe they’re awful landlord, but most of them are just trying to run a business and meet their net operating income, so that they can continue to meet their investor returns, and also take home money for their families. And to your point, you know, if they’re some of these large, you know, 50,000 unit plus, landlords might be able to sustain this for a few months, but even they will have problems. But for mom and pop landlords, their margins are incredibly thin, right? Sometimes on a property, they’re taking home a couple hundred bucks a month. And that’s all they really have. And so the risk is, either they have to evict a bunch of tenants, which is awful for people, and probably awful for them, because it’s actually very expensive to evict. Or alternatively, if they’re unable to do so they’re just taking losses and potentially go under, at which point a big institution, let’s say like a Blackstone of the world goes and buys it up, and then further kind of destroys the ecosystem, right? And so this isn’t really a landlord verse tenant thing, what we’re dealing with is something unforeseen a year ago, literally no one could have predicted COVID and the impact it would have. And that means that we need intervention from institutions, from government, from policy to really make sure that there’s a win here for tenants and for landlords. We can’t leave either behind in this situation.
Blake Miller 9:19
But let’s talk about that you guys are doing. You know, you first started with start talking about the Rent Relief Program. I think that’s a great place to kind of hop off and start digging in there. And then I want to talk about kind of the right product and service you guys are offering.
Samir Goel 9:35
So yeah, from the rent relief campaign, I think Abbey started to touch on this. But essentially, when we saw the data that we did, which was 62% of our tenants are unlikely to meet their rent obligations. We had to take a step back and think about how can we show up for our tenants but also our landlords who are partners in our ecosystem players. Right. And so we launched a public rent relief campaign. We raised over $200,000 in a couple weeks stemming from our foundation count Like Acumen Fund, and global good fund and just individual donors who were compelled to do something to support renters and landlords, and then we leveraged our network of over 200,000 rental units across the US to reach out and ask tenants to apply for rent relief. And once they apply, we do a quick diligence process. And if they’re approved, we actually pay the landlord directly. And then this ensures that the landlord is able to meet their net operating income to that the rent that the relief actually goes towards paying rent. And then we work with the tenants on repayment. So that way, there isn’t further perpetuating this essentially, baggage heavy relationship between a tenant and a landlord instead, work with tenants, we offer them a three month grace period, we understand their circumstances are willing to be flexible on payments, and we make sure that there’s an opportunity for them to get back on their feet. Because our goal here is really to buy time, right? Because government intervention takes time, it’s slow. As we can see in Congress, things have been stalled for weeks and weeks. But if we’re able to buy time, so that tenants are able to keep their roots, landlords are able to stay in business. And that might not have been for a larger policy intervention to actually address some of these issues in a bigger macro way, then, then we would have achieved our objective. So that’s really what we’re trying to do here with this fund.
Blake Miller 11:17
And that seems like such a helpful thing. Yeah. Have you guys already put all that money to work?
Abbey Wemimo 11:24
Yes, Blake. We’ve put majority of the capital to work the exciting thing is now this rent reliefd is starting to evolve into a product within a Esusu. So Esusu is going to be launching or we have actually started partnering with reasonable lenders to launch something we call the housing stability loans, which is, you know, moving forward, someone can add up for their rent to actually create an assistant whereby we can stand in place for the tenants give them the benefit of doubt, and help them by time. So then what the carpets were raised with depleted, but we we just recently partnered with Kiva, which has, you know, loaned over $1.7 billion to continue to deploy this cash and a plethora of CDFIs and credit union, which their core focus is to provide this affordable loans to individuals, it’s just creating this network effect pointing capital to where it should be. So as a society, we’re not solving homelessness backwards.
Blake Miller 12:24
That’s really awesome. I’m gonna have to keep up to date on that, we’ll see how it goes. I mean, it’s like, it’s an exciting thing that you guys have already deployed all that attack, like just the quickness in which it is, but it’s also kind of pressing in that he had to deploy that, you know, where we’re at everything. Um, you know, I really want to dive into what Esusu is as a product, because the way I understand it is you guys are helping people not only save, but also build credit. And you know, as somebody who personally is a renter, renter out of convenience, renter out of, like, the amenities of these things, and what it affords me to be able to spend my time on, I’m obviously not accruing, you know, any basically anything for that, except for the freedom of my time, which I do value significantly. Other people don’t have that, that luxury of those things. You know, they’re they’re renting because they don’t have the ability to buy a home or anything like that. Talk to me about how you guys were doing, because I think it’s so needed.
Samir Goel 13:28
Yeah. Thanks for that question Blake and also outlining some of the different categories of renters there. So what we’re doing at Esusu is really straightforward as you as a renter, when you pay your rent on time, we report that data into the credit bureaus. So you’re able to build and establish credit. And if you think about it, it makes sense rent is for most people 30 to 50% of their income, yet we don’t use it to determine their financial worthiness. And Abbey and I looked at ourselves, I thought, that’s just ridiculous, right? Because most renters are also folks with limited credit access and opportunity. And so there’s a direct overlay between renters, immigrants, minorities, college students, lower income populations, for the most part. And so this was really an opportunity to provide that kind of opportunity to access credit and build a financial identity. The way that we do this is really straightforward. We partner mostly with large multifamily owners and operators integrate with their system of record. So their yardie their real page MRI for all you property management software nerds capture that data and then report it into Equifax, Experian, and TransUnion. And people are able to build and establish credit. And for the landlords, the main benefit of this is that it helps them drive on time payments, so they see an uptick of 25%. And on time payments, and then for tenants like yourself, Blake, who are probably great tenants. It’s another amenity that helps you keep your best tenants in your building. Right, it adds that additional value. It’s like oh, I want to keep renting somewhere on building credit because whether I want to buy a car or a home or just refinance other debt or take out a loan It’ll help me on that journey. And so it really serves is that useful amenity. And beyond that we started pairing additional products like building stability and the housing stability loans, but I’ll pass that over to Abbey to share a little bit more about some of the additional services we’re offering.
Abbey Wemimo 15:16
Yeah, thanks a lot Samir. One of the other interesting things we’re doing Blake is we’re answering simple questions. An example is during COVID-19, can my residents pay the rent on time? Big questions we’re providing in on predictive analytics, identifying tenants that cannot necessarily pay the rent on time not to evict them but rather to a pay them with housing stability loans. So the tenants can accept the loans and landlord actually gets the cash. And through the process we’ve described previously, giving them three months moratorium, to not pay the money back and given them invest flexible payment terms, that’s not draconian compared to what’s in the market this today. So that’s what we think is the winning recipe here. Help tenants get credits for paying rent on time, which if you have a poor credit score can cost you about a quarter million dollars in your life. Number two for the landlord is if there’s uncertainty help understand the risk profile of tenants. And then above all, it doesn’t just stop it understand the risk profile, what is the action, which is providing affordable, reputable financial products to tenants, so they’re not being evicted. And the landlord’s also not suffering. What we found is proximity is addressed a little bit of the biggest issues we have in society today, what we are doing is just essentially a stopgap measure albeit a win win solution moment. And one thing it want to underscores is we need a national strategy particularly stemming from Congress to address the deep roots in a systemic inequality.
Blake Miller 16:57
You said stopgap there. And that’s it. Like, I’m usually the eternal optimist, like this is great. I think if anything, what, what this, what 2020 has given me as an experience is to, you know, try to think about what the other side is happening. And what happens if nothing was happening, if nothing itself here, you know, and now you have renters that have just taken on more debt, they still don’t have jobs, they still have these things. You know, what happens here? And are we just kicking the can down the road? And how do we fix this stuff,
Abbey Wemimo 17:36
So Blake, you know, I am an immigrant to the United States, I’ve done a lot of studying about this country. One thing that’s clear is the optimism of this country and makes it second to none. Every time that things appear as bleak American stepped up to the plate, and I’m a fundamental optimist, that there’s always a rainbow after the storm. So let’s go back down memory lane. Number one during the Depression, what happened, it was a lot of hopelessness. But under Franklin Delano Roosevelt, we had great strides, the medicare and medicaid medicare plan, we had Glass Steagall, to separate investment banking operations, from the regular checking accounts operations, we had a lot of big strider land grant initiative also led in that era, I fundamentally believe we can do something here, that is really going to right the wrongs of the past. And that systemic inequality we’ve collectively created as a nation, some of the tactical things you can do from a policy standpoint, which we’ll recommend is to create a $1 trillion loan loss reserve fund to right the wrongs of the past. And people might say this is crazy, but it’s not. What we asking is set aside $1 trillion if there are lenders out there that want to borrow money, so people can afford the rent. Let them unleash that capital right now while we figure out what’s going on in Congress so people can stay in their homes. And I will tell you the cost of make folks being homeless out there is greater than the serious crisis we’re going to have. So it’s a little…
Blake Miller 19:13
For a lot of people especially the extra capital-minded people will say, how does that make any sense? But I think that it’s it’s, it costs us more to have people homeless than to do anything to do anything else, right?
Abbey Wemimo 19:27
You got to Blake, so let’s do the math. Right. The math is simple. If on average, you spend $135,000 on on homeless folks, you know, suppressed health institutions, the ramifications of society itself crimes, that’s just an approximate, you multiply that times, you know, roughly 70 million people that’s going to cost society over a long time 15 trillion dollars, simple math. We’re not doing complex addressable market math yet. But if we take that math and say $1 trillion, so we prevent people. On average, they get, let’s say, five to $10,000 in zero interest loans. And if they can pay back, that’s great. If they can’t pay back the loan loss reserve one kicks in, just like insurance security, to make sure that people are not kicked out. It’s simple math. It’s a simple process, we’re asking for here. I once you…
Blake Miller 20:20
Sorry, I was just gonna say, I mean, it seems like having something like this in place, with also maybe doing something around stimulus and building and just helping us to build our way out. Provide people jobs, to build affordable housing, that is people off the streets. And, you know, I think that gives you kind of some ethic people. You know, frankly, to me what would be smart stimulus to come out of this stuff, because I think you only have to build got support people.
Abbey Wemimo 20:51
You got it, you got it. And that’s the right way to think about it is building net, not losing the ground. We have we’ve gained for the past now 12 years since the financial crisis. And above all closing the racial wealth gap, this that’s the real issue here. Majority of folks now suffer African Americans and Native Americans and Latino communities. Let’s just call a spade a spade. Until we address that issue. If there’s another pandemic, we’re going to be back to, you know, where we are. So if we’re not thinking about those things, and not thinking about the income wealth divide, in economic terms the Gini coefficient, we’re wasting our time.
Blake Miller 21:32
Samir, what I saw you I saw you we’re gonna hop in, and what do we have to add there?
Samir Goel 21:36
No, I think I think Abbey was quite comprehensive there. So I’m very aligned with all the all the points of views that were shared. But I think like, to your point, right, which is like you, we need to build our way out of this. That’s exactly what we did after the Great Depression, right? Under FDR. We had all these initiatives, we built highways, we did parks, we did all these things that employed everyday Americans in jobs that at the same time, elevated our country. And the reality is that we can’t just sit back and do nothing. Because if you know, 10s of millions people lose their job lose their homes, like every business suffers. Every business crumbles, people can’t buy things. Pete there’s more crime, there’s more issues, there’s more depression, America is already going through a mental health crisis right now, right? Like our society is being torn apart of its fabric. And that was before COVID. Right? We had all these issues around structural racial wealth inequalities, we had issues around mental health, you know, and these things are only going to accelerate if we don’t actually do something. So it’s not a choice really, for Congress. Congress needs to do something. The question is what, but just letting things happen is not an option either.
Blake Miller 22:39
Yeah, unfortunately, we’re starting to run out of time here. I guess that’s what happens when we got the double the fun on the on the podcast, right? But I always end everything with two with lightning round questions. And I’m gonna hit you both with two different ones. My favorite one to start each one though, is what product or service is going to be the next blockbuster, like, in other words, who’s completely obsolete in the next 10 years? Samir I want you to go first.
Samir Goel 23:05
Wow, that’s… Wow, I did not see that one coming. Like, be honest. that one that one was a real curveball.
Blake Miller 23:15
The fun one, there’s been some great answers.
Samir Goel 23:18
Wait, payday loans. That is going to be completely obsolete in 10 years, we’re gonna eradicate that industry from start to bottom because we’re gonna have better ways to essentially underwrite risk.
Blake Miller 23:28
Good one. Abbey?
Abbey Wemimo 23:31
Check cashing operations, those things are a thing of the past we have to rethink how we converse with people with the influx of FinTech companies cash checking and there’s a death sentence coming.
Blake Miller 23:42
Abbey, I’m going to stick with you. What is one device like smart device, wearable or something that you’ve gotten or, or just at home? It’s made your quarantine a lot better?
Abbey Wemimo 23:52
My Apple Watch has been incredible. My girlfriend and I got it keeps us accountable. Um, it’s kind of like this little thing whereby by we compete, which is helped me stay in shape throughout this quarantine.
Blake Miller 24:07
Samir what’s made your quarantine better?
Samir Goel 24:09
So we got kind of like an Alexa tablet. We just had the the music one at first, and we got the one with the screen. And that’s been a game changer just for really simple things like remembering alarms and playing music while cooking and just made life a little bit smoother.
Blake Miller 24:25
Now, we’ve talked a lot about how like technology, specifically FinTech technology is going to be changing the future is about what you guys are doing. What’s something that’s not going to change in the future?
Samir Goel 24:34
You know, I think people especially in COVID, think that because we can work remotely like everyone’s gonna want to work remotely and not do offices anymore. But I think I think that change will be a lot less drastic than what people think because it’s kind of that thing where dishes pastures always greener. And I think that we’re going to realize that there’s a lot of value in being together in person interacting with people I think work will be more flexible. But I think like the death of the office is not quite here yet I think there’s there’s more value to being with people in person live, and building those relationships and people people give credit for. And also, I think people didn’t realize how frustrating being at home would be either. And so, you know, whether it’s because you have kids at home, and so you can’t concentrate, or it’s just harder to be effective or productive in your bedroom, right in this tiny Manhattan apartment. I think that, you know, in some ways people will now experience working from home and be more inclined to have office spaces than they did before.
Abbey Wemimo 25:34
One thing that will not change Blake is the continued penetration of technology will continue to see expansion of technology, the erodment of particular jobs, which should also create different opportunities. So this is a clarion call to folks in Congress, or the policymakers on the state and local level, to create, you know, opportunities and retraining programs. So when the synergies from technology start kicking in which it is currently, we’re not leaving a lot of people behind. So that’s something I want us to keep at the back of our mind, just technology continues to permeate different industries. And one thing I would say is the continued optimism of America as being one of the greatest nation on the surface of the earth, I think is going to be a constant just due to the fundamentals.
Blake Miller 26:26
You guys I love your mission. I wish you the best of luck. We’ll definitely stay up to date on it. Let everybody know how they can find you Samir.
Samir Goel 26:33
Thanks, Blake. You can find us on our website www.esusurent.com. Abbey and I are pretty active on LinkedIn and our emails are just first name at esusu.org so you can find us pretty easily there. But Blake, thanks so much for having us. Really appreciate the time.
