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EPISODE SUMMARY
Jeff and Kenon discuss recent industry events, the experience of reconnecting in person, and getting Ludacris in the desert. Jeff tells his wurst Real Estate Joke of the Pod yet. Interview with Nooklyn CEO Moiz Malik.
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Jeff Allen
Hello and welcome to Episode 20 of the ClearCast Podcast. Big two-oh. This, as always, is the Real Estate FinTech Podcast. I am Jeff Allen. And I am joined, as always, by my colleague and friend, Kenon Chen. Kenon, how are you?
Kenon Chen
Doing great, Jeff. I like that 20 episodes on our 20-year anniversary, as well — as a company…
Jeff Allen
Not your and mine’s 20 year anniversary of friendship, the company’s — Clear Capital’s — 20-year anniversary of existence.
Kenon Chen
You’re right, it feels like much longer than 20 years.
Jeff Allen
Yeah, it’s actually hard to believe I joined clear capital like, I guess four years ago. I feel like I’ve known you a lot longer than that. It’s only four years that we’ve been buddies.
Kenon Che
I know. That it’s surprising to me, too, but we’re gonna have to keep at it.
Jeff Allen
I know. I know. Well, in that spirit, let’s keep at this podcast episode. We have a very exciting episode, today. We’re going to be joined later on by Moiz Malik, who’s the CEO of a cool company out of New York called Nooklyn. Talking about what they’re working on. Before we get to that, we’re going to talk a little bit about a pretty cool new conference that has popped up in the proptech space that you, Kenon Chen, just got back from attending.
Kenon Chen
I did. I’ve been doing the U.S. tour here since September, I think I’ve been going to a different event every week. Since the first week of September. But last week was was a bit different. The Blueprint Conference, which is put on by the same organizers as Ensure Tech. And I think the Prop Moto covered it and and their lead off quote is, I think, is the best way to summarize it. They said, “I spent three days in Las Vegas with 700, proptech founders and VCs, who are euphoric about the real estate tech boom.” And that word, euphoric, like that’s, that’s a great, great way to describe it, because it was like a bunch of, you know, early stage companies that were super excited about what they’re doing. And they hadn’t hit that that wall that we experience more on the mortgage side — all the compliance reasons why you can’t do that. So they hadn’t heard “no” yet. And so it ended up being super inspiring.
Jeff Allen
That’s awesome. Yeah. So the types of companies that are at the Blueprint Conference — this is the inaugural version, some more to come — are your kind of venture capital-funded startups, proptech companies, people who really have more of a tech focus and a disruptive focus. So you think these people are euphoric now, but they’ll be less euphoric later because they’re going to run into “no” and compliance? Or do you feel like there’s real momentum that these companies can do things differently? What’s your vibe?
Kenon Chen
Yeah, I mean, there’s definitely a lot of discussion around you know, what’s true innovation, right? What’s going to be disruptive or take hold versus you know, buzz. I noticed that there was there was a super local focus. A lot of companies were solving particular problems for a city, you know, like, New York, and we’ll hear from Moiz later on some of the specific challenges around around New York, especially for for leasing. And then there was a lot of focus on commercial real estate. I mean, not just in the single-family rental space, but you know, all the way up to commercial office buildings, dealing with the new sort of trends around hybrid work and how to manage office space effectively, how to use the Internet of things, to understand what’s going on at different facilities. And then yeah, quite a bit of innovation around rentals. And, with some of the changes and even like California — some of the zoning changes — allowing for more multifamily construction in what has been traditionally single-family areas. You know, it seems like that’s the right focus for capturing what’s next in the build world. So yeah, it was fun.!
Jeff Allen
Awesome.
Kenon Chen
And then Ludacris was there. So…
Jeff Allen
Whoa! Luda?!
Kenon Chen
Luda. You know, he laid it down there at the end so that, you know, so like everything I just said, Ludacris.
Jeff Allen
Ah, okay. Well, I love everything that you said. But I also really love Ludacris, though. So this sounds like it was a cool, unique conference, but it shares similarities to other big, stodgy, mortgage conferences where you have to have, like, a musical guest that closes out with some, like, 90s hits for all the old people.
Kenon Chen
Yeah, except, you know, no one’s wearing suits, though, you know?
Jeff Allen
Yeah. It’s pretty hip. I suppose Ludacris was more of a 2000s era than he was a 90s era. Sorry.
Kenon Chen
Dude, early 2000s is still like 20 years ago.
Jeff Allen
No. No it’s not. Do not remind me please. Well, cool. Glad to hear it was such a successful conference. And something we’re gonna have in our calendars here at Clear Capital for years going forward.
Kenon Chen
For sure.
Jeff Allen
What is your appetite for a joke? Hungry? Not hungry?
Kenon Chen
Well, I actually ate lunch today. So I’m actually pretty full. But I have a joke compartment, you know, I got a little bit of space for that. So let’s, you know, let’s see what you got.
Jeff Allen
You have like a third stomach like a cow, with room for a joke. Okay, well, from my lips to your third stomach. This is an original joke. And, I have to say that this may be the stupidest one that I’ve ever written. And I’m actually kind of embarrassed to be saying that.
Kenon Chen
I’m not sure if that sets the bar really high or really low.
Jeff Allen
Dealer’s choice, whatever you think. Okay, so there’s this real estate agent, right? His name is John Pretz. And he’s got this absolutely insane listing that he’s trying to sell. And it is truly, truly weird. First, the ceilings on the entire property -every floor — are five feet high. The whole house. Only five feet high. Insane. No idea why, maybe dwarves built it back in the day. Hard to say. It’s a tough one. You have to crouch just to like walk in the property.
Kenon Chen
Was this in Being John Malkovich?
Jeff Allen
Excellent movie reference. That was a great movie. But no, no, that was not part of that film. Next, the other weird thing. The seller has a bunch of dogs — like 10 little tiny puppy dogs — in the yard is constantly covered in dog poop as a result. Like, the seller never cleans it up. These 10 dogs just constantly drop a little craps everywhere. It’s disgusting. So we’ve got the five-foot ceilings, and we’ve got the dog poop all over the yard. You can see why this is a tough one for John Pretz to sell. But then one day — bam! A buyer calls up and goes, “I want to buy it.” And guess what? He’s not even gonna lowball it. He’s gonna pay full price. And Pretz is like, “hey, that is awesome news. But I do have to ask: This house is super weird, why do you want to buy it?” And the buyers like, “well, that’s easy for me to explain. I’m planning on starting a German restaurant in it. I’m a huge fan of German food. And I finally, finally want to open up my dream spot to serve German food to the masses. So this place is perfect for me.” And Pretz is like, “huh? I’m confused. Why is this house with five-foot ceilings and dog poop everywhere perfect for your German restaurant?” And the buyers like, “well think about it. You gotta sauer-crouch to get around. There’s schnitzel everywhere. And the deal is a John Pretz-sell. It’s a wurst case scenario!” You get it?
Kenon Chen
Why? Why?
Jeff Allen
Alright, so let me go a little behind the joke here. VH1 Behind the Joke. All I had to work with was this idea of worst case scenario, and worst would be spelled w-u-r-s-t. Because I thought, hey, that could be something! But I’ve been working on this joke for a long time. Finally, last night over a couple glasses of wine, my wife and my friends workshopped with me other German food puns. And we decided to turn it into like a four-plex joke centered around different German foods.
Kenon Chen
You didn’t even bring in the Daschund named wienerschnitzel.
Jeff Allen
Ahg! I could have done that. Missed opportunity. Truly, I’m truly embarrassed by this joke. I don’t think it’s very good that I’m sorry that I burdened you with it.
Kenon Chen
It’s alright. I’ve got a few a few hours to get over before I go to bed.
Jeff Allen
Okay, done deal.
Jeff Allen
Okay, we are incredibly excited to be joined today by Moiz Malik from Nooklyn. Moiz, thanks for joining us.
Moiz Malik
Thanks for having me.
Jeff Allen
Yeah, so Moiz is the CEO of Nooklyn. And Nooklyn is an interesting company. They are how people find and share apartments. Since 2011, Nooklyn has helped over 55,000 New Yorkers — that’s a lot — find their apartment and processed over 85 million in rental payments. So not just a listing site, but there’s kind of this whole workflow component to it as well. So Moiz, just to get started, can you talk to us a little bit through how Nooklyn works? What’s unique about Nooklyn and what you guys do? What’s a customer experience like for a Nooklyn customer?
Moiz Malik
Sure. So the unique part of Nooklyn is that we go end-to-end in the sense that, you know, if you think about most of our competitors, say StreetEasy, for example, all they do is match you up with an agent, and then it goes off of platform. And then there’s the other side of it, which there are like On Site and AppFolio, which are companies that help people apply, but you can’t find an apartment through them. And so we’ve tried to combine the two. And doing that makes it so that, you know, our listings are more accurate because the listings are taken down immediately as they rent. And because we have the workflow, through our software, those tend to be the biggest pains when someone’s moving is, you know, where do I write this, like certified check to and all of that. And so we’ve been able to take all of those annoying parts of renting an apartment and just basically build them into software.
Jeff Allen
Yeah, that’s awesome. And your website specifically says making renting easy and safe. The safe part was interesting. What about your process, specifically highlights safety, where others might not?
Moiz Malik
Sure. So we started, you know, a long time ago, it’s like our niche was the roommates marketplace. And at that time, it’s in 2012 where like the majority of you know, finding apartments was through Craigslist, and really StreetEasy and Zillow were not that big at that time, at least not in New York City. And so if you ask, you know, any woman or any person like LGBT, what their experiences were, like, you know, using Craigslist, half the messages are things like, “I want to touch your feet at night.” You know, truly awful messages that, you know, when we think about the story of the customer, you know, 70 or so percent of our customers are women. And, you know, it’s this story of this young woman who is starting her career, just graduated college. And the first thing that she gets, you know, as a message is basically tying her worth to her body or something like that. And so what we’ve done with Nooklyn is we built integrations into different ID verification platforms to ensure that people who go in to our roommate network are a real person. We’ve built tools to find out if there’s harassment going on on the platform. So we have kind of like certain terms that you know, trigger alerts like “sweetie” or all sorts of things. So we built a lot of tools to ensure that people can’t upload explicit messages and all sorts of things that we’ve tried to build to ensure that everyone feels comfortable using our platform. And overall it’s worked out great.
Kenon Chen
That’s super cool. I mean, just the identity verification, I can see how that would have, you know, a huge impact on both sides of the transaction. New York itself is a pretty unique area. And I hear a lot of folks say that, you know, the rental market in New York is unlike any other city in the country. It is the idea that if you if you solve it there, or if you make this process better there that that can be scaled to the rest of the country? Or are you going to have to take a different approach in other cities?
Moiz Malik
I think that like the software tools, like the process of leasing is the same, right? So if you think about what leasing is, it’s this two-sided transaction, you have the renter and the owner on the other sides. And what they’re trying to do in that process is build trust with each other. So the renter wants to know that that owner has a safe building, there’s no mold, all of that stuff, they’re going to be, you know, doing good repairs, all of that stuff. And then the owner wants to make sure it’s someone’s gonna pay rent on time, not burn their building down, all of that. And so the software, the communication layer, of applying, and paying, and all of that stuff is the same. The only difference from market to market might be that New York asks more questions than any other market would. But so it’s just a toned down version outside of New York City. But just to put out there, like our original plan was never to like, have much of like a national business. It’s, our ambitions have scaled with the business. Like, to be honest, I’m kind of shocked, we’ve come to this point, as a business. Like all of us who like, you know, were here early was just a way to like, you know, let’s start a business to we didn’t know about the startup culture, all of that stuff. So for us, it was just a how do we make a livelihood for ourselves?
Kenon Chen
What’s kind of driven I that that changed from the original vision of New York to looking outside?
Moiz Malik
I think, at its core, it’s that like, if you go to like Seattle, like the process literally is that like, you go through on like, you know, Craigslist, or you go, like riding around the neighborhoods and like look at signs, like that really still is the process. My cousin was looking at apartments in Poughkeepsie. And basically, like, he literally just had to drive around finding signs until he was able to find an apartment. And it’s super inefficient, like, Apartments.com — no one’s really solved this problem.
Jeff Allen
So we were talking beforehand about kind of your origin story with Nooklyn. I was asking you, are you the founder? And you said, “no, actually, I was a customer first.” So this sounds like an interesting origin story, walk us through kind of how you got involved with Nooklyn and ultimately became the CEO.
Moiz Malik
Sure, so I started out, I was building a FinTech company. It’s like, with hindsight, probably not the best idea. But basically, it was a startup to help colleges with their finances. And I moved to New York City to get that thing going. But I realized very quickly that like selling to universities is not an easy task, like the most of them take 12 to 18 months to make a decision. And then even when you get “yes,” it’s not really a yes. Because there’s like, what I described in higher ed as like “committees of no” where there’s like 17 people who can say no, but one person who can say yes, and if any one of those people say no, it’s over. And so Nooklyn actually was, I met Harley who started the company through Craigslist, and I moved into the same building that he lived in, so I was his neighbor as well as where the office was. And I ran out of money very quickly, because that startup was not planned out well. And at that point, I was just like, I texted Harley like, hey let’s build this website. Just as a way that I could like eat the next day, I remember at that point, like I had, like $2 left. So I had I didn’t have enough to go to the subway to like, go meet my aunt for some food or something. So I was like, let’s see if this guy can get this going.
Kenon Chen
And give us a sense of what was that next sort of step that made? I mean, build a website? But then like, how did that start resonating? And how did you get the word out?
Moiz Malik
So I’m a firm believer in like, in the backend aspect of websites being just as good as the frontend. So originally, the first like six months, or maybe even the first year was just focused on building a good backend, because what happens in real estate is that the backend tools tend to be really clunky, and no one uses them because it’s just really hard and difficult to use it. So we really focused on the first year of being just focused on making sure the agency used it for their own processes. And then we the first, like, kind of like outward-facing feature was the roommate network. And honestly, the biggest way we got that started was that we printed like, I think it was like, half a million coasters, and gave them for free to all the bars nearby. And so like that basically got it going. That was our first like, set of like, users using the platform outside of the real estate agents.
Kenon Chen
That’s a great idea!
Moiz Malik
One thing you learn is that all the bars don’t want, you know, just Budweiser, because people have opinions about beer and stuff like that. And that’s typically gives them coasters. And so that really got us going, you know, as a business from a user acquisition, and then honestly, it just grew organically, like we’ve never had some, like huge marketing budget or anything like that.
Jeff Allen
That’s awesome.
Kenon Chen
Yeah, I’m curious what you think the biggest roadblocks are, you know, right. So it says you built the backend, obviously, you’re trying to get folks using the tools, I mean, I would think there’s some pretty deep traditions there, and especially in the New York market. Is it is a hard to get folks to switch the process they’re familiar with and trying something new?
Moiz Malik
So for us, we don’t tend to hire people who are agents at some other brokerage. For that reason, it’s very hard to get them to shift. And, you know, it’s, we just tend to focus on people who are in hospitality. And so bartenders, just people who are very sociable, kind of like social butterfly, so to speak. And then the roadblock is the ability to hire and train those people is, you know, a significant amount of work. But once you’re there, that person, you know, has an understanding of real estate is through your system. So for us, we’ve tried not to, like hire and poach from other companies, because it just leads to a lot of missed expectations of what we’re trying to build. And to give like, a kind of good example of that, it’s the concept of pocket listings. So all throughout New York City, it’s the model of as an agent, you get a listing, and you’re the only one who can show it. But that’s like, deeply inefficient, right? Because if someone wants to see it, and they’re nearby, and you live in Jersey, like what are the odds that the person is going to see it, zero? And so at least at that day, and whereas at Nooklyn, there are no pocket listings. Any listening inside our network can be shown by any of our agents. And so it means that like when a renter will get a response very quickly, to an agent, saying, hey, like this guaranteed money that you potentially have is now going away, but you have to, you know, you’ll make it up in volume is like a hard sell. To a bartender, making $2,000 or renting an apartment, it’s like a huge upgrade. So it’s been easier to go that way in terms of our growth. And the challenge is just hiring and training people because it’s a pretty time consuming process.
Jeff Allen
Yeah. So let’s talk about New York, more specifically. We were talking a bit about this before we got on, but I think our listeners would be curious. With COVID, I think there’s a perception out there that everybody who used to live in New York City fled for Connecticut and upstate, you know, bought the big mansion and you know, left New York behind. Is that Is there any truth to that myth? Are things back to normal? How’s New York feeling right now?
Moiz Malik
I think that was certainly — I lived in Manhattan, you know, peak COVID, so to speak, like April, May, you know, I lived in Stuy Town, which is an apartment complex with like, I think 11,000 apartments, and in my building, I think like half of my floor was gone. And then it was something where like, when I would count the like, empty apartments in the complex, it was probably like 50%. So I think a lot of people left New York City who lived in Manhattan and I think Brooklyn was probably half of that in terms of like peak vacancy, was like maybe 25%, which is still greater than any other event. But still, it wasn’t nearly as bad as Manhattan. That said, you know, this year we’ve had, you know, record, I think we’re about on pace to rent 5,000 or so apartments. And so, it’s been the opposite for us this year where people have not only moved back, we’re now probably entering a period where there’s like an inventory crunch. So if you start looking for like, a Williamsburg two-bedroom apartment, like, we may not actually find something this winter, which was never true before. So it’s like, the summary of this is, you know, it was the lowest of lows, and the highest of highs is where we’re at now, where we’re now entering a place where I think he, occupancy is higher than it’s ever been. But it was certainly quite a roller coaster along the way.
Kenon Chen
Any predictions for what that’ll do to actual rental rates, you know, whether the costs of renting is gonna continue to increase?
Moiz Malik
At this point, no question, right? Because part of the issue is that there’s just not enough housing for the amount of people who, you know, who live here, and who want to move here. And I think that, like, if there’s anything we saw, there was somewhat of an exodus out of like, places like San Francisco, and other areas. And, you know, I think we’re gonna, you know, part of why New York City is where it is, is because like, you know, I don’t want to get political, but like some place like Texas will enact a law that’s highly restrictive towards the rights of women, and women will tend to then, you know, as a graduate leave that state. And so you already have a trend where people like smart, intelligent people are leaving the middle of the country and going to the coastal cities. And I think, I don’t know, I don’t think San Francisco did a good job of like managing that growth. So we’re in a place where there’s just going to be an inventory crunch. Rents are now — if not at their peak, basically, at their peak — and next year will be peak rents. And it’s just, it’s kind of a forced error in the sense like New York City could do a better job of building units, but it’s just very difficult. So it doesn’t happen.
Jeff Allen
Yeah. So to kind of close us out here, what excites you most about where Nooklyn is headed next? What’s on your horizon? What’s the product gonna do for folks?
Moiz Malik
Sure, so I think one of the biggest things like in the short term is lease signing. So in New York City, no one did digital lease signings, really, because housing court wouldn’t recognize a digitally signed lease. Now with COVID, that has changed. So for we’ve been working on this for about a decade. And finally, we can take what we’ve been working towards, you know, digitizing that lease, which is the contract that’s, you know, the product of Nooklyn essentially, and turning that whole end-to end-workflow. So that’s the short term is digitizing the lease signing process fully through Nooklyn for the majority of our listings, and then the longer term is applying it from market to market. So you know, we’re currently based in Brooklyn, Queens, and Bronx. And the next horizon is looking at other markets, especially, you know, areas like LA or, you know, Miami where there’s a lot of people moving back and forth from New York. And there is a demand and there’s just no product out there for them.
Kenon Chen
Well, I mean, it seems like it’s a problem, it’s not going away anytime soon. And that you’re part of making it more streamlined and safer. So you know, we’ll certainly be keeping an eye on your journey where you guys go next. So I mean, we really appreciate the time and getting to know you a little bit.
Moiz Malik
Awesome. Thank you. Thank you for having me.
Jeff Allen
Yeah, thanks for joining us Moiz.
