
Launch HN: Latchel (YC W19) – Rental Property Maintenance as a Service - wilbo
Hi HN!<p>We&#x27;re Ethan, Jullian, and Will. We&#x27;re the founders of Latchel (<a href="https:&#x2F;&#x2F;latchel.com&#x2F;" rel="nofollow">https:&#x2F;&#x2F;latchel.com&#x2F;</a>). We handle 24&#x2F;7 maintenance for residential property managers and landlords across the US.<p>Ethan was Director of Product at One Planet Ops, the creator of websites like contractors.com, homegain.com, and many other lead gen marketplaces. Jullian is a self-taught developer and designer who has built mobile and web apps, most recently at picmonic.com. Will comes from Amazon, where he helped design and deploy the last mile delivery operations for Amazon Fresh, Prime Now, and Amazon Logistics across the US and the world.<p>Will started the company when his family needed help running the family rental properties. His grandfather managed the properties full time all the way into his mid 90s! Sadly, his age caught up with him and he could no longer take care of the family business after getting diagnosed with Alzheimer&#x27;s. The disease progressed quickly and unfortunately the family did not have a succession plan in place (advice to anyone with a family business: plan the succession early, you don&#x27;t want to spend energy worrying about the family business when you want to focus on taking care of a parent&#x27;s medical or end of life care). Will helped his father with the properties as much as he could while working full time at Amazon but was quickly overwhelmed by the maintenance dispatching and follow-up. He saw that the overall process was very similar to the logistics and delivery problems he was solving at Amazon. After looking for solutions online and calling Ethan to see if he knew of any solutions they couldn&#x27;t find any. Ultimately, we teamed up to build what we couldn&#x27;t find on the market: a service to handle rental maintenance problems and ensure work orders don&#x27;t slip through the cracks.<p>Maintenance coordination is a difficult problem to solve because it is fundamentally a communications problem that isn&#x27;t easily solved by software. First, most contractors are third party and take jobs infrequently from a property manager, so they&#x27;re extremely unwilling to adopt a new process for reporting that work is complete or for getting paid. Second, tenants also interact with their managers rarely, so mobile applications (and even online portals) have low adoption rates among renters. Lastly, property managers face an agency problem: ultimately it isn&#x27;t their properties, it is their clients who own the property. The property manager is responsible for its care and maintenance and wants to be able to have all of the details of what happened and to know why certain decisions were made in case something went wrong.<p>We sell monthly subscription services to property managers to take all of their maintenance calls. We have two paid subscriptions: 24&#x2F;7 Emergency and a premium option where we handle both emergencies and non-emergencies. We also have a free software tier that gives property managers an online web portal for tenant maintenance request submission. This online submission tries to detect emergency scenarios and our software automatically calls the property manager in case of emergency. In addition to the monthly subscription services we also take a 10% referral fee from contractors we source for the jobs (we cover the credit card processing fees).<p>The HN community is full of people working on simplifying the oftentimes ugly interface between the real world and idealized technology systems. We&#x27;d love to hear your questions, thoughts, and concerns about this problem space.
======
dd36
[https://www.yardi.com/products/rentcafe-
connect/](https://www.yardi.com/products/rentcafe-connect/)

[https://www.appfolio.com/blog/2015/01/appfolio-contact-
cente...](https://www.appfolio.com/blog/2015/01/appfolio-contact-center-
new-247-maintenance-answering-service-now-available/)

This type of service has existed for a while with the larger vendors. What
differentiates your service?

Licensed property managers are on the hook for the decisions you make. How do
you and they manage that liability? Is it even legal to have an unlicensed
third party field a call and assign a contractor? I know states where it is
not.

If you've been small, you may have flown under the radar but getting attention
could change that. The difference between Appfolio/Yardi and what you're doing
seems to be the assigning your own contractors bit. That's legally
questionable IMO. Maybe less so for first-party but definitely for third-party
managers - it technically makes you an unlicensed property manager.

~~~
briandear
There are several states that don't require a license to be a property
manager. Massachusetts is one example.

~~~
dd36
That’s incorrect.

[https://www.mass.gov/service-details/re42r05-property-
manage...](https://www.mass.gov/service-details/re42r05-property-management)

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pilingual
Are there any plans to automate property management? If so, when?

I posted this request for an Uber for property management 7 months ago. After
that post, I reluctantly hired a property manager and it has been a nightmare.
[https://news.ycombinator.com/item?id=17656752](https://news.ycombinator.com/item?id=17656752)

~~~
wilbo
We're staying focused on maintenance right now because maintenance is usually
the biggest single headache for landlords and property managers.

There are so many problems to solve with generalized property management that
we feel it's much better to stay focused on what we know.

~~~
pilingual
Makes sense. Just as a thought experiment I was trying to figure what would be
required. You’ve solved the maintenance issue, here’s what I see is left:

1\. Placement. A system that posts to Zillow, Craigslist. It seems like photo
or video walkthrough is an all but done deal. With keycode locks a real estate
agent could escort a potential tenant through once they’ve been validated via
credit score.

2\. Payments. Seems easy enough to build this software.

3\. Evictions. This seems like an entirely legal process, so having a lawyer
on retainer for a metro might work here.

I think the biggest issue with property management companies is simply that
their incentives aren’t aligned with the owners. If they have a maintenance
person on staff they have to pay that person somehow. I’ve talked with other
indie owners/managers and keep hearing the same thing: “imagine you are in
that business. Do the math, and property management doesn’t earn much.” It
seems ripe for disruption.

Edit: the only thing that is missing is someone to keep an eye on the property
in general. Not quite sure how to handle that other than have one person who
handles an entire metro.

~~~
wilbo
The real value of a property manager is having someone who is invested in
increasing the value of your rental property asset. In multi-family this is
easier because the value is directly tied to the net operating income.
Increased rents and lower operating expenses = higher property value.

Single family gets more tricky because the value is more closely tied to the
property value and not the rental income. I think this is where the inventives
are often misaligned. Even so, the best property managers will handle a lot
more than just filling units, collecting rent, and handling maintenance. They
understand the goals of the owner and will adjust their management strategy to
meet those goals (eg income property or a quick sale in a few years).

To add to your list: tenant retention (highest cost is actually unit
turnover), setting rent to the right amount based on local comparables, and
keeping in compliance with the ever changing rental laws.

~~~
pilingual
Great insight!

Tenant retention, while an issue, is a very minor one in comparison to peace
of mind regarding the aforementioned issues. With scale and automation, I’d
expect to save on the placement fee. In any case, I wouldn’t even mind yearly
turnover if I had my other issues solved. Perhaps it’s just me. (My time is
valuable and I’ve spent way too much of it dealing with the property manager
and contractors when the property manager failed to deliver.)

I’ve heard varying things about setting rent. An investor/manager in the Bay
Area told me setting rent too high is bad, and I think his reasoning was you
wouldn’t have a pool to choose from. Another person had a system of just
setting the rent ridiculously high and lowering it every week until it was
filled. Comps can be tough, and usually the market speaks loudest here.

Keeping in compliance with laws seems to confirm there’d have to be a full
time employee familiar with the region.

~~~
dd36
The issue with turns is turn cost plus lost income. For anyone without
multiple properties, the cost of a turn is usually significantly more than
they would recover with a high turn rate but increased rents. This is why
institutional investors push rents aggressively but mom and pops don't. To a
mom and pop, a long term renter is valuable. As where a large investor isn't
concerned about cash flow issues from turns because they can spread it over
many units. Look at the public REITs, some have near 40% turn rates, which is
insane. But that's what you get when you ask for a 5% rent increase every
year. As where the mom and pop is just happy that you renewed and they don't
have to worry about a cash pinch.

~~~
pilingual
Your comment and x0x0’s are informative, thanks!

I guess I’m just optimistic that there is a solution which won’t require such
high cost of placement fees, in addition to other costs. It seems hard to
argue that the current PM system is efficient. Maybe it’s just the case that
there are good PMs and bad ones.

~~~
dd36
The companies I worked with never paid placement fees. You don't really need
incentives when housing supply is tight.

------
dvtrn
Anecdote: There was a brief time when I took a break from tech project
management working for software development companies, and did a brief stint
as a project manager for a small handyman startup in the real estate business.
I ran my own handyman company for beer money in college, sold it after
college, and have seen the handyman services industry grow and evolve with
technology. It's been very exiting to watch.

The work itself was a cakewalk. Dealing with property managers, contractors
and laborers was less of a cakewalk, but still manageable.

Where I saw an opportunity for the RE business I worked at for two years
(because of business decisions now even the owner has admitted were not just
stupid but "f--king stupid") was to try doing exactly what Latchel is doing
for property managers. We had all the resources, we had the people, we had the
market and we had the local reputation to actually get two management groups
with over 20 buildings interested enough to say "Show us your proposal and
we'll take it to our owners".

That idea died because of someone high above and their ego, and even though I
eventually returned to tech[1]--I still wonder what it would have been like
had I pursued this exact idea on my own.

Good luck Latchel, as other comments are showing here: this is definitely much
needed, and if you do it well, congratulations on your future riches, heh. The
demand for this is _HUGE_.

\---

[1] Me, returning to tech after two years in real estate
[https://www.youtube.com/watch?v=LJ5nV9aKthU](https://www.youtube.com/watch?v=LJ5nV9aKthU)

Edit: If you ever start operations in Chicago, or plan to, I can likely make
some introductions to a couple of large property managers I have a good,
personal relationship with that may be interested to at least hear your pitch.

~~~
wilbo
We've built our operation to be largely geographically agnostic. Our customer
base follows population density. Today we operate out of 41 states and have a
decent Chicago portfolio. Warm introductions are always greatly appreciated :)

------
gigatexal
How do you vet contractors? What’s the fee per month? Is the subscription a
lock in? Do you find and vet and place tenants? I’m interested: Alex at
alexandarnarayan dot com

Basically if you can beat the 8% per month and 50% first months rent my
current manager takes I’d jump easily. Even more importantly I’ve a tenant
that pays religiously on the first of the month. But I don’t get a deposit
until the 11th or the 12th. Can you guys beat that?

What are the chances I can get on the phone and talk to the person that would
be overseeing my property? How do you convey trust to owners when you don’t
live in the areas you serve?

Edit: the fee structure is insanely attractive.

~~~
wilbo
We do not take over property management duties at all outside of maintenance
(i.e. No rent collection, no filling of units, evictions, advertising, etc)

As far as vetting contractors, we ensure they have appropriate licensing,
bonding and insurance per local requirements and also vet their existing
social media reviews (looking for 4+ stars). Most of our clients provide us
their rolodex of contractors to work with and we can vet their responsiveness
and quality that way.

~~~
gigatexal
Ahh so only maintainence. Dang. Still a nice service but I don’t get a
discount from the current property manager for him just collecting rent on my
behalf as I used him mostly to get my current tenant but now the 8% a month is
torture.

~~~
dd36
You have to look at it like a retainer charge. Most of the time, what they do
is minimal but when something happens, they will give your property a ton of
time. I think property managers are chronically underpaid because the barrier
to entry is so low. The best run firms I've seen are one or two people that
charge a premium but cap themselves at say 150 units. Then you get their full
attention and care all the time. The hard part is they're never taking on new
clients because they're never losing old clients.

It's a lot like good CPAs, good lawyers, or good family practice physicians.

------
jho406
This is a headache for me too. Some questions for you:

Do you handle common area maintenance? Snow shovelling? Cleaning? Sidewalk
maintenance? Do you have a requirement on the minimum num of units per
building? How do you handle tenants that don't speak English? What is your
pricing?

Aside from maintenance, do you have plans to get into full-on property
management?

~~~
emlieber
This is Ethan, one of the founders here. Yes, we handle common area, snow
shoveling, cleaning, sidewalk maintenance, etc. We even handle unit turn
inspections and punch list creation.

No minimum number of units. In fact, 80% of our units are single family
residence.

We have Spanish speakers on staff, but all of our automated texts/emails are
in English. So that come some times be an issue for Spanish only speakers.
Generally we have to get on the phone with them.

We charge $25 + $1/unit per month for handling all tenant calls,
troubleshooting, and emergency coordination. For $25 + $10/unit we do
coordination for every time of job (snow shoveling, cleaning etc.) The monthly
subscription does NOT include the cost of the handyman/contractor going out to
do work.

No plans to go into full on property management. We feel like maintenance is a
big enough headache to solve for now!

~~~
dd36
How familiar are you with state laws? Performing walkthrough inspections as a
third-party without being licensed is illegal in many states - a felony, even.
I'll source it for you shortly.

EDIT: Here:
[https://azre.gov/LawBook/Documents/SPS_Documents/SPS_2017.01...](https://azre.gov/LawBook/Documents/SPS_Documents/SPS_2017.01_Unlicensed_Assistants.pdf)

"An unlicensed assistant shall not perform the following activities:

\- Perform a walk-through inspection or Tenant Vacate Inspection

\- Provide advice or negotiate with anyone regarding a property

Pursuant to A.R.S. 32-2165(B) A person who performs acts that require a
license under this chapter, other than a broker’s or salesperson’s license,
without being licensed as prescribed by this chapter is guilty of a class 5
felony."

Arizona is not unusual in this regard. I helped build a publicly-traded REIT
with an internal manager and worked with general counsel on these issues. Some
of the laws seem silly but if you can do what a property manager does then
what's the point of having property managers be licensed? And I for one think
they should be. People complain of property managers now but imagine if there
was zero training or licensing. I also deal with HOAs, which require no
training or licensing, and they make property managers look like geniuses.
They manage HOAs when they don't even know their own CC&Rs, let alone the law.

~~~
emlieber
Yes, we’re definitely more restricted in AZ than most other states on what we
can/can’t do.

------
projectramo
This is a much needed service, and I feel like I've seen a lot of people enter
this space but I wonder what happens to all of them after a few months. They
seem to disappear.

The main question I have is: which cities do you operate in?

The secondary questions: How do you handle the workmen? What if you customer
thinks that you charged too much?

~~~
jullianchavez
We currently service properties across the entire US. We have built Latchel to
be geographically agnostic so we can service rentals in any city without
having to establish a presence or build density. As for contractors, we will
work with our customer's existing contractors if they have any, and find new
ones if they dont. We work with our customers to set default budget limits for
individual properties or portfolios, and then seek either their approval or
their owner's approval (included with Premium service) for an increased budget
if we cannot find a contractor within their budget limit. This helps prevent
surprise contractor invoices and keeps budgets under control.

~~~
projectramo
That is great. It seems like a lot of work. I have often wondered how hard it
would be to find an honest, reliable contractor if I were to get a property in
a distant city.

I would be happy to outsource all that work to you, and I hope you succeed so
I can hire you. But how would you guys find one?

In other words, the issue with finding someone long distance is that you can't
check them out in person, or see their work etc.

~~~
wilbo
We have existing contractor networks in most of the cities we service.
Whenever we enter a new area we often have to source on-demand. We vet people
based on social media reviews and ensuring their licensing etc meets the local
requirements.

When we send someone out from our network we are implicitly standing behind
their work. The good new for us is you can tell a lot by a person's phone
demeanor and business professionalism. If someone is rude or curt over the
phone with us they certainly won't be polite with tenants.

------
hbcondo714
Congrats on the launch! Do you imagine scaling up to work with larger
properties like condominium associations? I ask because the property
management company at my current complex isn't that great. We have many
outstanding projects in the queue and they never communicate onsite issues
such as when the hot water went out. From a tech perspective, the website they
lease to us is so old, not mobile friendly lacks notifications and doesn't
have a CMS to allow our HOA to make updates.

~~~
emlieber
Yes, we hope to get into associations soon. Right now they are a much smaller
percent of our customer base.

------
gdiggity
This is a great idea. A friend of mine actually pitched this idea to me a
couple months ago.. and while I thought it was great it was too far out of my
wheelhouse.

------
altharaz
In France, this kind of work is proposed by a lot of real estate agencies.
Real estate agencies can even collect the rent for you and “guarantee” you the
amount you will get each month. This point is very important as it is a
nightmare to evict a bad tenant.

Do you have the same issues in the US? If so, do you plan to manage the rent
payment as well?

~~~
jullianchavez
Part of our long-term vision is to increase the number of tools we provide to
our customers to help with the other tasks associated with managing a
property. These tools may include tenant background checks, rental payment
solutions, etc. Right now we are laser-focused on tackling property
maintenance and making the most efficient processes possible. Most of our
customers currently use other solutions alongside Latchel that help with
tenant management and accounting.

------
kitcar
What are the differences between your services and SMS Assist?
([https://www.smsassist.com/residential-repair-maintenance-
ser...](https://www.smsassist.com/residential-repair-maintenance-services))

~~~
wilbo
SMS Assist targets commercial and large residential (eg 5000+ single family
homes). Their customers include Dollar Tree and the US Postal Service.

We offer similar services for mom and pop property managers.

------
crossroads091
Great idea! Wish there was something like this in India! It is becoming
increasingly strenuous on my Dad who owns a few rental properties, to always
be at the beck and call of our tenants and their problems.

~~~
jullianchavez
Hopefully with time we'll be in India, too ;)

------
raleigh_user
Is this different than rabbu.com? They just raised a round near me and I have
some experience in real estate, and have some concerns about the model
scaling. Happy to discuss more if it’d be helpful.

~~~
kitcar
What do you think are the most significant issues re: scaling the model?

~~~
raleigh_user
It’s really really hard to coordinate contractors in short time increments. I
did a consulting project with a measurement company (measures sqft of homes)
and their model is stressed coordinating and moving around in 1 market at near
max utilization. I helped them scale into 2 additional markets and it’s just
massive headaches. To the point I was thankful I generally work on software
and can operate with way higher margins. 15% margin on 3-$100 services a year.
Makes it really really hard to grow business, pay well, make mistakes (you’re
always going too and with such a small margin they hurt way more). Happy to
talk more in private if it’d be helpful. I am watching them hurt bad right now
trying to add market 4/5\. They’re at about 750k run rate

~~~
dd36
Homee helps address this.

------
deeteevee
Can Latchel be utilized by a homeowners association with an existing list of
preferred vendors?

~~~
jullianchavez
Absolutely. We organize vendors by trade category and customer contact
preference on a per-property or per-portfolio level. This allows us to
structure property and vendor relationships in a large number of ways that
accommodates almost any customer type

------
lukeplato
How do you plan on dealing with competitors? what do you think your 'moat' is?

~~~
jullianchavez
I feel like many of our competitors focus on either a pure software or pure
human operations solution to property maintenance. We approached this problem
by combining the two, leveraging the strengths of both to provide a more
efficient, and more scalable product. We use our technology solutions to
automate the tasks that can be automated, and use a skilled operations team to
either pick up where our automation hits snags (e.g. a tenant or contractor
doesnt respond to an automated SMS asking for their schedule) or where their
knowledge is required to make a decision that a computer may not be able to.
It's hard enough to build a quality product with either solution, even harder
to meld the two into an efficient engine. We believe this keeps us competitive
and makes it hard to replicate our processes.

------
draz
I'd be curious to see whether this expands into the BuildingLink market.

~~~
emlieber
I’m not very familiar with BuildingLink. What market is it for? Larger
multifamily?

~~~
notananthem
Lots of big multiunit apartments use it, its terrible, if anyone wants a run
down on current services like this I'd love to tell you why these are doomed

~~~
jullianchavez
I'd love to know more about these services and what specifically you find
terrible about them. Our team is always focused on building a good user
experience, part of which comes from learning from other services mistakes

------
rubyfan
How do you solve for quality control in the contractor network?

