Finding a new apartment is challenging, especially when landlords don’t know when a potential property might be vacant and brokers want a fee for showing the apartment.
That’s where Doorkee comes in: The 1-year-old New York startup is developing an all-in-one digital platform that creates a peer-to-peer market that incentivizes tenants to give proper vacancy notice. It also helps potential tenants see what’s available and saves landlords money finding new tenants, John Fagan, CEO, told Crunchbase News.
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The company’s mission to provide a better moving experience for all parties involved is now backed by a $5.7 million seed fund, led by New York landlord Simon Baron Development and early-stage venture capital firms Corigin Ventures and Alpha Edison. Also participating in the round were landlords Stonehenge NYC and Bushburg Properties.
A new statewide ruling in New York is also helping Doorkee gain momentum. In February, The Wall Street Journal reported that real estate brokers were prohibited from charging a fee to renters to access an apartment. Landlords often use brokers to show rentals and execute the leases in exchange for a fee tenants pay after signing the lease, Fagan said.
He said he learned about broker’s fees the hard way in August 2017, when his Brooklyn apartment lease would not be renewed in December. He thought he had a good amount of time to look for a new apartment, but some landlords weren’t able to tell him if one of their apartments would be ready by December.
“Surely, there were other people who knew they had to move,” he said.
A month later, Fagan decided to move in with a friend and were looking at apartments to share. They found the “perfect one,” complete with a private rooftop area. However, two brokers got involved in the transaction and wanted nearly $8,000 in broker’s fees to complete the deal, Fagan said.
“I was the one who found the unit online, I took the pictures to send to Mike, and all the broker did was let me in and wanted a fee for that,” he added. “I tried to convince the landlord to lower the fees, and he did, but we ended up losing the apartment. Once we realized this was a universal experience, we knew we needed to do something.”
Doorkee plans to use the new funding to grow its user base in New York, as well as expand to other cities and further build out the product so it is a complete tool from search to contract close, Fagan said. His goal is to move into the four next-largest markets in 2021 before going nationwide, he added.
Meanwhile, the company’s metrics are proving that tenants like using the platform, Fagan said. On average, they are giving notice 66 days before moving out, and taking advantage of earning a reward of $1,000, on average, for coordinating virtual tours at their convenience. Half of the people who are not renewing a lease are applying to post their apartment on Doorkee. This helps landlords avoid the usual 45 days to find a new tenant, he added.
“We are hard at work building out our offering and user base,” Fagan said. “We have four of the 10 largest landlords in New York as clients or working on becoming clients. We didn’t know if tenants would use this platform, but the answer is ‘yes.’ ”
Photo: John Fagan and Jordan Franklin of Doorkee, courtesy of Christian Rodriguez.
Blogroll illustration: iStock