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Property Management Brainstorm Podcast

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Episode 58: The Full Financial Picture, Featuring Craig Schoen of Rentify

Bob Preston - Tuesday, May 25, 2021

As a property manager or landlord, do you ever worry that you are not truly getting the full financial picture when screening tenant applications? A rental application may look quite good and complete, but in reality, some of the aspects that would be helpful in making a decision may not be visible. Wouldn’t it be cool if you could verify renter's income, payroll, past rent payments, NSF & overdrafts all in one, easy to pull, screening report?

On this episode of Property Management Brainstorm, Bob speaks with Craig Schoen, CTO at Rentify.  Rentify is a company dedicated to helping property managers and landlords utilize a new approach to get that full picture of a tenant's financial strength during the screening process.

A time-stamped transcript is below.

Topics Covered

[2:40] Craig introduces himself and the concept of "open banking technology" in their solution to tenant screening during the rental application process.

[3:45] What is open banking technology and how long has it been around?

[5:30]  Streamlining the rental application process.

[6:15] Craig explains what is contained in the Financial Resume Report which is the output of the Rentify application process.

[8:45]  How about landlord verifications and credit reports? Are these part of the Rentify solution?

[14:00] How to make sure your process remains with Fair Housing guidelines.

[15:30] Craig describes the entire flow of a prospective tenant submitting their rental application through Rentify.

[18:30] Who pays for the Rentify application screening, the tenant or the property manager?

[20:20] Craig describes the discount program Rentify offers to NARPM members.

[21:00] Craig shares a personal story about his grandfather's success in the auto industry.

Connect with Rentify

Rentify Discount for NARPM Members

Connect with Bob Preston
Property Management Companies in San Diego 

This episode is always available for listening, sharing, or download at Property Management Brainstorm. Subscribe to Property Management Brainstorm on Apple Podcasts, Google Podcasts, Stitcher, Spotify,  TunedIn,  iHeart Radio and YouTube.

Bob Preston:                     01:09                    Hey, y'all and welcome to the Property Management Brainstorm show. Thanks for coming in. This is Bob Preston, your host broadcasting from the North County Property Group studio in Del Mar, California. If you're new here, please subscribe so you get access to all of our ongoing episodes and tips and tricks. And if you like what you hear, please pay it forward with a positive review as a property manager or landlord. Do you ever wonder that you are not truly getting the full financial picture when you're screening your tenant applicants? Sometimes we get applications that are kind of smoke and mirrors, you know, and we can typically ferret those out and filter them so that, you know, we know who's trying to pull the wool over our eyes, but other times the application may look great, good and complete on the surface. But in reality, some of the aspects that would be helpful in making a decision just aren't visible, or maybe you're not getting the full picture. Wouldn't it be cool if you could verify renter's income payroll past rent payments, non-sufficient fund overdrafts all in one, easy to pull screening report? Well, I've got on the show today with me as a guest Craig Schoen CTO, and co-founder at Rentify and Rentify is a company dedicated to helping us as property managers and landlords to utilize a new open banking technology approach to get that full picture of a tenant's financial resume as they call it during the screening process. Craig, Hey, welcome to the show today. 

Craig Schoen:                   02:36                    Glad to be here. 

Bob Preston:                     02:38                    Great to have you too. And I always like my guests to kick us off by just giving us an introduction of yourself, a quick maybe elevator pitch for Rentify and bring us up to speed on what you're all about.

Craig Schoen:                   02:49                    Well, thank you. My name is Craig Schoen. I'm the co-founder and CTO of Rentify. And what we do is we use open banking technology that allows landlords, uh, provide a rental application to applicants that analyzes the full cash flow of that applicant. So, understanding from a bank level detail where their payroll is coming from, if they'd paid past rent in a lot of the other financial details that just aren't readily available in a credit check or another services, we find that landlords that adopt a bank check through Rentify are able to attract great tenants. And they're able to really understand a lot more about the tenants before they sign the lease, which is a win-win for everybody. 

Bob Preston:                     03:35                    You started with the description by using the term open bank technology. We have a company we work with that offers no security deposit options. You may know who they are. I won't mention them by name. Tell us a bit, a little bit more about open banking technology, how long that's been around and how you guys are tapping into that for your platform?

Craig Schoen:                   03:52                    Open banking technology really started to become something after the oh eight crash. And what happened was banks started realizing that they need a way to tap in, especially if they're not a customer of that bank. They need an easy way to tap into person. That's looking for a loan. They're essentially a digital version of their paper bank statement, and it started to grow, and it became essentially the backbone of what people call the FinTech industry. There's really not a ton being done for landlords to adopt this technology. And if you look at it, you realize that, you know, when the credit check was created and landlords started using it, the credit check was never built for landlords. It was built for the lending industry. So open banking, actually, if you, you know, we started to look at the data and understand how it would work for a landlord.

Craig Schoen:                   04:42                    And we realized, Hey, if you can offer a turnkey solution, no technical background, where a landlord could sign up and provide a rental application all on the same hour and that rental application allowed them to do all the pre-screening and a bank check and provide one report that validated the pre-screening questions, using the applicants bank information. So, when people say they make $4,000 a month, our bank check automatically verifies that, oh, it's actually only 3000 landlords. Get all these documents, pay stubs, um, you know, reference letters and plain mint reference letters or, you know, government documents. And ultimately it all ends up showing up in the applicant's bank statements. And we use that technology to find landlords that service, if we're lucky we get all those documents.

Bob Preston:                     05:30                    Right? I mean, it's a huge challenge for people like my company, North County Property Group, we have to take in an application. We open the application. We look, if all the questions are answered, first of all, sometimes they don't even answer all the questions. And then if it's not complete, then we have to reach out to that tenant and say, read the instructions, give us all these documents. And sometimes that can take days, uh, in this rental market. Sometimes that means right out of the gate that the tenant and their application going to be denied because their application is not complete. And we have 10 applicants and one by one person gave it to us all in one shot. Right? But that might not necessarily mean that person's the right applicant or the best, right. It could be that somebody just forgot to attach their pay stub. So, you guys streamline that you call that report, we get the financial resumes. So, tell us about that and what that report would show.

Craig Schoen:                   06:19                    When an applicant completes our process, we provide the landlord what's called, but a financial resume or a bank check. We've created a technology that takes this standard information that we receive from that bank connection being created. And we analyze it to organize it in a way that's readable to the landlord. And we recategorize a lot of the transactions. So, the landlord can see, okay, these are all the payroll transactions for the past year. These are all their rent payments coming out of their account. In the past, up to two years, they pay their credit cards on time. We provide any payday loan activity, government income. So, any type of social assistance, all of that state, federal it's all covered, and we categorize the whole thing. So, it's a simple one page that a landlord can basically see the entire financial picture of the applicant. What you're really renting to is their bank account. Because as long as the money's coming in and they're there, they're obviously behaving themselves. Everything's good. But if you don't understand the bank account, you really don't understand from a cashflow perspective, can this person pay you on a month-to-month basis, one page, most landlords, it takes them two minutes to read, and they have everything they need to know if they want to proceed or not with an applicant. You mentioned the

Bob Preston:                     07:30                    Financial crisis and all that kind of thing. Back in the day before 2008, there was a thing called stated income loans where you could start out, just turn over your bank statements. And I can't help it but feel like this is kind of a fancy or maybe higher tech way of doing sort of stated income analysis. Is it comparable, hundred percent?

Craig Schoen:                   07:48                    I, you know, it's actually really interesting. You mentioned that. So, some of our customers actually said, yeah, you know, back in the nineties, what we used to do is they were in a small town and they would call the bank. So, they would actually just call the bank and say, oh, is this person have, you know, like they, they knew who they banked with. And just, they said, they asked the person, can we call just to verify with the bank that you make, what you make? And they would ask a couple of questions and they would have someone at the bank, they would usually call, and they would get all the answers they need because they wanted to talk to the bank. They didn't want someone to print out a statement just like you don't want to take printed statement today because Princeton statements can be altered, and you want to get the information directly from the bank. So, you know, it's a hundred percent accurate. And I was like, well, why did you stop doing it in the nineties? They're like, oh, the person left. So, we just didn't have anybody to talk to them. And now we can basically make an easy process for every landlord to get that type of service. 

Bob Preston:                     08:46                    What about landlord verifications? I mean, maybe, you know, they paid their rent on time. You don't really know how they treated the property.

Craig Schoen:                   08:52                    We don't know to the detail of how they treated them, but one of the things that as we've added more applicants, what we're seeing is that there's profiles and patterns and the way that the accounts in the spending that the credits and the debits and the types of transactions, we start to see patterns where it will be possible in the future. As we add more applicants where we'll be able to give a pretty good probability score on pride of ownership. 

Bob Preston:                     09:21                    Do you do a credit check at all in your process? And if not, do you recommend that your clients still do that?

Craig Schoen:                   09:25                    We provide, um, the option to, to do a credit check. Um, but only after a bank check is done. And the reason is, is because the bank also provides the full identity and address of the applicant that they have. So, what you get is all of the KYC, know your customer, that the technology that the bank uses. So, when they provide the identity through the bank check, then you can auto-populate that if a credit checks also requested and you reduce your error rate on actually running those credit checks, because you get, as, you know, if you don't get the address, right. And other variables, sometimes you get back errors that people can't complete landlords like that we have credit checks because it's what they know. But once they do a couple of bank checks, they realize they can still do it if they feel comfortable. But for the most part, they just stick with the bank check. It's less expensive than a credit check. And they get the information that they're actually looking for. 

Bob Preston:                     10:21                    I completely agree. And I'm, and I'm with you on that. It's interesting though, because as a property manager, we're in the position where we also have to answer to a property owner and the very first question they usually ask when we're recommending that we move forward with a tenant is okay, what's her credit score. And so, I'm envisioning we don't use your technology yet. I'm going to check it out though. This has been, this has been great so far, but I do know a little bit about open banking because we do the no security deposit option. We get questions about that too. Well, how do you do that? How does that work? Right. And then of course we have to explain it. I think over the course of time, people will get more used to that, but it is going to be something we have to get through. So, I guess we could always run the credit report though. I mean, there's nothing that says we couldn't still do that. Of course. Absolutely. And then you've got both pieces of data and we could also get the landlord verification, landlord reference checks. Right. We could still do those things, but in addition to all that, we have your cool financial report happening for landlords is they use it to ask questions.

Craig Schoen:                   11:15                    So for example, let's just say you still talk to their previous landlord or the, where they're currently living and they say, oh yeah, they paid, the landlord says they paid, but really the landlord's just trying to get them out because they don't pay. Right. So those situations can happen. So, when you do a bank check, you said, okay, landlord said they were great, but I don't see any rent payments. So, it's red flag and you can ask them, I don't see you paying rent depending on what they say. It kind of creates this really simple feedback loop. You know, just ask the simple questions and have the data to know if someone's telling you the truth or not. 

Bob Preston:                     11:52                    Just because, you know, if I were an applicant, I've got a bank account that I share with my wife, not much money is in it, but there's a small savings account too. That earns almost no interest. We've got, you know, investment accounts with fidelity. We've each got a couple of IRAs. I've, I've got two or three credit cards. How much data does the applicant have to give you for you to do a proper and full analysis? They

Craig Schoen:                   12:16                    Just provide us their primary institution. So, it could be Wells Fargo, Bank of America. And we receive all the accounts inside of that. And that will then show us in that primary account where the money comes in and then the money going out, paying rent and all that other stuff. 

Bob Preston:                     12:33                    You determined that the main account they're running their money in and out of is their say checking account. And you can see that there are deposits coming in from some, uh, some, uh, unidentified account, or maybe it is identified. At least it would provide the landlord with the ability to ask a question like, Hey, what's this fidelity account that we don't have exposure to? You know, what is that? Where's that money coming from?

Craig Schoen:                   12:52                    Right. A hundred percent, we actually provide a, one of the pieces of information we provide is income, including transfers. So, we actually break out and show, okay, well, this is income, including what we consider through our analysis to be transferred. So, cyclical going from a checking to a savings and savings to a checking and account that is under the same ownership of the applicant. So, uh, cause sometimes, you know, if someone just showed you, oh, well, all my, the credits in my account, you know, every bank they give information credits and debits, you know, it looks really big, but a lot of those money is just coming from a savings account to a checking. That's not, we show it as income, but we have a specific number that's income with transfers. And we don't show that number if it's just a true income or payroll income. So, we give a lot of granularity that, and landlord can go into to really understand income sources and, um, but transfers is a big problem to solve, and we've solved it in regard to actually showing the landlord, this is how much money they make payroll. This is how much they make in total income payroll, plus additional income sources. One of the things

Bob Preston:                     13:59                    We all need to follow in this industry as property managers and landlords is fair housing guidelines. Have you talked to HUD about this or attorneys who are fair housing attorneys to make sure that what you're doing is considered legal within fair housing guidelines as a housing provider?

Craig Schoen:                   14:18                    Yes. So that's, that's a really, really great question. So, we absolutely, it is a hundred percent legal. We've done our legal reviews and talking with all the right people. And, and the reason it is, is because essentially all you're doing overdoing is organizing and categorizing the digital version of their paper bank statement. Now, of course the landlord can't use that information to discriminate on and we don't show any, you know, information that that would be considered on any of those grounds that are protected. So, it's really just the same thing as someone giving you a paper bank statement and they can redact what they want. But the problem, of course, when someone gives you a paper bank statement, you don't know it's true and they may forget to redact something. We automatically remove transactions that are not relevant to landlords. So, we do basically this, the first thing we do when we receive the data is we do, we review it, our system reviews it to remove any transactions that are not relevant to providing us.

Bob Preston:                     15:20                    Payments to doctors coming to mind, right. Things that are kind of bordering on perhaps privacy infringement, a hundred percent walk us through a scenario where I'm getting ready to apply for a property, kind of how it works, right? How that whole process runs. Where did these people have to log in, walk us through the steps?

Craig Schoen:                   15:38                    No problem. There are two workflows in our system. And, uh, so the first is what we call pre-screen plus a bank check. And what that workflow is, is when you've received an inquiry or an application through another source through your property management software, through your website, and you've received an application, maybe it's just a basic inquiry name and email you as a property manager or landlord who provides you with a link, um, that you use for your rental applications. You send it to the applicant; they click on it and it would have all the pre-screening questions you would like to ask. It could be 20 questions could be two questions. It could be, you know, your pets solely other standard questions. They first create an account. So, they should provide their email and verify it. They answer the pre-screening questions. They're provided with the bank connection page, where they see a list of all the banks in north America, or if they're in us, that's it just pre-filters to the U S banks and a really easy search where they can find their bank or credit union select the credit union or bank put in their card and password.

Craig Schoen:                   16:43                    And we have a little video on the right about 50% of applicants watch. And it just explains in the process what it is, how it's secured, you know, the benefits of it once they hit complete to putting in the password. Uh, we just ask them one last question, if they have any roommates or co-signers, so they can add those roommates or co-signers to the application and hit complete. And that's it, the landlord receives a notification within five minutes that the applicant's complete the pre-screening questions and then all the information in the bank check. So that's kind of this standard flow. The other is what we call just prescreen, then bank check. And that's for, if you put your application on a website, so let's just say your property management company, and you want people to fill out the application. So, they are on your website, they click the link, and they do the pre-screening questions and that's it. And then you, as a property manager can review the answers to their pre-screening questions to decide if you want to do a bank check.

Bob Preston:                     17:42                    So that might be more of the traditional application questions. Like how much monthly income do you have? Do you have any pets say, okay, this looks like a person that would meet our qualifications? Let's take it to the next

Craig Schoen:                   17:53                    Day. Absolutely. And that allows you to control your costs because we, we don't charge a monthly fee or setup. We only charge on a bank check is run. So, we don't charge even for pre-screening questions. So, you can say, okay, well I've received 20 prescreening applicants. And, uh, I'd like to go ahead with a bank check for four of them. And those four, they just get notified to do the bank check. They click the link, put in their card and password, and they're done cool.

Bob Preston:                     18:20                    So who pays is the renter paying it when they log in or is the landlord or property manager painted on the backend?

Craig Schoen:                   18:29                    Uh, currently it's a landlord pay model. And what happens is that the landlord is billed once the bank check is complete and they're provided with the report. So, it's kind of in real time. And then they're provided with an invoice, uh, and then a monthly, um, a summary of how many banks checks they've run next month. Actually, we’re launching our applicant pay model, which allows the applicant to pay for the cost, uh, which is $9 and 99 cents or the report. And the, the report gets shared with the landlord, but also because the applicant pays, they retain access as well to the report, which they can share with other landlords as their financial resume. Cool. 

Bob Preston:                     19:07                    Where are you guys located as a company and how long have you been at this?

Craig Schoen:                   19:10                    We're in Canada. So, uh, the great white north, as they would say. And, uh, so we're just outside of Toronto. Our head offices are in a place called Bellville. Uh, so it's right on the water. Very nice. This isn't our first company. This is that that have started. This is actually the second company that had started the first was in the automotive space that, that has done quite well. And, um, you know, as a diversification, uh, outside of the automotive space, me and our partners and investors were looking for different opportunities. And as you know, people who invest usually own real estate as well. So, it, as part of the conversations was, is there a technology we can create that can simplify the real estate industry? And we started to investigate. And when we saw that as part of our research, we said, well, wait a second. Why isn't one of the first steps for an applicant applying to a rental property and even which is the largest monthly expense, or they should be, uh, you know, hopefully, uh, largest, monthly expense is renting. Why wouldn't we do the same thing for landlords to connect with the bank so they can understand the person before they rent to makes

Bob Preston:                     20:17                    Perfect sense. Yeah, really cool. Hey, so we were chatting before we got started here today. I'm very involved in the NARPM organization. And for those listening who don't know it, when ARPA is it's the national association of residential property managers, quite a mouthful NARPM, uh, I happen to be the president of the California state chapter or CalNARPM. You have a special program for NARPM members.

Craig Schoen:                   20:37                    Yeah. Yes. It's been so exciting to work, work together and we offer a first report purchase. We offer 40% off. So that's our coupon code. NARPM 40.

Bob Preston:                     20:46                    Very cool. Craig, I warned you about this. One of the things I'm known for is telling brief stories, like when I go meet a new client, so I'm going to ask you, do you know, do you have a personal story you could share with us?

Craig Schoen:                   20:57                    Sure. I mean, I love stories, stories. It's amazing. One story I'd like to share is about my grandfather. So very interesting guy, super interesting guy. So, he is old school, so he never finished his grade 10 because he didn't have the opportunity to do so and worked, um, in, in where we are in the greater Toronto area, there's a, a, a general motors plant. So, radar for grade, essentially after grade 10, he started working at the general motors plant saved up his money, you know, in him and my grandmother, you know, it just everything, you know, you think of that generation. They did to try to get ahead and finally saved up enough money. And what happened was, is he said, okay, I going to do something it's kind of crazy, but we're going to give it a shot. So, he sold. So based on my grandmother gave him this car, her car and he sold it at auction to get two more cars and started a used car lot with my grandmother's car.

Craig Schoen:                   21:59                    And with it, then two days sold those two cars and then bought another four at auction and just try to double as much as he could. And this was back in like the late fifties, early sixties started that way. And we're he, uh, where we're situated was part of that suburban sprawl. So, it was farmland then, but over those like late fifties in the sixties, or see like big subdivisions and he was able through this, you know, just dog determination to get the general motors franchise in the greater Toronto area, uh, as a town called wipie. So, it's now a population of a hundred thousand, but at that time I think it was just about 10. So basically

Bob Preston:                     22:40                    He was after the local auto dealerships for GM, right?

Craig Schoen:                   22:43                    So he started with that and then grew it to the largest general motor franchise in Canada. And that in, in, in of course, you know, a lot happened in oh eight, you know, cause with general motors franchise, you had Pontiac, but he lost that. So you, he lost essentially 40% of his vehicles, even with that, he was able to grow and still maintain as one of the largest car dealers by volume in Canada, after losing his main, essentially his main product Pontiac and doing it just through talking to, you know, like when he, he has a way with people when they come onto the car lot, you know, he just has this way where you just can't not talk to him. Like he's just, it's, it's, it's, it's an amazing thing to see. And, um, so a lot of the entrepreneurship, you know, that, that I've learned is, you know, from him and, and, and his approach to life and he is now 86 and he started his latest dealership in a Honda dealership franchise, just north of Whitby. So, he's actually the oldest, I believe he is the oldest person to ever in north America start a car dealership at 86. You still go to the lot every day, every day.

Bob Preston:                     24:00                    That is a really cool story. The greatest generation, as they say, right. Hey, this has been a great conversation. I love that story. And the episode is also full of some fantastic information. Thanks so much for coming on the show. I'd love to continue, but just in the interest of time, we've got to wrap up today. So, any last words or thoughts for our audience, and if someone wanted to get in touch with Rentify, how would they do that?

Craig Schoen:                   24:19                    Yeah. So, you can go to It has all the information, but you can sign up. It explains the report security. Once you get all of that, that's probably the best place to find us. If you're a landlord or property manager, it's taken this opportunity to really think, do you want to be renting to someone where, you know, what's in their bank account or do you want to be renting to someone where you just know their credit score? And I can tell you landlords life just gets a little bit easier when you build in a bank check. There's just huge opportunity for landlords being in small, big, and small to use this technology, to make life easier.

Bob Preston:                     24:56                    Input and information for our listeners. Awesome. Craig, Hey, thanks so much for coming on the show. This is going to be a great episode and I'm sure you'll get some questions coming your way and hopefully some NARPM members will take advantage of your offer. We'll as we wrap up today, I'd like to make another quick plug to our listeners to click on the subscribe button and also give us a like you to Craig. I expect to like and subscribe also pay it forward with a positive review to help encourage more great guests like Craig to come on our show. And that concludes today's episode. Thank you for joining the show until next time we will be in the field, working hard for our clients to maximize a rental income and maintain top tenant. We'll catch you next time. 

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