Nomad, a company that equates itself to the iBuyer of the rental market, announced a $2 million seed funding round on Wednesday.
Nomad started serving a small base of landlords and renters in Denver in 2019. A team experienced in both real estate and tech, PJ O’Neil, former general manager at Opendoor, and Matt Thelen, previously director of business operations at cloud communications platform Twilio, founded the company.
To date, it has received requests from more than 1,000 landlords and has served over 100 customers in the broader Denver metro area and Boulder, the only two markets in which it currently operates. In the next year, Nomad plans to launch in several additional markets outside of Colorado.
PJ O’Neil | Credit: Nomad
The $2 million seed round received contributions from investors including Kickstart, Peterson, Carmax, Range Ventures, 8Z Real Estate and Planomatic.
“Nomad’s value proposition is unique and attractive to landlords in all types of rental markets, but especially today given the pandemic and the uncertainty it has caused in the market, both in the short and long term,” Nomad co-founder PJ O’Neil told Inman in an email.
Nomad guarantees its landlords market rent every month for two years, regardless of whether a property experiences vacancy or delinquency. According to the National Council of Housing Market Analysts, market rent is “the rent that an apartment, without rent or income restrictions or rent subsidies, would command in the open market considering its location, features, and amenities.”
What this means for Nomad landlords, is that the company gives landlords an upfront range of what it estimates the market rent rate will be, as well as its initial marketing price of the property. The company’s analysts then crunch several data points to optimize pricing, monitor how much interest a property gains, and then adjust the listing price accordingly. Once the property is rented out, Nomad guarantees that market rent rate for two years.
With Nomad’s work to recruit and retain tenants, O’Neil noted that landlords often end up making even more total rent over those two years than they might otherwise renting the property out on their own.
The company provides a guaranteed rent offer to landlords for two years and general property management services, if desired.
Landlords can opt to subscribe to one of three different packages:
- The “Core” package, which assists landlords in marketing and leasing out their property for a placement fee of one month’s rent.
- The “Complete” package, which provides the same services as the Core, as well as guaranteed rent every month for two years, a $10,000 property protection plan and a dedicated account manager, all for an initial fee of 50 percent of one month’s rent, as well as a 6 to 9 percent “guarantee fee” of each month’s rent.
- The “Concierge” package, which includes the same services as the Complete, as well as 24/7 property management services, preventive maintenance on the property and on-call repair technicians available, all for an initial fee of 50 percent of one month’s rent, as well as a 11 to 14 percent “guarantee fee” of each month’s rent.
According to O’Neil, the company has seen an 11x increase in requests from landlords for their guaranteed rent offers over the past six months.
“The strength of the value we offer, and the pain and fear landlords face has led to very strong growth for us during the pandemic,” O’Neil said.
