There are a million reasons to love New York City: a thriving arts scene; pizza on every corner; its melting pot of cultures.
What doesn’t make the list? Looking for an apartment.
Finding a place to live can be a nightmare, and it’s one that twin brothers Guy and Ori Goldman, 28, are starting to wake people up from.
Innovative real estate business strategies
In early 2015, the Goldman brothers launched Loftey, an agency that takes the seemingly endless stream of false leads, expensive broker fees, and high moving costs out of the apartment-hunting process. The idea was born from Guy’s three years of experience working as a broker and the brothers’ shared interest in real estate, explain the members of New York’s WeWork Gramercy.
“95 percent of the apartments that you see posted online are fake,” Guy says. “The entire industry—all these rental companies, thousands of brokers—their entire business model is based on bait and switching clients. There’s very little honesty going on in the business.”
So little, Guy and Ori say, that they have the potential to make a sizable, first-of-its-kind impact on the industry.
By establishing relationships with landlords and rental properties, Loftey eliminates a renter’s need to go through a broker. Instead, buildings pay Loftey a referral fee for bringing in clients. Part of that fee goes towards the company’s operating costs, and the other part goes into renters’ pockets in one of two ways.
“If someone rents an apartment with us, they have the option of either getting their move paid for or a guaranteed rent reduction,” says Ori, who comes from a finance background. “We’ve partnered with a couple moving companies so [a renter’s] things go from A to B for the price of ‘on the house.’”
Those who opt for a rent reduction can choose between getting a check upon move in or having their monthly rent lowered. Reductions start at $50 per month, guaranteeing all Loftey clients a minimum of $600 if they go with the up front option. Loftey’s services are free for all would-be renters.
As for all those fake listings on the web, the brothers have found a way to address that problem, too.
The company’s site features more than 10,000 vacant or soon-to-be vacant apartments, all of which are screened and authenticated by Loftey’s five-person staff. And if a client comes to them with a legitimate listing found elsewhere, they will work with them to finalize the terms of the lease, offering the same rent reduction or free move benefits.
“At any given time, we have between 30 and 50 clients,” Guy says, adding that the only thing most of them have in common is a need for a new apartment. “You’d think it’s mainly 20 to 30-year-olds coming to us, but today our agent is going to meet with a couple in their 70s.”
Thus far, Loftey has done upwards of $500,000 in deals. With demand steadily increasing, Ori and Guy plan to add three staffers to their team by March.
“‘What’s the catch?’ is a question we field all the time,” says Ori. “That kind of keeps us motivated; it affirms that we’re on the right track.”