PJ O’Neil wants to take the anxiety away from rent day — for landlords.
His property management tech company, Nomad, deposits money into a landlord’s bank account on the 5th of every month — no matter if their tenant has paid or not.
“It’s so they can rest easy, so they know they can pay the mortgage in time that month, so they don’t have to worry about chasing down that tenant,” O’Neil said. “Nomad gives them peace of mind.”
O’Neil and Matt Thelen founded Denver-based Nomad in 2020. O’Neil previously launched the Denver market for Opendoor, the home-flipping firm, while Thelen was director of business operations for marketing communications firm Twilio.
Nomad is targeting America’s small-scale landlords. He said 85 to 95 percent of landlords own one or two homes in the same city they live in, while the top 50 single-family real estate investment trusts in the US own less than 3 percent of the country’s housing stock.
“We’re unleashing America’s landlord. It’s the largest segment of entrepreneurs in the country,” he said.
So far, O’Neil said, 3,000 landlords representing every zip code in the country have signed up for Nomad. They have 7,000 tenants, who pay their rent through the site or app.
Nomad takes a 4 percent cut. In exchange, the company screens tenants, helps facilitate property maintenance and guarantees the landlords will get their monthly payment.
Nomad was the first company to offer “guaranteed rent,” according to O’Neil, although other venture-backed property managers have followed suit. He said the setup makes his business more aligned with a landlord than traditional property managers.
“We’ve paid owners for many months before and have not been recouped by the tenant,” he said. “That’s the risk we’re running, and we gotta make sure we place responsible tenants.”
O’Neil said Nomad’s screening of prospective tenants looks at credit score, rental history and income.
He noted between 10 and 20 percent of Nomad’s tenants have missed deadlines, but most set up a payment plan for a one-time fee. He said the company has an eviction rate of less than half a percentage point.
“What’s great is because we spread risk over a big portfolio, we don’t have to take extreme actions,” he said, adding that Nomad charges a fee to set up those plans. “We’re able to work with tenants who are behind on rent to help them get caught up.”
Nomad also lets landlords get up to a three-month advance on future rent tenants — something O’Neil said 5 to 10 percent use.
On the tenant side, Nomad also offers rent reporting to improve credit scores and access to a maintenance helpline. Tenants have the option of paying $45 a month to cover the cost of accidental property damage.
Property management is, of course, nothing new. O’Neil said traditional firms are a better solution for some landlords, like those who live out of state or have multiple properties.
But he said the smaller players that Nomad is targeting constitute the vast majority of landlords. For them, he said, it doesn’t make sense to pay the 10 percent of monthly rent most property managers charge. Additional expenses like lease and maintenance fees can bring the true cost to around 15 to 20 percent, he said.
“In many cases, the landlord lived in the home and knows the home inside and out. They don’t want to cede that control (to a property manager),” he said. “Most see Nomad as a really powerful co-pilot for management. They are in the driver’s seat while getting guaranteed rent and protecting the home at more than half the cost of hiring a property manager.”
Nomad raised $25 million from investors across three rounds in its first three years, culminating in a $20 million round in 2022. O’Neil told BusinessDen the company recently closed another “major” round, although he declined to disclose the size. It was led by San-Francisco-based Pinegrove Ventures with participation from local firms Range Ventures and Denver Ventures.
O’Neil said part of the goal with the new cash is to shift traditional property managers from competitors to clients — and have them start using Nomad.
“We want to enable any property manager in America to give their owners the same peace of mind that Nomad is giving owners that work directly on the platform,” he said.
Nomad, which works out of WeWork in the Wells Fargo Center, has 35 people on staff and is doubling in revenue year-over-year, O’Neil said. Its largest market share is in the Centennial State, but growth is fastest in Texas, Florida and California, he said.
O’Neil has felt the stresses of small-time property ownership firsthand. He said he owns three Denver-area rental properties. And he founded a Mile High property management business with his brother and mom in the mid-2010s while getting his MBA at the University of California Berkeley.
“Through that process and through being a landlord myself, I learned the pains and how hard it is to deliver a great experience to tenants,” he said. “I wanted to do something that solved the frictions in the landlord-tenant relationship.”
Story via BusinessDen
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