Case Study: Up to 50% reductions in delinquencies

Can you tell us a little bit about Songy Highroads and your role?

I’m a Principal at Songy Highroads where I lead our multifamily platform. Songy is an owner-operator and developer of multifamily, hotel and mixed use assets throughout the Sun Belt. We have an apartment portfolio we've built out in Atlanta that includes ground-up development, workforce housing, and a handful of different types of assets in between.

Trigo has been very helpful for us across our portfolio in terms of helping to identify potentially delinquent residents.

Atlanta has one of the highest delinquencies of any market in the country. And it's a super important focus for us as owners to try and utilize any resources we can from a software perspective to identify potential fraud and bad actors in the space. Trigo has been a very valuable resource in that regard.

What were some of the biggest challenges facing your portfolio?

Whether it was in-house management or utilizing a third-party manager as an owner, you always need to be very cognizant of the screening process no matter where you are. We have all these incredible resources that the internet and technology has provided us, but that also means there's plenty of resources given to people who are trying to get around the rules. We've seen an extremely elevated number of fraud cases throughout the market.

As an owner, we need to lean obviously on our property level staff, but, at some point, they can only do so much. We need to take a holistic view of trying to identify potential fraud as it comes in. That verification process comes in many forms with multiple layers of screening technology, but one of the oldest methods has been calling prior landlords.

That’s a great segue. So why has rent performance data been so important for you?

Think about if you lived in a small town and you were signing a lease for an apartment and everyone knew each other. If an applicant defaulted on a lease, you could easily get in touch with that landlord down the street. Well, when you're in a market like Atlanta with 6 million people, that can be hard to do. It can be tough to get in touch with those folks. And B, you don't know if you're getting the right data either.

It’s a difficult process to track down a landlord reference, especially when it’s left to the actual staff on site. It's critical for them to verify and screen all these residents, but they also have plenty of other things on their to-do list every single day.

Which brings us to time savings. How has this helped your on-site team members?

Having them be on the phone and calling all day is very time-consuming, and the data is tough to truly nail down.

Trigo has been instrumental in giving that time back to our staff so they can focus on other higher priority items. It allows us to outsource that function to Trigo’s team who does it much more efficiently, as an additional layer on top of our existing screening. It’s Trigo’s core competency and strength, so we leave it to the experts.

Trigo discovers residents who have been carrying balances of $10,000-plus. That’s data we don’t get otherwise. Those applicants typically have a much higher probability of becoming delinquent almost immediately. Allowing us to identify that through Trigo has been incredibly valuable to us. Evictions used to take three to five months if you didn't pay your rent. Now we’re seeing upwards of 18 months in some areas. 

And so that identification of potentially fraudulent actors has been extremely valuable to us as owners. It's valuable to our investors. It's also valuable to our property managers who don't have to spend the time dealing with delinquent tenants. It's a flywheel effect that has been very accretive for the portfolio.

How was the implementation process? How does your team like it?

The team loves it. Like I mentioned before, in the old days, let's say I'm a property manager on site. I get an applicant coming in, and they provide three previous addresses. I would take time out of my day to call, email, reach out to those prior three landlords and say, “hey, what was your experience with this resident?” And when you're dealing with large properties in particular, where you have upwards of 80 applicants in a month, that's a very time-intensive process for our staff. It takes them away from other higher-value parts of their day-to-day job.

Now we just send it to Trigo, and the team gets an answer in 24-48 hours. It's accretive to the managers and their time, and it's accretive to us knowing that they're spending their time on more important, revenue-generating things, not tedious clerical work.

Since implementing Trigo, what measurable results has Songy achieved? Can you quantify the impact?

Yes, absolutely. We've been utilizing Trigo for the better part of the year now, and we've seen significant delinquency reductions across the board.

With Trigo, we've been able to significantly reduce our delinquency 10%-15% in many of our properties in a short amount of time. We’ve even seen a reduction as high as 50% in some properties.

A bad actor can be very costly to us. It's costly to us in a number of ways. One is going through the formal legal process of an eviction, which is unfortunate when that happens, but there's a significant cost to it. And then B, there's structural costs to it. Property managers and staff on site have to spend significant time dealing with the resident and rent collections. And finally, when the resident leaves the property ultimately, there’s typically a much higher turn cost to get that apartment back up in order. Avoiding even one of these situations is significantly valuable to us. 

Getting applicants who are playing by the rules and want to be a part of our communities, that's a win-win for everyone. Being able to siphon out a handful of bad actors using Trigo is incredibly valuable to us as owners.

That’s great to hear. In closing, do you feel like you got a good return on your investment using Trigo?

100% - I think it's been very very valuable to us. We would absolutely recommend it. And I know our third-party manager, Cushman Wakefield who is one of the largest institutional property managers, shares those same feelings. 

In terms of the ROI, it’s an order of magnitude difference I would say. For example, you've got an apartment that's leasing at $2,000 a month. If someone moves in on a fraudulent basis and stops paying the rent almost the minute they move in and it takes a year and a half to move them out…well, that's a significant cost to you, right? But by paying a very small fee – less than $20 – to be able to know and verify that an applicant is who they say they are and has the qualifications that they say that they do? That's extremely valuable. 

So for $20 instead of coming out of pocket, effectively, $36,000 over 18 months is a no-brainer. We really appreciate you guys being such a great partner.