Rent collections have become a major pain point for landlords in recent years as collections rates have consistently declined and property managers have become increasingly burdened by inefficient and manual processes. While plenty of exciting technology solutions and platforms have flooded the property management space, we believe there is still significant need for targeted point solutions that address specific steps in the rent collections process flow.

1. Field Study:
Landlord Technology Solutions
Facilitating Rent Collections
Q2 2023

2. alpaca
vc
1
2
3
Defining the problem
Industry overview
Tech solution overview
Table of contents
4 Market map
2

3. Key Research Questions
Current trends in rent
collections
How have collection rates
trended over the past few
years?
What role has COVID-19
played?
What macroeconomic factors
are making it harder for
tenants to pay rent?
Understand inefficiencies
in traditional processes
What tools are leveraged in
the tenant screening and
approval process?
What methods of payment
are currently collected?
What is the typical method
and cadence for
communication to both
current and delinquent
tenants?
Tech solutions that
alleviate pain points for
tenants and landlords
What companies and
innovative tools are in the
marketplace tackling:
- Making it easier to pay rent
- Improving communication
and transparency
- Managing local legislation
and submission
requirements

4. Rent Collections Process Flow
4) Notify & Collect Rent
Notification cadence, payment
system and method
3) Lease signing & move-in
Documentation, security deposit, and
first month’s rent
6) Notice period
Notifying tenant on timing &
process of potential eviction
2) Screening & Approval*
Background check, credit report,
and income verification
1) Find a tenant
Listing, marketing, and
conducting tours
7) Eviction
Preparing for and conducting an
eviciton
5) Delinquency
Collecting from a tenant who
has fallen behind on rent
This Study Focuses
on Steps 2 & 4-6
8) Bad Debt Collections
Collecting from a tenant who
has moved out

5. Defining the problem
5
5

6. Rent Collections Trends
Source: NMHC
90%
92%
94%
96%
98%
100%
COLLECTION
%
U.S. Rental Collections by Month 2019-2021
2019 2020 2021
National collection rates have seen a steady decline from pre-COVID levels of 96-98% in 2019 to 92-95% in 2021. This
is a major issue facing apartment operators today, and is likely due to rising housing costs, eviction moratoriums, renter-
friendly legislation, social trends or a combination of all four.

7. DECREASED COLLECTIONS RATES
Three main factors contributing to lower collections
Macroeconomic Trends
• Rising rental rates: 25%
inc. from 2 years ago
• Record low vacancy
• Persistent inflation &
stalled wage growth
Burdened Renters
• Large proportion of
paycheck goes to rent
• Lack of savings
• Shortage of housing in
the U.S.
Operational Challenges
• Manual processes
• Restrictive Legislation
• Fraud is on the rise
• Court backlogs &
eviction complexity
Primary Focus
Source: WSJ

8. Record vacancy rates and rent growth
amidst marcoeconomic headwinds
Source: FRED (St. Lousi Fed) Economic Data
In the last 20 years, the U.S. has seen a steep decline in apartment vacancy rates and
steady increases in rental prices, trends that only accelerated post-COVID. Combined
with recent collection trends, this poses an important question for apartment operators:
» Are apartment operators focusing too much on headline metrics (vacancy and rental
rates) at the expense of economic occupancy & operational efficiency?
Combined with persistent
inflation and stalling wage
growth, renters face significant
headwinds in the rental market
Macroeconomic Trends

9. Renters are increasingly burdened
Source: Pew Research, JCHS, New York Post
Burdened Renters
Years of rising rental rates, stagnant wage growth, and lack of new housing supply has impacted millions of Americans,
making it harder for renters to secure an apartment, keep up with rent, and save to buy a home
40%Avg. paycheck amount that goes to rent
80% Renters living paycheck to paycheck
40% Renters who have less then $400 saved
6.5 million Home housing shortage in the US
10 million person increase in those who are cost-burdened by housing since 2016
30% Increase in cost of housing the past two years
25% Increase in the number of people who are homeless since 2016

10. Outdated & manual operations are burdening
property managers
“Rent collection often
needs human touch to
listen, provide support, and
set up payment plans but
manual calling processes
are inefficient"
"Sending out important
updates and reminders to
tenants is crucial, but
without a way to bulk
communicate, it can be a
time-consuming process."
“Managing rent collection
and tenant communication
can be challenging and time
consuming, especially when
relying on manual
processes. "
Without a centralized
system for contact tracking
and note sharing, it’s tough
to stay organized and keep
track of important
information."
"Local laws and regulations
are complex, but we don’t
have the tools to stay
informed and compliant."
“Not all tenants are
comfortable with digital
payment options. It’s
frustrating when we connect
with a tenant and can’t
collect over the phone."
Manual Processes No Bulk Communication Lack of Collaboration
Cumbersome Regulation
Need for Human Touch
Rigid Systems
Source: Alpaca interviews with property managers and
operators who wished to remain anonymous

11. Protective legislation is making it harder to
find the right tenants & fraud is on the rise
Source: Property manager interviews, RentPortlandHomes, Minneapolis.Gov, Seattle.gov, Rental Housing Journal
Operational Challenges
Macro trends have attracted the attention of both national and local policy makers, leading to a flurry of tenant
protection rights, housing laws, regulation, and assistance programs that have been met with mixed results.
Significant increase in ordinances the past 3-5 years at the city, county, and state levels have led to stricter tenant
screening, financial reporting, and eviction rules
Examples
• Portland, OR: No denial based on income source, must accept housing vouchers, 2.5x rental rate requirement, eviction
record limitations
• Cook County, IL: Criminal screenings halted due to ambiguity of criminal search restrictions and compliance burden
• Cities like Seattle, Minneapolis, Berkeley: Criminal records are unable to be considered in tenant screening process
• Reports from property managers of politicians delaying judge appointments to limit evictions during election cycles
Meanwhile, Fraud is prevalent and growing…
95%
Owners and operators report
difficulties in identifying,
mitigating, and preventing
fraud
97%
Owners and operators
experience fraud in the
properties managed
23%
A 2015 FTC study found
that 23% of all credit reports
have errors
30%
Increase in fraud since the
start of the pandemic,
costing millions per
portfolio

12. Industry overview
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13. Enterprise property management software (PMS) controls a large share of the multifamily market
Switching costs are high, especially for institutional owner/operators, due to depth and complexity of integration in
property portfolios and systems
Low barriers of entry to offer a new service or feature, leading to a high level of commoditization across suite of
services offered
Major PMS platforms control a large share of the
market leading to highly commodotized offerings
Representative PMS Offering: Entrata

14. Platforms are competing on consumer segments and
specialization instead of procuct innovation
PMS platforms now
compete on
target consumer
segments
&
specialization
Enterprise PMS solutions
SMB PMS solutions
SFR / Mom & Pop PMS Solutions
# of
Units
Product
Specialization
Low
High Broad
Specialized

15. Start-Up Acquirer Acquisition Date
Nest Egg Truehold Dec-22
RentPrep Roofstock Aug-22
Avail Realtor.com Mar-22
ResMan Inhabit IQ Aug-21
GreatJones Roofstock Aug-21
Buildium RealPage Dec-19
Cozy CoStar Group Nov-18
Access to capital by incumbents will lead to continued consolidation of point solutions and smaller players
Industry consolidation will continue to hinder
innovation and growth
PMS Acquisitions by Enterprise Platforms (Past 5 Years)
In both options, integration is hard and end consumer suffers, receiving a clunkier and less effective product
Two primary options for a new product in the space:
1. Get acquired
2. Large player imitates and adds your product to its suite of offerings, effectively pricing you out
Source: Pitchbook

16. Untapped market opportunity for targeted
collections solutions
Source: NHMC, RentCafe, and US Census Data
$1,702 Average
Gross Rent
44 Million Rental
Housing Units
$900 Billion Annual
Rent Payments
12 Months
x
x
=
5% of Residents
Never Pay Rent
x = $45 Billion
Value Capture
Available for LL’s

17. Tech solution overview
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17

18. Field study focus = operational level tech
Point
Solution
PMS
Integration
Return on
Cost
• Focus on point solutions, not a full-
stack platform
• Major landlords & property
managers are reliant on major PMS
systems for storing tenant
info/data and processing payments
• Point solutions can fill gaps in
current offering to provide
competitive edge, enhance
productivity, and improve the
resident experience
• PMS platform must remain the
source of truth for enterprise level
PM’s
• Enterprise platforms (Entrata, Yardi,
Appfolio, RealPage etc.) rely on
embedded service providers so that
clients can achieve the
customization and specialization
they need
• PM’s need an integrated solution to
limit increases in operational drag
and maintain data security
• Increased collections and therefore
increased top-line revenue
• Decreased eviction rates due to a
better and more thoughtful tenant
experience
• Decreased operational time,
freeing up property managers to
focus on value-add activities

19. 3 primary rental activities where new solutions can
add value
Key Question:
Does the benefit (increased collections/decreased eviction costs/decreased operational time)
outweigh the cost to implement and service the technology?
Fraud detection
Background checks
Income verification
Incentives: credit, rewards & benefits
Rent guarantees & flexible payment
Communication & collaboration tools
Eviction processing & legal services
Document automation
Local knowledge
Application
& Screening*
*Out of scope
Rent Collections
Evictions &
Post Move-Out
*Out of scope

20. Upfront solutions centered on tenant screening
& lease approval process
Tenant Screening & Approval Process
ID Verification Background Checks Financial DD
Highest Priority Least
• First step in preventing fraud and therefore
highest priority
• It’s critical to know exactly who is renting at
your property – forged identities are a leading
cause of rental fraud
• Typically happens at lease application but
could happen sooner (i.e. Checkpoint ID
verifies at tour stage)
• Depth of search and knowledge about a
tenant’s history can prevent future issues
• Includes: judgments/liens, bankruptcies,
evictions, criminal history, sex offender, and
homeland search
• Searches to confirm past resident/eviction and
criminal eviction history
• Diligence on ability to pay rent can reduce
the risk of late or missed payments
• Includes credit standing, income verification,
cash balances, and more
• Accuracy of data is key
• Tech solutions focused on advanced models &
smart-decision
Key question: to what extent should any of these steps be completed at lease renewal?
Typical Sequence
Major Players: Findigs, RentPrep, Vero Leasing, Checkpoint ID
Process Flow:
Step 2 – Screening & Approval

21. External (Tenant) Internal (Process)
Solutions focused on making it easier for the tenant
to pay rent:
Financial Solutions
• Credit card rewards
• Credit score reporting
• Rent Guarantees
• Flexible payment schedules
Payment systems/collection platforms
• New methods of payment
• Mobile resident portals, digital reminders, push
notifications
21
Rent collections solutions
Solutions focused on internal methods and
processes :
Communication
• Bulk messaging
• Predictive Dialing
• Two-way text opt-in
• Conversation AI
Collaboration
• Shared notes and contact tracking
Data Analytics
• Performance reporting and forecasting
Combining multiple solutions will lead to best results:
External solutions to change tenant behavior
Internal solutions to optimize management efficiency
Process Flow:
Step 4 – Notify & Collect Rent
Step 5 – Delinquency
Step 6 – Notice Period

22. Operational tech can optimize collection
process and maximize PM efficiency
Tenant
Relationship
Management
Data Analytics &
Reporting
Bulk
Communication
Goal: Due to overlapping data inputs and tech capabilities, there is opportunity for a single provider to
cover all of the above and deliver a one-stop-shop tech tool for property managers
Data Analytics &
Reporting
Bulk
Communication
Conversational AI Predictive Dialing
• Sending rent
reminders and late
notices to all tenants
in building, region, or
portfolio at the same
time
• Ability to create
subgroups based on
rent payment status
or other attributes
• Two-way chatbot that
can send reminders,
answer questions,
collect rent, and
resolve issues
• Machine learning
revises to most
effective methods and
adapts to dynamic
conditions
• Automatically dials a
list of phone numbers
and connects agents
to live calls
• Allows property
managers to provide a
human touch and
negotiate payment
plans
• A system that allows
property managers to
track tenant
interactions and
manage tenant data
(similar to a CRM)
• Property managers
can share live notes
and collaborate on
effective methods
• Advanced
measuring and
analysis to identify
risks and forecast
performance
• Accurate reporting
and flexibility to
easily change
parameters/KPIs
Conversational AI
Process Flow:
Step 4 – Notify & Collect Rent
Step 5 – Delinquency
Step 6 – Notice Period

23. Service
Fee
Financial solutions can transform tenant
beahvior
Rent Incentives: Landlord / Tenant Flywheel*
Tenant
Reward renters
CC Rewards
Benefits
Credit score
Increased incentives
change behavior
Increase in
collections/revenue
Differentiation =
higher renewal rates*
“I’m making better
financial decisions”
“my rent payment is
building wealth”
“I’m reaching my
financial goals”
Rent guarantees & flexible payment schedules
Major Players: Bilt Rewards, Esusu
Landlord collects
guaranteed rent on the 1st
of each month
Tenant pays rent to 3rd
party provider
3rd party provider pays
landlord full rent on 1st of
each month
Major Players: Jetty, Flex, TheGuarantors
Landlord
Tenant pays
service fee in
return for
FLEXIBILITY
Landlord pays
service fee in
return for
CERTAINTY
Process Flow:
Step 5 – Delinquency

24. Representative return on cost (ROC) framework to
evaluate potential solutions
Assumptions
Units 200
Avg. Rent/Month $1,500
Collection Rates # of Delinquent Units
Current 92% 16
Historical 98% 4
Difference -6% 12
Collections Gap
Gross Revenue Potential $300,000 per month
Current Revenue $276,000
Target Revenue $294,000
Difference ($18,000) per month
*assumes 100% occupancy
WTP Pricing Model
Per Delinquent Unit
Max WTP/month $18,000 $1,125
Max WTP/year $216,000 $13,500
Service Provider Value Proposition
Total units 200
Cost/unit/month* $6
Total fixed cost $1,200
Bad debt collected $18,000
Fee on collections* 20%
Variable cost $3,600
Total Cost/month ($4,800)
Increase in Collections/month $18,000
Value capture per month $13,200
Return on Cost (ROC) 275%
*Representative firm pricing model
Source: Alpaca internal estimates and projections

25. Market map
25
25

26. Market Map
Tenant Screening
Communication
& Data Tools
Fintech, Credit
& Rewards
Sources: Alpaca Internal Research

27. www.alpaca.vc
ryan@alpaca.vc
daniel@alpaca.vc