Due to New York City’s unique demand-heavy market, tenants usually find themselves jumping through many hoops just to get a shot at an apartment. It can get too confusing to navigate, especially for a 19-year-old student. There are too many moving pieces – guarantors, tax statements, proof of income, sublease agreements… – if you’re a student who doesn’t meet the income requirements (99% don’t) and you want to apply for an apartment with two of your friends, there could easily be 20 documents that you need to collect and submit.
NYU seniors Erick Rodriguez and Tej Chilukuri are very familiar with this painstaking process. When I spoke with them about their startup, Undorm, it made me realize the plethora of challenges in working in the real estate industry.
Undorm was founded back in 2014 by another NYU student. Back then, Undorm was just doing standard rental transactions with a focus on the student population. Erick and Tej joined Undorm in their Sophomore years at NYU and took over when the original founder left the startup in 2020. While Erick took on the role of CEO, Tej was in charge of the product as the CPO. Today, Undorm is a student-centric brokerage firm with an emphasis on consumer experience.
Erick and Tej are both at Stern studying Finance. While Erick has a concentration in Marketing, Tej is double majoring in Computer Science. The two have known each other for a long time and have complementary skill sets in sales and development. Together, they brought new sales and acquisition approaches to modernize Undorm’s technology.
Undorm has had its share of pivots. “Initially it was supposed to be a platform for students to be able to self serve and find apartments themselves using a marketplace structure like Streeteasy,” Tej explains, “with specific filters like walking distance to campus.” But after conducting market research, Tej and Erick found that the problem isn’t just on the apartment-discovery side, but also on the apartment-application side – since college students come from everywhere in the world, they are rarely familiar with the NYC renting process. “That’s when we began to gain value from current people in the industry,” notes Tej, “namely… our broker sponsor Elegran.”
In New York and most cities, a broker must have a sponsor for at least two years before becoming an independent broker. Since Undorm exclusively recruits student agents, Elegran provides Undorm with valuable services like professional training and legal services. Undorm’s agents are a part of Tej and Erick’s new business model. “This industry is very much a… face to face industry,” Tej describes, “which is why we’re moving towards the hybrid model of having a traditional salesperson to help students find apartments through our platform.”
Right now, Undorm uses Recapped, the project management and collaboration software, and its agents to service its customers. The Undorm “liaison” coordinates preferences between roommates looking to rent and guides them through the Undorm platform to track progress and submit documents. “At the end of the day, students like to be guided through the apartment search process,” Tej concludes.
Tej showed me the beta version of Undorm’s web app on his laptop: there is a schedule that can be shared with the roommates and guarantors, a preference section where each roommate can put in their location and other preferences, a checklist of documents to upload, and even tabs offering move-in and living assistance. It’s not public yet, but the goal is to launch it in the next three months. “That’s the product goal,” says Erick, whose expertise is a cross of marketing, sales, and product, “I would say the sales goal is to really dial in on our agent recruitment and make the most effective use of people getting into real estate.” Erick envisions Undorm as a career starter for student agents, as hands-on experience is very valuable in the real estate industry.
With this recent pivot, Erick and Tej are trying to figure out the new sales motion and the acquisition motion. In order for Undorm to make apartment applications for students as seamless as possible, they must do more market research and take feedback from their customers – the students. If the market research comes back affirmative, and Undorm finds its product-market-fit, then it can move on to step two: innovating the consumer experience. Undorm plans to do this in two ways. One, Undorm wants students to feel a connection with their agents since they are peers and similar in age. The agents will not only make the application process itself painless but also make sure that the client has a good experience working with Undorm. That includes uber rides to and from tours, lunches, moving services, and cleaning services. The second innovation is to create innovative leasing models that tailor to students’ unique characteristics. One such characteristic is that students generally move in around September, and move out around May or June. This is out of pace with the current lease-signing cycle which marks August as the hot season of signing one-year leases. Step three for Undorm will be to work with landlords to construct student housing with “handoff leases”, where students will be able to find new tenants for their landlords months before they move out, and get paid for doing so. This way, the landlords don’t have to worry about empty apartments in between tenants, and students will know that they have housing months in advance.
Erick and Tej are close to finishing the first step, and once they do, they will launch the new website and expand their current team of five agents. But there are many challenges to what Undorm is trying to accomplish. “Things have been done a certain way for so long, …to try and disrupt that is significantly challenging,” remarks Erick. The expectations and regulations in place in the real estate industry can be limiting to a startup like Undorm. “One example is our ads have to be very [carefully worded] so we don’t violate fair housing,” says Tej, “…the fact that we are focused on a specific age range could be considered discriminatory by Facebook’s algorithm.”
Despite these challenges, Undorm is moving forward with its three-step plan. The company isn’t under a lot of pressure, because there aren’t many direct competitors, and the nature of the real estate industry is that any brokerage firm will be profitable on a unit economics basis, so fundraising isn’t a necessity at the moment. Undorm plans to charge 1-month’s rent to its clients, which is a lot lower than the industry standard of 15% of the year’s rent paid to both the renters’ and the landlords’ agents. This also means that Undorm’s agents get paid more than simply representing one side, as done traditionally, which will only give them 7.5% of the year’s rent as commission compared to 8.3% from Undorm.
As Undorm looks to disrupt one of the oldest, most established industries, Erick and Tej are looking to balance their academics, professional, and social lives. Erick is seeking interviews as his college career comes to an end, while Tej already signed a work contract with Modern Treasury as a Growth Product Manager. Both seniors are looking to run Undorm autonomously post-graduation by shaping the startup into a student-powered, student-serving, and student-driven brokerage firm.