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About the Authors:
Terry Kiwala
Vice President
Terry Kiwala has worked in finance and investment for more than two decades and joined First Analysis in 2019. He works with entrepreneurs as an investor and as an advisor on growth transactions to help build leading enterprise productivity software businesses. He is a thought leader in his sector, having authored widely read industry research. He supports First Analysis' investments in Drive My Way, Insellerate, Lender Price, PCMI, SmartCommerce and Visage. Prior to joining First Analysis, he was chief financial officer of Vokal, a software development company, senior vice president at Tribeca Flashpoint Media Arts Academy, and associate vice president at National-Louis University. Earlier, he was an investment banking analyst at Lehman Brothers. He earned a bachelor’s degree in economics and government from the University of Notre Dame. He is a CFA charterholder.
Walid Elmekki
Senior Analyst
Walid Elmekki is a senior analyst with First Analysis. Walid joined the firm in 2021 after completing his internship. He previously interned at Wintrust Financial supporting the commercial banking division. Walid graduated from Ohio State University with a bachelor’s degree in finance and a certificate of leadership.
First Analysis Enterprise Productivity Technology Team
Terry Kiwala
Vice President
Corey Greendale
Managing Director
Richard Conklin
Managing Director
Matthew Nicklin
Managing Director
Walid Elmekki
Senior Analyst
First Analysis Quarterly Insights
Enterprise productivity
Will this tenant pay? Tech helps find a better answer
June 12, 2024
  • Consumer financial stress resulting from the long-term shortage of housing in the United States and consequent housing inflation appears to be driving an increase in multifamily housing tenant fraud, which was already widespread.
  • Traditionally, many property managers have used credit scores to evaluate prospective tenants, but credit scores' backward-looking nature means they don't capture current financial stress, and credit scores don't verify income.
  • These challenges have accelerated the growth of an industry of alternative credit qualification platforms. These platforms leverage the internet's ubiquitous connectivity with software that taps consumer data sources that previously were impossible to access inexpensively and at scale, such as employment income, rent payment history, and personal expenditures.
  • We profile 12 companies using alternative data to help landlords and property managers get a better answer to the critical question: Will this tenant pay?


Includes discussion of 12 private companies

Tenant fraud in multifamily is widespread and increasing

Traditional tenant qualification resources are inadequate

Alternative credit qualification platforms fill the gap

Innovators offer a diverse range of alternatives to traditional credit-score-based evaluation

Tech-enabled alternative metrics: This tenant will pay

A lost year for the First Analysis Enterprise Productivity Index

Enterprise productivity M&A: Notable transactions include Crooze and Workzone

Enterprise productivity private placements: Notable transactions include Ecotrak, FloQast, ParkHub

Tenant fraud in multifamily is widespread and increasing

Recent surveys suggest fraud in apartment leasing is much more widespread than it has been in past years. In a January survey by the National Multifamily Housing Council (NMHC), more than 70% of multifamily property owners and managers indicated they had experienced an increase in fraudulent applications and payments in the prior 12 months, and the average increase in the volume of fraudulent applications was 40.4%. Overall, 93.3% of respondents said they had experienced fraud in the prior 12 months.

Why did this increase occur? A key cause was likely the financial stress resulting from the long-term shortage of housing in the United States. The lack of affordable housing for sale combined with sharply higher interest rates has priced many potential buyers out of the market and kept them in (or pushed them into) the rental market. But the choices in the rental market are not much better as tight supply has pushed rents to high levels and vacancy rates have plummeted to the lowest levels in decades.

Fraudulent activity in apartment leasing occurs in a variety of ways. The first type of fraud is the most blatant: applicants who steal the identity of another person and rent under the false identity with no intention to pay. In this circumstance, landlords must pursue eviction in the courts even though the lease was executed fraudulently. Another type of fraud is more subtle. Applicants execute leases under their own identities but misrepresent their ability to meet lease obligations, usually by falsifying employment or income with altered documents or providing false information on lease applications. These tenants may intend to pay, but their misrepresentations materially understate the risk of their tenancy.

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