Poplar Homes, a technology-driven property management company for investors and landlords of single-family rentals, raised $53 million in a round of Series B financing.
The company stated that the funding was led by LL Funds and included new and existing investors, notably Crescent Cove Advisors and AGNC mortgage REIT. Computer scientists and investors Jeff Dean and Zain Jaffer contributed as well.
Poplar’s target audience is made up of those who self-manage rental homes. The company said that 90 percent of the nation’s SFR stock is owned by individuals and that there are more than “seven million individual SFR landlords who have historically been do-it-yourself landlords.”
“Poplar Homes’ property owners on average own 1.4 homes, making them truly independent, ‘mom and pop’ investors that have historically been unable to access the technology and custom-build property management platforms used by large commercial institutions,” Poplar said.
In what has become a popular model of late, Poplar Homes backs its customers’ rent with guaranteed payments should tenants for any reason not pay by the third day of each month. Poplar also tackles tenant qualification, including employment verification and background checks.
The company provides $15,000 in eviction coverage should one of its recommended tenants be subject to the process. Legal requirements and tenants’ rights laws make evictions problematic for individual landlords. It’s often easier and more affordable to allow tenants to walk away.
Landlords who hire Poplar Homes are provided a web-based administrative portal from which to oversee activity on their home. This entails payment tracking, tenant logs and property maintenance records. The company also provides 3D tour creation for each listing.
Renters can use Poplar’s website to search for homes, virtually tour them, submit applications and once approved and in the home, use Poplar’s tenant-facing machine-learning technology to manage maintenance tasks and “fix 65 percent of all maintenance issues remotely.”
StreetCred is Poplar Home’s take on helping tenants become homeowners.
Similar to Gravy, and the deeply funded rent-to-own Divvy Homes, those enrolled in the StreetCred program can have 20 percent of their rent funneled into an account that is realized as cash-back at closing of a house purchased through Poplar.
Investment in technology for the rental industry is trending, largely a byproduct of the historically tight housing market.
Rental proptech Zumper has raised more than $150 million to date, Lessen raised $35 million in June last year, and NestEgg, an app for individual landlords, secured $7 million in 2020. Renter-first landlord CRM Funnel Leasing announced a $36.5 million round in February this year.
“We’re well positioned with 7,500 doors and growing,” said Poplar co-founder and CEO Greg Toschi in a statement. “Single-family rentals are an increasingly valuable asset, and Poplar is at the forefront of bringing institutional operating power to main street real estate investors, who are often spending hundreds of hours a year on everything from leasing and maintenance to legal issues and accounting.”
In addition to a number of recent executive hires, Poplar Homes announced it has acquired nine property management companies in multiple high-growth markets across the country, ranging in size from 200-1,000 doors. It continues to eye a number of others to accommodate its growth plans and currently has dedicated teams in each of its 13 markets, serving more than 5,000 property owners. The company states a platform adoption rate of 95 percent.
Poplar Homes co-founders Toschi, Chuck Hattemer and Rico Mok created the company in 2014 while students at Santa Clara University. They wanted to build a solution to help students secure off-campus rental homes. The company employs 200 people and manages homes in California, Washington, Nevada, Texas, Missouri and North Carolina.