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Show Summary
In this conversation, Andrew Bowen discusses the challenges and opportunities in the rental housing market, particularly focusing on the issues surrounding traditional deposit systems. He explains how his company, LeaseLock, is revolutionizing the rental process by providing lease insurance that benefits both renters and property owners. The discussion also covers the importance of data insights in understanding market trends and the ideal client profile for their services.
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Investor Fuel Show Transcript:
Andrew Bowen (00:00)
Yeah, I can’t take credit for coming up with it. I’ll take credit for falling in love with it once I actually was truly exposed to it. But our founder originally really saw the challenges that were happening with the average American renter and really the average American and bankrated.com every year does a survey and this past year and it’s a survey of basically savings in place. And the stat that got me and pulled me over into it was that 59 % of Americans as of 2025 when recording this,Could not handle or could not pay for an unexpected expense of a thousand dollars or more cash
Michelle Kesil (02:08)
Hey everybody, welcome to the Real Estate Pros podcast. I’m your host, Michelle Kesil. And today I’m joined by someone that I’m looking forward to chatting with, Andrew Bowen, who is the SVP of Lease Lock. So excited to have you on the show today, Andrew.Andrew Bowen (02:23)
Well, I appreciate you bringing me on, Michelle. I’m excited to be here.Michelle Kesil (02:26)
Yeah, of course. think our listeners are really going to take something away from how you’re approaching changing the industry of lease insurance. So yeah, excited to dive in with you.Andrew Bowen (02:37)
Good.Perfect.
Michelle Kesil (02:40)
First off, for those who are not yet familiar with you and your world, can you share what your main focus is?Andrew Bowen (02:47)
Sure, my main focus as you mentioned is lease insurance. I’m our SVP of strategic partnerships and to give a little clarity on what lease insurance is, it is a way to protect ownership groups ⁓ from the threat of bad debt that typically a security deposit would cover. So think of the world of security deposit alternatives, but instead of approaching it from a underwriting of risk on a resident basis, we actually underwrite the asset. So it’s actually business to business insurance, not a business toconsumer insurance product that ultimately is designed to make leasing easier for residents, protect operators from potential litigation and deposit mishandling, and ultimately still provide the protection that ownership really needs and desires from a property.
Michelle Kesil (03:34)
Awesome. And do you operate nationwide or are you in specific markets?Andrew Bowen (03:40)
That’s a great question. There are very specific markets where we have to be in. There’s other markets that have passed legislation that makes it difficult to work in. But from the perspective, we are a national provider. can provide it in all 50 states where it’s legal and 49 of the 50 have actually 50 of 50 have some type of ability to do it. And as of about a month ago, we actually have been picked up to be able to offer it in Canada as well. So we’re actually doing international.Michelle Kesil (04:11)
Awesome. How did you come up with this idea? How did this business get started?Andrew Bowen (04:18)
Yeah, I can’t take credit for coming up with it. I’ll take credit for falling in love with it once I actually was truly exposed to it. But our founder originally really saw the challenges that were happening with the average American renter and really the average American and bankrated.com every year does a survey and this past year and it’s a survey of basically savings in place. And the stat that got me and pulled me over into it was that 59 % of Americans as of 2025 when recording this,Could not handle or could not pay for an unexpected expense of a thousand dollars or more cash
They would have to put on some type of microloan or credit card or whatever the case is And when you think about from a renters perspective being able to come up with the money to actually facilitate a move a first month’s rent potentially last month’s rent and then what I would call a meaningful deposit a deposit that’s actually collecting enough of an Inch essentially self-insurance on that to cover the
back end damages, rents, etc. would be in play was just a challenge that he saw and realized that there was a better way. There was a better way to be able to mitigate the risk and spread the cost out while providing it to residents in a way that they don’t have to come up with $1,000 for a deposit to be able to move. That hinders a lot of people’s abilities. That was the motivation that he came in to bring it.
Michelle Kesil (06:31)
Yeah, absolutely. What are some of the challenges that this poses? Like maybe what is some of the kind of fight back that people give you when you want to offer it to their businesses?Andrew Bowen (06:47)
Sure, so the biggest fight back we get is, because again, to give perspective, again, this is a business to business proposition. We don’t actually talk to residents at all. Residents don’t even know we exist. So the two big ones we hear often are, well, okay, that’s the way we’ve always done it. We’ve always done deposits. My owner might want to deposit instead. And even though they’re willing to drop that deposit to say $250,We can come in and replace that with a certificate of insurance that might cover depending what the underwriting is, let’s just say $1,500. So we can very often 5X, 10X the coverage on it, but they haven’t done it that way in the past. So there’s that resistance to change that’s kind of famous in rental housing. The other challenge, and this is a real challenge, I’m glad groups are actually thinking about this, is it is yet another of one of the fees that can be passed on to the residents. ⁓
with affordability at that point. So even though we’re a business to business solution.
The vast majority of the time, the cost of the actual insurance certificate is passed on to the resident. And it’s something the resident is choosing to do. So the resident is saying, I would rather have a small monthly fee that I’m going to pay on an ongoing basis versus have to outlay this thousand dollars in cash. So that the challenge of affordability and how to sell it and how to be able to build it into your pricing structure, whether that is as a all in inclusive within rent or as an additional fee item is another challenge that folks have to deal
But ultimately, both of us can really be rolled up into change management is the hardest part of what we do.
Michelle Kesil (08:30)
Yeah, that makes sense. think change is a challenge in any industry that wants to disrupt something.Andrew Bowen (08:35)
Yeah,we have to make sure that the pain of staying the same is greater than the pain of change. That’s when things start to move on.
Michelle Kesil (08:44)
Yeah, for sure. So you mentioned your business to business. Does that mean that the businesses are like leasing offices or do you work directly with like real estate investors as well?Andrew Bowen (08:58)
Yes. That answer is just kind of simply yes. We have operators and owners of real estate of really all kinds and sizes. ⁓ We provide the solution for the NMHC top 50 multifamily operators. We work with several of the large and publicly traded single family operators, but we also work with smaller operators that have 10, 15 units as long as they’re on a platform that has the integration we need to be ableWe can work with businesses of all sizes.
Michelle Kesil (09:33)
Awesome. So what like besides the insurance piece, is there like another service that you are offering?Andrew Bowen (10:20)
So our core business is the lease insurance business. Now we actually do have a number of different partnerships where we can work with them and offer ancillary services as well. ⁓ A great example of that is a company we work with very, very closely called Deposit Cloud. when we bring Deposit Cloud and lease, and Deposit Cloud is a cash management platform. it offshoots or offshores. ⁓Michelle Kesil (10:23)
Mm-hmm.Andrew Bowen (10:47)
offshore offshore, but actually takes away the entire management of the deposit process, how it’s paid, how it’s collected, how it’s returned, the entire compliance piece of deposit management.When are you paying interest? you paying interest? How quickly is it turned around? Some of the challenges around, okay, if they paid you electronically, there are some jurisdictions you have to pay them back electronically. You can’t just cut a check necessarily. So by working with both us and Deposit Cloud, us being the opportunity to avoid a deposit altogether, assuming the resident makes that choice, those residents that make an alternative choice to say, no, I’d rather pay the deposit, then also have that completely outsourced and managed.
removes the entire.
risk that deposit management places upon both owners and operators completely and transfers it off without cutting back on the backend protection against bad debt. That’d be our closest one. There’s a couple other partners and we do a lot of reporting and building market research and insights from the data that we’re collecting and the data that underwriting generates. But again, our core platform is providing the lease insurance that owners and operators need.
Michelle Kesil (12:00)
Yeah, absolutely. So how does this support the leasing offices and the investors? How would this serve them? It seems like it’s mostly for the renters to have better managing of their finances.Andrew Bowen (12:16)
⁓ It definitely is one that we stress is that, but I would say that the benefits are actually probably even stronger to the leasing teams and especially the ownership group. So if you look at, let’s start with owners, because it’s my favorite one to explain.When I first joined LeaseHawk a couple of years ago, I went back and did some research on kind of where deposits have been and why we’ve just seen this steady degradation of what we’re willing to accept as a deposit. You and I were talking beforehand, I ran properties for 20 years before coming on the software side of the business for 15. So I’ve been around and I’ve watched this decline. If you go back to 2010, the average deposit back in 2010 was basically one month’s rent, if you go look around.
over the course of those 15 years, I’m being generous and saying the median is now at 500. ⁓ So it’s gone down by about 66 to 70 % to chase occupancy. And we got that point of occupancy, we averaged about a point higher than we did back then. The reality is also bad debt went up by one and a half to two percentage points over that time frame. And that’s without taking into account the COVID bump and the eviction moratoriums and those kind of things.
What we’re able to do from an ownership perspective is to be able to step in and give an owner an opportunity to take an average bad debt coverage of call it $500 deposit and.
Put the burden of that back still on the resident, but then also have a coverage level now that could be $2,500 again, every deal is underwritten individually coverage level levels matter relative to rent. So I’m going to use as an example that $2,500 in coverage now, whether that is someone who was a higher risk individual or a low risk individual that happened to have a family just situation change will get married. People unfortunately break up job changes happen.
give a 5x coverage to an ownership group. There’s also the opportunity to make a small amount of ancillary income on it. This is insurance. Insurance is designed to make you whole, not to drive a profit. But we do work with our carriers to make sure that they understand that there is a level of administration that owners and operators have to have in this process, and they should have the opportunity to recoup those costs.
So it’s not uncommon for us to see valuations where we start to return 50 to 100 basis points in bad debt that people are losing today. can put a cap rate on that. And for a portfolio of 5,000-ish units, you can be literally talking about
a million and a half million, you 2 million plus in value that’s being returned to owners. There’s a huge value there. The other one with the operations team is twofold. Number one, now you’re able to market yourself as a zero deposit community. So you’re attracting another layer of renter again, without passing that risk back on to owners. The leasing professionals since we again, we look at the asset, we underwrite this risk, we look and say, okay, how likely is it that anyone in this property is
is
going to behave this way, not is Mrs. Smith going to behave this way? And that’s a distinction between us and everyone else out there. We’re the only ones who really underwrite the risk on the asset rather than having that person go apply at an outside space. So they’ve gone from your leasing office now to now they’re on some website from a guarantor platform or a surety bond.
your sales people lost control of that sale. Ours, they can be very confident. The cost is X, you know, and X is always X. It doesn’t change for that property. So it actually empowers them and gives them another way to attract residents as well as smooth out the leasing process and make sure that that is as smooth and hiccup free as possible.
when it needs to be, but also has the steps in place that, okay, if we see a denied renter from a screening perspective, denied renter from a screening perspective is not eligible for our program. There’s a reason you do them. let’s probably still be denied at that point. hopefully that gives a little more clarity on it. Because actually, of the things that attracted me to this business was that it really does have a clear and distinct benefit for
every constituent of rental housing, the residents to the operators to the owners are all going to get a benefit.
Michelle Kesil (17:19)
Yeah, absolutely. That makes a lot of sense. And thank you for providing all that information.So what are you most focusing on solving or scaling to next in this business?
Andrew Bowen (17:34)
Okay, so what we’re focused on right now in solving and scaling for is actually providing the markets with the insights that our underwriting platforms are actually generating. So being able to, a lot of us came from a data science background and a market research background. We have a chief economist on staff and Greg Willett, who’s a long time rental expert. Our CEO oversaw a number of the analytics platforms for a large staff.provider in the industry for years. That’s where I came from as well in between. So really what we’re focused on is bringing that to scale to the markets, looking at such things as, and Michelle don’t quote us on this because we’re still workshopping this name, ⁓ but really looking at what we call unfulfilled leases, which is think about all of your skips and all of your evictions, which you’re probably tracking today. But what about also all the people who just moved out early and maybe paid a lease break or paid their lease termination fee, et cetera? What’s
that risk and exposure we see there. We actually just came back from NMHC Red Sea Optech today where we actually, our CEO, our chief connoisseur myself presented some of the findings here from a Dallas survey we did or market case study we did. And we were finding that across multiple properties or multiple operators, multiple properties aggregated up, the unfulfilled lease percentage was over 20 % over a 18 month period.
period, which as a former operator, I didn’t trust the data. I’ll be dead honest. I was like, I’d be fired if I was if I was losing 20 % of my leases. So actually digging through and checking the checking it was the was true. And we saw it in multiple markets. It wasn’t just Dallas. So even if you think about the 10 % of households that are going through some type of eviction in Dallas right now, according to evictions labs data and the Dallas Advocacy Center for eviction, that’s still double that just kind of missing on people’s performance. It’s not
being caught in their budgets. And then we’re looking and providing, well, what are the early warning signs we might be able to provide and see? ⁓ We’re not ready to definitively call these early warning signs, but we’ve seen a couple of things that have some really strong correlations, not causation, but correlation to unfulfilled leases. ⁓ The one that was the most surprising to me, a 60 day leading indicator of it was the percentage of leases that have a concession applied versus
versus non on that when that number starts to climb regardless of the size of concession and regardless of the type of concession, it’s a 60 day leading indicator that you’re going to have more unfulfilled leases coming up. So it’s things like that that we’re really focused on is how do we bring more visibility to risk, but also provide the tools that allow you to see it coming down the road and think about, okay, what’s the next thing I should do to help avoid that risk? That’s really what we’re excited about right now.
Michelle Kesil (20:34)
Yeah, amazing that you guys have been gathering all of that data and are able to prove those points.Andrew Bowen (20:41)
We’re not ready to put it in stone just yet, it’s really promising.Michelle Kesil (20:43)
Okay.Right? Awesome. So as far as your target audience, I know it’s business to business, but is there like a yeah, can you like expand on what the ideal client for you would be?
Andrew Bowen (21:02)
Sure. So the ideal client is someone who has a portfolio of let’s call it 100 units or more to spread that risk out or is working on a platform. Like there are some of the single family home management platforms. think aptly is a good example of this where we’re actually built and integrated into their workflows. So we’re underwriting their broader risk. But ultimately it’s 100 units or more. If it’s a multifamily, it’d be 100 units on a single assets. Obviously the portfolio, ⁓ typically the audiences thatare the decision makers for us and are really thinking about this are usually either the head of operations or the CFO. They see it from two very different lenses, but they both get it. ⁓ And then we spent a lot of time with the institutional investors too. So there’s a lot of the institutional investors that we’re working with that are
really asking their operators to think through this so that they can help mitigate that risk that they’re experiencing. The unfulfilled leases stat that I was bringing about, there’s a couple that are very, very interested in that research that we’re doing and have been fortunate. We’ve been fortunate enough, they’ve been working alongside us to kind of ferret that through. But yes, I mean, it’s really anyone who is interested in figuring out a way to provide housing at a rate
that is less impactful on residents overall total wallet while still protecting the back end and making sure that obligations are actually taken care of at the end of the day, we’re a great fit for them.
Michelle Kesil (22:38)
Yeah, absolutely. That makes sense. Sounds like you guys are really creating something innovative here for people.Andrew Bowen (22:47)
I appreciate you notice that Michelle.Michelle Kesil (22:49)
Yeah, of course. So how can people like do offer like trials, people just sign up? How does it work if someone’s interested?Andrew Bowen (23:00)
So if someone’s interested, mean, the best thing to do is go ahead and you can either fill out the form, fill out the interest form at leaselock.com. Think of it just like you think of it, leaselock.com. I’m also happy to answer questions individually. My email is my first name dot last name at leaselock.com. It is an insurance product. It is an insurance product. So it’s not something that you’re gonna be able to go on a website and be able to say, okay, well, what does this cost? So it’s one of the…If I had a magic wand and could wave and could change one thing, I would change this, but I’m never going to be able to change this. We’ve got to underwrite the risk that’s in place. So one of the conversations we very often have with owners and operators of real estate is to explain kind of the process and the program, how it works, how it works well, how does the claims process work? ⁓ How do you monitor it? What’s the filing periods? All those kind of details. And then we’ll talk about, to get to a price point, we need to do the underwriting, which means we’re going to ask for some information
about the property. When data feeds are available to be set up, we’re going to set that up. We’re going to underwrite and see what the risk is. And then we come back to property or to owners of properties and be able to say, hey, here are your options.
You might have you might one property might you want might want a $500 certificate of insurance per lease. Another one might be $3,500. Those are clearly gonna be two different price points for very good reasons on that. So when you go there’s lots of information on there lots of learner videos, you can see that we’re happy to answer that. But we’re not the kind of we’re not the kind of business where you have to log on and immediately see a price because it is bespoke for every organization or every portfolio.
Michelle Kesil (24:40)
Yeah, of course that makes sense. So before we wrap up here, if someone wants to reach out, connect, learn more. Where can people find you?Andrew Bowen (24:51)
Okay, so couple different spots, obviously, leaselock.com I’m also very active on LinkedIn and doing a lot that thought leadership out there. So please feel free to hit me up on LinkedIn. I’m Andrew Bowen, calm on LinkedIn. ⁓ And then obviously, again, my email is is [email protected] calm and I’m happy to have conversations with whoever would like it.Michelle Kesil (25:12)
Perfect. Well, really appreciate your time, your story, and your perspective. Thank you for being here.Andrew Bowen (25:18)
Thank you for having me. I’m Michelle. enjoyed it.Michelle Kesil (25:21)
And for those listeners tuning into the show, if you got value, make sure you’ve subscribed. We’ve got more conversations coming with operators like Andrew who are building real businesses and we’ll see you on the next episode.
