Audio Of The Week: Flip's Susannah Vila

Flip is a USV portfolio company. They provide a suite of services to renters that allow them to easily flip out of leases and move when they need to with the cooperation of landlords.

Before Flip was a USV portfolio company, it was angel funded by the Gotham Gal and Flip’s founder Susannah Vila went on the Gotham Gal’s podcast last month to talk about how she got the idea to start Flip and how she has gone about building the company. It is a great listen.


Comments (Archived):

  1. JamesHRH

    Is Flip the only GG then USV portfolio company?

    1. fredwilson

      No. Kitchensurfing (failed), Shippo, Flip, Clue

      1. Susan Rubinsky

        I LOVE Clue!

  2. awaldstein

    Agree, listened to it when GG’s podcast when it came out.

  3. Richard

    FLIP and Wilson, Flip WilsonWYSIWYG*Flip did it all – risk taker and comedic innovator. America has always embraced talent

    1. fredwilson

      Loved him. Howard Lindzon calls me Flip

  4. JLM

    .This is a funny business. I’ve owned tens of thousands of apartments and have dealt with this for decades.Most leases are for a year, so the necessity to break a lease and to subrent it is a function of the time remaining on the lease. If you have three months left on the lease, no bueno.Most landlords collect the first month’s rent, the last month’s rent, and a security deposit equal to a month’s rent. So, a LL has 3 months of 12 months at the beginning of the transaction.Urban markets like NYC can be a little different, but in large institutional complexes, 300-400 units minimum, this is the way the game is played.In a rising market, a LL is more than willing to cancel a lease because they can reap the benefit of a rising rental rate. They are absolutely not going to allow a tenant to turn an apartment into a profit center.Even in a hot market, a complex is only 98% leased because you are “making ready” a unit — paint, carpet cleaning, refurbishing appliances, changing locks. This usually takes 2 days per apartment if you are adequately staffed.A LL will not be receptive if they have a high vacancy.Even now, landlords are forbidding AirBnB type arrangements, but are in the AirBnB business themselves with say ten units in a 400 unit complex.Normally, if a tenant would come in and say they want to leave, you would figure out what your leasing velocity is — how quickly you are turning vacant apartments and renting them — and charge the tenant some multiple of that amount.A LL also has to make a thorough inspection as to damage.LLs hate subletting because it sets up a “privity” issue. A LL does not have a legal relationship with a sub-tenant and has to work through the tenant to enforce the original lease.Most well drafted leases forbid subletting with less than six months left on a lease, do not allow the tenant to make a profit on the lease, do not release the prior tenant, require LL approval which approval may be withheld in the discretion of the LL, and reserve the right for a LL to enter into a new lease with the subtenant.When you ignore any of these things and gloss over them, the subrenting tenant may be guilty of “fraud in the inducement” if something goes wrong.Theoretically, a LL could get 2 months rent from a departing tenant and then capture all the remaining term from the new tenant. This results in a LL receiving 14 months rent over a year. Many times, the new tenant wants a new longer lease term.So, the universal appeal of such an arrangement is not as broad as one might think. I think it is a very good idea, but professional apartment companies — guys who own thousands of units — are not going to be wild or accommodating about it.The other issue has to do with legal and real estate licensing issues. A lot of companies think they can get into the tenant rep (new and old tenants) business without being a licensed real estate broker in that state. No bueno. That is a huge problem.There was some company who was peddling excess high tech space in ATX and they got their ass in a crack over licensing.Another consideration is the unlawful practice of law. One cannot be peddling deal specific, deal tailored legal docs without a law license. Many jurisdictions — Texas as an example — allow a licensed lawyer to also act as a real estate broker.Having said all of the above, I do think a marketplace for leases will work as long as nobody thinks it is a way to make money from the underlying lease. If that is the focus, the LLs are going to pitch a fight.JLMwww.themusingsofthebigredca…

    1. fredwilson

      Landlords will like this which is the newest service they

      1. Richard

        Many states have early lease opt-out for women who are in a threatening situation. Please forward to flip. It would be nice for people to see this who are in danger and not eligible for Flip’s service.https://uploads.disquscdn.c

  5. Gayatri Sarkar

    The interview is very insightful. I think the real estate tech is the next big thing. Real estate is the largest owned asset class and has been traditional for a very long time. There is a huge opportunity both in US and asia market and the social impact is huge. It can change the way we do rent, mortgage or own home.