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Calling All Cozy Experts!
Hello Cozy Experts and Bigger Pockets Enthusiasts. My name is Kyle and I will soon be showing my first property to get my first new tenants and I have ultimately decided to go with Cozy.Co to do my Background & Credit Checks for my screening. I have the property listed, but I am wondering..... What's next? What's the full process of how this works with Cozy?
1.) Show Property to Tenants, and tell them "If you're interested, follow this link (my Cozy listing link) and go through the Application process."
2.) Let the applications flow in, and mark a cut-off of when I will no longer accept applications (so that no one pays for the application and applies unnecessarily).
3.) Filter through my applications, call my favorite most qualified tenant, and give them a call - Sit down and sign the lease.
4.) Now what?! They're signed to the lease, they can move in, they are screened and I've decided that they are qualified, but how do I set up their payments online with Cozy? Does Cozy need a copy of the signed lease? Cozy has the potential tenants pay 39.98$ for the Background & Credit Check as part of their application, but does Cozy charge anything anywhere else? Is the process in steps 1-3 accurate / correct? Am I missing anything? Should I change or add anything? I am new to this and I can not afford to make and costly mistakes. Please help me to find the best way to be thorough and professional in finding my own brand new tenants for the first time. Thank you to everyone for responding in advance!
Disclaimers: I don't work for, or otherwise get money from, Cozy. I am not a lawyer and this is not legal advice.
I used Cozy to do the background checks on my first rental, and I'm currently using it to collect rent on that rental. So far I've been happy with the results.
Before I even advertised the house, I created an account for me at Cozy (free) and created an entry for that house (free). I also tied it to my bank account so I could collect rent (free).
I didn't use Cozy's online application. I did go in and play with building an application on their site - it has some standard questions already on it (name, address, previous addresses, etc), plus you can select from some "canned" questions to add to it, but at the time I tried it (summer 2017), I don't think it let you put in your own free-form questions. I opted to type up my own application in my favorite word processor, and I asked prospective tenants to fill it out on paper. I did not charge an application fee.
Once I had some applications in hand, I did the initial screening myself - comparing the rent to their stated income, calling their previous landlords, etc. This filtered out a few prospects.
Once I had a couple of applications I was ready to go further with, I logged in to Cozy, selected the house, and then selected the "ask for a credit/background check" option. That asks me for the prospective tenant(s) email address(es), and then sends the tenants an email with a link in it. They click on that link and it takes them to a page at Cozy where they can enter their details and pay the $40 fee. Once the checks run, I got a notification, and I could see the results at Cozy.
I ended up declining the first prospective tenant based on information in those reports. When you do that, you have to send them an "adverse action letter", which basically says that you turned them down based on something in their credit report, who you got the credit report from, and offer to give them a copy of that credit report. Cozy doesn't generate this letter for you - you have to do it yourself. I did ask Cozy support a question about something I needed to put in that letter and they responded promptly.
After I declined the first prospective tenant, I repeated the process for the second prospective tenant: go to Cozy again, selected the "ask for credit/background checks", and put in the email address of the second prospective tenant. They got an email from Cozy with a link, clicked on it, put in their details and paid the fee, and I got the reports when they were ready. I ended up accepting that tenant.
The next step is setting up the payments. Basically, I selected the entry for the house I was renting on Cozy and filled in the start date, rent due date, rent amount, and lease term. It didn't ask me for a copy of the signed lease. I then told it that John Doe, who just had a background check done, was my tenant for that house. I collected the first month's rent from the tenant in person, and made a manual entry on Cozy to show that it had been paid. If your tenant(s) are going to pay with a bank account, they need to set that up with Cozy, and I think I got a notification that the tenant had successfully set up their bank account. After that, Cozy sends the tenant an email before the rent is due each month, saying either "you need to make a payment" (if the tenant wants to authorize the payment each month) or "remember, Cozy will deduct your rent from your account on (date)" (if the tenant set up automatic payments).
I get an email when the tenant has authorized the payment, and then I get another email when the money actually hits my bank account. I don't pay anything on a per-payment basis. The tenant doesn't pay anything either, if they have the rent taken out of a bank account. If they pay by credit card, Cozy charges them 2.75% on top of the rent amount.
Cozy sits on the payments for about 5 or 6 days - that's how long it is between the "tenant paid" and "it's in my account" emails. I think, but don't know, that they're doing some kind of short-term investing with the money, which is how they pay for their service. Cozy offers an option for $3 extra (to me) per unit per month that reduces this wait time to 3 days, but I don't use it.
Some hints and kinks. 1) One of my applicants was a husband and wife, and I wanted to do the check on both of them. They only gave me one email address on their paper application, but Cozy didn't know how to send two requests to the same email address. You need to either 1) ask for two separate email addresses, and create a request in Cozy for each one, or 2) create two requests in Cozy with the same email address, but two different names. (Example: "John Doe", thedoes -at- example.com, and "Jane Doe", thedoes -at- example.com.) Only the first request will go through, so the email they get will say something like "John, please click here to run the checks." John should click on that link and fill in his information. You can then look at your Cozy dashboard for pending requests, see the link it successfully mailed John, and the link it should have mailed to Jane but didn't. You can then manually send an email (or a text or whatever) to Jane with that link, so she can click on it and fill in her information.
2) Once you've sent a prospective tenant a request to do a credit and/or background check, there isn't any way for you to cancel that request yourself. If you contact Cozy support, they can do it for you. In other words, if you have more than one prospect, only send the request to the first one, and wait for some kind of disposition on that (you accept them, you decline them, they tell you they rented elsewhere or are no longer interested) before sending the request to the second one.
3) The results of their background checks and credit checks stay online for a while at Cozy, but not forever. If I remember right, they are available for something like 15 to 30 days. If you want to keep a copy of those reports, and if it's legal for you to do so, remember to download them before they are removed from Cozy.
4) Don't be afraid to email their support if you need help. They responded promptly to my requests.
Disclaimers: I don't work for, or otherwise get money from, Cozy. I am not a lawyer and this is not legal advice.
@Matt R. Matt this is an awesome write up! Thank you for taking the time to do this, it answers a bunch of my questions that I didn't even know I had!
I'm going to print out what you have written. Out of curiosity, since you're also in MO, are we able to download the cozy reports and save them?
Originally posted by @Michael King:
Out of curiosity, since you're also in MO, are we able to download the cozy reports and save them?
Cozy didn't stop me from downloading the reports to my PC. Whether or not you're legally allowed to keep them long-term varies from place to place.
If you did want to keep them, doing something like putting them on a USB flash drive that stays locked in your office, or printing them out and keeping them in a locked filing cabinet, probably helps protect you against claims of exposing someone's personal information. If you keep them on your PC and you get hacked, or if you keep them on your phone and your phone is hacked, lost, or stolen, that's not so great. I don't think the credit or background reports had the full SSN on them, but they did have the person's full name, previous addresses, and other personal information.
@Kyle Baron I have used Cozy to fill 3 units. in the process I have ran about 7-8 credit/backgrounds. I had 1 recently that came up clean on Cozys background/credit. I was ready to accept them but as normal did my own facebook and google searches of them to ensure they would be a good fit. first google result page showed 2 separate evictions in Delaware. 1 of the addresses matched a previous address on his credit report. needless to say I denied them.
remember to run your own check in addition to cozys check.
Matt's write up of Cozy is excellent. I have used them to advertise a rental and collect rent. I ended up using zillow for my background checks recently, but the rent collection is seamless and free (if you wait a week to get paid). I like the idea of writing up a pre-screening application to weed people out prior to collecting their fee and running the background check. I let them know that I am looking for a minimum income requirement, info about pets, smoking. Read up on fair housing and what you are allowed to ask. I didn't know about sending the rejection letter like Matt said. That seems like a good way to protect yourself by explaining why they were not chosen.
Good luck!
Originally posted by @Donna Salmiery:I didn't know about sending the rejection letter like Matt said. That seems like a good way to protect yourself by explaining why they were not chosen.
My understanding is that you only have to send that letter if you reject them based on information in their credit report. If you reject them for some other reason, you may not be required to send a letter saying why.
On the other hand, with the rising popularity of laws that say that you can't screen your tenants for certain things, always sending a letter that says you rejected them for a legal reason might be a good idea; I don't know. Your lawyer would know for sure.
Thank you all for this great thread. I haven't used Cozy, but based on all the positive reviews I may look into it. The biggest challenge I face is that I have quite a number of tenants that pay in cash and aren't technologically savvy. Maybe one of these days one of the bigger sites will partner up with a national bank which will allow tenants to deposit checks or cash into a "cozy" account at any bank. That would be the silver bullet. If anyone runs with that idea I'll only charge a 5% royalty fee for the idea. ;)
can you offer some tips on how to search potential tenants info on google and Facebook? I found it hard to locate relevant information.
Originally posted by @Jim Vanhorn:@Kyle Baron I have used Cozy to fill 3 units. in the process I have ran about 7-8 credit/backgrounds. I had 1 recently that came up clean on Cozys background/credit. I was ready to accept them but as normal did my own facebook and google searches of them to ensure they would be a good fit. first google result page showed 2 separate evictions in Delaware. 1 of the addresses matched a previous address on his credit report. needless to say I denied them.
remember to run your own check in addition to cozys check.