Some 40,000 college graduates descend on New York City every year, and most of them need a place to live.
The Next Step Realty plans to dominate that untapped market of renters by focusing on them exclusively. The company, which soft-launched in May 2010, works with agents in 30 cities in the U.S. and Europe, with a focus on New York City.
Founders Blair Brandt, 24, and Belton Baker, 23, started the agency after hearing complaints from their friends and classmates who had already secured good jobs in metropolitan cities but didn't know how to find the right apartment.
"College grads were unfamiliar with conditions of the market and needed to be pointed in right direction," Brandt said. "So this way they don't make mistakes wasting time, money, and energy."
Before launching the company, Brandt worked at Christian Angle Real Estate in Palm Beach, Fla. and struggled to find clients. He found that most potential sellers and buyers already had established relationships with brokers and didn't want to betray them, he said.
But that wasn't a problem with recent college graduates, most of whom had never dealt with real estate before. They lived in dorms, sorority or fraternity houses, or off-campus housing that was well-known and passed down through groups of friends.
"We heard the complaints and we saw this as a mutually beneficial relationship for the broker and the graduate," Brandt said. "The brokers get in early and start making long-term relationships with clients, and the graduates get some guiding help."
Brandt and his partner were also in a good position to deal with the young demographic because they were both recent college graduates themselves, Brandt from the University of Richmond and Baker from UNC-Chapel Hill.
The Next Step Realty spread the word about their service by sending an email to 1,000 friends and acquaintances. They put a tracking link on their URL, and within a month 100,000 people had visited their website. The clients started coming to them.
Brandt said the first two years were about working out the kinks, and in 2013 he wants the agency to make a push toward quality and not necessarily quantity. The majority of the company's efforts will focus on New York, where it plans to use about 20 brokers to cover the market.
Brandt expects each broker to have three appointments a day during the busy season (May through November), and to close on two of those three appointments. He's tough on his agents, generally starting with 50 at the beginning of the busy season and cutting the group to 25 or even 10 if they aren't up to par.
In addition to building a client base in New York City, The Next Step Realty just acquired former competitor Post Graduate Apartments, which focused on housing for the post-business and law school set. The agency is also going through a round of fundraising with angels, private equity investors, and some friends and family. And its new website launches at the end of this week.
"We're still building our clientele and trying to grab a larger portion of the graduating class each year," Brandt said. "But we've already had some graduates from 2010 come back to us when looking for their second apartment because they were satisfied with our product the first time around."
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