Savvy credit card users already know that there’s quite a game to be played as to how to get the best rewards. From free flights to cashback options, cards can offer many perks that can make your life a little (or a lot) easier.
That said, one benefit that didn’t exist before was a way to reduce housing costs. That is, until Bilt Rewards debuted on the scene in 2020.
Bilt is a Mastercard (MY) – Get a free report which offers points when you use it to pay your rent, as well as waiving transaction fees. And it also offers points on travel and dining, so you don’t miss out on the perks you’re used to with other cards.
To find out how and why Bilt was created, TheStreet had a chat with Founder and CEO Ankur Jain.
This interview has been edited for clarity and readability.
The street: When you go to Bilt’s website, the tagline at the top is “We help you navigate real-life shit,” which sounds like a very Gen Z way of attracting people. Who do you think needs Bilt the most?
Jain: If you rent, you should have Bilt. I think a lot of what we built this for was for our generation to come. You spend 40% – in some cities 50% – of your income on housing, and somehow your biggest expense doesn’t bring you anything. So it’s just this really weird loop where you’re paying rent every month but you’re not able to build credit, you’re not getting rewards, you’re not getting closer to owning a house. The whole cycle is broken and you’re kind of supposed to figure out everything else with the remaining 50% of your income.
The street: What are the seeds that brought Bilt to life?
Jain: We were thinking about different problems to solve and where we could really make things happen as entrepreneurs, and we kept coming back to housing.
I remember thinking to myself, I had an Amex card and a Chase card before this and I get points on everything. Why can’t I use my credit card for rent? …so I was drinking with Barry Stern who started the Starwood band and I asked him, “Shouldn’t owners care about loyalty or want to attract people?” And he said: “What you might not realize is that airlines and hotels make all their money on their loyalty programs and card companies… airlines usually lose money. money on flying planes, but they make money with a loyalty (program).”
It was quite an eye-opening moment when we realized that the categories in which you spend a hundred billion a year traveling across the United States are one-fifth the size of the rental market. It was the light bulb (moment). If we can understand that and adapt the model to housing, the scale of that is just huge.
The street: But you did. What did it take to make this happen?
Jain: What we quickly realized was that this very simple idea was not authorized from a regulatory point of view. This mortgage environment did not allow rewards points or credit card points to be used for a down payment. So the next two years consisted of this: Could we get the government to change the regulations so we could use this? We had to go talk to the FHA and the FFA and Fannie Mae and Freddie Mac and the Treasury Department.
It wasn’t like there was any resistance to it, it was just that no one had asked the question before. No one had ever asked, “Why won’t my rent payment history qualify me for a mortgage?” Therefore, there was no regulation authorizing it. It was a huge moment… super exciting.
The street: Seems like it was a bit like rolling a rock down a hill.
Jain: It was usually frustrating, but it’s exciting now that it’s here. The problem was that you had three steps: the first was to anyone you offered this to, and the second was that it would never work. So they don’t even engage. You talk to real estate owners and they say everybody’s tried, the economy never works, the banks will never waive fees and they’ll never work with you because it’s just not like it works.
And then eventually you run out of them and the first people start buying it. It only takes one person to bite into each category, and then people start breaking through. And finally, after asking enough times, the first person commits to each category and now you have the skeleton. Eventually you get to the third phase, which is like everybody’s on board and now it’s actually getting the product to market.
The street: And you just got another $150 million in funding.
Jain: Yes. It’s a $1.5 billion business now.
The street: What are Bilt’s development plans for the next few years?
Jain: We now have over two and a half million apartments in the Bilt Alliance and we are rolling them out monthly, batch by batch. And I think right now we’re looking at the next 12 months (and thinking): how do we get Bilt into the hands of as many tenants as possible?
The street: One last thing… what would you build next, if you could?
Jain: There are so many things I want to do with Bilt first. (But) I think going forward there are two areas that I find fascinating. I think we’re about to have some pretty exciting breakthroughs with biology…when I look at the fact that today if you get covid they can inject monoclonal antibodies into your system and give you your body the tools to fight off a virus instantly that can be spread to so many different diseases and infections…I’m very excited about this opportunity.
I’m (also) super excited about nuclear power, which I think is the least discussed thing. Ironically, all those people who like to talk about climate change and green energy aren’t talking about nuclear. And this is the only solution, in my opinion, viable.
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