Stepping in as CEO at a 6,000+ Door SFR PM Company with Dan French

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Why did Blackstone come into the SFR space or Waypoint? Actually, whoever, whoever started it. But why did Blackstone jump on to the biggest fund in the whole world? You know, biggest real estate global AUM. Crazy. They did it because they recognized the durability of the cash flows and that underlying real estate asset. SFR was great. Actually, it's better. You could argue it's better than multifamily because when you look at SFR renters, they have 5 times the income. Where in multifamily, if you get 2.5 to 3, you're like happy. You're like, oh, this is great. So actually the renewal rates in SFR higher, delinquency lower. The true asset of a real estate deal is the quality of your residents. Right. That's how I look at it. The durability of those cash flows, that's what you're buying as a real estate investor. Now, you can access that until you had a management platform that was built to go service it and make it operationalized.

That's the hard part.

So yeah, but that's going to happen in SMF, right? Small multifamily, the same thing. The durability of those cash flows, someone needs to unlock them on a national scale basis. We're perfectly poised to go do that.

Welcome back to Peter Lohmann's podcast, friends. Today I have special guest Dan French, CEO of Northpointe. Huge get. I'm excited to have you on the show, Dan. I want to start by having folks who aren't familiar with you just kind of bring them up to speed a little bit. Tell us a little bit about how you got into this role at Northpointe and some of your background.

Well, first, thanks for having me, Peter. You're a total legend. I actually listen to a lot of your pods. I read all your newsletters. I've read your—

Oh, thank you.

All your blogs on your site. I think you're excellent, man, and you're definitely the thought leader that I look to in the SFR space. So thanks for what you put out there and keep it going.

Appreciate that.

And I know it takes a lot of work. Yeah, I'm new to the role of CEO, but I'm not new to property management. I've been in, you know, the commercial real estate arena for 20 years. Building out different things. And in the beginning it was a really small partnership, myself and two of my, you know, great friends I grew up with, actually two brothers investing in really small assets pre, you know, great financial crisis. So before a lot of people, you know, Gen Z didn't really remember how the GFC went down, but I like to school them up when they join our team. But yeah, I lived through all that. We put together a portfolio of about 100 doors back then, and a lot of people have the same story, right? It was, For me, it was about building long-term wealth, and I had a full-time career that was something separate as a career in public service. I was an elected official from the age of 23 to 30, but concurrent to that, I was looking to go into real estate with my partnership because I, I wanted to have a big family. And now I have that big family. I was, I'm super blessed. I have 4 kids, wonderful wife, but I knew, you know, public service is not going to really create wealth. You know, it's been barely keeping the lights on. So that was my goal. That was in my heart was, own real estate, hold it forever. It's kind of, you know, looking back was like the infomercial way to invest. It was like, oh, money will just appear in the mailbox and you know, everything goes right.

It's free real estate. Yeah. Remember that?

It's, oh, it's terrible, man. It's up and to the right. And I wouldn't say we were that naive, but I was pretty close.

And so you acquired a bunch of units prior to the great financial crisis.

Yeah.

And then of course I need to ask what happened during the great financial crisis to all those properties that you owned?

Oh, terrible. I almost went personally bankrupt. I was taking personal recourse. Oh man. On many of those deals. Yeah. It was brutal. It was a bad stretch of years. But really, Peter, that's how I know real estate or property management from the ground up is I was sleeping in vacant homes even though I had a full-time job, weekends, holidays, anytime off was full in trying to, you know, work things out with the bank. Yeah. The various different banks that owned our real estate and many of them went belly up, right? It's like people forget about this, but the meltdown was so severe. It's nothing like what we've seen post-COVID. It's a step change of how, how bad it was out there.

Totally.

So really though, we, for people that wanted to work the, the loans out and keep paying or restructure things, the banks or the private equity groups that bought them were very open to that. You know, because you really stood out. You were probably in the 5 or 10% that actually wanted to work with those asset owners and not just hand them keys.

Because a lot of people were walking away.

Yeah.

They, because they, yeah, they were just throwing keys back to the banks.

Yeah, exactly. Like they, they were thinking this is, this is a no-win situation. I'm already underwater. So like said, there's no way I'm making money, so why would I keep continuing to steward the asset? And for us, you can— Yeah, go ahead.

They own a home that's worth $200,000, but they owe $300,000 on it. Yeah.

Right, exactly. And so, yeah, in our case it was duplexes and 4-unit buildings and we had maybe, you know, 30 of those, whatever it was.

And were you, were you flipping these or were you actually buying and holding them?

Well, it happened pretty fast, but we were, we were intending to hold and just Okay, make cash flow and, you know, maybe do that whole thing.

So you had bought them originally with the, with the intention of holding them anyway. So presumably rents were still flowing. It was just kind of an overleveraged situation for you guys, but it wasn't like— because I remember listening to Matthew Whitaker talk about how they had all these homes mid-flip, the hammer drops, and now they've got dozens and dozens of properties that they can't sell at basically at any price. And they weren't set up to rent out the homes at that time. They had no experience with it. Sounds like you were in a little bit of a better position going into it.

I thought his series he did there was excellent. It was like a 6-part series and really, really great. And a lot of it resonated with what I went through. I was like, man, I had that same exact experience. But yeah, for— I don't know exactly how his went down, but for us it was like we were trying to not, you know, we were trying to outsource property management. And just do that long-term hold thing. And really quickly, another good lesson for operations, we found out that people were stealing, you know, so it was really hard to find good property management in, in that small-scale sub-institutional asset class, which is something that still resonates today with a lot of people, including why I think Northpointe is a big opportunity. But yeah, we, we couldn't find trustworthy, reliable property management. People were absolutely stealing. And that's when we took over property management. And that's why I said when I know real estate from the ground up, I slept in those vacant homes. I ran maintenance for a while on, you know, everything, vendor network, outsourcing, all that. QuickBooks was what we were using back then. There was no AppFolio. There was no, you know, maybe there was, but I wasn't, we were just doing whatever.

I don't think so. I don't think pre, pre-Great Financial Crisis.

Yeah, I think, I feel like they emerged after like 2010 or something. So it, Yeah, different world, man. A lot of pen and paper stuff, just, and just grit, just absolute entrepreneurship grit. And my partnership, I was blessed to be in partnership with two people that just never gave up and were super savvy and nice. It was a great learning opportunity. It was tuition is how I look at it. It's like that phase in my life made no money. I ruined my credit for 10 years. I couldn't buy my own first home until I was 38 years old. So I know how to delay marshmallows. I know, I know what long-term, I know what long-term pain looks like.

Yeah.

So my pain tolerance, like, you know, you, I talk about icing the veins, you know, when, when some of these young kids come through, I'm like, man, you guys gotta get, gotta get your ass kicked.

Yeah.

A little bit here. You know, there's no other way to do it. You can't read it in a book.

Yeah.

Gotta get your own ass kicked.

Totally resonate with that. I want to sort of paint a picture for anyone who's not as familiar with Northpointe. So Northpointe's a big company in our space and they've kind of been operating quietly. For a number of years. In the last year or two, they've started to make a little bit more noise. But just for a sense of scale, and maybe you can bring us up to speed or maybe you won't disclose, which is fine. Last year in 2025, I updated my top 20 list of largest property management companies. Northpointe came in at number 7 on the list with 6,400 units at the time, and at the time running on AppFolio and departmental style of organized, you know, of how they're organized. And you came into the job as COO in September '25 and then recently moved up to the role of CEO when co-founder Adam Halich stepped down. So just for anyone who's not a little bit familiar with Northpointe, I just want to bring them up to speed. Anything you want to add to that or kind of fill in?

Yeah, there's a lot. I mean, we could do the whole hour just on Northpointe, obviously, or really like where it came from. We can do a whole hour on that. But effectively, here's how I look at it. It's a company that was founded 20 years ago and the way it grew was, was really fascinating. It's almost like a franchise-like model. And they had more, you know, we prior had 1099 teams that were just all over. Almost everyone was 1099.

Really?

They had a small back office. Yep.

Wow.

And that transition only took place in June and right before I got, you know, so I got, I arrived in September. So that, that transition happened or got completed in May or June. And concurrent with that was an AppFolio transition. So from PropertyWare. So this is already a company that was in massive change mode even prior to me arriving and credit to Adam and the team. And, and, um, I think that those were visionary moves. You had to do those things in order to become a true platform. So, so Northpointe is off those numbers, by the way, like many groups in, in its large-scale property management. Actually, we've seen it tapering down. Mm-hmm. I think there's reasons for that. It's been a tough time in the space. 1.5 million units have actually disappeared between 2017 and 2023.

I've just been learning about that. I'm fascinated.

Yeah. I wrote about that.

Yeah.

Jay Parsons is, Jay Parsons is the legend in multifamily. You're the legend in SFR, you know, like you're, you're the Jay Parsons of SFR, man. That's the highest compliment.

I, I am nowhere near Jay Parsons. In fact, we brought, we brought Jay Parsons in to co-author the PM Trends report last year just so we could get a little bit of star power on it because we wanted to lend some credibility to that research that we did. Which by the way, we're redoing again for this year. We've already got the results back from Harris Poll. Some of it's mind-blowing. Can't talk about it yet though. Yeah. So he, Jay Parsons, has been talking on LinkedIn recently about how the SFR world has lost 1.5 million units in the last like 8 years or whatever it is. And that was total news to me. I gotta be honest. I was shocked when I first, 'cause I've been so focused on with PM Trends, like the growth of percentage of units that are professionally managed, which has been going up, but if the overall pool of single-family rental homes available is shrinking, that could explain a lot of what we're experiencing, including it sounds like you guys in terms of churn because there's just fewer units out there to manage.

Right. And both those things are actually can be true and are true at the same time. Yeah. So We, you know, I, I was just looking this up this morning, but I think multifamily has about 23 or 25 million units in the US. A lot of those, by the way, are really sub, you know, sub-institutional asset level. Like they're, they're below 100 units. And single-family homes for rent are about 11 to 15. There, people aren't really quite sure. There's different, different ranges, but either way you cut it up, cut it up, 11 to 15 million, such a small percentage are professionally managed. And for sure, and this is another thing that Jay Parsons, and I've seen you write about this, like zeitgeist about blaming the Blackstones of the world and people who own or institutional owners of single-family homes, such a small percentage. It's like, you know, 1% or something like that.

I don't even care if they owned, I don't even care if they owned 100% of them, it wouldn't change a thing because the rents are set by the market. The rents are set by the market. It's such a high demand.

Yes, it's supply and demand. It's, it's totally transparent. It's a, we're blessed in the US to have all these things, such a high functioning capitalist system that, and, and so beyond that, but it is true that 1%, I think in the US, maybe some markets are 2.5 to 5, whatever it is.

Yeah. It's tiny.

Maybe higher, but it's so, yeah. So overall it's been tough to be a single family property management, especially third party, pure third party. It's been tough because the, the, demand or the overall supply of units to manage is down. But at the same time, we've also seen consolidation and we've seen some groups get bigger. And I think that's going to just continue. That's one of my main reasons why I'm so excited to join Northpointe is because what I think I've seen in multifamily, definitely from the data, but also by my personal experience, I didn't cover the mid part of my career, what I did after the GFC meltdown because there were some happy parts of the story. You know, actually it did some okay things. It's just such a big opportunity because exactly what happened in multi with professionalization of property management and more scale, you're going to see the same thing play out, but it's going to take 10 or 20 years and you'll see the same thing. Like, you know, to get to the top 50 on the NMHC, which is National Multifamily Housing Council list, like your list, Peter, to get to the top 50, number 50 is $32,000, something like this. Okay, so that shows you— and I think the same thing is going to happen with SFR. We're going to see a top 50 where just to get in on the number 50 will be— you'll have to be at 10,000. Yeah, SFR doors under management because consolidation is coming and there's a lot of reasons for that. And it's— I'm a bull. I'm as bullish as can be on an operating platform to be best in class. And Northpoint is perfectly poised. All right.

I got a lot of thoughts about all that. So first I want to say one thing, which is my top 20 list, top 20 largest, you know, SFR third-party managers is by no means complete. It's self-reported data and I'm only capturing probably a single-digit percentage of the total companies out there. So I know there's a bunch of larger companies. People always email me this as if it's news to me, like, Did you know this company's not on your list? I'm like, yeah, I know, dude. It's all self-reported. If they didn't report it, I can't make up the units under management. So if you know of a company that should be on the list that isn't, please email them and tell them to report the data. We're getting ready to reopen that, by the way, for 2026 so that you'll see a big push on all my media stuff about— and we're expanding it to top 50. It's funny you mentioned the top 50. We're expanding the top 20 to top 50 and we're going to do a top 10 by state as well. So there's going to be an opportunity for a lot more management companies to be spotlighted and highlighted, which I'm excited about. Today's episode is sponsored by Enterprise Bank and Trust. If you run a property management company, you already know that trust account banking can get complicated fast. Compliance rules, software integrations, vendor payments— it's a slog. That's why many property managers across the country partner with Enterprise Bank and Trust. They build a banking program specifically for our industry. Here's one feature that I think is especially interesting. Instead of paying traditional interest on your trust accounts, which many states actually don't allow, Enterprise offers a competitive earnings credit rate program. In plain English, you earn credits that can be used to offset bank fees and even pay for third-party expenses like property management software, bookkeeping services, consulting, crane, and more. That's a pretty meaningful benefit if you are already paying for those tools, But it's not just about the credits. Enterprise also has a dedicated team that specializes in property management trust accounts. They'll help you open and structure these accounts correctly, stay compliant, and integrate with the software that you're already using. They also offer lending solutions if you need financing for acquisitions, growth, or other opportunities in your business. Bottom line, Enterprise understands property management. If you want to learn more or connect with their team, Go to enterprisebank.com/property-management or just click the link in the show notes. Thanks again to Enterprise Bank for sponsoring this week's episode. On the topic of the sort of SFR following in the footsteps of multifamily in terms of professionalization and institutionalization of the asset class. Really interesting topic. I think I heard you say you think it's probably going to take 5 or 10 years. I'm sure I agree with that. Do you think that is started a while ago, starting now, or is about to start? Like, where do you see us on that 10-year journey? Like, have we even started it?

No, you no doubt have.

Are we—

I'm going to say we now because I'm in SFR space and I'm deep in it now. We have started it. But let me, let me go back and tell you my, my journey in the mid— yeah, like what I want to call the mid part of my career. So after that GFC near meltdown, we kept operating through that, that whole storm and then eventually worked it out and returned all of our investor capital that we took that we took in and paid everyone back in full. That's something I'm really proud of. My mom was one of those people. So we paid everyone back in full. I made no money personally off that trade. And in fact, I lost a lot of money and I ruined my credit, but I learned all the lessons.

If you could have held all of those doors though, to today, they would be worth so much money. They would be fine.

Well, look here, you know, one of the other things I learned also is pick your market. Like we didn't, that market was upstate New York. It just was not the market I would've chosen. To be like ultra long-term hold. I would rather, knowing what I know now, I'd park my money in Austin or someplace, you know, massive growth markets. It's, yeah, gonna have a 20-year run. In brief, after that, I ran for a much higher office and lost that election, got my butt kicked. And that was, that was great for me when I was 30. That opened me up to go join full-time to this real estate private equity firm that was vertically integrated. That firm bought $2 billion in, in asset value over between 2011 and '19, and that was 17,000 apartments. I became CEO of the firm in 2016, and then after COVID, when we had— so we decided to sell, we became net sellers. We, we shut down the complete buy side of the operation, completely shut down. And, and around 2019, we became net sellers deal by deal, and we sold off about 85% of the portfolio. So when you're self-managed, vertically integrated, you only have one way to grow your unit count. Obviously it's by buying more deals. So we decided after COVID to pivot and become a third-party, pure third-party provider.

Got it.

Of services for only multifamily, 100-unit-plus deals. And we pivoted that from, so at its bottom it was 2,500 doors and within 3.5 or 4 years we pushed it to 18,000. And that's when I had a glorious exit with my partner. It was just time for me to go and spread my wings, do other things.

Got it.

But it was a great run. I'm very proud of it. Proud of the team. It's, it's still going. It's 24,000 doors now, 5 states.

That's awesome.

So multifamily, man, is, is extremely, extremely competitive. I would dare say it's much more competitive than SFR.

I agree based on what I've heard.

Look, there's just a lot, man. Here's what, here's the main thing, right? The way I look at SFR, large-scale property management. I'm sure people were doing this in, in prior decades and quietly, but it really only kind of became a thing after the GFC. So when people started building actual big platforms that had national scale was really just about 10, 15 years ago.

Okay.

When you, when you saw Waypoint and you saw Invitation Homes, I've read all their, their, I've actually talked to a lot of those founders and, and heard some of their stories. Crazy stuff. Just going from the auction steps, buying doors to building a national-scale platform is just insane.

Yeah.

And that only just happened. So the talent density is a top thing that I really look at, that multifamily has had decades upon decades of scaffolding talent from these different companies, you know, and SFR has not seen that. So the talent pool, I want to say this with humility because I know I'm, you know, I just know the bar. The bar is the bar. So the bar of professionalization of property management, of thinking about strategy, large scale, how do you perform for owners being owner obsessed? The bar is the bar. So we are going to absolutely raise the bar in single family. We're going to do things that the world has never seen yet in SFR. And that's, that's the mission.

Got it. So that's an interesting angle that I hadn't really considered, which is sounds like you're saying multifamily has had 10 to 15+ years of professionalization, institutionalization, And what comes with that is platforms that are growing and talent who works at those companies that's gaining the experience of seeing and feeling and experiencing, oh, this is what it looks like to work at a company that actually values customers. This is what it looks like at a company to be actually organized. This is what it looks like to work at a company that is growing by 20% every year for 20 years in a row. Whereas in single family, we haven't— we're kind of just starting. Like there's a few platform players now. Of course, PureHRG just merged. You've got you guys, Evernest. I mean, there's a handful, but there's— I mean, you could probably fit them all in a small conference room. The number of people who have been involved in all those, a lot of them have kind of moved around between them. It takes time for all of that talent to develop and disperse and new companies come along and they build their talent and That's, yeah, that's, that's interesting. I hadn't really thought about, I, I've always been so focused on the, the sort of tech and operations angle. I hadn't thought as much about the people side of it. I actually find, I want to get your take on this. I find that multifamily experience in our world is sometimes a disadvantage because it's so different in fundamental ways. So for example, we brought on a new director of maintenance a couple years ago, about a year and a half ago. He's worked out fantastically. He had no experience in property management, and I was extreme. I was much more interested in hiring him because of his experience in the pest control industry than several other candidates I interviewed who had been directors of maintenance for larger multifamily properties, because I think that larger multifamily maintenance experience is so fundamentally different from what's required to manage single-family homes, that it's actually a disadvantage. And it's— what we do is closer to like a pest control driving house-to-house type of operation than multifamily.

Yeah. Oh, Peter, it's definitely another long, you know, subset of different things that we can pull out here. But the way I look at it and what we're trying to position the board— by the way, Northpointe is, for your audience benefit, is private equity backed, right? So we are in growth mode. We're built, you know, we're, we've rebuilt our entire exec leadership team. We have capital to go do, you know, M&A, which, which means like we are rolling up other prop, property management operating businesses and, and trying to integrate them. And like many other teams have done, but you know, what, what, what we're trying to do at Northpointe actually is a bit different from pure asset SFR scattered site. Management, we're actually trying to grow into different, different channels or segments as I call them. So BTR is a major growth channel that I want to go make sure the company's geared up to do well and extremely well. And I actually think sub-100-unit BTR deals is a perfect thing for an SFR group to go hit and—

Like you want to build them or you want to manage them once they're built?

No, no. Yeah, we're on, we're not on the buy side at all in terms of owning or real estate assets.

So basically staying connected with developers who are, who are creating these new BTR communities and getting the account once they're live.

Exactly. Yeah. And then also, you know, small-scale— SMF is what I call it, small multifamily. This is a really fascinating space for me as I think like I said, you know, you think about the real estate world, right? Why did Blackstone come into the SFR Space or Waypoint, actually whoever, whoever started it. But why did Blackstone jump on? They're the biggest fund in the whole world, you know, biggest real estate global AUM. Crazy. They did it because they recognized the durability of the cash flows and that underlying real estate asset. SFR was great. Actually, it's better. You could argue it's better than multifamily because when you look at SFR renters, they have 5 times the income. Where in multifamily, if you get 2.5 to 3, you're like happy. You're like, oh, this is great. So actually, renewal rates in SFR higher, delinquency, delinquency lower, you know, you know, your underlying, the true asset of a real estate deal is the quality of your residents, right? That's how I look at it. The durability of those cash flows, that's what you're buying as a real estate investor. Now, you couldn't access that until you had a management platform that was built to go service it and make it operationalized.

That's the hard part.

So yeah, but that's going to happen in SMF. Right. Small multifamily, the same thing. The durability of those cash flows, someone needs to unlock them on a national scale basis. We're perfectly poised to go do that. We're going to go build out a segment, you know, so different segments, right? Segment of small multi. It's going to be purpose-built for that, that exact use case segment for BTR, purpose-built for that exact use case and continue with SFR. Okay. So single-family home detached, scattered site.

Yeah.

Yeah.

Where's the upper bound for SMF? Is it 50 doors?

It's about 80. 80. So 80 and below. Yeah.

Yeah, that's fair. Because that's anything above that, you have an onsite manager with a leasing office and the employees are tied to the payroll on the actual property, not the third-party manager and all that. Yeah.

Right.

How is BTR different from SFR? Because to me, that's just a bunch of SFR that happen to be near each other is what do you have to do differently to manage those?

Well, first of all, I think of it as it is institutional capital. So by default, anyone who's putting together a BTR deal, whether it's a merchant builder, long-term holder, whoever it is, has institutional-level capital, right? So they have owners that they're— or investors that they're reporting to. So to me, that's where multifamily experience comes in extremely handy because if you're just from scattered site— yeah, reporting, budget variance, pro forma, you know, long-term, you know, CapEx programs, knowing how to do all that is very difficult for an SFR purpose-built firm that's only, you know, servicing an owner that has, yeah, one, maybe, maybe one owner gets up to 10. Different owner, way different owner, different expectations. It just operates Definitely from mostly from the asset management standpoint. So the level of sharpness and how you show up, the cut is here where, where most people from a reporting asset management standpoint, I want to separate asset management from property management. Yeah, there are differences in property management, but there's step level changes in the asset management that is expected of you.

So yeah, I would categorize it as a different skill set. I don't think it's actually any harder. I'm quite familiar. We have some outside investors in some of our stuff that we own. In some ways, I actually think it's easier for personally as a person with sort of an engineering bent and sort of a facts and data type oriented guy. I'm like, yeah, absolutely. Let me get you the reports, my friend. Please don't call me angry about a broken toilet. Instead, let's look at the 5-year budget, right? That's, that's where I want to live. It was very hard for me to get used to dealing with emotional homeowners who cared more about their house than their financial outcomes. So I think property managers are, are in a great— they've gotten really good at servicing those individual homeowners, catering to their emotional needs and, you know, getting right on the phone right away and calming them down. Institutional owners are not going to call you about every little expense, but they have high expectations on just like you articulated, budgeting, variance reports, CapEx, like all that stuff. That's actually very teachable. It's very learnable. You know, multifamily, like you've pointed out, has been doing this for decades. It's, you know, especially once you start building into the softwares. So it is, it's, it's so different.

I agree with you, by the way. Yeah.

It's really interesting. Like, I'll be curious to see what SFR companies are able to make that shift and still maintain the core of their SFR mom-and-pop business because The type of person who thrives in that like reporting-oriented environment with institutional customers is quite different than the type of person who is great at helping an owner calm down when they're angry about something.

Totally right. That's why I'm very adamant that we're building these out in different divisions or segments, whatever you want to call it. I don't think it's a smart move to, you know, like I was telling our team, if you have someone who is covering 250 scattered site homes. And we're, you know, we're skating toward a world, Peter, where every PM has 300 as a goal. And when we'll get there, but you can't just give that person 40, a 40-unit deal and say, hey, go run this now because now, you know, you have room, you know, that's only 280 homes. Like, no, no way. That needs to go to a separate channel of purpose-built PMs that know how to deal with that. They know how to talk to owners. They know about the reporting. They're a little bit more schooled up on the asset management stuff. The construction CapEx program, you know, how that works and integrates with your maintenance and construction teams, how that gets reported back and project managed. This is a lot more— it just plays a little bit differently. It's—

I totally agree. And I've really struggled to figure out what's the best way to implement that in practice. So the easy thing to do is like, oh, this is a different asset class. We're going to get a dedicated property manager. We're going to train them in how to do everything, and they're going to be the point of contact for that owner. Great. Everyone agrees with that. Problem I run into is like, how far do you take that? Like, does that property manager now handle the leasing? Do they now handle the maintenance requests? Do they now handle, you know, the turns and everything else? Like, because a certain amount of that work still needs to flow through your normal org and be handled in the normal way, like lease-ups or lease-ups. So where do you separate out, like, what, what, where's the dividing line between what that property manager is doing themselves and what's being handled by the normal division, you know, departmental style of your organization? Like, we're wrestling with that right now. So I'm just interested in your take on like when you say you set up a dedicated property manager, does that mean that property manager is doing everything for that property or are they just kind of amassing the data and the reports and being that single point of contact?

The way I look at it and what we're currently building is like, I view the platform as the horizontal enabling layer. Like, this is, this is all your back office stuff that, that every, every division or segment is going to draw from. So for example, there will be a leasing call center mechanism, there'll be marketing, there'll be, of course, accounting, HR systems. They're not going to have to— they're going to draw upon all those shared resources, executive leadership, business development. You know, these things play across all the segments. And then when you get down to the nitty-gritty, like, I, I think over time you'll iterate and emerge, and it'll be emergent what you build in terms of like the leasing flow in a BTR deal is going to look a little bit different than the leasing flow in a pure scatter site portfolio. So how they pull down the services from that, that shared horizontal enabling layer, it will be different. It'll be bespoke over time. But I think that the true secret sauce there, and I'm just There's no— there's— yeah, it's— you can share ideas all day. Like, people can go, go grab our ideas. Like, it's all about execution. This is very hard to execute. It's not hard to ideate. I'll say, in my opinion, it's super hard to execute. But over time, these segments, the main thing is that they're single-minded. They wake up every day and they're like, I'm a BTR property, property manager. I serve BTR owners, so I'm going to be best in class at BTR. Same thing in the other segment. I'm a small multifamily expert. I'm going to be best in class for these owners that I serve, or I'm scattered site at SFH, single-family homes. I'm going to wake up and I know, I know the routing, I know that system. So I become real deep and I become obsessed almost with how to serve owners only in that segment. And that's where excellence is unlocked, is through focus.

The property manager who's who has these institutional customers, are they also physically going to the property to do leasing tours?

Well, define institutional, like BTR or small—

Like BTR in your example. Yeah. Like BTR. This is your property manager in Ohio who's responsible for the BTR customers here. Are they also going to the property and doing tours? Are they responsible for rent collection? Are they handling the maintenance requests?

Well, it depends on the scale of the asset. So we might find ourselves get pulled into larger scale assets that we, we think sub-100 units is where we want to stay. But I'm pretty certain that people are going to pull us into 150-unit deals and then we'll have to make the determination like, all right, that's actually an onsite property, property manager and it's a pass-through cost that's paid at the asset level. And that'll, that'll have a different fee structure and different systems. So even within the segment, it's actually There's a lot of different ways you have to build it out because then you have a BTR person who might have 2 50-unit properties, so they're not there every single day, but their expectation is that they're in market, you know, they're tasting the soup is what I call it, or inspect what you expect or whatever that phrase is. You know, like go there very frequently as much as you have to and make sure all the systems are working correctly. There's no trash in the property.

This episode is sponsored by Haven AI. I've been hearing a lot of great things about Haven AI recently. Couple weeks ago, I was on a webinar panel about AI and property management, and Evernest talked about how Haven's AI agent transformed their leasing operation, handling most of their top-of-funnel leasing interactions across text and email. And you might have heard Haven mentioned on a recent episode of my podcast where one of their customers, Matt Luke, told me about how he's managing 350 doors with no W-2 employees. That's not a typo or a misspeak. Zero W-2s. He's using Haven's AI agents for maintenance and leasing to make that work. There's no shortage of AI hype in property management right now. Everybody's got an AI something. But what caught my attention with Haven is that it's not just a chatbot bolted onto your website. It's a platform of configurable AI agents that plugs into your existing software and actually takes action. We're talking creating work orders, dispatching vendors from your preferred vendor list, triaging emergencies, qualifying leads, scheduling tours, and following up with prospects across phone, text, and email around the clock. They're Y Combinator-backed and were just named one of the top 50 AI startups in real estate. The operators I've talked to who are using it seem genuinely impressed, which in our industry is not easy to earn. If you want to see what the buzz is about, book a demo at usehaven.ai. And thanks again to Haven AI for sponsoring this episode. What I'm trying to tease out is like, just take my company for example. Like we, we specialize in SFR and small multi. We've never done a BTR. Our whole, we have a leasing team and they do all of our lease-ups for every single property. So every single property enters like a leasing machine. Picture a big black box. That's a leasing machine. Vacant properties enter the box, occupied properties drop out the bottom. We have property managers in our new setup, which is going live like this week. We have property managers who are assigned to owners. So each property manager has like 100 owners that they, they're the single point of contact for that owner. If we were to, and, and the property managers don't actually do the leasing. The leasing is handled by the black box, right? But the, but the property managers, know what's happening in leasing and talk to their owners about, you know, the leasing status of their property. What I'm trying to unpack or tease out here is like if we stood up a BTR division at my company, which we're not going to, but if we did and we hired a new property manager and we said, okay, property manager, your customers are all BTR. What I'm trying to unpack is like, does that property manager use that same leasing machine that we've already developed? Or are they going to now go and do their own leasing because it's different when you're leasing up a BTR community?

The default is that they would use the existing leasing. Okay.

Yep.

And, and that's because— and the reason why I think we're going to— that all SFR— I don't even care if many of us, right, all, all went together. But that's how I look at SFR, right? It's like, dude, if we all rise up, like, I don't care if FNS gets huge, you know, I actually am really happy about that. Pure HRT, get big. Guys, like, let's all get big together because it's all going to pull each other up, you know? So I'm owner obsessed and not competitor obsessed. But the way I look at BTR, that channel is like leasing.

They would still use the existing leasing platform that we have.

Exactly. You still use that, that existing leasing platform.

But what happens if you find out after doing this for a year that BTR requires its own nuance with leasing, since it's different enough that you can't run it through your normal machine. This is where I get— this is what keeps me up at night. What do you do then? Do you create a separate leasing just for BTR? And now, like, your company's getting all fragmented and like your best practices aren't being shared between those two. I don't know.

I— Yeah. Okay. When I lost my train of thought, that's what I was going to say. Leasing. We, we have a thesis that leasing in coming up channel from SFR scattered site leasing is actually more, it's more in tune with how BTR deals lease, like at least traditional BTR deals because it's, it should be leased like home, you know, home by home. Yep. Instead, when a multifamily operator comes down or down quote unquote to like this mid thing where I look at BTR as like mid between SFR and multi. They, they kind of would just operate it like it's an apartment home leasing. They'll just throw it on apartments.com and they'll use the same ILS systems and they'll just expect the same renter kind of demographic to just find a BTR style home and just be like, oh, well, whatever. No, I think it's a completely different renter. It needs to be leased one by one. So it's much more akin to how we already do scatter site asset single family homes.

Yeah.

For rent. So that's our thesis that we are going to try to put it into that machine. Now when it gets bigger, TBD. And, and Peter, that's why, that's why it's a little, that, that's why a lot of people don't, they don't want to do multiple channels like, like we're gonna do. But that's what's gonna separate us from the pack, I think, is that we're gonna take these on because we know how to do it. It's in, it's in my DNA to bring into the company. And also this guy, uh, Steven Wright, who's our chief innovation officer, two decades in multifamily. Then we're gonna keep, I think, pushing in some of this multifamily expertise. And push out different paths to grow. But other firms are doing the same thing. I think they have the same, some of the same mentality. Now, who can execute best is the answer, is the key question.

Totally. Well, I appreciate you being candid about, about your unit count dropping a little bit in, in over the course of 2025. And I know that for a lot of people listening, they're kind of thinking like, oh, okay, it's not just me because a lot of people have experienced that and we barely We're, we're up over 2025, but barely. We net added 29 doors.

That's a big deal. Yeah. Congrats.

So yeah, we added whatever that is, 5% or something or 10%, but it was tough. I mean, it was, you know, it was scratch and claw your way to just get a couple dozen doors added net. Now, of course, gross, we added hundreds of doors because we're churning out. I'm curious about, so You mentioned, you know, you're private equity backed. I know some of the guys at LP First Capital, great company, really like what they're doing. Are you guys in acquisition mode right now? Like if just if there's anyone listening, you know, are you one of the people they should be chatting with if they're thinking about selling their management company?

Yes.

Northpointe, that is. Maybe.

Absolutely. Yeah. Yeah. Northpointe. Yeah. Yeah. We'd love to talk to you. Yes. We're in big time buy mode. We have a deal that should close in 30 to 45 days. It's in the Midwest, not Columbus. It's, it's—

there's no one left to buy over here. They all got bought out by the big players except for us.

Mm-hmm. No, it's, it's really exciting. So that's over 1,000 doors, that portfolio. So it's all about— to me, it's about how well do you integrate and how well do you do the churn that's been massive in the industry, especially SFR. Like, multi hasn't been as exposed. And I have a lot of friends in the private equity space and that they've told me personally, that's why they couldn't wrap their mind around investing in SFR rollup, you know, property management rollup idea because of what they call the melting iceberg. Yes. It's when you buy a company and then it's like, dude, all your owners get spooked, everything changes. They get scared and then they go to the next competitor. And as we know with our PMA is very easy to leave and go to the next owner. Yeah. So the group that can solve that melting iceberg problem is gonna have massive, mass— they're, they're gonna become the gray star of our space. They're gonna be the top on the leaderboard and they're gonna access that power law distribution I've written about. They'll be far and away number one. That's where Northpoint is aiming to be, and we will be.

I've been thinking a lot about this melting iceberg problem recently, and I'd love to get your take on some of my recent thoughts on it. So, First thing is when you buy a property management company, you need to understand that in normal times, the average property management company is churning 20% per year, every year normally. So what do you think is going to happen when you buy a property management company? You think churn is going to go up or down? It's going to go up. So even if you, even if you somehow perfectly executed the acquisition, and nothing changed from the perspective of the owner. 20% of the owners you bought, let's say you closed on January 1st of this year, by December 31st of this year, 20% of those owners gone. Gone. You made a few months of management fees off those owners. And the next year, another 20%. Next year, another 20%. So that's the melting iceberg. And I think buyers need to know this and they need to factor it into their acquisition and Also, you should, by the way, not assume that the churn won't change. You should assume it would go up because when, just like you articulated, when a property management company, when a property owner learns that their property management company that they use has been sold, they're going to take that opportunity to think about, you know, maybe I should just sell. I've been thinking about selling anyway. Let me just sell it. Or they're going to shop around or they're going to be like, you know what, times are tough. I'm going to, how hard can this be? I'll just manage it myself. So that's a huge challenge for, for these roll-up groups is this churn issue. And just informally speaking to a bunch of them, it's been brutal. I mean, I talked to a guy the other day who came in and eventually worked his way up to COO at one of these larger groups several years ago. And that company was experiencing, it was experiencing double-digit churn per month at that company. That's how bad it can get. So, all right. So a couple other thoughts. I don't think that's anything new, but You know, in the, in the SaaS world, they don't use, they don't look at what they would call logo churn, which is what we look at. That's client churn. They look at NRR, net revenue retention, I think is what it is. And that's like, what percent of your revenue did you retain every year? And if you're thinking like, how could those things be different? Well, what they do in SaaS is over time they roll out new products and new features and they charge for them. So the revenue, what we would call the revenue per unit, or actually it's revenue per client, goes up every year as they roll out new products, new features, raise prices, they add ACH fees or whatever it is. So even if they lose a certain percentage of their customers every year, the existing customers pay more. And so that net revenue retention could be, could be zero or could be slightly increasing even as logo churn exists and is, you know, could be significant. So but property managers, we have this problem of we only have one product to sell, which is property management. And unless we find a way to upsell our owners on other products and services and features, our, our net revenue retention is always going to be negative. So that's another piece of this I've been thinking a lot about. And we talk about that melting iceberg and sort of the private equity guys who look at this. That's what they're accustomed to seeing. And if we can find a way to separate out unit churn from revenue churn, we're going to unlock a core part of like the financialization and institutionalization of our industry.

Deep thoughts, man. I like it.

No charge for that, by the way. Uh, yeah, thank you.

Thank you.

Yeah.

Can I, I'll, I'll respond to a few of them if that's cool.

Yeah, absolutely. Please do.

Yeah. First of all, I think that there's many styles of M&A, right? And when I first started, you know, conceiving of the idea of, well, how would you do an M&A platform roll-up? Well, at first I was thinking, you know, just from straight up in the lab, you know, like the lab experimental, how would I bake this up if I was just strategizing? I would just change the nameplate day one, you know, change all the systems and everything. I'll race, race, race, call it, you know, North Pointe, now you're North Pointe, like day one, right? Takeover day. But actually having—

There's some groups who do that, by the way.

I know, I know. Yeah. And we're going— well, that's why I'm differentiating us. We're not doing that. And the reason is because I think that the data is, is proof positive that it sounds good in the lab, but in actual the field, the execution where the guts, blood and guts happens, which is all business, don't do it, man. Do not do that because it freaks out owners.

And the employees too, by the way.

Yeah. And the employees. So I think, you know, from, from, that's where Northpointe is gonna differentiate to all the owners who may be listening out there. You know, we, we want to actually partner with owners. This is separate from the other big players, I think, in this space that want you to just go away. They want you to just take a vacation, go on a cruise. That's not us. We want you to keep rocking with us, roll over some of your equity, and actually probably have an earnout based on, What's happening with your current book? And, and that way you're much more aligned with us as shareholders. We are shareholders together and we, we keep your, your name and we go to market together to your owners and say, hey, you know what, this is brand new, but actually it's going to support you better because now you have a much more, much bigger platform behind you. So the consistency, the consistency, the reliability, the, the standards have just gone up and they've not gone down. And truly, I think that's going to make us a much better buyer out there. But, but, you know, we're going to lose out on certain people that just want to say goodbye. And I don't think that's, that's our preferred owner. You know, our preferred owner is that, that person that still has gas in the tank and wants to go kill it. Maybe they want to transition from doing ops all day to doing biz dev because they love biz dev. You know, I talked to an owner just like this recently, world, very classy owner. And that person told me, yeah, she's, she's like, yeah, I would love to do a small multifamily. Channel because I actually turn that away almost on a weekly basis. I turn away an owner who begs me to do the small multi in my market, but I just can't do it.

Yeah. So multifamily is easy. It's the same as single family. We've been doing it since day one.

Well, in her experience, you know, this is what I tell some of my team though, Peter, like you're Peter, bro. You know, like what's easy for you, edit it.

No, but this is even back when I didn't know anything about anything we were doing it. I mean, a fourplex.

I know, but some people figure it out and some people duplex is the same thing as a single family.

There's, it's no different.

It's, you know, that, that plays the same, but she's talking about 50-unit deals and infill.

Yeah. We've actually struggled with those. We have struggled to retain those. We, we've had a real issue of churning out those owners. That's what happened. I didn't realize that's what you were talking about. So that makes sense then. Please tell me the secrets.

Yes.

Because we, we've not mastered that yet.

Well, and just, just watch the Northpointe journey because you'll, you'll see all of them unfold in real time. We're gonna kill it in that space. We're gonna absolutely, we're gonna have 10,000 doors in that space alone. Very, very quickly. Very quickly. And $10,000 in BTR. Yeah.

How do you think the owner of a 50-unit door property, would you say they're more closely aligned with an institutional owner in terms of show me the reports and the data? Or would you say they're more closely aligned with the mom and pop? Like, hey, that was like my grandmother's chair rail and now it's ruined and I have memories of that. And how could you let this happen?

No, much. Yeah. Much more closely aligned with the institutional owner.

Okay.

Expectation. There's almost certainly they have capital that they're reporting to. So, and now look, I've invested, I've been a sponsor and I've raised capital. I've done the whole stack, you know, I've done large-scale multifamily deals. I've done hotel deals, done 300-unit deals, 400-unit deals. So I know how the, I know that owner and I believe, and I know enough of those small owners to know how they think as well.

Got it.

Okay.

Last thought on the melting iceberg problem is that you, when you acquire, when you do a deal to buy a property management company, you, I think like you have to buy the machine that produces the units. You can't, if you just buy the doors, then your, your iceberg is going to melt away. You want to buy— you want to buy a machine that knows how to backfill the doors that it loses every year, which to me looks more like a stock purchase of a branded, well-established management company with leadership in place. Like, that is a machine that knows how to backfill doors that it's losing every year. If you just buy 200 doors off of some brokerage guy, those doors are going to melt in your fingertips. You know what I mean?

Right, right. Totally right. The last thing I'll say about, you know, churn is I was talking to this guy, Moses Kagan. I don't know if you've heard that name.

Yeah, he's been a huge influence on my, you know, journey.

Yeah, I thought so. I, and yeah, and anyway, I was talking to him and he really made it hit home big time. He's like, you know, it wasn't calling it this, but he was really talking about a trust layer. So developing that trust layer between this platform you have and the owners, if you can kind of occupy that space and build trust with your owners, then look, it's property management. Things go wrong. The roof is going to leak, or days on market are going to be more than you want because of some supply-demand thing. But maybe you need to, you know, you can't just have a knee-jerk reaction of like, all right, I'm just going to fire you. So if you have this trust layer where people look and they see a, you know, a living, breathing human person that represents a team that, that is out there grinding it out for you every single day, they're gonna give you grace. And this is, I was telling my team this over the weekend, I wrote a, a big long memo to them, but, but basically one of the ideas I had was like, it's when he told me that it reminded me of doctors and malpractice. So very famous experiment or study. 1997, Malcolm Gladwell wrote about this back in his book called Blink. But it's a fascinating study. People with good bedside manner are doctors, and all they have to do is spend 3 extra minutes, you know, use inclusive language like we versus just like you. We are going to do this, or here's what we're going to do, or look at. They use humor and empathy. They have a bunch of different categories of stuff they do well, right? Mostly it's just being human. Being human is showing up well and caring. But those people, those doctors get sued less. They accept far less, far fewer malpractice suits. And I think the same thing's gonna happen with churn. The people who can build a trust layer to their owners and let them know like, we are grinding it out every single day for you. We're gonna go to extraordinary lengths to preserve your property, care, care for the residents and keep them safe. Be ultra compliant and be as aligned economically as possible with your financial outcomes. Those factors are going to make the melting iceberg go from 20 to 10, and then someone's going to kill it.

I've been thinking a lot about this recently as well, and we're exploring a few, a few, a few components of this with the new PM Trends report. My thesis these days, and I've swung— I've actually swung back and forth on this a couple of times over the last 12 years, but my current thinking is that your clients want to call their property manager. They do not want to call their property management company. And it's a very subtle distinction between those two ideas, but it's extremely powerful. People want to deal with people. They want to know that somebody at this company— and they don't even really care what company they work at— they just want to know that somebody at this company is looking out for them and their property. And when they call that person, they call them back. And they know what's happening. They know about the turn, they know about the eviction, they know about the rent collection. If that's true, like you said, a lot of grace is extended. I'll give you a specific example from the other side of the coin. We bank with Chase because Enterprise doesn't operate in our state. We love Enterprise. We wish we could bank with them, but we bank with Chase and we've been with them for forever. Huge company, right? Of course, we have a— I have a business banker there that has made an effort to get to know me, met him several times. Great guy. His name is AJ. And whenever I have a question now, I get to just go to AJ and he helps me with it. That's obviously a great thing. But I was thinking the other day about like when I call AJ and I have his cell phone number, when I call him, he's like the equivalent of my property manager, right? He works at a large company, but he's the one that helps, helps me access the large resources of this multinational, multi-trillion-dollar company or whatever it is. And I like this guy and I want him to be successful in his career. And he's been really helpful to me. And when I call him on his cell phone, if he doesn't answer, I don't sweat it because I know he's going to call me back in an hour or two. Right now, if I were to call Chase Bank and they didn't answer, I would be furious. I would be like, this company doesn't care. They never answer the phone. Right. And you're already seeing the parallels with your property management company. When we, when, when we look at the PM Trends report, we see that property owners have very high expectations of their property management company in terms of the phone and email response times and things like that. And my, my thesis is that if you assign all of your customers a specific property manager and you give them their number, you're going to get way more grace on everything from phone response times to turn costs to problems with rent collection. Because just like you said, the owner gets this relationship and they're like, this person is working for me. They're trying to make me successful. They're doing their best, right? They're calling me back nights, weekends, occasionally. Like, I know a little bit about them. They don't care at all about my company. My owners do not care about our property management. They don't care about my journey. They don't care about my background. They don't care about our story. They don't care about our values. They do not care about any of that. They just don't. And they don't care about how great our systems are and all the things that we're doing and all of our insurance to protect them. None of that. But if somebody named Sally is their property manager and they know that Sally was at their property the other weekend and noticed that the window was a little sticky and they took care of it for me, Suddenly everything's right in the world. This company is amazing. Sally's the best. Oh, no problem, Sally. Call me back tomorrow. No rush.

Right.

So I don't know how to exactly boil what I just said down into like the direction of the industry or what you guys are doing, but it's something I'm starting to really form a strong opinion about.

Yeah, that's a great reflection. It's kind of similar to the hospital and the doctor. Exactly. They don't care about the hospital. They don't know the administration of the hospital. And what— who's the administrator? They don't. They just know how they got treated in the moment with their doctor when they were sick or their, their, their loved one was dying. That's it. You know? Yeah. So it's so true. And it, it just goes to how you hire. It goes through, I think, leadership because leadership, right, is just trickles down. And so what we talk about, our team will focus on. So we're talking about owner obsession. We're talking about being reliable, trustworthy, economically aligned, you know, being there for owners and responsive. I think that's gonna trickle down. But then of course you have to hire great people with high character, high integrity. You, you really just can't train those things. You have to just hire for them and, and do a good job. Yep.

Totally agree. So I wanna ask you about your experiences in CRANE. So you're, you're a CRANE member and you, uh, did you join in the fall? I can't remember exactly when you jumped in.

Well, actually, uh, so one of the LP First teammates, joined Thomas.

Yep.

Yeah, I think it was IO actually.

Well, Thomas, uh, yeah, they kind of, yeah, that's right. Yeah.

Yeah. They, they, I don't think honestly they're, they're just very, they're amazing. I, I love partnering with them by the way, but they were just so busy that they didn't really utilize the, the Crane stuff. So I took it over from him maybe 2 months ago and I'm, I'm super excited, Peter, to meet some of the Crane folks in the offsite we're having next week. Get some FaceTime with you. But yeah, I've, I've been on all the, the, you know, the email chat, what do you call that? The, the circle inside there.

Yeah. Inside circle. Yeah. The online community. Yep.

Yeah. That's been super helpful. That's been, it's been great. I love what you built.

Yeah, it's fun. You know, you mentioned that multifamily is super competitive and I'm wondering if we're gonna start to see that dynamic enter our space. So far it's very collaborative and a lot of people who enter our industry from other industries remark on how collaborative and friendly everybody is. Not just Crane, but the conferences and NARPM and everything. So I hope we can keep that going because it's— it does make it fun to work in our space.

I think I'd love to, you know, I'm exactly right. I want to keep that going too, because I've received like a very warm welcome from SFR-type folks and it feels like much more like a, like a community, like it's smaller. And I would love to, you know, see us continue that. And what I mean by competitive, I don't even mean like, you know, we're shooting at each other like in multifamily people shoot each other. It's just like for these owners of large assets, they have such, you know, knowable, such knowable options that are out there in the markets. Like very knowable, like Greystar, Asset Living, RPM, and then whoever's good in the local market, you know? So that's where the, like, well, within it, it's kind of friendly, you know, it's like, whatever, you know, we're friendly, we can share ideas and share whatever. But with But the owners know they have such like liquidity of options is what I would call it. Like there's options everywhere. If you want expertise, you want boutique, good. You got that in every market. If you want like large scale, good. They're everywhere. If you want whatever, just a local player, cool. You have that. That's what I mean by competitive.

So competitive. So the, the multifamily property management companies, it's competitive like it's hard to win business and it's competitive like there's a lot of good options for your customers to choose from.

Exactly. But human to human, it still feels— it feels collaborative.

That's good to know.

Yeah. And so different spin on the word.

Does that competitiveness— I mean, that must result in downward pressure on pricing, right? Because you got to win these deals. That's— I mean, that must be how it shows up, I would imagine.

Look, I think at some level, management overall is commoditized. Unfortunately or unfortunately, that's just, that's just how it is. A lot of people are selecting on price or what you actually—

yeah, multi.

I mean, I think to some extent in SFR or they're trying to, they're trying to get you down in pricing because they, they view you as a commodity. Yeah, like totally, you know, so that's where if you can escape that commoditization and you can build like something that's hard to get somewhere else, I think you can go Really, when scale—

would you, would you agree with the characterization of property management as commoditized? Or if so, like, how are you combating that?

I don't know. Well, the reason— one of the reasons why I joined Northpointe is because I think we can escape that, that commoditization.

Well, everyone says that about their own company. We're nothing like the other guys, right? Yeah. They don't know what they're doing. Of course. We've got a whole system here. You wouldn't know.

Exactly. Yeah, we're using AI in ways you never thought of.

Yeah.

It was like, well, no, forget that. But we do, we do think that long-term, if we change some of the fee structure to make it much more aligned with owners, that's something we're already experimenting with. We've, we've taken that to market a couple times and it's been very well received. But just like an NOI-based property management incentivized structure, I think things like that that really can stand out, you break away from the commodity stack. I think. But yeah, because look, at the end of the day, everyone has access to AI workflows, offshore team, like, great, you're gonna do something cool, I'll do it tomorrow. You know, so it's, it's more about like, you know, what kind of people do you have? What, what is your talent bar? What does your talent acquisition machine look like? And then can you actually escape via new pricing models to be more owner-aligned? That's something where we, we're really thinking deeply about that now. How do you price differently?

In SFR, you know, your views do strike me as differentiated. When I talk to most property management company owners, especially, or even, even or especially larger owners, and I've had some big owners on the show, they tend to, they tend to retreat into their tech. And by retreat into their tech, I mean that's what they, that's what they proclaim as their, their moat. Or they wouldn't use those words, but you know, we have unique technology here. We've implemented AIs in certain ways. We've built out our own in-house thus and such. We have the best technology, the best integrations, the best software. And they sort of assume that that's going to result in growth and customer satisfaction and competitiveness with, you know, with other property managers. But what I've heard you articulate has almost— you actually have said the opposite. You're like, whatever your tech is, I can copy that. What you can't, what I, what I, what you can't copy that we're doing has to do with people, has to do with models and strategies. So I do, you know, that is a different perspective from what I hear from most folks. It's refreshing. Say a little more about like specifically with people, how are you tackling this problem of the lack of a scaffolding for the, that, that we talked about early in the show with multifamily that's been around for decades, but we don't have it here. How are you guys addressing that shortfall?

Yeah, well, first of all, thanks for that call out. I'm very adamant about that. Like, just to double-click one more time on that, because I was second chair to building out 10 real estate tech companies as part of the platform that I was formerly part of, where I was CEO of the real estate investment and operating business, but second chair in all these 10 real estate tech companies. So I know how difficult that is. It's insanely, insanely hard. So I look at myself as, um, leader, CEO, that, that just means I'm in a level of service to everyone in the org. That's even, that's just, that's just higher than everyone. I have to serve more. So I have to leverage my time as best as possible to make you more effective down the chain, all the way down to a maintenance tech.

You know, you ever see those upside down org charts? I'm kind of getting 100%.

That's how it is. You know, it's cheesy, but it's actually, if you're a real servant leader, you actually have taken that into your heart and you understand it. And you understand leverage. If I can keep, if I can save everyone an hour of time in the whole team, well, boom, I just won 100 hours this week, you know? So your, your time is the most leveraged time. So, so if my, if I take my most leveraged time and I have to think about how to build this tech thing, and I think I'm gonna build it better than AppFolio, who's spending $150 million per year on R&D, which is real estate, which is tech technology, which is Software devs, product managers, designers, stuff I know, I've seen. I think that's the ultimate lack of humility. I just don't. So if I'm an owner, I would want to run away from those folks and go to the folks that are single-minded, obsessed with owner, with owner outcomes and not building some fancy tech thing that is never going to work as well as Appfolio anyway. So we're going full stack Appfolio.

This episode is sponsored by Appfolio. We'll make sure this episode is not sponsored by Appfolio because yeah. Sorry, but—

or whoever you use, I think you should go. And there's kind of a rebundling that's happening in technology.

Yeah.

Which I think is good. There would be some point solutions that are amazing that continue to exist. But anyway, it's all about the people. How do we find the people? Was that your question, Peter?

Yeah. My question is like, how do you— the scaffolding that doesn't exist, how do you get these folks trained up? And yeah, because I think a lot of property managers have a a talent pipeline opportunity?

Yeah, I think, I think there'll be some blend with getting best-in-class SFR folks because look, now there has been a decade of people building out some really wonderful firms that I admire, both on the pure property management side and the institutional SFR property management side. So get some of them. But I think, I think what we're going to be uniquely good at is, is getting multifamily talent in the door and helping them plug into a new program. And so they'll bring some of the, some of the DNA from the multifamily space and we'll of course have our DNA of how we've built as a company for 20 years and it'll kind of be this mashup and then we'll have a Cambrian explosion.

Yeah, there, there is an interesting, you know, you, you've mentioned a couple times through the show of like multifamily kind of coming down into BTR and, and SFR kind of coming up into small and medium-sized multifamily. There is a really interesting blend that's happening in the middle there. And I wonder which of the— I wonder sort of like where the endgame is there. Like, is it the case that single family, because what we do is so much harder in a lot of ways because our properties are spread out all over the place, like, are we going to disrupt and move upmarket and start eating away at the market share of the big multifamily guys because we just are so lean and gritty and we figured out everything the hard way? Or are they going to come down into our space and be like, listen, idiots, we've been doing this for 20 years. Here's how you do things, right? You have a leasing agent, you know, whatever their opinions about how to do things. I wonder where, like, if you picture like the battle lines, like they're going to kind of move back and forth. I wonder where that's all going to shake out.

Well, my prediction is one of the reasons why I joined Northpointe and see such big opportunities that we're we're uniquely poised, we SFR, to go up channel because like The Innovator's Dilemma is a book I love. And when you have your business model kind of everything gears up to just go take care of that, that, that what drives the most revenue in your business. And for large-scale multifamily operators, that's everything is in service of that 100 or 200-unit-plus deal. So when you try to build something else that's down stream, the numbers aren't the same, you know, the revenue is not the same.

It gets starved for resources.

Yeah, it gets starved for resources, or it even like parts of the organization or organism will attack this other new thing. So they have a real tough time. We actually tried to do this and we got our butts kicked a little bit at my former company. We had to like retreat and just say, all right, we're 150-unit-plus operator. This is what we do. Let's stick to it. And So I think the innovator's dilemma is going to make it hard for the large guys to come down and it's going to be comparatively easier for us to go up.

I love that. I think I saw your LinkedIn post on that. I enjoyed— I shared that around a little bit. I think there's really something to that. Of course, I would say that because I'm an SFR. So we're, you know, we're the good guys. We're going to conquer all.

Yeah, no. Yeah, that's right.

That's right. Awesome. Well, we're over an hour. That went by really fast and really enjoyed talking with you, getting to know you better and hearing about your story. So Appreciate you coming on the show today. For people who want to follow along with your journey in Northpointe, where is the best place for them to do that?

Well, I'm a frequent poster on LinkedIn, perhaps annoyingly so, but yeah, it's been, it's been fun. I've gotten great connections through there. So if you ever want to reach out, of course do it. I always give out my cell phone number too. Like, hit me up, text me, let's exchange ideas. Or if you're an owner and you have just some thoughts about your portfolio, I'd love to hear it. It's 845-629-1808.

Awesome.

So hit, hit me up that way.

Well, we appreciate that, Dan, and thanks again. This has been great.

Peter, I'm a huge fan. Thank you so much, man.

All right. Thanks again.

Thank you.

I hope you have enjoyed this episode. If you like the show and want to get connected to the community, you can follow me on Twitter @pslohmann. And subscribe to my email newsletter on my website, peterlohmann.com. I try to share as much valuable property management content as I can on a regular basis. Thanks again for listening and have a great week.