Private equity avoids property-management roll-ups because owners flee to competitors after acquisition, eroding value. The "melting iceberg" problem kills these deals. Whoever solves owner retention will dominate the market and capture outsized returns.
They couldn't wrap their mind around investing in SFR property management roll-up idea because of what they call the melting iceberg. 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 PMAs, it's very easy to leave and go to the next owner. So the group that can solve that melting iceberg problem, they're going to become the gray star of our space. They're going to be the top on the leaderboard and they're going to access that power law distribution I've written about. They'll be far and away number one. That's North Point is aiming to be, and we will be.
