Don Mullen –Single-Family Rentals at Pretium (Capital Allocators, EP.324)

29:31And again, our best years of performance, obviously, were during COVID. We didn't expect that, but we expected the best years of performance to be when people acknowledged the fact there's a housing shortage. And when people were going public, the market had not yet been attuned to the big idea wasn't buying cheap assets. It's owning assets that are in heavy demand. And so our engine, I think we had two points where we had insight that many shared. So that was when we built the business. Many people thought, hey, these are cheap assets, let's buy them. Colony, capital, American homes for rent.

30:07John Gray is arguably the best real estate investor of my lifetime, right? And I say arguably because somebody may disagree with me, but you'd have a hard time finding someone who would disagree with that statement, I think, generally. One of the best real estate investors maybe of all time. So lots of people have that idea. But by 17, 18, 19, we were kind of lonely saying, this is not a trade. This is an industry that's here to stay, that'll be here for a long time because Americans have always rented houses. There's always going to be someone who wants to live in a good community that can't afford to purchase that house.

30:42And there's a cohort of Americans who are increasingly choosing to rent over own because they have other priorities in their life. That's why we stayed with both private as an investment manager and as our assets. And we think that opportunity is only increasing, not decreasing at this moment. because if you looked at what happened, we have 70 % of Americans have mortgages less than 4%. They're not selling their house anytime soon. I think when you go to five, the number is 95%. If the Fed raises rates, as some people are suggesting, one or two more times, mortgages will be seven. At this point, we're crushing more supply than we are actually crushing demand.

31:27So the Fed's in a really awkward spot. But the reality of it is we saw that the mismatch of housing, the ability to scale, the need for rental stock delivered in a better way. And I say a better way because we do service faster than entrepreneurs do, understandably, because they don't have full -time staff. And we have hundreds of people doing service. And so we believe that we've both created a solution for a need as well as made the product better. Where do the opportunities come from? I guess you could bucket into two or three things, Right. So there's the how do you acquire all those houses?

32:04Then how do you service all those houses? Or at least two of the biggest categories. So when we acquire houses, our first fifty nine thousand houses, we bought one at a time. That's usually one of the things that makes people's eyes a little bit like glaze over. Like, how the hell did you do that? How did you do it? So we built the technology that analyzes houses for sale in all the markets we operate in. And so we're able to acquire houses one at a time by sort of driving a proprietary search engine that didn't take, you know, four astrophysicists locked in a black room for months. The ability of off -the -shelf technology to create a lot of the things I'm going to describe is one of the reasons this industry exists.

32:52The technology wasn't ready and cheap enough to build it off the shelf using things like Salesforce and basic modifications of search to have done this in 2000. It really was the technology and the entry point occurred at the same time. What goes into that model that you're looking at when you're looking to buy? We tend to look for 30 -minute commute times, low crime rates, all data you can buy. Good school scores, not great schools, not because we're picking for people, but the Americans like good schools, but very few of them really want to spend the extra money for great schools. We want a front and backyard, so it's a classic American home you dream about if you grew up like I did.

33:39And I think our house was less than 1 ,000 square feet with three boys and one bathroom, so that was not what we're buying. We're instead looking for a three -bedroom, two -bath house from the backyard, an eat -in kitchen, two -car garage, where the predominance of the members in the community are owners. So for many folks, that's the lifetime dream to live in an asset like that. And for renters, it's really a huge advantage because historically, most folks lived in renter -based communities where all the houses were renters. And those were usually lower quality assets with lower quality schools.

34:17That's changed a lot with both our programming as well as others. And so in looking for those houses, it's one of the ways that folks are able to break out of generational poverty by living in ownership communities. But we look for assets like that because we're looking for those aspirational tenants who want to take care of the asset, want to stay there for a long time because they like to live in that community. When you're doing your diligence, when you first went out and bought the $25 million, you mentioned going to these communities, presumably looking at the homes. When you're buying $59 ,000, I'm curious what you miss in that process when you're bringing it to scale.

34:57When we started in the beginning, as I said earlier, we bought houses like a lot of people at the foreclosure sales. And the tail risk was very high. Then we start to look at portfolios that were for sale of houses from Fannie Mae and Bank of America. lots of tail risk in Bethlehem. So the things that we focused on there, just to give examples of risk factors, we used to joke a lot, but a lot of the houses that were in foreclosure like that, they used to call them grow houses because the squatters would break in and the power was still turned on and they would grow weed illegally in these houses.

35:34And that was more common in Southern California and Arizona than it was in other parts of the country where we saw. And so we just didn't want to go through all that drama. So that's why we eliminated the risk of that through unoccupied housing. Even within that, it was an iterative process to improve our inspection skills. So one of the great things in the U .S. system today is the 30 -day inspection period all Americans have. And so we were able to reduce our tail risk further by inspecting roofs and foundations. One of the big events that took place, there was a Chinese sheetrock problem in Florida.

36:17So we quickly put that into our inspection report because that was, you had to rebuild the house because those houses, the timber was fine, but the sheetrock was horrible and damaging and unhealthy. And so we tried an iterative approach to reduce fat tails. What kind of team did you have in place to do these inspections? We believe the acquisition of assets, which I talked about, is critical in all the things we do. Also, servicing the assets in a way that drives return is important. A lot of people think servicing is beta. We think it's a source of alpha. And then financing the assets wisely is equally important.

36:54Building the enterprise for us was, again, an iterative process because there wasn't anybody around doing this. And when we started it, pretty much no one in multifamily thought it was a business. So we had a huge struggle both getting everyone down the value chain. So we had to create our own group of handymen and otherwise inspectors from other fields and train them with our tools that we created. We eventually moved from the old school clipboard with checkboxes and numerical scores that were fed in quickly to custom programmed iPads that fed the data into Salesforce. And so, call it 18 months into this, we used the Salesforce platform to manage workflow for all these inspectors, as well as create documents that they could use in their iPads remotely that would feed the information to the acquisition coordinator and then power the closing process so it was both streamlined and not require emails.

38:03So when the house is agreed upon to be purchased, it alerts and schedules the inspector to go. It alerts the closing department. It alerts the finance department. And they're given timeframes to execute their tasks. So that was a big win for us. And today, how many homes are you able to buy in an average day? Well, it varies a lot. So I think one of the important things to be aware of now is that for both investors and the market generally, where value is changes tremendously. So for many, many years, homeowners would sell assets at very attractive cap rates to institutional investors because homes overall were depressed in price because we came out of that period where they traded amazing discounts.

38:55So I used to say it's really not that important to buy the house at the courthouse steps and get that extra 10 or 15 percent discount because all homes are cheap relative to demographics. All homes. Now we're in a position because of locked -in mortgage rates that all owned homes are rich compared to homes sold by an open door, offer pad, entities that right now the cost of financing is so high they're periodically forced to sell houses at attractive prices to investors. And home builders are in a position where at any given point in time, so in February when mortgages came down, they would sell to retail.

39:36When mortgage rates go up, they'll sell more to us. And so we think one of the critical parts of success right now is being able to source assets from all three and potentially even four, meaning build them yourself, venues. And so today, the bulk of our houses are bought in portfolios. A year ago or 18 months ago, they were bought from owner occupants. And now in portfolios, as an example, we'll probably buy 15 to 20 ,000 houses this year, but almost entirely in portfolio form. Once you own these homes, you mentioned there's an alpha component in servicing. What have you been able to build that's different and better from the servicing capabilities outside of Prudium?

40:21Well, there's a couple of tiers to look at. There's the original small mom and pop home servicers in the communities. When I own houses and those folks service my house, you had NOI margins of like 30%. When we put an asset management layer and create a federation of them and force tech on them, we were able to get to 45%. Once we built our internal structure where we did 100 % of the operations, we were able to drive margins to 65 % and even higher in some portfolios. So what's the difference that we do first versus that tiering? The first thing is what we did was actually save time. So it's not pricing, it's time.

41:07By owning the workflow, we crushed that down to a fraction of what it used to be. The house cash flows more and the house is available for renter sooner. Reducing the cost of turnover by both the quality of maintenance while residents are in the asset and by doing it yourself with your own workers ends up saving money and creates time savings too. So I'd say the peer group of the largest folks, we have similar efficiencies, particularly I'm talking about invitation homes, for example, American Homes for Rent. The next tier down just doesn't have the scale for owning your own workforce, owning the strategic purchasing, being able to rent houses because of your advertising budget in a more efficient way.

41:58So what we've done is capture the mindshare of the prospective residents, deliver the assets more quickly, and deliver them more cost effectively. Each stage of it is tweaking things now at this point. there's a massive easy answer. I'm curious how you think about the exit strategy in this market that you're in. Sure. I think there's a multitude of exit strategies for any portfolio, but let me frame it broadly first and then work my way down. Framing it broadly is I think this will always be an asset class that people invest in like multifamily. It's never going away, right? It's just going to have good years and not good years and houses or apartment buildings that are out of favor.

42:48So the demographics of Detroit don't justify a lot of the old buildings, but new buildings still might attract people. It's like new office does, right? I mean, office has the greatest dispersion today ever in office history. And single family homes will eventually become like a regular real estate asset class. So we will be able to sell portfolios. We saw that pre -interest rate increase. We would sell portfolios to REITs that either use our management or somebody else's management. So I think exiting portfolios will be like every other asset class, where you can sell them in pools to other institutions who like that asset class at that time.

43:29And whether they want a value -added strategy or a new build strategy or just a stable cash flow, that will take place. When you're talking to people about the strategy, what are the common critiques you run into? I think some people are still recovering from the this isn't scalable concept. So there's still like a cohort of people, despite that it's been done and it's like that it's still in front of them, still aren't aware that it can be done. and arguably that you can generate margins very similar to multifamily as an industry. We can provide more value to those folks because people have a predisposition to stay in an asset that's built around a school system longer.

44:14So as I think as an industry, two forces will be at work. We will continue to try to improve the experience of the consumer in the house by driving more efficiency and offering more services. So two or three of the things that all of the industry is focused on, including us, is efficiency of power delivery, another regulatory nightmare. Because if you put solar panels on 100 ,000 houses, guess what? I'm a utility. I don't want to be a utility. I just want to drive efficiency and delivery. So we have to sort that out. The other thing is there's a lot of ways that we touch the consumer and the structure of the market's inefficient.

44:55Like why are we making people pay monthly? instead of when they get their paycheck every two weeks. I think we're going to see things like that. So as a result, I think we'll find that this business will end up being more important to consumers, drive higher returns, and more efficiency for the consumer. The other parts of critiques are that we're taking housing stock away from prospective owners. When people focus on that, they don't focus on as well, at least equally, should be the fact that we're putting people in communities that historically they wouldn't have had the opportunity to live in.

45:29So if you're a 620 FICO score with $60 ,000 worth of debt, making you $150 ,000 or $160 ,000 a year, you weren't living in this community. And so people are raising their children in better school districts and better houses with more aspirational community members because they live in an ownership community. So I think it's a little unfair, both to the industry and our residents, not just us, our residents, that people are trying to eliminate the opportunity for them to live in those communities. The other thing that I think that is underweight is because of our capital, not just ours, but the industry, we're putting billions every year into building new houses that during a cycle like this wouldn't take place.

46:17Homeowners would back away. the imbalance would continue to a greater extreme. So when sales drop down in January because mortgages are too high, we're like, okay, we'll take a billion dollars of houses. So the home builders have come to look at us as the safety net, the lender of less resorts, so to speak. So I think the critique is unfair, that I think we will increasingly serve a great balancing function, both for residents and construction in a way that makes the market less prone to volatility and gives people more aspirational assets to live in. In such a large -scale consumer -facing business, I'm curious how you manage the inevitable PR, whether it's one of those critiques or something goes wrong in a house.

47:04You have to err on the side of helping the resident any way reasonably possible. And so our desire to use our scale when helpful for folks is one of the advantages we bring as an entity. For us, the incremental thousands of dollars to do that is the right thing to do. But mom and pop who have three houses that they're renting can't perform that intervention. Not because they're not well intended, but most of them, that's their business and they're running very tight, similar to what happened during COVID. So during COVID, mom and pop entrepreneurs who were renting assets suffered the most because folks could go into rental moratoriums.

47:49In effect, they couldn't evict people, understandably, but they had to pay their mortgages on those assets. Because we have the scale that we did and so many good residents making payments, we were able to go out and hire 25 people just to specialize in helping the people who couldn't make payments. and help them apply for federal support. So I think the arguments against scale are actually misguided. Scale makes a big difference in helping support both the residents and connectivity to the community, which is a big part of our program for the next two years. As you build this business over time, you touched earlier on adjacencies in opportunities.

48:32How have you thought about taking Predium from the scale you have in single -family rentals to other businesses? Well, I think that the most obvious things that we're going to be focused on is, as we continue to drive the efficiency of asset servicing, we should bring that to multifamily in the same communities that our single -family homes are in. So we're actively seeking out platforms to purchase in those communities or create one. In addition to that, we're focused on our home builder colleagues. Some of the smaller ones, say home builder 15 through 50, they're the ones who are most challenged by what's happened with the regional banking system.

49:15While we don't necessarily think about that impact on the home building industry, it is quite significant for all the smaller and mid -sized home builders. And so we have platforms that have been lending to construction. We're increasing our staff and increasing our capital to be in a position to take on these regional home builders as a part of our ecosystem. And we can be a great support to them because we can both buy the houses, help them buy the land and finance them. And so as a result, we expect to be good partners. So that's another adjacent thing. One of the fastest growing categories is active adult, as most people know.

49:56but basically they are quite similar communities just with older folks in it. By the way, 55 and older isn't that old anymore. Kind of a strange concept, but age has changed tremendously. It's a huge factor in the housing shortage. If you go and look, yes, the millennial generation is the greatest generation in scale since the baby boomers, but the baby boomers don't think they're old yet. And so as a result, they're still living in homes, single family homes, much longer than any generation. If you went back to 1992 and you looked at the data, you turned 60 years old and you moved out of a single family home.

50:37And it was like a rock dropping out of the sky how fast the curve goes down. And you looked at that same curve in 2019 pre -COVID, which is going to make this even more extreme. People don't move out of their house till they're 74. So you took 14 years of inventory that used to come off the market, cut down on the number of homes you're building. So below trend for almost a decade and increase the number of prospective buyers or renters. That's why this is socially extreme. But active adult is where a lot of these folks will end up moving. Actually, I think that it almost be redefined as active adult is over 65, not 55 in many cases.

51:19My parents are 85 and 86, and they live in an active adult community. But with all that being said, we think that's a great opportunity set too, because it's an area that benefits from scale. There's a large amount of ownership. There's not a lot of opportunity for rentership in that community. So if you think about the things that are adjacencies that we think we can use our toolkit for and improve the environment for the residents, active adult housing choice ventures, building communities, and using our financing arm to help build more homes at this point. How do you think about your buyer build decision on one of these adjacent businesses that you want to go into?

51:58When I think about growing businesses for Predium, you have to start top down again. You have to make sure that you're looking at a business that solves a problem for an investor. Can you differentiate the product? Is it a needed product? Is it something that creates an attractive enough return for the risk you're taking? Then you look at it and you say, can I create that in a reasonable way by acquiring a platform or a team? Speed usually does make a difference in these things. Pretty quickly, if it's a relatively new category or a relatively new adjacency, there's either competitors in the space already that have mindshare.

52:39And so you need to be in a position that you can bring some differentiation. I think that acquiring people right at this moment is far more attractive than it is doing it organically. 24 months ago, it was all about organics. Now it's about acquisitions. At this moment, valuations for a lot of alt asset managers have gone down. But a year ago, they were very high and pretty attractive. So there was a lineup of guys all thinking about going public. And all of us who manage these things are humans. So we have a normal array of emotions. What happens is to all of us with an emotional set that's not like Spock on Star Trek is the fact that we're all disappointed that we work so hard that our peak success was a year ago.

53:31And now we have to go back at it again, back into the salt mine, and rebuild a new thing, a new adjacency, get it larger, higher, so that we can have that efficiency for our client. The landscape is scattered with guys with $10 to $30 billion. I'm in the older vintage of these guys, but there's a whole lot of them between 50 and 65. and they've all thought they had reached their goal of being able to take it public or realize value and now they can. I think you're going to see what Angelo Gordon did with TPG is the beginning of a massive wave of this. There's a lot of mergers that are going to take place.

54:14And so when the market wants to do that, when people aren't holding out for the last dollar, but rather saying, I want to make sure that I'm merging with a person I can work with because I have to work again, but I want to make it easier by being bigger. It's better to be acquiring platforms if the culture fits. Going back to one of your first questions, the culture has to fit. The people have to like working together. So I have to make sure that it's a strategic advantage for the clients that you did this, that it doesn't look like over here is a private equity firm and we bought a long, short equity fund.

54:49Yeah, that has nothing to do with each other. So they're is a strategic initiative beyond the leadership getting along. When you can get all those things, I think you're going to see a lot more of this because a lot of people out there trying to figure out what they do next. As you're looking at these types of deals, what are the aspects of the culture that you've built at Predium that you look for to make sure there's a match? One of the things I'd observed that a lot of the folks out there are great investors who actually don't want to run the business of investing. So in some ways, that's the first good fit for us.

55:22It's not like that's what I want to do, but we've done a pretty decent job of it. When I look at the culture within those people, it's being in a position that they're really on a mission to create value for the investors, I think is critically important. I think it's also important that while a lot of people like to be absolute return people, most of the investors that I've come in contact really find that abhorrent. Just like, Like, how do I allocate that into my broader portfolio that the mandate is do whatever the hell you want? So I also like people who are aware of what their clients' needs are, not just focused on driving returns, but that their enterprise fits into the box that the clients want.

56:08So in a way that we add value, that's an ease of access for the clients. culturally, they have to be collaborative, but they also have to want to use the infrastructure to inform their investments. One of the most valuable things that we have is a ton of information about how the economy is performing in a lot of different ways. And so smart people will make use of that tool. I think that what we want is critical thinking. It's a big factor that to look for in someone? Do they like to try to solve complicated problems in a way that creates value for the investment? And I think that's a differentiator for us.

56:50So we don't want someone who is very beta oriented, but looks for complexity and thinks they can add value through complexity by applying the right resources and not looking for hobbyists. You know, so when we talk about non -performing loans, we often say there's professionals and tourists. We want to be professionals only with the deep knowledge, with a specialization that adds the most value because of our knowledge. And the client can choose if they want to be in that asset class or not. Our job isn't to roam the world and buy the cheapest stock off to Shanghai. That's not what we're going to do.

57:27If you put on your Lloyd Blankfein hat and you're talking to someone you're thinking of bringing in, what's the roadmap for what Predium looks like 10 years from now? So our aspirations are to be a $200 billion or $250 billion alt manager, hopefully faster than 10 years. What we want to do in doing that is to create more new categories. I think some of the categories that will morph private credit is going to change a lot over time. We're going to have a default cycle in private credit, which will have an impact on distressed investing. They'll have a new round of expertise required. We focus a lot on intellectual property as a category, whether it's patent portfolios, whether it's financing people successfully defending their patents.

58:13We continue to look at how would we add real estate debt in the right way. I think, as I said earlier, real estate's never had this much dispersion. So as one of my clients said to me the other day, we're like a lot of people, we're only in three categories of new dollars in real estates. We're in sheds, beds, and meds. Sheds being like industrial and logistics, beds being residentials, and meds being medical office. But what that just says to you how to favor like offices, which we all know, but it's going to be a massive restructuring of that space. I suspect it'll spill into others. And so the debt part of that market is going to be great.

58:50Great. So historically, people have mostly done performing real estate debt. I think you're going to see a massive growth in that. So what we want to do is be in a position that over the course of the next five to 10 years, we've added areas that had growth opportunities that add value to clients and in doing so, create an enterprise that will long exist past my time on this earth. Don, I want to ask you a couple of closing questions and we'll let you go. What's your favorite hobby or activity outside of work and family? Is there a better word than dilettante? Because it has such negative connotations.

59:27But let me tell you what I mean by that, because it sounds very like aspirational and royalty. And what I really mean by that is a person who's interested in a lot of things and an expert in none. I collect some wines, but not so great. I have an art collection. I'm not that great. I play golf badly. I ride a bike. I used to be good. I'm not as good, but I love riding my bike. That's my favorite thing to find time to do because I find the relaxation after mile 25 to mile 50 to be some of the best moments outside of work and children. So that may be my thing, but building this business has been pretty encompassing during that.

1:00:06But yeah, I have a lot of interest and I'm really not very good at any of them. What'd you dream about doing when you were a kid? I dreamed of being a detective because unlike other kids in the neighborhood who had a lemonade stand, I opened a private detective stand to look for cats and lost toys and things like that. I think the book was, was it Encyclopedia Brown was a little book about that as a kid. So I used to avidly read them. So certainly at one point, I thought I would be a private detective. And later I read a lot of Lou Archer -type novels as a kid. So I loved that whole era. After that, when I grew up, better set of aspirations, let's say.

1:00:50You know, I liked the guy who had the office down the block who was the insurance salesman because he didn't have to wear a uniform. My dad wore a green uniform. And he didn't go at any of my sporting events. Not because he didn't love them, because he was embarrassed to be there in his uniform. And so I wanted to live a life that didn't have one bathroom for five people, that probably didn't require me to wear a uniform. I was excited to wear a suit, to be quite frankly, I never had one. And got me out of a lovely little town called River Edge, New Jersey, and I just wanted to get out of there.

1:01:25What's your biggest investment pet peeve? Two things. One is, despite people's best efforts, there's still a lot of consensus following. And that's only been amplified over the years by technology -driven investors and traders who focus on trend trading. And so the system really does still not reward people to be outside the system. And that was great for me. It took a long time. This was like we were out in the desert wandering around for seven, eight years before people figured out that it really was a business. The infrastructure of it is a little bit reminiscent of the Apple -IBM computer debate of the 90s where it's like you were never incented to buy an Apple product if you were a corporate purchasing person because you got no penalty for buying IBM and you had a lot of risk if you bought Apple.

1:02:19And there's a lot of that in the investing world where you don't really get a penalty for buying Blackstone in most places. And God bless them. They do a good job. So no one should take that as a critique of them, but a critique of the mindset of many, not all people in this space. I think that people write things off too fast because they often don't have the time or the willingness to explore an idea. And that creates opportunity, though. But it makes the opportunity harder to execute on. What investment mistake did you make that you'll never make again? Timing is a great example here. So personally, I was short in the last tech boom in the early 21st century.

1:03:08And I got squeezed out of my shorts and lost a huge percent of my net worth. That 60 days later, I would have tripled my net worth. so timing which is a classic complaint everyone has and that's the case even in sfr where everybody thought we were late because four or five people were in but the reality is we were early which two people have had the biggest impact on your professional life first that fellow whose father was an elevator repairman has to go at the top of the list because I probably wouldn't have got a job and been invited back because when I left at the end of the summer, there was no plan to hire me back beside being a summer intern.

1:03:52My real first full -time job wasn't a junior credit analyst. My real first full -time job, I was a secretarial assistant that Mike got me on the payrolls. His name is Mike Hyland. He is a terrific guy. He got me on the payroll at First Boston as the assistant to the secretary named Louise. And I actually whited out things on spreadsheets and typed them in because we didn't have Excel back then. And then would take him to the photocopier. And that was my first full -time job on Wall Street. Then there's a bunch of other people, not the least of which is my father, I'd say. And the reason why I'd bring him up is not because he was a mentor on Wall Street, but that what I said my advantage was a willingness to work hard and, as colleagues have said, boil the ocean to find an idea.

1:04:44So I'm famous for getting on a plane with three or four canvas bags of research and finishing the trip to California or the Middle East with down to one canvas bag and then rereading it all on the way back and making notes and figuring out what to do. And that, I think, is the product of my father, who worked extraordinarily hard. His challenges in life put the chip on my shoulder. We had to borrow money from uncles and cousins and stuff like that to buy a house. And so feeling like the poor relatives was one of the important motivators. After that, I've learned from just a ton of great people like Lloyd, I mentioned, Gary Cohn, Tom Harris, Mike Milken, John Goodfriend, Ace Greenberg, Jimmy Cain.

1:05:34Even though a lot of people like to take Jimmy's name in vain, I thought I learned a lot from him. So I had the benefit of almost being a zealig for those who know those old movies of Wall Street because I worked at all these fantastic places with all these brilliant people. And they all taught me something. What was the best advice you ever received? So there was a fellow who worked at Bear Stearns named Richie Metrick, a brilliant man. And they had given me a new business unit to manage. And I went through it and started analyzing the people and laying people off and hiring people. And Richie said to me, why are you firing all these people?

1:06:14He goes, well, I kind of figured out if I could do their job better than they could, I probably should replace them. And he goes, no, stupid. That's why you're in charge.

1:06:27So it gave me a whole different perspective on human resources. So while it might sound like a story about me, it's about me being stupid. And so I had to change my views. That was one of the best pieces of advice I've ever had from someone. All right, Don, last one. What life lesson have you learned that you wish you knew a lot earlier in life? I think I'm very blessed. So everything that's happened, I wouldn't redo. No matter how bad it was or how good it was, I wouldn't go back and change anything. Everyone around me has just been a great experience. Great friends, great family, very happy with everyone.

1:07:07If I had the opportunity to learn something sooner. When I was in my 30s and running a lot of stuff, I had a great sense of anxiety. Because my responsibility vastly exceeded my experience. And during that period of time, I would say that I could have been more magnanimous to the people around me. And as I grew older, I became keenly aware of the fact that you don't meet anyone once. You will meet them almost as many times as the earth goes around the sun. And so as a result, I wish I was a more magnanimous younger person. Nonetheless, being is driving people hard and working hard. And I've found that to be an interesting and amusing thing as I'm in this seat today and traveling the world.

1:07:55I find people who used to work for me from Abu Dhabi to Korea. And I guess I wasn't as bad as I perceived myself to be because so many of them have been nice and helpful and collaborative. But more than a few have said to me, I stood outside your office and was absolutely scared shitless to go in. And that person is the global head of real estate allocation at a very large sovereign wealth fund. Don, thanks so much for sharing your experience, insights, and this incredible story of single family rentals. Thank you so much for the time. I appreciate it. Thanks for listening to this Sponsored Insight.

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