Transcript 0:00 So tell me a little bit about Scholastic Capital. Why single family homes after all this grandiose stuff you've been a part of? If you buy homes in good school districts, you've got the demand. 0:07 If there's, if it's a supply constrained area, you'll also have limited supply. Like, you've got the ability to really set the market. So what was that experience like for you? 0:14 It was life-changing in a lot of different ways. I was able to be in rooms where I just, like, sh- had no business being in. 0:19 Welcome to the Purpose Driven Capital podcast, where we help you align your money with your mission and maximize your impact. Here's your host, Matt Johns. 0:28 Today, I had a great conversation with Sean O'Dowd, managing partner of Scholastic Capital, a real estate private equity firm that targets single family homes in elite school districts in Midwest United States. 0:40 Now, before starting Scholastic Capital, Sean used his experience as a consultant at Boston Consulting Group to start his own consulting firm, The O'Dowd Group. 0:49 He worked on strategy creation and implementation for Fortune 500 companies, and performed pre-deal diligence for leading private equity firms, while helping them establish value creation for their portfolio companies. 1:01 Sean is a super interesting guy. Scholastic Capital actually grew organically out of his own real estate investing that he tested over multiple years. 1:10 In addition to Scholastic, Sean hosts his own podcast called Your Daily Real Estate Investing Tip. He even rowed for the varsity crew team at UPenn. Welcome to my conversation with Sean O'Dowd. 1:21 How far along are you on number three? We are, uh, official due date is fir- first week of March, but it's most likely gonna be February, 'cause the first two were pretty early. Oh, man, how exciting. Are you guys ready? 1:33 I think so. I think so. It's harder with number three, 'cause it's like w- we think we... 1:40 We're, we're less, like, worried than we probably should be, but, 'cause it's like, "Ah, we've done it a couple of times and everything," but maybe we forgot something that we should have been thinking about. 1:48 [laughs] Yeah. Now one thing, I don't know if you know this, but we both share a common background at our universities. We were both on the crew team. Now- Mm... 1:56 granted, I was on the club team, and, you know, I kinda walked on, did it for a semester, and I was done. You were recruited into an Ivy League school crew team. So what was that experience like? 2:05 How did you get into crew, uh, rowing in general? What does that do for you? What have you learned from that? Yeah, you know, rowing is kind of, for lack of better words, it was an accident. 2:13 So I moved a ton growing up, and I lived in a school district when I was in, I wanna say seventh grade, where we had gym class in the weight room, and the weight room had an erg, which were one of those indoor rowing machines- Mm-hmm... 2:25 that sometimes you see in gyms. 2:26 So I, I got on the, the erg, and don't, no clue what it did, no clue what it was, but I did decently enough that my mom was actually a teacher at the school, and the gym teacher came and found her and was like, "Hey, like you should really, you should really sign this guy up to go do some rowing." 2:40 Didn't do anything with it. My mom spent like five or six years telling me like, "Oh, you, you should go join up." I started rowing junior year of high school, and it quickly became something I, I, I was good at. 2:53 Fortunate to have a bunch of offers across the Ivy League. 2:56 And to your point on, like, from learning from it, rowing is interesting, where I think it's the sport with the biggest ratio between time spent practicing versus time spent competing. 3:05 So just the, like the consistency of the lot of time on the water, a lot of time on the erg- Yeah, it's a lot... and very little reward. It just, it was fun though. 3:13 I'm glad I did it, and I think it, I think I learned a lot from it. 3:16 Yeah, 'cause you, you always see, like, the motivational banners of the teamwork and things like that, but, I mean, really it's, it, there's a lot to it that people don't recognize, unless you've been in the boat and you've done the actual exercise yourself. 3:28 Yeah. It's, it's one of those things where, like, if it looks easy, it means it's actually exceptionally hard. And if it looks hard- [laughs] Yeah... 3:34 it means something, something's going wrong in how it's, what they're doing it. 3:38 You parlayed that into a great education at UPenn, and then you moved into BCG right from there, and jumped in and did the consulting thing for a couple of years. What did you learn from that experience? 3:47 'Cause that's kind of one of the big things that a lot of people in the professional business world speak about, and it gives tremendous experience leading into greater things usually down the road. 3:54 So what was that experience like for you? It was life-changing in a lot of different ways. I met my wife, actually, at BCG, so from one standpoint, like, that alone was fantastic. But it was one of those things- Mm... 4:03 where I, I, I was able to be in rooms where I just, like, sh- had no business being in. 4:08 Literally my first project, and a week into the first project, it was a due diligence for a company where I had seen the CEO on CNBC three days prior, and now I was sitting next to him in a boardroom telling him about an acquisition and, like, correcting him on an assumption that was wrong. 4:25 And it's kind of ridiculous, because, like, I had no business being in that room. 4:30 But the, the experience of being there and seeing how these decisions are made and, and what's right, what's wrong, was fascinating, and something that I just, uh, you can't get that experience anywhere else. 4:40 And the ability to have kind of seen so much in such a short period of time was life-changing in a lot of ways. Is there something that stands out to you as one experience that just pops when you think back to that time? 4:50 There's a couple. I've, two come to mind, actually. 4:53 So the first one was, I was working for a client, and there was something going on in Australia, and they couldn't figure it out, but Australia was just, like, five years ahead of the rest of the world. 5:02 So they sent me and one other guy to fly to Australia for three days. 5:05 We spent more time on the plane than we actually did there, but I, I spent literally a couple days walking around mines in Australia to figure out what was going on, and talking with a bunch of Australian miners, then flew back to go give the CEO the headline of, of what was going on. 5:20 And then the other one was that boardroom situation. Like the really- Mm... really, really awesome, awesome acquisition. 5:26 And we spent a lot of time talking with battery PhDs, and then it gave us the ability to go talk to the CEO of, like, "Hey, this is what the battery PhDs are saying, and, and why it may or may not be what is an acquisition that you actually wanna go make for your company." 5:40 But those experiences were... 5:41 It w- it was a big learning in, like, hey, if you wanna get something done and get some- something done quickly, here's how you go from we know nothing to we have a pretty educated position in a two-week period. 5:51 And that's been really helpful from just like a just get stuff done quickly in a way that, that moves the ball forward. So from there, you started your own consulting firm. 5:59 You worked with some major companies, the Fortune 500 companies, some major private equity firms And from that, it's led into Scholastic Capital. So tell me a little bit about S- Scholastic Capital. 6:08 Why single family homes after all this grandiose stuff you've been a part of? [laughs] That... Tell me more about that. Yeah, for sure. So the Scholastic Capital standpoint, it was really a couple different things. 6:18 So my, my mom was a teacher growing up, so I had that experience with my mom being a teacher. And then I moved 22 times before I went to off to college. Mm-hmm. I went off to Penn. 6:28 So I was moving basically every single year, and my mom's a teacher. 6:33 And as part of that process, when I was 10, 11, 12, 13, 14 years old, I started noticing, like, hey, it doesn't matter where we live, there is always a really good school district in that area, where everybody knows the name of that school district. 6:45 It's the place that everybody wants to send their kids. People kind of pull out all the stops to get into it. 6:49 It's like, oh, this is kind of an interesting universal human thing of, like, if you've got kids, I've got two, now soon to be three, like, you, you wanna try to get your kids into the best school district. 7:00 And with the BCG experience, I started thinking about acquiring real estate through that lens of supply and demand. 7:08 Like, what- what's gonna give you an asset that's got a lot of demand to be there and not a lot of supply? So had the thesis is if you buy homes in good school districts, you've got the demand. 7:17 If there's s- a supply constraint area, you'll also have limited supply, like, you've got the ability to really set the market. 7:24 So I had the thesis and started buying homes with the, the profit I was making from my consulting business. So when you're looking at single family homes, why single family- Mm-hmm... 7:32 as opposed to, say, multifamily or something like that? 7:35 What I care most about is the market dynamics of, like, really good school district, really high demand, and then that limited marketed supply that we talked about, because it gives us the ability to set rent and set prices and, and have long-term leases. 7:46 The reason why single family homes is that is the only asset class I could find that has that just extreme mismatch of supply and demand. We buy homes in really good school districts. 7:57 These are areas that don't have multifamily. Like, their multifamily hasn't been built. Mm. They are the final boss of NIMBY. 8:04 They prevent multifamily construction in these areas, and the byproduct is national average is 60, 65% of homes are, of housing units are owner occupied, meaning somebody owns the place that they live in. 8:17 In the zip codes that we're buying, we're buying in places that are 90% owner occupied, and it's 90% owner occupied 'cause there is no multifamily. So- Mm-hmm... 8:26 what I care most about is actually the dynamics in the town, and then the best way for me to access that is through single family houses. 8:32 So dive a little bit more into your strategy, though, with the whole Scholastic piece. You're going to these great- Mm-hmm... school districts. What's the benefit of that? 8:39 And you like to have these longer term leases too, so maybe you can tell us a little bit about that too. Yeah, for sure. 8:45 So the interesting thing about this is if single family homes in really good school districts, our most common tenant moves in when the eldest child is 14, meaning they're basically moving in for high school. 8:56 Typically, our average tenant makes around $210,000 a year. Our two most common occupation amongst tenants are, uh, doctor and software engineer, and they're typically moving 10, 15 minutes or less. 9:06 So to make it the simplest possible, it's basically a doctor looking to get their kids into a really good high school. 9:11 And for us, the byproduct of that is when they are moving in, their s- child is a freshman, they have zero intention of leaving until their child gets a diploma and graduates. 9:22 They really want the kids to go to a great high school, so they go to a great college. So when someone moves in, like, that's a four-year lease right off the bat because they wanna stay there for, for high school. 9:33 If you've got multiple kids, the most common American family is two kids two years apart, well, that's a six-year occupancy period from the time the first kid starts high school until the second kid graduates. Mm. 9:44 So because the tenants aren't planning on moving, we can set the, set a lease, a period of three, four, five years, annual escalators on that lease, really saves us on the vacancy cost. 9:55 And again, a tenant making $210,000 a year is a highly qualified tenant. We, we don't really have issues with non-payment to the extent that you sometimes see in other asset classes across single family. 10:08 Now, how are you approaching the asset selection process of choosing which homes you're actually going to buy? How are you sourcing these deals, and how are you selecting which ones specifically you wanna target? Yeah. 10:18 So there's a lot of different steps to this process. So we think of it first from, like, a zip code perspective. Then we think of it from, like, an asset class perspective. So what zip codes? 10:25 Where do we wanna actually buy these homes? The way that we did that is a couple step process. 10:30 Number one, we wanna preserve the ability to sell this portfolio down the line, 10, 20 year, 10, 12 years down the line to Invitation, Progress, Blackstone, any one of the big single family funds. 10:41 So I, I called them all up. I tapped the Penn network and said, "Hey, if we build you this portfolio and try to sell it to you 10 years down the line, where are you gonna want these homes? 10:50 What do you want them to look like?" And the independent answer that they all independently gave me was Upper Midwest. 10:56 If you build this portfolio for this kind of thing, Upper Midwest is where we're gonna be most excited about it. So great. That makes it a lot easier. 11:03 We were initially thinking national, Palo Alto, Greenwich, Connecticut, Highland Park, Dallas. Now we don't need to do that. We're focused Upper Midwest. It's in your backyard, right? Backyard. 11:12 I'm in Chicago, so it actually worked out, it actually worked out really well. So that gave us where. Then we started zeroing in on those zip codes with really great school districts. 11:20 Our best data set on that, we've got a data set that shows what percent of high school graduates go to the Ivy Leagues. 11:25 There's a magic percentage in there where if it's above that percentage threshold, we can charge more rent. So that gave us the zip codes. Then it's actually the houses. 11:33 Again, those conversations with those guys were actually very helpful. My favorite example on that is they don't wanna buy a home on a street that's a speed limit of 25 miles an hour, or faster than 25 miles an hour. 11:44 It's gotta be 25 mile an hour speed limit street or less. So for us, when we go out and buy homes, it actually makes it very easy where we've got software that we've built. Every day, new homes hit the market. 11:54 It gets dumped through our software, gets taken out automatically if it's got 17 different things that we're not looking for, like a 45 mile an hour speed limit street. 12:04 Then we do actually do physical and manual underwriting on top of that to see, uh, which homes we actually wanna buy. Does it end up getting pretty competitive in the bid process for these kinds of homes? 12:13 It does because it's great areas, and these are, these are really high-quality homes. Our average home is 3.1 beds, 2.2 baths, 1,760 square feet. Average purchase price is 487,700. 12:25 So it's, it's basically a starter home in a really high-end area. There's a lot of interest in those homes. It'll hit the market at 9:00 AM. It'll be off market and under contract by noon most days. 12:34 So we need to go fast, and that's why we've taken the time to build out that custom software because we basically need a home to hit the market. 12:42 We finish the automatic underwriting, which cuts out about 90% of the homes within a minute. We finish our actual manual underwriting within an hour. 12:51 We are almost always first offer, and we win 55.1% of the offers we make because we're fast. We don't have a buyer's agent, so the listing agent can keep all the commission themselves. 13:02 They steal their clients to us, and we can move quickly to lock up the good homes. And then you created the system. It's proprietary to you, right? It is. Correct. It's proprietary to us. 13:12 Now, you developed this, though, on your own as you were going through and just getting into, in, uh, investment real estate when you were running your consulting firm. 13:19 So how was your testing process, I guess, is the right question, as you were figuring out this thesis? Yeah, for sure. 13:25 So the last thing I wanted to do was start a fund and be like, "Hey, come invest in this idea," and it actually being exactly that, an idea. 13:32 So I was basically using all of the money that I was making from my consulting business to buy homes myself to test the h- test this thesis before actually turning this into a fund. 13:42 So over, uh, about a three-year period, was buying homes, was personally doing every single tour with every tenant to ask them about why they were moving, what they were looking for, did all the property management to really build confidence and tweak and adjust the thesis before we actually turned it around into a fund and said, "Hey, now we're ready for business to, to work with outside capital." 14:03 I've been a part of managing single-family homes. It's, it's fun. [laughs] You get some good relationships with folks, but it gets hard at scale. I mean, w- with multifamily, they're all right there, right? Mm-hmm. 14:11 You got 100 tenants and 100 doors right on your, uh, doorstep there. But with single family, they could be anywhere scattered in these various zip codes. How on earth are you managing? 14:19 Because now you've got pretty good portfolio now, but you're projecting many, many more. Uh-huh. How are you scaling the management of these properties over time? 14:28 Yeah, so the, the management piece and is the hardest part because this is an ops game at the end of the day. And for us, the way that we do this, it really comes down to data. 14:36 So when we're acquiring homes, we are doing a specific inspection process on them, and a big part of that is we're just taking as much data as we can. 14:45 So we have data sets that basically show for every single home in the portfolio, everything in those houses, make, model, serial number for everything. Mm-hmm. 14:54 So I can tell you what the average age of all of our fridges are. I can tell you how many fridges are gonna, are gonna hit at the end of its useful life next year or the year after that and really forever. 15:03 And that has so many benefits for us. One of it is just from a pure FP&A perspective. 15:08 Like, we can actually forecast and be escrowing appropriately how much money we need to be putting away for new roofs because we know to the day when every roof was replaced. We know- Sure. Go ahead. Oh, FP&A? 15:21 Oh, uh, financial planning analysis. Basically our- Mm... our future for- financial forecasting. We can, we can build out that really detailed forecast. 15:28 But most importantly, actually, is we can keep our tenants happy and manage the properties effectively. 15:33 Like, if we get a call and say, "Hey, the, the furnace at 123 Main Street is out," well, when we call the HVAC company, we're not saying like, "Hey, can you go over to 123 Main Street, please?" 15:42 We're saying, "Hey, furnace company, I need you to go to 123 Main Street. The furnace is a Lennox 1234. It's this model. It was installed in this year. Based off its last three service calls, we think the issue is this. 15:54 Make sure you bring the parts for it." And that- You project what the issue is, too. Correct. This is a combination of a bunch of different softwares that enables us to do that. 16:01 But the beauty of this is our vendors love us because we're the easiest client they've ever had. It's a one-trip call. They go straight there, they bring the parts, they fix it, they head home. 16:10 Our tenants are thrilled because the issue's fixed immediately. The vendors doesn't need to go there and then go back to the shop to get something and then come back the next day with another guy to help him out. 16:19 It's just bam, bam, bam, bam, bam because we've got this data, and that's the most important part is, like, you have to build it with the data from the ground up. 16:26 It's really hard to do this retroactively because once tenants are in homes, you can't go in there with a clipboard and be like, "Hey, I'd like to go through and take serial numbers of all-" That's right... 16:34 "everything in the house." You have to do it from the front. Yeah, and I, I would imagine there's some economy of scale here to this, too. There is, exactly. 16:42 I mean, we are clustered across the upper Midwest, so our vendors overlap, meaning we have primary and secondary and challenger vendors that are all in the same area. 16:52 So we, we can get some negotiation r- power with them because we, we do a lot of work with them. And again, we make their lives really easy. 16:59 Our goal is to be the easiest client they ever work with because we've got this data. We're, we're keeping them sharp. They don't need to waste their time. They can, they can get in and get out when they fix our homes. 17:08 Yeah, but your plan is not to manage all these properties yourself over time, right? It's not. So we have a third-party property management company that we work with is, we call them, like, first line of defense. 17:17 Like, they pick up the phone when the tenant calls. What's unique about them is it's, it's a true partnership model compared to what you traditionally see with the property manager. 17:26 We, uh, for example, work out of the same software, so I can literally listen to the phone calls and listen to the recordings of the phone calls the property manager has with our tenants and vice versa, rather than us just getting a report at the end of the month, for example. 17:39 You're obviously an incredibly data-driven person. [laughs] You talk about metrics in a number of different areas. So- Yeah... how do you use metrics as an investor, I guess, to monitor your holdings? 17:48 Uh, you talked about the individual pieces of the properties themselves, but is there a grander- Mm-hmm... use of metrics, too, of looking at the neighborhoods or looking at the zip codes that you're targeting? Yeah. 17:58 We've got metrics for just about everything in terms of, like- Uh-huh... what we look for, and, like, everything is either red, yellow, green. We're within scope, we're slightly out of scope, or we're missing scope. 18:06 And, I mean, the ones that matter most for us are for, at the end of the day, for our investors is, like, what does this look like for them? What are they actually getting out of it? 18:13 And what's kind of unique about us is because we've got the multi-year leases, we've got a little bit more security in our, our financial planning going forward, is we actually pay out monthly distributions to our investors. 18:23 So that matters to our investors. They have the ability to reinvest them if they like, or they can take them as cash. About 50/50 do both. Distributions paid out monthly. 18:32 And what's fun about that is it's not including the depreciation. So we do pass the depreciation back to investors through Keg 1. So how are you tracking all these metrics? 18:41 Is it something where you actually, uh, have it automated, or are you going through one by one and putting check boxes and red li- red, yellow, green? How does it work? Yep. 18:48 So we, we have a variety of different ways that we do it. The most important of which is what we call the scorecard, and it is, it is an automated system where it's basically pulling data across 19:00 10, 15, 20 different softwares that we use, and then kind of aggregates it into one big thing, and then 9:00 AM it's sent to our Slack channel every morning. 19:08 The beauty of my ops manager, Mira, who put this all together, and it's a very kind of useful one. And then within that, you can kind of think of that as, like, the signpost. So if everything looks green, great. 19:20 If something looks yellow or red, then I can then go click in and go to the specific software system and say, "Hey, our maintenance spend was a little bit higher than I expected over the last week. It's now yellow. 19:30 Like, why? What's going on?" And then we can go into the system and actually get much more detail out as to, as to what the exact, uh, issue is. 19:37 Now, I love what you said earlier about the exit, and I'm sure this all plays in well too, because you've got all these metrics you can keep up with for the life of the ownership of each of these homes. 19:46 But thinking about the exit down the road, how are you preparing for that? What does that look like to you? I know... And I love that you called all these big guys and, and asked them what they would be looking for. 19:55 Mm-hmm. So w- what is that process looking like, and what is that end exit looking like for you? Yeah. So I, I have two customers. Customer number one is my investors, and I, I work for them today and every day. 20:08 Customer number two is probably some kid out there who's 10 to 12 years old and is in middle school right now because that kid, a decade from now, 12 years from now, is gonna be an analyst at Blackstone. 20:21 And in a lot of ways, like, my job is working for him right now because he will be the one who goes through our data room, or she, will be the one to go through our data room first and put together a first pass of the investment memo that then goes to the VP and then eventually gets up to IC. 20:36 And my job is to make that 10 or 12-year-old's life as easy as it possibly can be 10, 12 years down the line, and he thinks Gloss is the easiest diligence they've ever done. 20:45 So for us, like, it's basically preemptively building our data room now, and that goes back to all of the data that we have now. 20:51 It's like when we give this nice package over to them, I want them to be able to say, like, "Okay, here's, here's the serial number of every single fridge, and here's the serial number of every single furnace." 21:02 They can see exactly how old it is. They know they've got years of useful life in it left. Like, this is a pretty good asset. 21:08 A nice, tidy package of every single service record that we've ever done for every single one of the houses. 21:14 The invoices for every, every repair we've ever paid on all the houses beautifully labeled, kind of structured, put together, and just make it, like, the easiest possible diligence that we possibly can because if that customer's happy, if he can write, or she can write a really good memo for IC, then my main customer, my investors, get the best possible return out of the money. 21:35 And that's a brilliant tie-in to your BCG days, too, because I'm sure you were that analyst in the room at some point, too, and you were going through those same documents, right? I was that analyst. 21:44 I've gone through it many, many, many times. [laughs] And that's why, that's why I care about it. And it sounds ridiculous, but it's, it is true. 21:50 Like, it is a lot easier to build a convincing, strong case for an acquisition when the data's very clean, when it's easy to chase, trace through the records what's going on. 22:00 When it's messier, it's harder to do, and even if you try not to, like, you are naturally predisposed to like the thing that's very easy to go through versus the difficult thing to go to. 22:09 Now, I'm thinking about liquidity too because there's a bit of a, a timeframe here- Mm-hmm... before that 12-year-old becomes 22, 24, right? [laughs] So is there gonna be some liquidity options in, in between? 22:18 Obviously, some houses aren't gonna make it the whole way through in the portfolio. What are your thoughts on that? Yeah, for sure. So the way that we are structured, investors have a five-year lockup. 22:27 So after five years they can raise their hand and say, "Hey, I'd like to withdraw from the fund." 22:31 Honestly, we'd love to do it earlier, it's just if some- if somebody gives us a million dollars, we go buy some houses, and then a day later asks for the money back, like, we can't really sell the homes that quickly. 22:40 But we do have the ability for investors to, to leave after five years. Inevitably, life will happen. 22:46 Some people will, will want the cash out, so we, we have to be thoughtful about maintaining reserves and financial planning so we can make sure that we re- redeem those folks out when, if and when the time comes. 22:56 Now, I, I know you're keenly aware of the news and paying attention to what's going on in current events. 23:00 Are there any political or legislative things that are kind of on your radar right now that could be a concern in any kind of real estate, but particularly the single family side? Yeah, so there's a couple. 23:10 The big two ones is regulation risk and then interest rates. So on regulation risk, there is some negative press about single family homes and whether or not they should be owned by investment institutions or not. 23:21 We have been keeping an eye on it. There was a senator who wrote, like, a rough draft bill that banned single family homes. 23:27 Our legal counsel thought it was, to use his phrase, "Enough loopholes you could drive a truck through." 23:31 And the gentleman actually lost his re-election bid about a month or two ago, so he's no longer in office and, but it is something that we're monitoring and keeping an eye on there. 23:40 On the interest rate side of things, interest rates are interesting. We are hyper-conservative with our leverage that we use, and there's many worlds where we actually don't use any leverage at all. 23:50 Like, we're a pretty high-floor fund, and we wanna make sure that we stay that way. So- Mm... we're not super impacted by interest rates going up because we don't use leverage unless we absolutely have to. 24:02 That being said, if interest rates were to go down to, say, 2%, like, we're gonna, we're gonna take advantage of that or refinance and return capital onto investors if we have the ability to do so. 24:12 When you step back and look at what you're building, what do you think you've- Uh-huh... learned so far, and what do you anticipate learning down the road? 24:18 We've learned a bunch of different things, and there's some, some big, high-level areas that I'll focus on. But we've learned small things, like 80% of our tenant base has a dog. 24:26 We thought it was gonna be closer to 20, 30%. So, like, fences really matter to our tenants- Fascinating... especially in cold areas so they can let the dog out in the winter. 24:34 That was something that we were low on, for sure, in our, uh, our estimates. 24:38 But from a bigger perspective, I think the big thing that we've learned is there is a really underserved element of the North American population who are renters by choice. 24:50 Like there is this stereotype of home ownership is always better and people should own homes if they can. 24:57 For our tenants, uh, more than half of them have actually previously been a homeowner and are choosing to rent instead. And- Hmm... they, they've literally owned homes. 25:06 They could own homes, but they decide to rent, and that's just a cohort that is not thought about in institutional real estate. 25:14 New York are higher in tenants, but you typically see them in high-rises in, in New York City and San Francisco, and they tend to be a little bit younger. 25:22 But there's families who say, "Hey, like, I actually strongly prefer to rent." So that's been a huge learning is just how big of a segment that is and, and how underserved that group is. 25:31 Regarding going forward, I think the big things that we're, we're gonna be focusing out on is how do we, how do we continue to take a strategy that we feel really good about, that's working well, and build out the right team and support structure around the investors that we're really working for. 25:47 So for that, we need to learn about how best to hire the right head of IR, for example. We need to think about, like, how best to make sure our reporting... 25:56 We send reporting out monthly because I pay distributions monthly, so investors need to know why they're getting the amount that they are. But like how can we make our reporting better for our investors? 26:05 Like, those are gonna be long-term, consistent things where we're just constantly tweaking at the margins to make sure we're doing the best job we can for the investors. Well, thanks, Sean. Appreciate this. 26:14 Thank you for your time today, and best of luck with number three. Thank you so much. Appreciate that. [laughs] All right. Take care. Have a good one. You too. 26:22 We hope you enjoyed this episode of the Purpose Driven Capital podcast. If you found this valuable, be sure to like, subscribe and share. Are you ready to align your money with your mission? 26:33 Discover the Purpose Driven Capital framework, access practical tools, and build meaningful connections to grow your movement and multiply your impact at PurposeDrivenCapital.co. 26:43 The views and opinions expressed in this show are solely those of the individuals speaking and do not reflect the views or opinions of Honeyhive Capital, any broker-dealer, investment advisory firm or its sponsors. 26:55 The content is for informational and entertainment purposes only. 26:58 Nothing in this content or any communications from it should be treated as constituting financial investment, legal, tax, or other advice of any kind, or as a recommendation to buy or sell an interest with respect to any investment. 27:11 We look forward to you joining us next time.
