Dallas Tanner, the co-founder, president, and CEO of Invitation Homes (NYSE:INVH), joins Industry Focus host Nick Sciple and Motley Fool Canada analyst Iain Butler to discuss how the rental home industry has changed in the past decade, how Invitation Homes has grown to become America's largest home lessor, and where the company and its market are headed over the next five years.
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This video was recorded on Nov. 4, 2021.
Nick Sciple: Welcome in, everybody! I'm Nick Sciple, joined by Motley Fool Canada analyst Ian Butler. Our special guests today is Dallas Tanner, the co-founder, president, and CEO of Invitation Homes. Founded in 2012. Today, Invitation Homes owns more than 80,000 rental houses, making it the largest owner of rental homes in the United States. Dallas, thanks for joining us.
Dallas Tanner: Awesome, thanks Nick. I'm great to be here and thanks for having me.
Nick Sciple: Great to have you here with us. Just off of that, I said in the intro Invitation now the largest rental home owner in the USA is less than 10 years after the company was founded. To me, that's really remarkable because when I think about home rentals, we've been renting houses for as long as we've been living in houses. How is Invitation gotten so big, so fast? What's special about your company and the market environment that you matured in?
Dallas Tanner: You nailed it. Single-family rental has been going on in this country for 250 years. There's always been landlords that own properties, but it had never been done at a scale or in an institutional fashion where you could drive synergies, economies of scale, better services. I think what you had happened, quite frankly was, in my background it dates into early 2000 with single-family rental. But during the housing crisis for 2007 and 8, you had this glut of supply come through the market, both primarily initially through the distress channel. Nobody could get mortgage, availability of finance basically evaporated. Dodd-Frank came in rightfully so by the way to create tougher lending standards. You had this glut of homes and all of us seller home values dropped 50, 60, 70 percent in some parts of the country. We had already been really active in residential. Me and my partners have been buying manufactured housing developments, multi-family. We're looking at single-family home and we said, "It's not all that different from our multi-family businesses in terms of we could acquire an upscale, we can just start something really meaningful here." Starting with Phoenix we bought about a 1,000 homes. No leverage, on our own, and just work the business model to see if it could act and behave like our other multi-family properties with scale. Sure enough it did. What we found though was that our customer is actually a lot stickier, meaning the average multi-family customer would stay with you about a year-and-a-half, the average single-family home resident, at least in our business today, stays three-years and even beyond, it's getting longer and longer. As you start to think about that, you thought, OK, you have a really sticky customer, you've got great real estate if you anchor it on the right locations. What else can we drive to make this a better experience? By the way, you've got these 65 million people in the millennial cohort coming our way that want to be in a subscription-based economy, not everybody wants to own a home.
Taking a step back, two-thirds of the country own something, and a third of the country leases something across 150 million households we have in the US. It's very normal to have a pretty healthy percentage of your customer base in terms of housing across the country lease. Why isn't anyone done this like with professional standards for making it cool, making things quick, and mobile, and other careers use our economies of scale to actually leverage into other things the customer might want. That's what led us down that path. We ultimately started Invitation Homes in 2012, after a few years of refinement, partner with private equity capital to start the company, took the company public in 2017. It's just been a really successful story of real estate start-up, but really not doing anything that hasn't already existed, just figuring out how to do it better. Usually when innovation spurs around a number of different industries, you usually are taking something that's already been done in one way, shape or form, you figure out how to do a better. Real estate pretty archaic quite frankly. There's a lot of things we do that we've done the same way for the last 30 years. We just found an element of real estate, meaning single-family rental, detach single-family homes, and have figured out a way how to do it better. Expand our services across economies of scale and it's been really successful.
Nick Sciple: You talk about some of the conditions coming out of 2008. Maybe created an environment that attracted capital that allowed the business to grow. Invitation, as you mentioned, it's the largest in its space, but isn't the only operator. What differentiates your approach to that single-family housing space relative to some other operators?
Dallas Tanner: Well, there's a lot of money coming into the space. To your point. There's a lot of capital trying to recreate what we have. Our company today sits at about 80, 85,000 homes on a given day. We're in 16 of what we think are the best markets in the US, that's a differentiator between us and a lot of our peers. Ninety five percent of my revenue in our company comes from the West Coast, Sun Belt, Southeast regions. We've really anchored in on parts of the country where we're seeing household formation and demographic growth at two and half times the US average, and so that's been really meaningful in terms of driving or not driving, I should say. Having us be able to participate in the natural demand that's in the marketplace, has led itself to major outperformance in our portfolio. I think there's a few things, we buy a more expensive home than 95 percent of our peers. Our philosophy has been anchoring on being infill, buy a more expensive product in over time and distance that's going to lend itself to the better schools, great transportation corridors, and parts of the country where people actually want to live. Not because they want to live there because it feels reasonable, they actually want to live there based on location. We have a saying in our business, we are channel agnostic, location-specific, meaning we don't care how we can buy homes, we'll buy them through any channel that makes sense, we're not going to compromise our locations. That's one big difference. The other is that our average price point as I mentioned before, I think last quarter average price point was $450,000 a home, that's a lot higher. Then basically where a majority of the new capital or a lot of our existing peers are investing. We just anchor it on being the high-profile, high-quality portfolio, and by the way, the coolest thing about our business, we think about our customer. Our customer day, we know a lot about him after the last 10 or 11 years. Usually combined household income of about $120,000. They've got one to two children living with them. Typically both parents or partners work in that home. We're able to help that customer leg into a neighborhood they otherwise wouldn't afford and that to us is the social impact part of what we do that we're really proud of. We should have portions, or parts of neighborhoods, or communities that you don't have to necessarily be an owner to be able to live there, that you could through a subscription-based model, lease, or find your way leasing into that lifestyle at a much lower cost, zero down-payment, we'll cover all the maintenance costs and all the long-term CapEx, and that model is really resonating with the customer. I think that higher-price-point, a little more deliberate about where you're investing capital-wise is a big differentiator for our business.
Nick Sciple: You mentioned earlier the millennial demographic, subscription economy, that thing. You also said access to more, maybe a bigger home than you could afford on your own. Who is your typical rental? What do they look like? How did they come to you? Talk about that.
Dallas Tanner: Like I said before, average age is about 39 years old today. You think about what I said before, there's 65 million people between the ages of 25 and 36 coming into our business. We're really well-positioned to meet that demand. The customer falls into three categories. Before I go into those three, believe it or not, two of the three categories could buy a home if they wanted to. I will come back to that in just a second. The first is, and this is the one third or plus or minus on our surveys that really isn't qualified for home-ownership and we call that our group out of necessity, meaning they just need the space. They need the affordability factor and they don't want multi-family. They want the garage, they want the yard, they've got two dogs. By the way, we're total tech-friendly company. They look at us as an alternative to maybe an apartment rent or something else, they go, this is better bank for my buck because on a per square foot basis, it's much cheaper to rent from us than it typically is for multifamily. A third of our customers come out of this necessity bucket. The other two-thirds fall into two categories. One is transitional, meaning they've got some life event going on. There's something going on in their world that is required them to transition for a period of years.
Maybe it's a new job, maybe it's a new marriage, maybe it's a divorce, and they're just figuring things out, testing out of school, testing out a community. Then the third bucket, the other 35 percent, is what we call our preferential. These are people that could absolutely own and they have no interest. They just want to lease. They are a couple of groups there. People like my age that would want like maybe a subscription-based lifestyle. Just say I want to be down-payment light, I want to travel, I want to do all these other things. I want to invest in my Robinhood app versus putting $50,000 down on a home. Then the other is funny enough, like the boomers, we've got these like retirees that are like either I want to be totally cash-light, and I want to invest my money and I want to travel, or pay Invitation Homes. I'd like to run a home from you in Orlando because I'm only going to be here six months of the year visiting grand kids and doing this so that the other half of the year are going to be in Minnesota where I own. We've got this really interesting mix and we're seeing our segment shift more toward transitional and preferentials overtime. Because I think there are plenty of options for people who just need housing. But with that being said, we like that because in our business for debt with national partnerships with Terminix, we have smart home technologies, we have filter programs for clean air where we automatically drop shifting. People want that. A lot of people are like," How do you guys do for me what Costco does for me when I step inside the door of Costco? " Everything's there. I can buy a life jacket, light bulb, and I can buy more meat and produce that I need for a month. I can do it all in one place. I think that's where we're starting to shift to with our approach to the customer. Running a cool house from us in a great neighborhood is just the start. How can we make life simple? We're continuing that evolution internally and finding ways to drive that overall customer experience, because when we do that, they just want to stay with us longer. I think you'll see us get more dynamic in terms of product offerings and also the types of leases we can add over time as we get smarter about what the consumer wants.
Ian Butler: Does that become a growth channel for you becoming a service provider beyond just the host because you are the touch points for any service out there. Is that something to explore in the years ahead? I don't know where things are at, I'm new to the story but curious about.
Dallas Tanner: Absolutely. Early in our journey, we laid this out about two and half years ago at our Investor Day. We said, look, we think we will do $30 million a year of run-rate ancillary revenue, which is pretty small when you consider we have a company that does almost two billion a year. But it was like we wanted to show people the path and we had to get comfortable with getting uncomfortable ourselves and exploring some of this. We also don't want to be gimmicky. We don't want you to move into our home and feel like we're hitting you with a new service every 30 days. Nobody likes that. But what we want to create, it was like a suite of services in a menu, and I'd say we're in the first or second inning of that development. Today when you lease from us, you get the Smarthome functionality that you can lease from us, which gives you thermostat controls, locks, and all that stuff. Eventually, I think that'll just be ordinary because people just expect that. That will just be standard. But today, you get that on a subscription-based service. We wanted to make sure that as part of our overall ESG strategies, we start to weave in some customer responsibility around filter programs, clean air. It also extends the life and duration of your capex with home, HVAC, and things like that.
Now what we're starting to experiment are some of those optional things, like pest control, pets services. We have 50,000 pets in our homes, which is a remarkable number. What are things we can do with cool companies out there that can drive down the cost of owning a pet, and also create some pet-friendly resources for people? We've got a few things in the can that we're working on. It could be as simple as gym memberships and things locally, but we really want to try to drive value for people and things that we all pay for. So we're doing a lot of work right now around insurance. We're trying to figure out ways like, how can we help people drive down the cost that maybe life or auto? Are there national providers that we could use our strength and our economies of scale with to help create that as an option for people if they want to buy insurance through a preferred partner? Those are some of the things that we're starting to fine-tune, but the delivery piece is one that we spent a lot of time on. We don't want to overwhelm people when they step in the door, they got to pick 30 different things, we want to say, hey, get this great property. We love having you as a resident in our portfolio, and by the way, here is the one or two things we want you to have that are part of the program, but we have another 20 that you can choose from at any time, and you can do this all [inaudible 02:42:55]. That's where we're trying to make this the process where somebody can sit there and go, I'm sick of my current insurance provider, I want to see IHS has, and if they can get a quick quote and figure out that they can save 100 bucks a month, they should do that with us. We think that that is part of our value add experience with a subscription-based model where people come in and go, this is way more than just leasing a home. This is a cool company. This is a lifestyle company. I want to try to get closer to the things that they're looking at and see if they can provide a better experience for me and my family.
Ian Butler: I'll just quickly follow up along those lines. Nick mentioned at the top and coming in from Canada and have some familiarity with Tricon. I've followed them for a number of years, so just curious about listening the story. But they've talked about how, as you say, technology has come more and more into their business. As they've scaled, they've had to leverage technology and AI and whatnot. When you are buying and adding to your portfolio of homes, how have you evolved on the technology front, and then just even from the maintenance perspective, how is the maintenance of a growing portfolio evolved over the years?
Dallas Tanner: By the way, big fan of Tricon. I think they do a great job. I like Gary Berman and his team. It's interesting, we obviously are collecting and consuming a ton of data all the time. So you think about breaking into a few different parts. First, just the real estate data, like tracking things, like, how is our portfolio appreciating? What are we seeing in CapEx with particular parts of the country? Are we finding that we're more efficient in a 1,800 square-foot home or a 2,300 square-foot home and why? How much time are we having to spend on mechanical systems in certain parts of the country, and what's the average warrant affairs. Just like your real estate bucket, which obviously impacts the way you want to invest capital over the long haul. Then there's other things like, what are we learning from the customer and their experience? Meaning, are their ways that we can serve the customer and that we can adapt our operating model to overtime really fascinating stuff over the first 10 years of our business? When we started, we're rehabbing homes, we're putting in a lot of carpet in homes because that just felt like that's what you'd have in your home. Then we figured out over time through wear and tear and through customer insight was like, oh my gosh, people want luxury vinyl plank flooring.
They want hardwood surfaces in more areas versus not because they're easier to clean. When it doesn't feel like you own your home, that's a better value proposition for somebody. Now we're doing things like hard planks and luxury vinyl flooring almost throughout entire houses in some markets. Then we're also doing things around certain paint colors, fit and finish standards, certain things with cabinetry, and what I would call countertops, and that is actually led to an evolution of how we work with homebuilders here in the US. We have a national partnership with Pulte Homes, where we're putting very particular fit and finish standards at home for a variety of reasons. One, it's what the customer wants. Two, it's more efficient for our investors over time and distance. You'll see that we'll be much more sustainable in our long-term thinking around expense. Three, it's lifting the value of the home both in the near and long-term in terms of, if we ever sell that home back into the secondary market or the end-user market, its very size is what people want in terms of what they want to buy today from a third-party. All of that data is driving our thinking around the real estate and then also around the latter part, which is the customer experience, meaning, what are the services people want? When we get smarter, for example around pets and pet programs, it's OK, but how do we onboard somebody with their pets when we move them into a home? For a lot of people, when they move into our house, it may be the first time they've lived in a single-family detached house. They could be coming from a town-home or a multi-family project where they don't know how to even turn off a water main if there's an issue. So we have a system called Procare. When we move somebody in, you're going to hear me talk about this and you go, that makes sense, but it's like, it took us years to figure out this is the best way to move people in. We have one of our superintendent, they move you in, spend about an hour with you, go through a 50 point checklist on the home.
But then they'll finish the meeting with, there's two or three things. If you forget everything else, there's two or three things we need you to remember. If there's water coming out of the room for some reason, it's not your fault, just maybe there's some mechanical or something there, here's your water main, you got to know how to shut that off. We'll be here or call the emergency service line. Then we say to them, "Hey, listen, anytime you move into home and you start running fosters, flushing toilets, messing with door handles, whatever, you might find a thing or two that drives you bonkers, that's normal." We find that anytime we move into a new house ourselves. Here's the fridge list, and we schedule the appointment to be back with them inside of 45 days. If it's an emergency, we'll be here in an hour. Just tell us. But if it's just something that's simple cosmetics, something you can limit, put it on your fridge list so we can have somebody come out for an hour and a half, fine-tune anything that you just aren't happy with. What you do there is you've taken a lot of the edge in the new situation with living, and you had to build trust with the customer. Then what we do is we say, "Look, from as long as you live with us, you can always call us."
They have our maintenance number. They know how to schedule things on there own, but we say we're going to be in the home every six months, that's safety, health issues. We also want to make sure that you're not having a bad experience with something that you just haven't picked up the phone and called us about. That Procare bottle for us has really worked. We probably made a ton of mistakes in the first couple of years of doing this business, and we wanted always customer service to be a 10 out of 10. But until you figure out how to fine-tune your services and what works for your customer, a lot of people want to be left alone, a lot of our residents don't even want their neighbors to know they're renting for whatever reason, they just don't care. Like, hey, I live in the neighborhood. I'm your neighbor. Whether I own or lease, why should we care? Having systems that are efficient, that work for the resident, allows us getting in the home have all been delivered and developed by intaking all this data. We do half a million work orders a year in our homes. We spend on average 3,000 to say $3,500 a year per home in our portfolio just on maintenance and long-term CapEx when you average it out, and we all know what a pain owning something can be. You get smart across 80,000 plus.
Nick Sciple: You reported earnings last week put up one of your biggest quarters as far as acquisitions in a long time boosted your future guidance for acquisitions. When you look at this market today, we opened up talking about, there's a big oversupply when you look at 10 years ago. Today, I would say under-supply demand is much higher than there is supply on the market. When you look at conditions, today what makes this housing market so attractive for you to really put your foot on the gas as far as acquisitions?
Dallas Tanner: We wish we could buy more, honestly. The marketplace is fairly tight from a supply perspective and we're pretty picky about where we'll invest capital. But I would say, what people have the hardest time understanding, and for the listeners is that you have to be honest about why we are where we are. Meaning, why is it that there's only 4-8 weeks of supply in any given market on a resale perspective? Now, taking a step back, we're still going to have six-and-a-half million resales in the US this year, and that's a pretty healthy number. What you're just not seeing is the amount of available inventory, and there's a couple of things that have caused those challenges. First, go back to the housing crisis of seven and eight. What happened to builders? Let's just be honest about it. They overbuilt, developers are over speculated, and everyone got slammed. They either lost money or restructuring with banks, there's a lot of difficult situations for developers or builders and the building supply folks. They got left holding the bag on a ton of their distribution because homes weren't selling and there was obviously just a lot of payment in the space. Well, as a country, we need somewhere between about a million one and one and a million four in terms of new units being brought to market every year. Well, if you look back at 9, 10, 11, 12, 13, 40, 50, we never got to a million units. We're like 6, 7, 800,000 deliveries, and still, while the housing market was climbing itself out of distressed companies like us, we're buying excess supply, a lot of these markets at 2-3 years of inventory, which is totally unhealthy. What happened was, as builders were very slowly getting back into a comfort level of being able to develop and bring new products, and can you blame them?
Banks got hit with attorney general settlement. Builders were restructuring major issues with lenders and everyone freaked out. By the way, the builders did a good job in this period of taking a lot plus debt off their balance sheet and getting their companies in much healthier positions going forward. But you get to 2021, I think this is the first year we've developed enough supply to just keep up with annual consumption. So we've got 10-years of under-development. That's the headline. Nick, when you think about it from our perspective, we've got all this household formation occurring. We've got people that are wanting to maybe stay a little bit longer in some areas, but have flexibility of at least. It's a perfect scenario for our business because, again, that millennial cohort we talked about is much more transient once flexibility doesn't necessarily want to own a home, and so as we've laid all this out, we're pretty bullish about the prospects of our business. We want to continue to invest capital. It will not correct itself, in my opinion overnight, from a supply perspective, this is going to take time and rightfully so, we have made lending standards that are a little bit more deliberate about if somebody should own a home or not. You shouldn't be able to borrow 80 percent of our first and 15 percent on a second with no income while you're in college and that was going on in '06 and '07 and lenders got smoke for it and builders felt the pinch when all the development, future supply they're trying to bring on slowed down. As we talk to our builder partners, you got those considerations. Then the other issue we're all facing, which we all got to be honest about too is coverage really disrupted the supply chain for developers and for builders. I have conversations with builders all the time. There were like, I can build the entire home and still be waiting on a door and window package or a plumbing package because I can't get the parts from overseas.
That's going to take another six or 12 months for that to normalize, I would bet. When you look at our consumption of goods versus our consumption of services in the country. There's a lot that lends itself to this moment in time. It's great for builders, it's great for developers. It's going to be really good for people to own real estate, and we think our prospects in the demand that we're filling. Nick, you talked about our rental rate this quarter. We know trees don't grow to the sky, but we've been shocked at what the market is willing to pay for vacant single-family for rent home right now. We don't set market rates as we really clear up something. If we overprice, it doesn't lease, it we underprice it leases too fast. But we're pricing it like where the market is. I think this last quarter, we were in the high teens, 17, 18 percent on new lease growth on our vacant products. Now we're obviously being careful with customers that are in our homes. You will see that our renewal numbers are much lower than that,9, 10 percent maybe 11 percent when you blend it all together. We know we've got a lot of embedded loss to lease in our current portfolio with our people that are renewing, but we feel like it's the right thing to do and try to be moderate in terms of where the market is versus where we're asking for renewal, we're really excited about the prospects for our company. We're not worried about demand right now. It feels like there's tons of demand in the market.
Nick Sciple: I was going to ask about that rental growth rate. The blended growth about over 10 percent, you got 18 percent on unoccupied where you've had new renters coming in a little bit lower with the renewals, as you mentioned, how long do you see this persisting? As you said, there's this misalignment of supply and demand in the market with the supply chain issues, this could take a while, so the underlying market dynamics you're talking about. I don't see that turning in reverse here in the near-term, so how long do you think rental rates will be constructive for your business and keep going up for renters?
Dallas Tanner: I don't see the cost of housing going down, unfortunately, generally speaking, just for all of us. We've got wage inflation, we've got cost of goods sold inflation. The one thing that could help the market come down a little bit, might be a little bit of interest rate creep and allow natural supply to inventories, to fill back up a little bit, see a little bit more of a moderate pace maybe in new home purchasing and things like that. I'm a big fan of like normalized markets over time. While we're grateful for the amount of demand we have in our business today. I would like to see this be sustainable. I don't think these are sustainable numbers that we're seeing. I would expect these to naturally come back down to Earth at some point. But you're right. I don't see how in the near-term demand falls off a cliff. It's just, there's not enough housing inventory to keep up with US demand. Companies like us do a nice job of aggregating good supply and making it available and offering professional services around it. But we need more supply and we're not a supplier. We need builders to build confidence that they can go out and develop at a quicker rate. You got to be honest. It's not their fault either because legislation in a lot of these markets make it very difficult to bring new supply into the US housing market. California, for example, we love California, we have 13,000 homes there. It is such a difficult market to bring new supply into. It's not as easy as a market like Arizona or Georgia or Florida, where developers tend to focus a lot of their resources because it's easier to bring new supply and people want to live there. People want to live in California. Let's be really clear about it. Like the sunshine tax, maybe a little bit expensive, but it's a great place to live from a weather and just like a dynamic GDP market and everything else. But it's very hard to bring new products. You talked a builders there and they just want to pull their hair out because you can't get anything approved and you'd [inaudible 02:56:21] regulation on the planet. I think this is a very hard thing to unwind, to create new supply very quickly because there's so many factors at play. You've got the supply chain factors, you've got interest rate factors. Right now we have free money, so super easy for somebody to buy a home. Then the third factor is that every one of these markets, they're on their own in terms of how easy to make it for new product to come into the market or not. I just think Nick, again, we're just not going to see the pressures ease up in the near-term. We're just not. That's my own tone.
Nick Sciple: Looking at this environment, going forward, constructive demand, supply environment, what do you make of the prospects for your business, say the next 3-5 years what are some road markers that are on the map for you going ahead.
Dallas Tanner: I'm really bullish. We want to continue to grow our portfolio. We make no qualms about that. We've signaled, we just signed a national partnership with Pulte Homes that we're going to deliver another 8,000 new building, I should say that doesn't make any sense. I'm sorry. New homes, new footprints that we're bringing into the marketplace. We will try to continue to expand upon that with them and also with some of our other builder partners. We're going to continue to drive the ancillary offering buckets and the customer experience side, which I think should help continue to redefine. We've been a trailblazer in terms of how people think about living. I want to make the experience for our customer really unique to where we think we change the way we think about what I'm looking for, perhaps our landlord for on a company I want to rent from. What are these alternative services or how can I make my life more simple overtime additions? I want to make sure that we continue to kind of blaze the path there. Then I want to be smart about additional markets and maybe there's parts of the country we're not in, not in markets like Salt Lake City in Nashville today. Those are great markets. We'd love to invest capital there some day.
Austin, Texas is a really interesting market, San Antonio. We're looking at a number of ways that we could continue to expand and grow our business. I think our shareholders want it. If you think about investing in a company like Invitation Homes. It's a really good proxy for what's going on in US. housing. We own all this real estate. You get to ride via depreciation curves up or down, and then you also get to learn a lot about what the consumer wants today in terms of real estate preferences, living itself. It's a great proxy for an investor to take a ride on US residential, or to figure out where the market is going and some way, shape, or form it. I think multi-family did this in the '70s and '80s, where they aggregated all these different properties and created much more efficient property managers of multi-family. That's what's led that industry to become very efficient, very institutional, and a sector that big investors and small investors alike want to invest in, single-family rentals still in the first or second earning. Generally a few of us that are public. There's a handful of other big companies that are starting to grow, but do you take a step back, there might be 20 million, call it single-family for rent homes in the US, maybe 250,000 are institutionally managed. I would expect that our company will continue to grow, continue to grow externally and then also organically through the things that we're trying to offer the customer.
Nick Sciple: This amount of capital we're seeing move into this space, whether it's for you or some of these other operators in the industry, plenty of room to absorb the demands of your business as well as maintain our growth.
Dallas Tanner: We should. If you look at the multi-family numbers over a 20 year, 30 year period. The bigger institutional multi-family managers got to about 10-15 percent of total market share. I could see a world where single-family operators own 10 percent of the single-family [inaudible 03:00:08] that clearing the unit landlord, but maybe 15 percent of the time that home is owned by a professional company that can offer an array of services. We all know somebody that owns a single-family home but rents it out. That's been like a US thing. Back to our earliest point for 200, 300 years. Nobody's just done it with scale I've been able to bring the right structure and technology, we spend 20, 25 million dollars a year just on technology spend every year just trying to get better and figure out ways to enhance that experience. Unfortunately, amount of pop landlords can't do that. They're going to take whatever off-the-shelf property management softwares out there and they're going to only be able to fix things as their pace allows. We can offer 24-hour service. We can have emergency service nights and weekends. We can find ways that go into your home when you're not there if you want us to. It's pretty cool and it should make your life a little easier over time, and that's our goal.
Nick Sciple: Dallas. Thank you so much for spending this time with us, our time's up, but I have about a half hour here with you. Maybe last question I ask any CEO or leader of a company and maybe you gave us some of your bullet points. But for a public investor, individual investor keeping track of your company, what are the two or three things you have them takeaway from this conversation?
Dallas Tanner: Look, I would say be really focused in on the markets that we invest capital in, they're outperforming almost three to one in terms of household formation and demographics, follow the way that we're building revenue into the business through our external growth and also some of these ancillary offerings. Then I feel really bullish and proud about the team we've assembled. My CIO comes from Hilton, who built Hilton Home Owners program and the keyless entry. Our HR folks are from Pepsi that built some of the greatest companies overtime and the core team that runs our company has been doing this since the inception in 2010, and so we just got this really excellent group. I think our prospects for our investors should be really good at so long as we go out and execute.
Nick Sciple: Also will keep tracking the story. Thank you for joining us.
Dallas Tanner: Thanks, appreciate it guys.
Nick Sciple: As always, people on the program may own companies discussed on the show and Motley Fool may have formal recommendations for or against the stocks discussed. Don't buy or sell anything based solely on what you hear. Thanks to Steve Broido for mixing the show, for Dallas Tanner and Ian Butler. I'm Nick Sciple. Thanks for listening and Fool on.