As one of the key architects behind RealPage’s $10 billion rise, Michael Britti has seen firsthand what makes mergers work—and what makes them fall apart.
Before leading acquisitions that reshaped the industry, Michael built and sold his own companies, giving him rare perspective on both sides of the table. In this episode, he and Tyler Christiansen, CEO of Funnel unpack the deals that defined a generation, the importance of culture in innovation, and why the best leaders are really just great sellers with a vision people want to follow.
What you’ll learn:
- How one acquisition strategy changed multifamily forever
- The difference between a “build or die” and “build or buy” market
- Why great culture is a company’s best competitive edge
- What today’s entrepreneurs can learn from multifamily’s past cycles
Episode transcript:
0:00 Michael Britti — Building, buying and believing in the power of a team
Michael Britti: I’d rather have a B product and an A team than an A product and a B team.
Economic rent is when you own a resource and you are gonna start charging more for it without creating any additional productivity. That’s what’s going on today. The statistics say 90 plus percent of startups fail.
I think it was Mark Twain said, it’s not what you don’t know that will hurt you. It’s the thing you know for sure, that just ain’t so.
Technology, it’s an arms race always, but there wasn’t the technology on the fraudster side that there is now.
0:50 Introduction
Tyler Christiansen: Welcome back to Multifamily Unpacked. Today’s guest is Mike Britti, one of the key architects behind RealPage’s $10 billion rise. Before leading mergers and acquisitions through some of the biggest deals in multifamily history, Mike founded and scaled multiple companies of his own, including one that sold to TransUnion.
He now serves on Funnel’s board, advises as a venture partner at RET Ventures, and as a Senior VP at OL Capital.
In this episode, we talk about what makes acquisitions succeed or fail, how innovation really happens, and why great teams beat great products.
Let’s get into it.
1:33 Michael Britti and Funnel
Tyler Christiansen: Today’s guest, Mike Britti, is someone I consider a friend and a mentor—also a boss who happens to sit on the Funnel board—but, thank you so much for being here today. Really appreciate it.
Michael Britti: Tyler, thanks for inviting me. I’ll try to make you proud.
1:43 Michael Britti’s first big acquisition
Tyler Christiansen: I’m sure that won’t be too hard. Mike, you are somebody that I first heard about when I was competing against RealPage and at Entrata, and your legend precedes you and you are known as the dealmaker in multifamily, including helping Funnel with our first acquisition.
As you think back, we’re gonna try something new here. We’re gonna ask you some get-to-know-you questions up front. What’s a deal that you helped put together—big deal—that sticks out to you from the early days of acquisitions that you did? Maybe the first one or a big early one.
Michael Britti: I joined RealPage in 2009, but the ones that stick out to me—there was a period, a really busy period, where we bought four deals between October of 2017 and April 2018. So a very short period of time, we closed four deals over $800 million worth of purchases. And three of those deals were over 200 million. But those three big deals, again, we had never done a deal over, I think, 70 million. And then all of a sudden, in a very short period of time we closed three really big deals and that was—let’s see—On-Site Manager, LRO, and ClickPay.
Tyler Christiansen: Wow. Yeah, those are some huge ones. I worked at LRO prior to the acquisition and was at Entrata, I think, when the On-Site deal closed. So I remember those vividly. Those were large acquisitions. Probably some of the biggest in multifamily history at the time.
Michael Britti: Yeah, and they all worked out great at the time.
Tyler Christiansen: That’s right.
3:38 M&A trends: The good, the bad, the ugly
Tyler Christiansen: Just to continue on the get-to-know-you—are there any kind of M&A trends, perhaps, that you’ve seen throughout your career, or just things that look different today than they did in the past, or perhaps bad M&A that you’ve seen, that kind of—people convince themselves of one thing and another is true?
Michael Britti: That’s interesting, right? Because it’s important to have historical perspective in anything, but in our industry it’s good to know about that history. The statistics say 90 plus percent of startups fail. They fail in the first few years. And some go on for years and then fail later.
But the point is most of them fail, right? And I guess it’s the old Anna Karenina principle from Leo Tolstoy, right? All happy families—all happy companies—are like, all unhappy companies are unhappy for a different reason.
And so there’s lots of ways for you to fail. You can have bad funding problems. You can have bad product-market fit. The other market dynamics can be bad. You can have personnel problems.
Having the perspective of knowing the history in our industry I think it’s very important, and we can talk some more about that history and how we got to where we are—but it’s important ’cause I think a lot of people fail to understand that.
5:11 What matters more? Product or team?
Tyler Christiansen: I think that this is—we referenced it in the intro—folks know about the $10 billion Thoma Bravo RealPage exit. And candidly, the way we’ve framed this podcast is looking at the historical lens because I think as a new generation of companies and leaders come into multifamily, I couldn’t agree more. Understanding the context is critical because, as folks say, history doesn’t repeat itself, but it rhymes.
There’s a lot that can be learned from the success that you and the RealPage executive team—we have Leslie Turner on the Funnel team who was part of that team. There’s so many times I turn to her and say, how did you guys do this? What things do you wish you would’ve done differently? And so on one of those—one of the things that I imagine showed up quite often, in particular, as you think about—I once heard Steve Winn—for those who don’t know, he was the CEO at RealPage during that tenure—reference that part of the strategy was finding organizations, companies, products that had gotten a certain amount of traction, often in the enterprise. They got some big innovative players to buy into the technology, but then were having struggles moving downstream and selling it. And that was where he thought there was opportunity for RealPage to add value with the great sales motion.
I’m curious—as you looked at these earlier-stage companies—what stood out to you more as a marker for ongoing success within the RealPage product? Was it the product itself and you all thought, hey, you know what, because On-Site is such a quality screening product we’ll bring it into our team, period? Or in the case of On-Site—we’ve had—Monty is a good friend of ours as well. Was it more the team and maybe there’s some gaps in the product? And I think I ask that ’cause we have a lot of entrepreneurs listening to this, and they’re trying to figure out—none of us feel like we’re there yet. But when you were looking at M&A, if you had to pick one or the other, what matters more—product or team?
Michael Britti: Team. I’d rather have a B product and an A team than an A product and a B team. And let me start by just saying Steve Winn is a visionary and a genius. I can’t say enough good stuff about him. It was his strategy. I just followed him around, took really good notes. I was Boswell to his Dr. Johnson. He was the man who was the genius behind all this. And I like to think I did a good job executing on his vision.
So anyway—and to further answer your question—I think it’s important that people understand there was—going back 10 years or even further—there was no market for a lot of these things.
The PropTech market didn’t exist. There wasn’t a lot of private equity investing in it. There wasn’t—there wasn’t VC money going into it. There sure wasn’t an exit until, really, Steve started the ball rolling way back in, you know, 2007 by starting to buy up these little companies. It created an exit for people who had started these things. Before that, there wasn’t a lot you could do for an exit on those things. So it was interesting.
And nowadays, we take for granted that, oh, the market’s awash with money—there’s private equity money and all this other money—but it’s not always been there.
8:26 Multifamily is like Reno, Nevada
Tyler Christiansen: Yeah, really well said. It’s actually something that I’ve noticed—the world has matured, multifamily—I like to tell people that, to me, multifamily’s like Reno, Nevada. It’s the biggest little industry in the world—or littlest big industry, I think.
Michael Britti: I like it.
Tyler Christiansen: But you’re right that it was incredibly—there—there was no build or buy. It was build—build or die is what it used to be. And I think, to your point, even competing against RealPage, I don’t think we appreciated just how sound the strategy was because this is an industry—if you have a quality product and a quality team, it’s incredibly sticky, right? We have high retention rates among software purchasing decisions. And I will say probably to your point on the team being more important—if I just go down the list of really impressive leaders at RealPage—I mentioned Leslie Turner, who now runs Services at Funnel, she was originally part of the On-Site product, and then went on to lead additional teams. I’ve got great friends like John Hinkley, who went on to lead great teams—was another acquired leader that you all did—that Modern Message. Makes a ton of sense.
And so I think, if you roll forward that—whether you’re answering that question in terms of a product skill set, a team skill set, or just an individual leadership—you referenced you got to work with Steve. I’m sure you got to with a lot of great leaders in putting these deals together. Is there a skill that you feel is perhaps underrated in leadership today?
9:42 Underrated skills in leadership today
Michael Britti: Selling.
Tyler Christiansen: Selling.
Michael Britti: Every good—or great—CEO has to be good at selling, and they have to be good at selling in a number of ways. They have to be able to sell to the market. You gotta be able to get customers to buy it. And so you have to be able to have a vision and get that vision across to the customers.
And you also have to sell to put together a good team, you gotta sell them on your vision. And that’s huge, because if you don’t have a good team and you’re able—you might be able to sell to customers, but you don’t have the people to back you up. And the third thing you have to sell to is the money market, right? Venture money, private equity, angels. Unless you happen to be independently wealthy—you’re gonna need to get somebody else’s money. And you have to sell them on the vision too.
And they’re all different kinds of sales, right? Because selling to the customer is a value proposition. Selling to the team is, hey, you’re gonna do really well here, this is a great company, I’m gonna build a great culture. You’ve done a great job at Funnel building a great culture. People love working there. That is a huge competitive advantage. So people forget how important that stuff is.
11:10 Selling a culture is important, too
Tyler Christiansen: Yeah, I really appreciate that, Mike. And I think that, we also do have a lot of sales professionals who listen to this podcast. And I’ve always told, even competitors, they’ll reach out, like top sales reps at the PMSs or other AI competitors, they’ll reach out and say, hey, we love seeing a sales guy as a CEO. What I always tell them is, I’m doing the exact same job It is selling, right? And it’s—whether it’s to investors or to my team members. And it’s—if you’re genuine about your belief in your product and your platform, we’re all setting a vision for where we’re going to go, because nobody buys OneSite for what it’s doing today; they’re buying it for where they’re going to be on that platform in two or three years. So I appreciate that. That answer is very salient.
11:49 Finding purpose in multifamily acquisitions
Tyler Christiansen: Now, the last one here—the get to know you—and I do want to go back into the past and unpack some of these. As you think about the different roles that you’ve played—so we framed you as the deal guy, but I know you’re much more than that. That’s why I wanted you to join the Funnel board. I know from the team members who have worked for you that you’re more than that.
So as you think about your impact, both at RealPage and just broadly—where do you really find your own purpose? Is it in putting together a deal that somebody undervalued, finding that diamond in the rough? Is it really the advising that you get to do to founders? You also sit on the board of StarRez, another residential company that’s grown tremendously over the last five years. So I’m curious—of the multiple roles that you’ve played, is there one that you find the most fun?
Michael Britti: Being semi-retired is my favorite role only ’cause I’m getting old now. But honestly, I love working with people. And particularly people I like—I try not to work with people I don’t like. It’s important. What I like is helping people meet their goals, right? There are people—they have a vision. I hear it, I get excited, and I want to help. And that’s what I like to do. So it worked out really well ’cause a lot of times we’d go to buy a company and I got to meet some of the most wonderful people in the world. Some not so much, but most were very good, wonderful people—smart, had a cool vision and executed on it—and it was nice to be able to make something good happen for them.
13:16 Before joining RealPage
Tyler Christiansen: Yeah. Wow. It’s amazing. And yeah, I certainly have seen, again, when we’ve got to interact with you and we meet these shared team members, the light that comes in people’s eyes when they think about their interactions with you is incredible—and especially ’cause it’s a hard job. Sometimes being the dealmaker, not everybody feels that the deal was cut the best way for them. So to have so many fans of yours is really impressive, Mike.
Michael Britti: Thank you. I’d like to think that most of them—not all—would give me a good recommendation if I asked for it.
Tyler Christiansen: Agreed. Thus far, I’ve been trying to find one that wouldn’t, and I would say they all have. Now let us go back in time. So you mentioned you joined RealPage in 2009, I believe you said. So what were you doing before that? How did you make your way to RealPage? And then, in particular, you highlighted PropTech didn’t really look like PropTech today, certainly not the big, multi-billion dollar outcomes that we’ve seen. But what did RealPage look like at that point in time in terms of the company and product offering?
Michael Britti: It was strange. Look, I competed with RealPage just like you.
I had started a number of companies or been among the founders of a few different businesses—most of which didn’t do well—but I had a screening business that ultimately I ended up selling and that was a 10-year thing. And that was the last thing I did before RealPage. And it was a nice business—sold it to TransUnion. It still exists, by the way.
14:45 RealPage early product offerings
Tyler Christiansen: Yeah, that’s fantastic. And by the way, I think that one of the things you said at the outset—of 90% of companies fail—I think that those of us who started our careers in safe places and good companies really underappreciate how hard it is to get across the proverbial chasm to having a company that is worth an exit. And so I think having that perspective on just how hard that is informs a lot of the strategy that you see going forward.
So you referenced already that there wasn’t a ton of deals going on. RealPage itself, as I understand it—and I love studying the history of this—was a bit of a spinoff from a different platform. Maybe give the audience just a little bit of factoids around—there’s a product in there called Little Buddy, I believe. What was the core product offering and what was…
Michael Britti: No, it’s very funny, right? And I hope I don’t mess up the story. And Steve, if he watches this, I apologize, Steve, if I get the story wrong. But Steve had a business called CLR. He sold it to a big, huge company and he said, hey, I’ll stick around for a year after that I’m gonna go do something else. And he did, and he was a man of his word. On his way out—and they were all very friendly, he just said, hey, there’s this business of yours that I’d like to buy and if you guys don’t mind spinning it out.
And so they said, yeah, okay. And then they showed him the business, and then they said, oh, but it also includes this thing, Prentice Hall, which is Little Buddy. And they said, you gotta take that also. And so he looked into it and at first he was like, I don’t even want that thing. And then the more he got into it, he realized, hey, there’s nobody else really doing anything in this industry. So then he said, okay, you keep the rest of the stuff, I’ll just take that. And that’s how it got started. And then he built it up.
It was at the time CDs and it was a desktop application, all that stuff. And he jumped to browser-based right away, more or less. And that was a big deal ’cause nobody was doing that. And ’cause most people went to a thin client first and all this other stuff. I don’t know if this terminology is confusing anybody. I don’t blame you ’cause you have to be old enough to remember all that stuff. But the idea is—he had the vision for where he wanted to go right away.
And then he bought a bunch of businesses to make the rest of it work.
17:17 How to identify emerging market segments
Tyler Christiansen: Actually, there’s a really interesting learning there. I remember—Steve has not done many podcasts—I hope he listens and comes on—but one he did with our friend Steve Leitz once—he talked about the important moment in time in which he was selling the vision of cloud-based software. Similar to what, kind of, Salesforce did—those—people forget, but there were CRMs before Salesforce. They just were—they were DOS-based, right? And they were—or Windows-based. And Salesforce was the first cloud-based, right? And that was the dot-com era. And so everybody was rebranding their company to be such-and-such dot com.
And to your point, that technology change created an opportunity for RealPage and for others to move in. And frankly, even companies like Entrata got their genesis in the early kind of two-thousands—2003 I think Entrata was founded—and every—but I remember Steve referencing getting Camden to buy into cloud-based software was this watershed moment for RealPage. And it would appear to me that Steve, as an entrepreneur, and RealPage were always looking a little bit ahead of the curve and saying, where’s the market going? It’s a growing, evolving market.
Would that be a fair way to frame how things ended up on your acquisition list, or was it more a little bit more financial engineering of, hey, we’ve gotta get scale? Looking at it historically, it looks to me like you were identifying emerging market segments as they came in and then bringing ’em into the platform.
Michael Britti: There was a number of ways we identified companies we were going to buy. Among them, we were always looking to either strengthen a current product offering, or accelerate innovation, so go do something new and get there faster by doing a purchase, or to meet customer demand more rapidly.
Now, what’s interesting about—and I’ll talk about customer demand in a second—or we were looking to expand our total addressable market—our TAM—by getting into an adjacent market, right?
But what’s interesting about customer demand is a lot of times the customer doesn’t know it wants something until that thing exists, right? There’s an old—this French economist named Say’s Law—supply creates its own demand. And that makes sense, right? You didn’t know you needed a cell phone until they existed. You didn’t know you needed a desktop computer until they existed. But then once those things exist, you can’t do without ’em. So anyway, that’s that.
And so it’s getting ahead—sometimes it’s—sometimes the customers tell you what they want; sometimes you have to tell the customer what they should want.
19:59 Origins of Archstone and impact on multifamily technology
Tyler Christiansen: That’s very true. Yeah. And I think that—to your point—I’ve always felt that today’s customer demand is certainly not only a reflection of the supply of what options are available to them, but really years of kind of evolution that led to that current demand. And so when I see entrepreneurs, for instance, looking at the market today and coming out with—I don’t want to pick on anybody—but another fraud tool, for instance, right? It’s—yes, there is absolutely a need for fraud, and folks like Snapt that saw that years ago are well positioned to take advantage of that.
I think as entrepreneurs and as platforms, the bigger opportunity is to get right where the market’s going in the coming years. You referenced obviously that you had run a screening company as well, I’ve referenced Camden already, but there’s another company that had a big impact on multifamily technology, and that’s Archstone, right? And so that’s a company that you know well. And as I go across multifamily, there’s leaders all over the place that have that Archstone DNA.
Having spent time there, is there something about their focus on technology or experience that perhaps allowed them to stand out? And am I right that it really was a bit of a predecessor to a lot of the technology platforms and more technology-focused operators that we see today?
It took visionaries like Camden, Archstone, UDR—people like that—who realized that technology was an advantage. You could serve your residents better, faster, and cheaper if you applied technology. And that would be a big advantage ’cause the resident experience was so much better. And it just makes sense.
A lot of what Funnel does and a lot of what the best companies out there are doing is making the resident experience great. They’re sitting in the background—the resident may have never heard of them—but they’re getting a much better experience because of that. And also, by the way, it keeps the price—even though rents have been going up dramatically—it keeps the price down because it’s cheaper to manage a property with technology than with tons of humans.
23:00 Does yesterday’s RealPage playbook still apply?
Tyler Christiansen: Maybe to turn that to today, ’cause I do think you’re right that—and by the way, as a side note, I don’t think I had the full realization till just now that Denver is a real hotbed for multifamily innovation, right? Because between Archstone and AIMCO and UDR and many—
Michael Britti: Avanti is there.
Tyler Christiansen: That’s right. And many of the technology startups that we’ve seen have emerged out of that market. The—
Michael Britti: It’s the thin air, by the way. It makes you think you can do anything.
Tyler Christiansen: That’s smart. That’s smart. Yeah, I need some of that. I am from Utah originally, but here in Tampa—yeah—the air is not thin. So as you think about the decades of experience you have in M&A—obviously, as you mentioned, both doing property acquisitions—and you look at the current moment in time, you know that we’re in—interest rates are still very high. M&A activity has cooled down for the last several years. Just looking at RealPage, for instance, right? Like, they’ve only done a couple of deals since you’ve left, but it appears they’ve done, I think, two this year.
What are—do you think the old playbook holds true of kind of the things that we’ve looked at before? Or do you think in this new—kind of where we are today—that it might look a little bit different? Just curious—kind of your read on decades of M&A experience. Does the playbook that you deployed so well at RealPage still apply?
Michael Britti: Look, I got lucky. I was in at a good time. Now there are a lot more people competing for a lot of these deals, which bids the price up. So it makes it harder to do a roll-up strategy, and it makes it harder to move the needle as a business like a RealPage, right? You gotta do hundreds of millions of dollars’ worth of a transaction as opposed to, you know, a bunch of $50 million deals or something like that. And so it’s become much more difficult. It’s bad for the big companies. Really good for the entrepreneurs. If you can get a market niche, you potentially can have a buyer. So it has changed, yes.
25:04 What is rent seeking in 2025?
Tyler Christiansen: And so on that point, I mean, as we think about the ecosystem and landscape of PropTech and when I talk to folks in other kind of adjacent verticals—like you mentioned, you work with StarRez and they do on-campus housing and international markets it seems to be there are a lot of similar challenges. And one of those challenges that is universal probably not just to PropTech, but certainly in PropTech is getting a foothold, establishing a niche, when integrations can be challenging, right? Because ]the platforms that have been created by the big PM softwares—whether through building or through acquisition—inherently are designed to flow the usage and the revenues through the pipes, the approved pipes.
What you just articulated, and one of the examples, for instance, previously would be an On-Site only works with integrations, right? It has to be integrated into the PM software and all the different tooling to work. Do you think if you look compared to the environment that you all helped create to today have integrations improved? Are we in a better place? And how should, you know, both multifamily operators and entrepreneurs think about—how much can I break the tech stack and innovate with new products if I’m dependent on these integrated solutions?
Michael Britti: It’s a very good question. The problem I see is, and I know you probably feel this pain, there’s only four or five companies that everyone has as their—that if I’m a multifamily owner, I’m only gonna use one of these guys. And it’s very sticky once you’re using their leasing and rents and accounting system. It’s really hard, I heard someone—now I wish I could remember who said it—“the best accounting system for your company is the one you’re currently using,” because it’s so hard to change.
It wasn’t so bad until very recently, but up until recently people thought, okay, I gotta integrate—if I’m RealPage or Yardi or whatever—I’m gonna integrate with lots of people and it’s not really gonna be a closed system.
They’re becoming more closed. That’s economic theory at work, right? There’s this theory about rent-seeking, and rent-seeking doesn’t mean people paying their lease, right? It’s economic rent is when you own a resource and and you are gonna start charging more for it without creating any additional productivity. That’s what’s going on today. There are companies that they’re rent-seeking. They realize they can do that.
It’s a short-term strategy, by the way, ’cause it doesn’t work forever. It only works until customers get tired of it and start leaving whoever’s rent-seeking the most. Adam Smith talked about this way back in 1776 in his great book about the Wealth of Nations. And so it’s been going on forever. Usually people get rent-seeking by getting a government monopoly. But oligopolies do it as well. They don’t even have to talk to each other, they just know, they see in the marketplace what’s going on and they realize, oh, somebody else is rent-seeking; I’m gonna do the same.
28:23 It’s harder to scale and innovate from the ground up in 2025
Tyler Christiansen: I think, obviously, in a capitalist economy, as you said, that we hope that the long-term impact of that is that it creates opportunity for innovation. But you’re correct—for instance, today, every one of the PM softwares now charges for integrations, which—not saying that’s right or wrong—there is a lot of—
Michael Britti: Yeah, and they should charge.
Tyler Christiansen: They should—
Michael Britti: How much they should—
Tyler Christiansen: Correct. They weren’t seeking—yeah. The increased value comparative to—none of them have webhooks yet, so I’ll say that—none of them have increased the value of the way in which you integrate with them. But they’re all charging and, in many cases, the fees are going up.
But maybe to double-click on that, I would be concerned as someone who’s passionate for multifamily—I’m biased, I’m an entrepreneur for a quasi-startup, now scale-up—but the playing field, the system’s getting more closed, I would assume means it’s harder to get off the ground. And if it’s hard—
Michael Britti: That’s the problem—is that it’s harder to innovate because, if you have a little niche, you gotta pay the toll from these other folks at some point. That toll makes it harder. Now the good news is, right—it’s also easier to start up a company nowadays because of Azure and AWS and all these other systems. Used to be you had to go buy a whole bunch of servers and spin up your own huge IT team. Now you can outsource all that. You can outsource HR, you can outsource your CRM to Salesforce; you could do all these other things that you used to have to do in-house. At the same time, that toll—it makes it harder to innovate, because you think, oh, initially I’m only gonna go after a segment of the market that has this company—the first one I integrate with—as their system, their accounting system. So it—it’s just harder.
30:10 How has your experience impacted your role as an advisor?
Tyler Christiansen: Yeah. Fascinating. Mike, just keeping focused on today—one of—you get to advise and sit on multiple boards—I’m gonna put a compliment here just to—’cause I know you won’t like it, but I’ll bury a question in there as well. I’ve appreciated your perspective as both a former entrepreneur, someone who knows multifamily inside out, that you are always willing to share a point of view. I always find a lot of value in our conversations—you don’t hold back—but you have a clear respect for the job of being a CEO, an entrepreneur running a business. And I’m curious, it appears to me that the experience you have informs the way in which you advise now. So, am I correct in perceiving that way as a CEO on a board?
Michael Britti: Oh yeah. No, thank you. I appreciate the—but that’s exactly right. Look, the hardest thing is—I think it was Mark Twain said, “It’s not what you don’t know that will hurt you. It’s the thing you know for sure that just ain’t so.”
It’s important when advising people, or when you’re talking about business and different options. We all have our own biases, and confirmation bias, everyone has it. And so what happens it’s very important to always realize, okay, this is what I think, but I could be wrong. And here’s how I could be wrong. That way, you’re really giving good advice. You’re not just giving your opinion and saying, yes, this is from the oracle, you must do this.
31:50 Fraud solutions in multifamily 2025
Tyler Christiansen: I’ve got a running tally, by the way, of quotes that you’ve gotten. We’re gonna—we’re gonna summarize ’em. I think we’re up to 12.
You’re obviously a very well-read man. But Mike, your experience as an operator was, as you mentioned, in the screening world. I look at the world today—and I referenced this earlier—and clearly fraud is a challenge in multifamily. But also it seems like entrepreneurs have all keyed in on this, and there’s a lot of different technology solutions available to operators. Now, I’m curious, if you put back on either your Archstone hat, your screening CEO hat, your RealPage hat, what is this moment in time of a plethora of solutions, but still a kind of core challenge of fraud?
How does this compare to previous iterations of screening, which is, at its core—obviously it’s about finding the right renter for the right home and mitigating risk—but it feels like a somewhat different moment than how screening was that, to me, looked like a commodity 10, 20 years ago.
Michael Britti: Yeah. In fact, up until three, four years ago screening hadn’t changed much, and it was a commodity. And you’re absolutely right. Look, the industry statistics speak for themselves, right? I was just reading an article, 93.3% of operators say they’re experiencing some form of fraud in the past year, and that’s huge.
When I was running a screening company, fraud was not that prevalent. And it’s increasing, right? Apparently, 40% increase in the number of fraudulent applications, things like that. And the reason is obvious, right? Technology, it’s an arms race always, but there wasn’t the technology on the fraudster side that there is now. AI can imitate stuff so well. There’s so much better technology to fake documents. There’s all sorts of things you can do today, right off the internet, which is ridiculous.
But you can become a fraudster faster than you can apply for most jobs.
Now the good news is there’s really good technology to counter that, but it requires people to not be complacent, ’cause you’ve gotta change your processes, you gotta seek out those solutions, and you’ve got to use them. And oh, by the way, the solution you picked three years ago isn’t gonna work tomorrow. And so you always have to be thinking about fraud and how I’m gonna—[address] the problem. And it’s too bad, but it’s—that’s just the cost of doing business.
34:26 The AI hype cycle expectation vs reality
Tyler Christiansen: Now, Mike, one more question about today. Other technologies, fraud is a hot topic. Of course, AI is the big topic. And you were an entrepreneur during the first the dot-com era bubble, right? You ended your run with RealPage in what now we all look back on as a bit of a bubble, right? 2021 valuations when we were all in lockdown were incredibly high historically. You know, but in each of those cases there are enduring technologies, right? A lot of the virtual work-from-home technology we’re using on this call came out of the COVID explosion. Obviously, internet in general and dot-com and cloud-based computing are still with us. So in spite of the—there was hype, there was a bubble, and there was a reality of long, sustainable, wonderful companies like RealPage and Salesforce and many others.
So how would you think, as an entrepreneur that has the wisdom of seeing multiple cycles, about the current AI moment—you know, there’s a lot of promise, there’s a lot of hype, there’s a lot of valuation increases, but we also probably can assume there’s maybe some misaligned expectations from reality.
Michael Britti: I’ll do another quote, okay? I think it was Winston Churchill, right? “The longer you look back, the further you can look forward.” AI is new, but the disruption from it is nothing new.
Disruption’s been going on forever, and it’s good to think about how in those earlier eras how people dealt with that disruption. An example, people who were very slow to get on the idea of browser-based, and they’re like, oh, that’s not gonna do well, and I’m still gonna send shrink-wrapped CD-ROMs out and all that stuff, they went out of business. So it’s important to embrace technology and use it properly.
It’s also, there’s the Gartner Hype Cycle, and if you are not familiar with it, look it up. It’s a great thing to understand because that’s a very accurate model for how technology works. At first it’s overhyped, and then there’s this trough of disillusion where things didn’t quite work out as much as they expected, and there was—there’s too much—there’s overinvestment, and then it takes off again. And so—
Tyler Christiansen: Slope of progress, right?
Michael Britti: That’s right. The slope of progress. You can be too late embracing technology. Being too early—eh, I’d rather be too early.
37:01 Underutilize areas of innovation. What is coming next?
Tyler Christiansen: Alright, let’s now turn to going forward. I think that—are there any areas, as you think about—you get to, again, operate in more of a—you say you’re semi-retired, but it doesn’t seem like it to me. You’re always available. Are there areas of innovation that may, perhaps, be underutilized or perhaps folks aren’t working on yet—particularly, you get to advise a couple of different investment firms like RET—our wonderful VC investors that are looking more at the seed stage. Are there any areas that—like, you mentioned PropTech in general didn’t exist and then there weren’t—all the little segments—are—is there anything that may be on your radar that perhaps doesn’t have all the shiny attention of, say, chatbots and centralization that Funnel sells?
Michael Britti: I’m not smart enough to see into the future and think what’s really good. If I was, I wouldn’t be on—I’d be busy building that company, not being semi-retired. But what I think is fascinating is that often people look and say, oh look at that company—they’re killing it. They’re doing a great job. They own that space. If a single company owns that space, that’s not for long. That’s not the way the world works. And so a lot of innovation is to reimagine what someone who’s already successful is doing and do it—and sometimes you only have to do it—a little better to win all the business. And that’s, to me, where a lot of the future innovation is gonna come.
A lot of it’s incremental. And people think, oh, insurance, HO-4, a sleepy thing. It’s always gonna be the same. And then people have come along and said, no, I’m gonna reimagine it. I’m gonna make it better. And they did. And again, I don’t know how much better they are, but they’re better enough. And that’s, I think, where the future innovation’s gonna come from—is people reimagining what other people are doing and doing it better.
39:09 Michael Britti’s billboard
Tyler Christiansen: That’s wonderful advice. Yeah, and I think you’re right—in our industry, in every industry, there’s no zero-sum winners, right? There’s a reason that you referenced that there’s four or five big PM softwares in our industry, they all, fundamentally, do the same thing. But depending on your portfolio and your strategy, one is better for you. And I at Entrata—our big innovation early on in PM software was cloud-based, but so were the others eventually. But then it was student housing, right? It was—we were the best student housing provider. We had really great functionality—
Michael Britti: Still are, by the way.
Tyler Christiansen: Fantastic student housing PM software. Alright, you know what—I think this is a really great place for us to wrap up and just make sure that the audience really got a good sense for Mike. And I’ve really enjoyed unpacking your multifamily experience. Mike, we’ve got this billboard here in Tampa that sits right outside my office. If we got that billboard for you, Mike, and we said, hey, put something on there that is multifamily-focused or otherwise—maybe it’s another Mark Twain quote, or we can go with John Wayne this time—you haven’t quoted him yet anyway—what’s a quote or an opinion of Mike Britti’s that we could put on that billboard?
Michael Britti: I’m gonna go back to the Roman Empire. “This too shall pass.” So no matter what your problem is—this too shall pass.
40:35 Housing equity and affordability
Tyler Christiansen: That’s wonderful. Thank you. That’s a great one. Alright, now—so you, Mike, are semi-retired. What’s something outside of multifamily and doing deals that you’re passionate about—maybe a philanthropic cause that—something you would enjoy spending more time on?
Michael Britti: Over my career, and particularly when I was younger and had more free time, I was very heavily involved in homeless issues and worked at homeless shelters, was on the board of several homeless shelters, and worked with ways of dealing with homelessness. It’s an intractable problem. A lot of it—people think, oh, the best way to do it is to build super-cheap housing. That’s not the only way to fix it. It’s—and it’s—it’s only a part of a solution. Anyway, it’s a big problem, requires a lot of work, and it requires people also to show up and talk to people and be nice to folks in need. And so, anyway—I’ve always done that, and there are a number of charities I’m involved with that deal with that issue, and it’s—it makes sense in the homebuilding industry or the homemaking industry. So anyway, that’s something I’m passionate about.
Tyler Christiansen: Mike, that’s fantastic. So we at Funnel we have a charity called HOME. To your point, what I’ve always felt having had some exposure to other charities that do work in the space of homelessness, HOME by Funnel was designed to be really focused on what one of our partners, Entryway, calls “housing-ready individuals.” And that is in particular because there are, to your point, so many more nuanced challenges in homelessness, right? My mother works with individuals coming out of sex trafficking. I have a lot of family members that have dealt with substance abuse issues, and all of those obviously show up and more in homelessness. Are there any charities in particular that you could mention that folks might look up?
Michael Britti: One of my favorites is—and I haven’t done work for them for years, but I worked with them for a decade and I was on their board—there’s a group called the Calvary Women’s Shelter in Washington, DC. It’s a great organization. It does exactly what you were describing.
Tyler Christiansen: Mike, I’m not surprised to hear this about you, but I think that I find the same fulfillment, and we are very blessed to be able to work in an industry where providing homes and serving the housing industry—the rental housing industry specifically—provides for us. Funnel does not believe that our charitable initiative is going to solve housing and affordability or homelessness, but I think all of us, if we think about ways to give back from this industry that’s given us so much, there’s a lot more that we can do. So happy to hear that. Appreciate the reference.
43:02 The future of multifamily is gonna look a lot like the past
Tyler Christiansen: Alright, so Mike—we’ve talked a lot about the past of multifamily. You get to be involved in organizations now that are helping build that future. But for you—if we were to say, “The future of multifamily is blank,” you know—what is it? What does the future of multifamily look like to you?
Michael Britti: I’ll go with my earlier statement—it’s gonna look a lot like the past. So learn about the past. Understand that—the ups and downs in the industry, the disruption caused by technology—it’s gonna look like the past only different.
Tyler Christiansen: Yeah, and I think that’s very relevant right now, given that everyone feels like the supply-demand imbalance—which right now, if you’re on the pro side of, we as an industry want to build more housing—it’s working very well right now to keeping housing affordability in a good place. But if you’re an asset manager who underwrote 10% rent growth in Austin, it doesn’t feel that great. So we’ll go back to your billboard and say, “This too shall pass.” If you look in the past, eventually those rents will grow again.
Michael Britti: You let the market work—it will.
44:11 Life is too short to work with people you don’t like
Tyler Christiansen: Alright, last one—what’s a value or principle, Mike, that you refuse to compromise on?
Michael Britti: Life is too to work with people you don’t like, or drink cheap wine.
Tyler Christiansen: It’s a profound wisdom, Michael. I appreciate the time and, frankly, the fact that you want to work with people you like. I’m honored that you took this call and that you’re on the Funnel board. Normally, Mike, we ask folks to promote their company or where they’re at, so I guess we’ll help people to go check out funnelleasing.com and support us over there.
Michael Britti: If you want to get in touch with me, send a very nicely written letter, care of Funnel, and I promise I will write back.
Tyler Christiansen: There we go. I’m sitting at the front desk at Funnel. I’ll get it for you. Mike, thank you for your time. I really appreciate it.
