Multifamily Unpacked, Season 1, Episode 6: John Helm, RET — Industry-influenced technology solves tough challenges and addresses product-market fit
Industry-influenced technology solves tough challenges and addresses product-market fit
John Helm and RET are (if we do say so) Kingmakers in the multifamily tech space.
Helm, the founder and partner at RET Ventures created an ecosystem that fuels renttech product market fit. The combination of both vendor portfolio companies, and property management companies in the RET ecosystem ensures that RentTech providers create products demanded and influenced by end-users to solve the multifamily industry’s toughest challenges.
Helm shares his background and how that influenced him to found RET and the philosophy behind their investments.
Read the interview below, listen in the player above, on Apple Podcasts or Spotify.
Tyler Christiansen, Funnel Leasing
Welcome back to Season One of Multifamily Unpacked. Today’s guest is my friend John Helm. John is the founder of RET Ventures. RET is a very unique venture capital fund created based on John’s experience as an entrepreneur in the multifamily industry. RET brings together the largest operators along with innovative technology to find gaps that exist in the multifamily industry and to serve our renters and our customers better. I’m excited for you to join in this conversation where we unpack all that is RET Ventures and the future of multifamily. All right, well, welcome in everybody. Today, it’s my honor to be speaking with John Helm, who I consider a friend, a mentor, and also a boss. But John has been a big part of the Funnel story. And today we want to tell John’s story. For those of you who are like me, a multifamily geek, John played a huge role in the industry, and those who probably know John know him, and RET as a bit of kingmakers, in our opinion, in the role they play in helping bring technology to the forefront. But a lot of new entrepreneurs and new folks in the industry probably don’t know that John’s roles and multifamily date back a couple of decades. So I think it’s a great place for us to get started. John, why don’t you tell everybody? How did you make your way into the world of multifamily?
John Helm, RET Ventures
Well, it’s a long story, as you implied, and you can tell by my lack of hair and gray hair that I’ve been at this while. I got into the real estate industry in 1985, right out of college. It’s funny, I thought I was going to be a banker in Chicago and had a job all lined up. And then I took a course taught by Professor Grasscamp at the University of Wisconsin. And it’s actually a funny story, I’m going to tell it, that got me excited about real estate, and I chucked all my plans and moved into real estate. The story is a good one. So this was, I think it was called Real Estate 501 or something. It was a grad-level course in the real estate school that seniors could take. And so there must have been 500 of us sitting in this auditorium and Professor Grasscamp wheels out onto a stage, he was actually a quadriplegic, so he was in a wheelchair. And he looks at everybody in the audience. And he says, ‘So I guess you’re all here because you know that real estate’s made more millionaires than every other form of business endeavor combined in the US.’ And we all were like poking each other ‘Holy shit. I didn’t know. Did you know that? Wow.’ And then he looked at the audience. And he said, ‘And I’m going to introduce you to one right now.’ This is 1985. So we’re thinking, Sam Zell who’s because he got backstage. And so this, he shouts off stag he says ‘Fred, Fred come on out here.’ And this guy wearing a University of Wisconsin maintenance uniform comes walking up on stage. And he looks at the class, he says, ‘class meet, Fred. Fred’s been on the custodial staff here at the University of Wisconsin for over 30 years. Every year, Fred buys a couple of houses, fixes them up, and rents them to students. Fred now owns over 100 homes and is worth, I don’t know, it was like $13-15 million.’ And the whole class is Jaws just dropped, you know. So anyway, that was my introduction to real estate. And so I went out to Arizona and I actually worked as an office leasing broker at CB, back in the late ’80s. CB, back then it was still called Cole Banker. And we actually had the residential business tied to it. I still think I own seven shares of Sears stock somewhere that I got through our ESOP because Sears owned us. Anyway, did that for three years, the whole market in the late ’80s, as everyone knows, probably too well, completely blew up. I went back and got my MBA and spent six years at McKinsey. And then my last client at McKinsey was Marcus and Millichap. And they recruited me away to be their CFO. And before I knew it, I was back in real estate. This was in ’96. And it just so happened that their office was on Page Mill Road about two miles from Sand Hill Road. And this is when the whole .com boom was taking off. And we incubated in-house and then spun out, one of the first ILSs called ‘All Apartments Spring Street.’ And that was in ’96-’97. We spun it out in ’97. I stepped down to run it full-time at that point. We merged it into realtor.com. And that company ultimately became Move, and I think there’s still around I’m today. But I left in ’99 did another startup from 2005 to 2011 in the same space and pretty much been doing real estate tech, or in and around real estate tech ever since.
Tyler Christiansen, Funnel Leasing
So I wanted to double-click there on that transition you made. I mean, the career pathway makes a ton of sense. You know, you were in Wisconsin, got into real estate, and then went and you were at Harvard, McKinsey, Marcus and Millichap was here was a customer. The interesting transition for me was to your point, obviously, you were in the Bay Area, you’re in the Silicon Valley, at the height of the.com. bubble. But you also were on the finance side, you were CFO and Marcus and Millichap and then made this transition to the tech startup. I mean, what was that like going from being, you know, a real estate guy and obviously, great credentials and experience in that to moving into a technology space? I think, obviously, we’ll touch on this, but your experience both on the financial side, the real estate side of the business as well, then that transition. So what made you want to jump into the technology side? And what were some early learnings, I guess, in terms of going from being, you know, finance and real estate, to the very different world of operating a technology business?
John Helm, RET Ventures
Well, I think so, you know, back in ’96-’97, no one really knew anything about the internet, right? It was just starting up. So it was drawing people from every discipline imaginable into it. And, you know, maybe it would have been a little harder for me to do that 10 years later, but we were all learning together. And, you know, originally, it was, we call it the company All Apartments, because if it began with an A, back then you were at the top of the search results. There was no algorithm like Google, literally, we almost debated calling it Aardvark Apartments. But All Apartments was good enough, that got us ahead of ‘for rents’ and ‘Apartment Guide,’ and all the others. So I think it was really easy. And when we jumped in, we started the company. And a lot of people, I think, on this call, Mike Mueller. Mike was president and was handling the industry side of things. And I was really doing all the tech and the online stuff, which was early days, like I said, you know, we didn’t have to worry about Google search algorithm because it didn’t exist. So we were all learning together. And we learned as we went, and we built the software, I mean, back then we had server cages. I remember, in fact, even before there were colo facilities, we had all the servers in a closet in our San Francisco office. And one day, my dog got a little too excited. His tail hit the main power switch and brought the whole company down. You’d have to worry about stuff like that today. But so I think it was just easy to make that switch back then. But I, you know, I think even with this fund we run today, right? Having, obviously, I feel this way because it was my background, but having people that really understand the industry running companies I think is really critical, especially in our industry.
Tyler Christiansen, Funnel Leasing
I love that. Well. And I think that to your point that sometimes the lack of experience, that naiveness or maybe just the vision to come in and ask the hard questions is not an impediment. But so you mentioned obviously, AllApartments and you referenced briefly a second ILS that you launched My New Place. So I guess, tell me a little bit about the state of the multifamily tech industry. Obviously, you were playing in the ILSs space. But what was the overall state of the multifamily tech space? Who were you having to integrate with? Who are the big players? And what were the problems that were trying to be solved by the operators of the day?
John Helm, RET Ventures
Well, you know, it’s funny, I remember, a lot of the industry was still on rent roll, right, a DOS-based rent roll product. I think we actually looked at it when I was at Marcus Millichap. You know, obviously very different. Back then, you know, on the ILS side of things, you know, I think our initial price point was, like $89 a month or something. And the print guys were obviously still incredibly strong. They were getting, you know, $1000-$1,500 a month for a full-page ad. And they were dropping those books off at CircleKs and Seven-Elevens and, and coffee shops around town. And that was the competition. And it was I believe it was us and Virtual Properties (who became Apartments.com) and then rent net (who also ended up being acquired by realtor.com), I think about a year after us. So we were very focused at first, everything that went online, and if you look at the first businesses to go online, they were anything that had a relational database. Because it was easy, it’s very logical just to put that online. Right. So some of the first businesses that besides search, obviously were yellow pages and classifieds, right? Apartments was the fourth largest classified category. But all the classified categories went online at the same time, right? Resale homes, new homes, jobs, cars, and apartments were the five big ones. I guess you could say we were all responsible for the poor state of the news industry today because we gutted the profitability of all the newspapers. They made all their money on classifieds because that whole business just disappeared over 10 years. It’s now all online, and you don’t I don’t even think you can find a classified ad section except maybe in a very local paper these days.
Tyler Christiansen, Funnel Leasing
Right. Yeah. Well, and to that point, I think that, obviously, we’ll get to it a little later, you know, what technologies today? Are you hearing from your limited partners that might become obsolete the same way that print media did? But I want to, I want to ask you another question, I guess, kind of thinking about your transition to where you are now. So you were very successful in running two different startups in the space, ultimately, with great outcomes. So tell us kind of how each of those, you reference All Apartments, but with My New Place that ended up selling to Real Page, correct? And how did that lead you into the world of venture? Where did you go from there?
John Helm, RET Ventures
So what happened when I was starting My New Place was, I remembered how valuable our customer relationships were. In the first company, I thought, you know, it’d be great if I could get a couple of these guys on the cap table. Because then they’re involved in the business, they’re invested in our success. And I can work much more closely with them, they can help with product development. And so when I started my new place, I specifically went out and brought in four large owner-operators on the cap table, it was Essex, UDR, ConAm out of San Diego, and then the Lane Company who has since I think, gone away, but they were based in Atlanta. And those four were great early investors to have in the company. As we were developing new products and thinking about how to price, you know, they would open up their orgs to us, and we could work with their teams, especially the REITs, who had fairly sophisticated marketing departments, and work with them on product formulation. And that’s how we started out as an ILS. But then we we built this whole new set of products called rent engine, who in many cases, were predecessors to Funnel around content syndication, very light CRM lead tracking, you know, 800 call tracking that sort of thing. And those products were all developed because we saw firsthand what our investor customers were looking for, and where they had gaps in their marketing tech stack. So I think it was a natural progression to move from that to venture because I saw firsthand the value of having these guys involved. Frankly, I saw some of the negatives, when we had one of them on our board meeting Brad Forester, the president ConAm and was on our board. And you know, when we would sit down and talk about pricing and margin, having one of your biggest customers sitting in the room could get a little awkward at times. And so I always thought, you know, it would be great if the strategic investors were investing through a fund because the fund could act as that buffer and weed out some of the negatives of the past through all the positives. Also, you know, we were asking a lot of Brad to come. We had monthly board meetings. So he was flying up to San Francisco once a month to attend board meetings. That’s a lot to ask an operating executive. And so we kind of I always had this in the back of my mind. But when I sold a real page, I had a five-year non-compete. So that’s how I ended up living in Europe. As those of you know, I spent four years in Germany. I took my family over there on a sabbatical. And we ended up having so much fun over there. We stayed for four years. But while I was over there, I that’s where I really started doing venture capital. And I worked with a fund out of London called DN Capital ended up working with them for four years. When I was moving home about the time my non-compete was expiring. We had to move home to get our kids back in the US school system and get them ready for college. Yes, I’m an old dad. They’re still in high school right now. And you know, to give credit where credit’s due, one day, I got a phone call in Germany from Mike Schall, the CEO of Essex. He had been thinking the same thing I’ve been thinking, which was, it would be great to form a fund with industry operators focused on technology for the multifamily industry. This would have been back in 2016-’17. And, you know, back then there were a handful of Prop tech funds. But they were very focused on either residential or commercial real estate. When I say residential, I mean, you know, homes and multifamily was kind of being ignored. So we saw an opportunity to form a fund that was focused on what we call rent tech, and go out and round up a lot of the large owner-operators to basically be partners in that fund, and create a lot of the same value that I’ve seen back running My New Place, literally, you know, 8 years, 10 years earlier.
Tyler Christiansen, Funnel Leasing
This is really exciting, John to think about these different elements of your career and how they’ve influenced what RET is and the impact it’s having on the industry. To pay you two compliments here, just, you know, the two of us talking as friends, one you referenced your kids and having met your kids as well as your wife, I have to say, you are a very lucky man, but they are wonderful, you’ve had an amazing family. And I’ve often thought John, when you and your family flew back from Germany is probably one of those things, those moments in multifamily history that was undocumented, but made a huge impact. Right, you come back and you look at the companies such as SmartRent, right, that is now a public company, CheckpointID, Site Plan, right just had a huge impact. That decision for you to bring that experience back into multifamily. Now I’m very biased, of course, the Funnel has been a beneficiary of this model. But when you explain some of the key differences for RET, not only is your perspective, but clearly the firm’s perspective, that the funds raised, come from limited partners that are operators and multifamily, they have assets. And your focus, you know, when you are sourcing deals, to your point, there are other prop-tech companies, but your singular focus on rent tech, which I love that you all have coined that phrase because it’s what I’m passionate about. That singular focus allows you to source better deals and add more value. But when you talk to your LPs, from their perspective, what’s the best part of this model, of the RET Venture models versus, you know, nonspecific VCs or broad prop tech VCs? What is the feedback they give you? Because my understanding is you get a lot of folks who re-up as you’ve opened up new funds, and so they’re obviously very happy with the model.
John Helm, RET Ventures
Yeah, well, it’s funny, right? There’s almost a healthy tension. We are a Strategic Fund. And so all of our LPs are owner-operator managers, we’ve got 45 or so LPs, and combined, they own operate in or manage a little over two and a half million units. So a good chunk of the institutionally owned market is in our fund. And it’s funny, because we often refer to ourselves as a consortium or a syndicate, because there’s a lot of cooperation across our LP group, and that’s, that’s by design. And so when you ask, why do they join? And what are they doing? You know, it’s funny, it’s back to my healthy tension comment. A lot of them don’t even care about their financial returns, they care about the value of working with their peers to move the whole tech ecosystem forward, and what that’s worth to them operationally. Now, obviously, I care about returns, that’s how, you know, I make money. But, obviously, I think if I lost their money or didn’t drive good returns, I wouldn’t be able to raise subsequent funds. But I would say a lot of the value that these organizations see comes from the information flow the exposure to new technologies, and we call it kind of the safety and numbers effect. And I think you’ve seen it at Runnel right when Funnel first started developing their you know, centralized CRM product, you know, I think landing a big REIT and a big private player as you’re, effectively your first customers would have been very difficult if they hadn’t all known they were jumping in together. That’s what we often find. We saw that with SmartRent as well. We can start working with a company at a very early stage, that’s often at a stage where a major owner-operator wouldn’t normally consider working with them because you know, they wouldn’t know if they’re going to be in business 12 months later. By our fund capitalizing the company, and then equally important, the large LPs knowing that two or three other LPs are all jumping in at the same time gives them the confidence that ‘okay, well, if we know the company is raising money, and we know that they’re working with us, and two or three of our peers, they’re probably going to succeed, and we won’t be stuck 18 months from now, having rolled out a piece of software that’s no longer supported.’ And so that I think is a very high value to our LPS because it allows them to access cutting edge and new technology earlier than normally they would be able to effectively.
Tyler Christiansen, Funnel Leasing
Yeah, absolutely agree. I mean, we’ve had obviously great a relationship with RET and the limited partners, we get to interact with one of the big differentiators. I tell folks, when they tell me they want to raise capital from RET: A) I tell them to take the check as quick as you can if you can get it, but B) the influence. And the participation is completely different than other strategic VCs. It’s not just ‘hey, we give money and we wait for the return.’ There’s involvement. There are conversations, and that collaboration to your point. I think it goes in line, I actually wanted to ask you kind of an offline question here. But you mentioned in your career, and you and I have seen it with others, a lot of folks who get into multifamily they never leave. Right. And that builds a sense of camaraderie that I sense when I’m around the RET LPS at Summit events or conferences. So clearly, there is a dynamic that you bring trust to, now on the portfolio company side, I’m not going to ask you to tell me your favorite portfolio company, but we all know. The other portfolio companies what would they say are the biggest benefits of RET? The sourcing and the safety, as well as, the returns are some of the things that the LPS gets. The portfolio companies like Funnel, like SmartRent, like Siteplan, Checkpoint ID, what are some of the things that they would point to and say, ‘Hey, this is the reason that our 80 is, you know, better than taking capital from, you know, a generic VC.’
John Helm, RET Ventures
Look, there’s, there’s tons of money out there, money’s kind of a given, well, maybe maybe not as much today as there was 12 months ago, or at least not at the same valuations. But you know, there’s a ton of capital out there. And I think hopefully, what people are saying is that we bring a lot of additional value to the table in the form of, you know, knowledge, customer connections, and I think it’s a group package, right? It’s us and our LPS working with our portfolio companies to drive success. You know, sometimes I refer to myself as a traffic cop, right? I mean, I’m not going to take credit for, you know, helping your company, right, it’s really Essex, Mid-America, you know, Cortland, who’s done a lot to help you just like it was UDR and AIMCO did a lot to help SmartRent in the early days. I think we help foster that engagement and bring to the table customers and CO-development partners that think and act more like owners. And that obviously brings a lot of value to the portfolio companies.
Tyler Christiansen, Funnel Leasing
Yes, completely agree. And I think one thing that probably is not obvious to folks that I see as a benefit is while you source quality technology companies for your LPs, I also think you source quality LPS for your portfolio companies. Not just in terms of introductions, but what we have found is that RET limited partners are a little more innovative, they’re a little more culturally aligned in terms of their willingness to put in capital and test new technology than the general multifamily public. So I think the fact that the LPS who are investing in RET are very like-minded has been extremely beneficial for us. We know these are companies that have a little bit of tolerance for some of the bumps that come with new technology because they really want to get some of that alpha of outperforming the market with new technology. So that’d be one of my answers.
John Helm, RET Ventures
Oh, well, thanks. Yeah, it’s, you know, it’s true, right? The group self-selects, you know, they self-select in by investing in the fund and then participating. And all of our LPs are, you know, very good about participating in the fund. They can’t work with all the portfolio companies, but what we see is, you know, typically when we make an investment, a handful, you know, three, four or five, engage with that company and then over time as they help that company, hone its product offering and make sure that they’re building something that works for them and by extension, the industry, then other LPs begin to come on board. I know you’re experiencing that right now with Funnel.
Tyler Christiansen, Funnel Leasing
Yeah. Interestingly, I would say probably the biggest misnomer about RET at least among other vendors, is they think once you get an RET check that the limited partners just sign up. To your point, it is not that easy. Each one of them has their own unique strategy and while there is safety in numbers no two property management companies are the same. But I think you’re right there’s there is that camaraderie and collaboration.
John Helm, RET Ventures
So when Oh, and look, you have to perform. You know, it’s a double-edged sword because they all are very good. comparing notes and working with each other, if a portfolio company drops the ball, that can really hurt them as well.
Tyler Christiansen, Funnel Leasing
Correct. Yeah, I told someone that, who you’ve been talking to, and I said, ‘You better knock it out of the park for the first six months because you’re gonna build a reputation quick.’ So I want to take one step back from the technology, you obviously have a unique vantage point that something is also very interesting about RET. It’s not that you have 2 million units of mom-and-pop shops. I mean, these are public REITs. These are the largest third-party managers in the country, that all invest in RET and collaborate. And so, I’m curious, in your conversations with these leaders and influencers in the industry, what are the biggest macro challenges that our industry is facing? Not just the technology, but obviously, as you refer to tech valuations are down. But popular, you know, the consensus is that we’re either in or heading into a recession in the whole economy. So what are what are some of the headwinds that we as a multifamily industry are facing that you’re hearing about from your limited partners?
John Helm, RET Ventures
Well, a big one during COVID, and I think it’s still out there, right? This is a weird economy, right, where we’re heading into a recession, but there’s still a labor shortage. It’s kind of crazy, but I think so many people retired, and or left the workforce during COVID. That, you know, we’ve got this problem where you literally can’t hire enough people in a lot of industries, and multifamily is one of them. So I would say one of the biggest issues that people have been struggling with during COVID, and even today is staffing, especially at the site. And so we’ve invested in a number of technologies. And when we invest, we pursue themes that are addressing problems that our LPS face. And one theme that we push, is self-leasing, and Funnel, obviously, you’re a big part of that. But it’s the technologies that allow an owner-operator to take a prospect all the way from initial contact, through to lease signing and move-in, potentially never even coming into the leasing office or never even talking to a leasing person. And, you know, Tyler, you’ve been a key part of that with Funnel, obviously, they couldn’t get access to the units without SmartRent. And so SmartRent has been a big piece of that puzzle. You want to make sure the person you’re letting in your building after-hours is who they say they are. And that’s where Checkpoint ID came in, helping screen the people. And then, finally, they got to be able to find their way around the property, which is where our investment in Engrain has helped with their very robust mapping. So we’ll often make a series of investments that we think help solve a problem and then cajole, encourage pester bother our CEOs and all working with each other, which I know you’ve, you’ve experienced as well,
Tyler Christiansen, Funnel Leasing
I am integrated with every one of those tools and adding more. And I think I would agree with your point. Thematically it’s been very, it’s not surprising that many of our customers use the tools you stated, because they’re they’re moving in that direction. I think to your point about self-leasing and staffing shortages. One thing that we have seen here at Funnel is clearly COVID accelerated that. Now, the labor shortage persists, even post-pandemic, and in this market where rents are no longer going up into the right 20% year-over-year, the only way to increase performance is to operate more efficiently. And so, you need to perform, or you can’t keep the property staffed, self-leasing, centralized leasing, is not going to be optional. It’s clear what we’re seeing moving forward. And to that point, you know, one of the things that’s really remarkable about RET is the fact that these tools that you had all invested in, none of these are new investments, you know, that were responsive to the market changes, right? These were investments that just so happened to be great tools for a virtual environment for a self-leasing environment. So how do you all identify those technologies before they’re needed? Essentially, right? To your point, when we first started talking at Funnel, we didn’t have any big customers, we were just building a CRM. And lo and behold, you made an investment that ended up benefiting many of your limited partners. So what is the sourcing that you go about, in order to determine what is going to be the next big thing?
John Helm, RET Ventures
Right? Well, that’s where having this great LP group comes in. You know, they’re not afraid to tell us where they’re experiencing problems, where their holes in their tech stack, and where they’re looking for solutions. And so it’s great, right, because we’ve got the biggest customers basically telling us, ‘Yeah, we would love it if you would find something that does this. And because we’re really not happy with what we’ve got today,’ or ‘we see this problem coming down the road, and we need to solve it.’ You know, that was how we made the investment, for example, in SmartRent is they, they were watching what was happening in single-family rentals. And how the single-family guys were effectively renting homes with, with no leasing agents, right, they had installed smart locks, and the person would show up for a tour and somebody in a call center would unlock the door for him, turn on a couple of lights, adjust the AC and let the person do the tour. Then when they left, they locked the door. And you know, they saw the value of doing that in multifamily but they also looked across the landscape and saw 15 different companies that had fewer than 500 installed units each. And they said ‘We need to do this, but they’re just you know, who do we go with? We don’t know if they’re gonna be in business in a year.’ And that’s how we ended up running effectively an RFP process and selecting SmartRent, and who they all got behind. And then you know, the rest is history, if you will.
Tyler Christiansen, Funnel Leasing
I think we just announced I think they smart and just announced half a million units live on the platform now. Yeah, so quite the growth from that RFP process you were running with them?
John Helm, RET Ventures
Yeah. And it would be more if we didn’t have all these supply chain issues. But hopefully, you know, it’s all that’s beginning to work itself out. But I think, so back to your question, we really listen to our LPs, and that guides a lot of what we look for.
Tyler Christiansen, Funnel Leasing
Love it. So to that point, obviously, RET now has been in business for Is it five years? Is that? Is that correct? Does that sound right?
John Helm, RET Ventures
Yeah, we just came? Yeah, we didn’t even celebrate it. No, actually, our first close in thousand seventeen, yep, five years. Okay, five years. I think our first close was in September of ’17. So we’re just past the five-year mark.
Tyler Christiansen, Funnel Leasing
So this question may be a little biased then, but we’d like to ask you out of all of our guests. Do you feel the overall tech ecosystem in multifamily is better today than it was five years ago?
John Helm, RET Ventures
Well, obviously, we think it is because we, you know, we’ve been helping move it along. But yeah, I think it’s still got a long way to go. But obviously, we wouldn’t have started this fund if we didn’t think there was a lot of opportunity to improve that ecosystem. And, you know, I think we’ve got a lot of great investments and companies we’re working with that are doing just that like Funnel.
Tyler Christiansen, Funnel Leasing
I agree. I tell folks all the time, I think having been in the multifamily tech space myself for 10 years now, I believe the last five years have been far better than the first five. And there are two reasons I cite is number one capital, which you know, are at is the best example of rent tech capital. So if you’re an entrepreneur and you get some traction, there is access to capital. I think one of the reasons we’ve seen historically a dearth of innovation in multifamily was the only way was to sell to a big strategic, right, that was the only way to make a return. You didn’t you couldn’t get the legs to get that escape velocity. And then the second one, which also I believe you all help facilitate, is APIs are getting better, right? When you have more innovation, and more quality startups, that puts pressure on the legacy providers, to provide quality standard APIs. Which I would imagine, is a core requirement of just about every technology you invest in the need, but but frankly, now have the ability to integrate with the big PMS providers.
John Helm, RET Ventures
Yeah, no, I would agree with that. And they’re, and they’re getting better about doing it to
Tyler Christiansen, Funnel Leasing
Correct, I agree. So this one, this question may be a little more controversial. Are there any areas in the industry that you are all at RET? Feel are oversaturated? Are there times when you look at you mentioned the early days of IoT with Smart Rent, and there are a lot of providers, but not a clear winner, and you all helped pick a winner? Are there any spaces that you see today that you think there’s too much noise or they’re oversaturated and you’re not you’re intentionally not making a play?
John Helm, RET Ventures
Well, we might still make a play. But that doesn’t stop us from thinking there are a lot of providers or vendors, I mean, obviously, the smart apartment category was crazy back when we invested in Smart Rent, but I think we helped rationalize it by throwing our weight and capital behind Smart rent, and you know, helping them become the leader. There are other you know, there are some hot categories. I mean, at Optech right if you walk the entire tradeshow floor, how many EV charging companies did you see? Right now that won’t stop us from making an investment in EV charging, but I think there are just an unbelievable number of companies, especially level-two charging companies. There’s a lot of money flowing around and, you know, mandates and subsidies. So I think that’s driving some of that. Look, you know, ever since we started All Apartments 26 years ago, there’s been a ton of ILSs. Right? It seems like every college kid that can’t find an apartment, decides he’s going to fix the process and start an ILS. And so at any given point in time, we get an ILS business plan it feels like once a month. And there are a lot of ILSs out there. I think that that category, though, has obviously consolidated to a very significant degree. And but that’s a category that it seems, is always creating new companies. Because it’s easy to get one going right? Somebody decides they’re going to get one going and they’re concentrated at the University of Arizona, or, you know, some college where there’s a housing problem, and they fix it in that market. And then they want to take it national, I think yeah, those are, those are probably two big ones. There are still quite a few companies out there trying to do smart apartments that are trying to compete with Smart Rent. Obviously, we think that trains left the station, but it’s not stopping a lot of people, including incumbents, right, that are related spaces that are now trying to roll out offerings that maybe are part of their security system or whatever product they currently have in the market.
Tyler Christiansen, Funnel Leasing
Yeah, agreed. Are there any problems that are not being solved by available, you know, that entrepreneurs are not solving? Clearly, there’s not a huge need for more entrepreneurs starting ILSs in their college town, but when you talk with your LPs, are there areas where you see a lack of innovation or entrepreneurs coming in? And what do you all think about that? I mean, single family has been a big theme that has emerged in the last five years. When your LPS brings something to you, and you don’t see an option right away? How do you go about that? And are there any themes that you wish there was more innovation in?
John Helm, RET Ventures
You know, yes, and no. Obviously, there’s, there’s a few areas that we’re we’re focused on that maybe we don’t want to talk about, because we haven’t made investments in them yet. So yeah, but I would, I would say that we’re seeing tech pretty much across the board. It’s tough, you know, to say, what’s the next big thing? You know, I’m not Steve Jobs. I tend to, I think we tend to react, right? What made that guy incredible was he figured out what people needed before they knew they needed it? Right. And that’s a rare gift. I don’t have that gift. So we’re looking in areas where typically, it’s, maybe there’s a product out there right now, that’s the first generation, the second generation, but it’s gotten a little long in the tooth, and the people that are on it are frustrated. And they like to see the third generation, and we’re looking to make those investments. You know, to not get anyone mad at me, I’m not going to point out what those products are today. But I think everybody in the industry listening to this call knows what those products are.
Tyler Christiansen, Funnel Leasing
Okay, well, and I guess another one that’s semi-controversial, and you can withhold if you desire, but are there any areas of technology? You know, we touched on it, but, you know, the media guides of your day got replaced by digital websites and ILSs. Are there any technology verticals that RET believes may be obsolete in the near future, given the move to self-leasing and IoT?
John Helm, RET Ventures
Yeah, one would be key cards and key fobs, right? We think access controls, you know, gonna go the way of a Smart Rent or companies like that, right? Where it’s a code, or you’re opening up the door with your iPhone, effectively. Wave your iPhone, and you’re in, or you’ve got to keep a key code. I know, key cards and key fobs work, but the problem is they’re, they’re just like keys, right? You have to keep track of them all. And you’re really when you put in one of those systems, you’re just replacing key track with something that’s equally as complicated. I won’t say who it is, but I remember when one of our LPs, I think telling me a story where when they went to actually audit their system, they found that they had hundreds of fobs that were still active that were just out there. Because you know, a resident moved out but they’d never deactivated the fob or a delivery person was given a fob and then they quit their job. And that’s the great thing about it. A more modern access control system is you know that they’re integrated with the property management software. And when that person moves out, their codes don’t, they can’t, they can’t access anymore. It’s harder with the older systems to keep track of everything. So that’s one. I think, look, everybody loves to beat up on the cable company, so I’ll take my turn. The cable box, right? That’s going away. Obviously, people are streaming these days. And I believe one of the next big trends in the industry will be ubiquitous Wi-Fi or building-wide Wi-Fi. And if you’ve got building-wide Wi-Fi and a smart TV. You move in, you turn on your TV, and you go to your favorite apps, and you’ve already got your Netflix subscription or, or Google TV or whatever it is you’re using. You’re up and running. And you don’t have to, you know, sit at home and wait between two and six for somebody to show up. And then they don’t show up anyway, half the time. So, I think that’ll be another big change. And I believe the industry is finally getting turned on to this. A lot of folks are putting in building-wide Wi-Fi. In many cases, they have to not only as a resident feature because the residents are demanding it, but because of all the more sophisticated software they’re deploying, that needs access. Throughout the property, for example, SitePlan, right? SitePlans enabled, you know, a building owner to send work orders to their maintenance, guys, no matter where they are on the property. Well, for that to work properly, they need connectivity. And sometimes the cell phone signal isn’t strong enough, or the data connection isn’t there. So I think we’re seeing more and more adoption of that technology as well.
Tyler Christiansen, Funnel Leasing
Love it. Yeah, that I agree, the world is going online, and so are our buildings. So, one of the more recent investments that RET made was a company called Stake, a great company, with really cool technology. I’m giving them a shout-out, but also, they play in what I would consider the rewards and loyalty space. Right? And obviously, there were a lot of headlines outside of our industry, with Adam Neuwmann coming in and creating and raising money for a company called Flow. And the idea of that was, you know, a more mobile renter experience, right? As you all look at the landscape, less on the technology side, and more on the owner and third-party manager. You know, we’ve seen big consolidation, the fee management businesses moved into fewer, but larger players, and even the REITs have grown substantially in their unit count from the early days. When you came into the industry, you know, MAA has done multiple acquisitions to become the 100,000 units that they are. Do you at RET spend time forecasting, consolidating, or macro trends of renters becoming more mobile? When you think about these themes? So when you are trying to look ahead and predict, you mentioned obviously can’t predict which technologies consumers are going to want. But the macro of our industry? Do you spend time thinking about how will multifamily look in five years? And are there fundamental changes that we need to be prepared for?
John Helm, RET Ventures
Yeah, and I’d say we’re very applied. And I think I’m a very applied person. So are we thinking blue sky 20 years out? No. Are we thinking five to ten years out? You know, where’s the industry headed? Definitely. And a lot of it is, you know, making the industry more efficient, more effective, having a better resident experience, and then we haven’t even talked about it right on the construction side. There’s a lot of opportunity there, so we’re spending a lot of time on the construction side of things. You know, modular, has had its fits and starts. We have not invested in a modular company. But we have invested in companies that I would say are more componentized. In a shout-out to our company, our investments in Juno and Falkbuilt. Falkbuilt is componentized as effective interior wall construction, and Juno’s doing it with mass timber for an entire property where the floor plans are very similar. And they can get a building up and half the time and get it through zoning and planning and half the time. Because they’re there construction drawings are more like, you know, detailed manufacturing drawings right down to you know, this screw goes here sort of thing, which is more common in the manufacturing industry. So I’d say those are all areas that we’re focused on, that I think will pay big dividends over the next five to 10 years.
Tyler Christiansen, Funnel Leasing
Yeah, I think that’s a great prediction. I think the housing shortage in America will only become more pronounced and with you know, upcoming election cycles, housing affordability is going to be a big topic. So I think that’s a great theme. Obviously, RET is focused on how can we make the construction side of our business more efficient, right, because we clearly need it, we need more inventory.
John Helm, RET Ventures
By the way, on the affordability side, you were you mentioned Stake, we’re very excited about that investment. And you know, what I like about Stake is a lot of the companies before Stake that we’re addressing affordability, so to speak, whether they were lending a security deposit or providing a surety bond for the security deposit, or, you know, companies doing basically bringing buy now pay later, they all had one thing in common, they were encouraging the resident effectively to go into debt. And effectively borrow money, either effectively to pay for their security deposit, or maybe to pay their rent, you know, at the middle of the month, instead of the beginning of the month. What we like about Stake is it’s actually helping residents build wealth. And it’s also a great tool for the property managers, right, they’ve got a cashback product, where the typical property might pay 4 or 5% Cash Back to the resident, if they do certain things that encourage good financial behavior, ie paying their rent on time. They will also pay cash back or something for renewal, things like that, and the owners are getting that money back in the form of higher rents because the residency is a cash-back incentive. Also lower delinquencies, and longer lease terms, so less vacancy loss, and at the same time, the residents are building wealth. An amazing statistic: half, I believe it’s half, of the Stake accounts, they call them stakers the residents in their program, have more money in their Stake account than any other financial account. And so they really are helping these people, and they’ve just rolled out a debit card where the resident gets 5% cashback for the first three months and then 1%. After that, on their purchases, that money goes into the account as well. And then the more money that’s left in the account, the more interest accrues so and I don’t know if you saw enterprise just announced a big fund that they’ve raised where they’re helping renters participate in the upside of the buildings that they live in, in terms of value creation. And a big part of that is also the cashback program through Stake.
Tyler Christiansen, Funnel Leasing
It’s exciting. Yeah, I am very excited about the ESG components that RET is advancing. Funnel, obviously, we have our 501 (c)(3), which we call H.O.M.E. It’s a very exciting time for sure. I agree. Looking forward, that will be a critical component. Well, John, thank you for being on through to finish, we do a speed round here, just to get to know you a little better. So feel free to answer these, but if you could, so you know, any favorite non-work apps. You know, I use ESPN every day, what do you look at on your phone, you wake up in the morning, or before you go to bed at night?
John Helm, RET Ventures
So I read a lot. I love reading, a lot of news and books, and I listen to books. So I guess my three favorite apps would be Audible, because I listen to books when I’m driving or mountain biking, sometimes skiing. Kindle, because I love to read books, all nonfiction. I mean all fiction. I mean, okay, fiction, okay, all fiction, and then Real Clear Politics, which is a great kind of news clipping site on the news of the day. And they’ve got different categories, your core politics, real clear lifestyle, defense, you name it. So those are probably the three apps I use the most.
Tyler Christiansen, Funnel Leasing
Excellent. All right. Well, speaking, you’re a big reader, so maybe you’ll take the book side of this. Do you have a favorite book or podcast that you’ve read or listened to in the last couple of months?
John Helm, RET Ventures
Yeah, you know what, I’m going to shout out a local author here in Park City who actually had the opportunity to meet Jack Carr. At the Terminalis series. It’s now, I think it’s on who’s doing it, is on Amazon or Netflix. I think it’s on Amazon. It’s they turned into a TV series, but if you’d like those kind of spy novels, you know, sort of genre. He’s great.
Tyler Christiansen, Funnel Leasing
Excellent. Okay, great. Thank you. All right. Obviously, you’ve done a sabbatical. Are there any philanthropic causes or, or passion pursuits that you have? That, you know, someday if you were to retire, although you’re obviously doing great with RET, and I don’t want you to go anywhere, but, you know, what would you spend your days doing if, if it wasn’t RET?
John Helm, RET Ventures
Oh, I don’t know. If pure philanthropic something around housing affordability, I think that’s near and dear to both of our hearts. And, you know, I like you know, the old what’s the adage, you know, teach a man to fish as opposed to giving them a fish so, things that organizations and really gotten turned out of this with Stake obviously, that build what’s the phrase, financial education or financial awareness, right? Helping people really think about how they can, how they can build wealth and make themselves financially secure? And then pseudo philanthropic, I mean, if there was a way I could somehow work with the US Ski Team, I love that too living here in Park City, obviously.
Tyler Christiansen, Funnel Leasing
Excellent. Yeah. Well, those are both great passions. Alright, last two. So do you hold any opinions? And I’ve known you to have opinions, John, do you hold any opinions, multifamily or otherwise so strongly that we gave you a billboard there driving between Park City and the airport in Salt Lake that you could put on that billboard? What would you put up there on the Billboard?
John Helm, RET Ventures
You know, I would probably, and I think the whole country could use a little more of this right now. I put up on a billboard, “Live and let live.”
Tyler Christiansen, Funnel Leasing
Love it.
John Helm, RET Ventures
I’ll do my thing. You can do your thing. Let’s not, you know, get in each other’s business too much. If I’m not hurting you, and you’re not hurting me, then we ought to be able to do what we want to do.
Tyler Christiansen, Funnel Leasing
Love it. That’s a good one. All right. And then this one you see on the wall behind me there. There’s a term there, but you don’t have to say Funnel. But you know, renter-centric, your LPS helped us create this tagline for us. But when you think about RET and your career multifamily, what does renter-centric mean to you?
John Helm, RET Ventures
Well, I won’t say Funnel, how about I’ll say “centralized” because that’s effectively and I say no, centric is pretty close to that. But that’s, you know, what it really enables, and that’s obviously a direction I think the whole industry is headed.
Tyler Christiansen, Funnel Leasing
Awesome. Well, John, I appreciate that. Thank you so much for your time today. Obviously, I would invite folks to to follow John and RET on LinkedIn. As you mentioned, it sounds like he may be working on some new deals. So everyone should follow closely to find out who the next big companies are in PropTech. But John, thank you for your time today.
John Helm, RET Ventures
Yeah, in fact, I think we just announced a couple so I don’t want to get in trouble with the PR people.
Tyler Christiansen, Funnel Leasing
Okay, we’ll go check them out on LinkedIn and we’ll follow along but thank you for your time, John. Thanks for listening to this episode of Multifamily Unpacked if you enjoyed what you heard here, leave a review and rating on Apple podcasts and follow Funnel on LinkedIn.