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54 It's about understanding the power of leverage for somebody who wants to make that shift from a W2 job to a more passive income job. We spend a lot of time educating on leverage. What have been your key takeaways from this year's conference? For me, my whole life is mortgages, right? at's all we worry about is making loans. In the past—really, since January 1, with the increase in interest rates—as a lender, we've been very concerned about the customers adapting to the new interest rate environment. Even though the reality is, pre-pandemic, this is exactly where we were, and we were never busier. Investors were building up portfolios at a breakneck pace. en the pandemic came, and it really threw gasoline on the fire. But then the interest rates crashed, which was wonderful for our investors. So now, we've done a complete reset. Going into this conference, I was expecting to hear a lot more wringing of hands and concern about interest rates. While there was concern from the investment community, it wasn't nearly as pronounced as I expected. ese investors have a plan. Most of them understand that interest rates are going up and have gone up, and they still plan to build out their portfolios in that new environment and just adjust whether it be the return on investment or the debt service coverage ratio. ey're adapting, and I've walked away from this conference feeling like it's game on. Do you foresee any possible headwinds on the horizon that could hamper the SFR investment sector's growth in the future? It's the margins getting squeezed because of the shortage of assets available for purchase. Anybody that's selling a house knows it's worth a lot of money. ose margins are getting squeezed with the higher cost of money. I came away from this event not as concerned about that, but I can't put my head in the sand. e houses will become less affordable to build out your portfolios if you pay twice as much in interest as you paid six months ago, and everybody knows what their house is worth. ere are very few bargains out there, so that's a concern for me. STUART DENYER Co-Founder and CEO New Western Stuart Denyer co-founded New Western in 2008 with his business partner, Kurt Carlton. Together, they revolutionized the way residential real estate is bought and sold. In his current role, he works with the leadership team to make strategic decisions with the portfolio of companies. He also manages various departments within each brand and oversees company resources. Originally from England, he came to the U.S. in 2001 to work in commodities trading on the Chicago and New York Mercantile Exchanges. Denyer received a bachelor's degree in business and management studies from St. Mary's University in London. He also has his real estate and mortgage licenses. What does the state of SFR look like right now? ere's plenty of opportunity in this space. What we are finding is that, if you are a single- family buyer, mom-and-pop type investor, semi-professional, essentially not institutional, moving just outside of the city seems to be ripe for opportunity. Also, build-to-rent; I don't see that that's going to fall away. You're going to have obvious issues with supply chain, but from a mom-pop perspective, there are patches of land that just aren't big enough for the institutions to consume. How has the SFR sector weathered the pandemic, and what lessons have you taken away from it? Remarkably robust. Government intervention has helped very much, but single-family desperately needed some technological innovation. at came from multiple different sources, and I think that helped enormously with all these road bumps acting as accelerants. e pandemic showed how the industry could manage, and it was able to manage the processes. It showed there was resilience. Interest rates had a big hand in helping, but for the most part, it seems like it's been very resilient to most things that have been thrown out over the years, and has been assisted greatly with tech. Could you speak more about how technology is driving SFR? e ability to qualify and quantify who you're working with as far as a contractor has been improved greatly by technology. Also, the ability to locate and isolate inventory has taken a huge step forward with the introduction of big data—this data really wasn't available before. You used to have to open an MLS book to find out about houses or head to the county and search through public filings. When the big institutions came in and they cleared out the courthouses and were able to pay so much more than your local real estate investor, they understood that there was going to be this steep appreciation for the next however many years. is allowed them to say, "Let's just get a whole bunch of supply right now because we know that, even though we may be paying about 10% above market right now, and everyone's saying we're mad, the market's eventually going to appreciate 20%." at thinking, that mentality, that data—all of the tools, it's been very powerful for the semi-professional who has been able to replicate these behaviors and apply these processes to meet their individual needs. I think we'll see far more cohesion between Main Street and Wall Street moving forward, far more relationship- and partnership-based activity. I think that'll be to the benefit of both sides of the house, with tech enabling rather than tech prioritizing. Cover Story By: David Wharton "MSA-specific data for a lender is huge, and it's made a big difference. Yes, we still get valuations, but it's the data behind the valuation that makes the difference." —Jeffrey Tesch, CEO, RCN Capital

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