My name is Adina.
I’m the CEO of Divi Homes.
It’s a pleasure to meet y’all.
Thank you for being here.
So while they’re pulling that up, I will just kick it off and get started because we’re
about three hours behind at this point.
My passions are at the crossroads of finance, housing, and inequality and trying to solve
all of these.
I’ll get into what my company does at the very end of the presentation.
That’s not what I really want to focus on.
But I want to start off with a little story that I think explains why this is so important
When it was about the 1980s, my mom decided to go on a little road trip with her friends.
And she was in Israel, and she was backpacking, and she was hitchhiking.
And a man picked her up.
She got into that car, fell in love, and got pregnant.
That man is my dad.
My mom and dad quickly got married, immigrated back to the U.S., and found themselves very
young, 21 and 24, pregnant, and trying to figure out what they were going to do with
They couldn’t get a mortgage to buy a house and settle down and be able to raise a family.
But they were fortunate enough to find a woman who gave them seller financing on their
So this woman financed the purchase of the house to let my parents pay an installment.
And in that house, they had three additional kids.
I’m the third of four.
And then eventually were able to get a mortgage, take cash out of that house, and use the cash
that they took out to pay for all four kids to go to college.
And I tell you this because, to me, this is the heart of the American dream, which is
being able to provide a better life for your children than what you actually have.
And so so much of what we’re going to be talking about here is why that American dream has
disappeared for so many Americans and what we at Divi are doing to try to address that.
So let’s dive in.
I have these bright blue slides.
The goal is to just give you the takeaways so you don’t have to figure it out.
I try to stick to one chart per slide to keep it super simple, and I’ll explain it.
But this is the takeaway that you should get from the next couple of data points I’m going
to give you, which is wealth inequality is rising across America.
I think y’all know this chart, which is that 99% of wealth is owned by the top 50%, and
the bottom 50% only own 1% of wealth here in the United States.
So this chart shows distribution of wealth by what your household income is.
So the top 10% of owners, sorry, the top 10% own 76% of wealth, the next 40% own 23% of
wealth, and you sum that up, 99% of wealth is owned by the top 50%.
And what’s even more interesting is that the rich are getting richer while the poor kind
of stay at the same level of income.
And so what this chart actually shows is income percentiles.
So on the x-axis, the zero is if you’re at the very bottom end of the income spectrum,
100%, you’re at the top end.
And then the blue line is how much income or family household wealth you had in 1963,
almost 50 years ago.
And the yellow line shows how much wealth you have today.
So if you were in the top 1%, your household wealth was on average $2 million 50 years
Today, it’s about $10 million or a 5x growth.
And if you were in the bottom 50th percentile, you haven’t seen your household income change
almost at all.
And so you might be asking, okay, why is this the case?
Is it that wealthy people are making more in salary?
I would say while there are some salary differentials, the main driver is asset appreciation, access
And when I say assets, I’m going to use that pretty liberally, it can mean stocks, it can
mean housing, it can mean small businesses, direct investments.
But all of that in a group together is investments in assets.
And so you can see this is a really simple chart where I took what were the 20-year returns
by income as well as asset.
And you can see that household income has not appreciated much in the last 20 years,
whereas the S&P 500, as well as if you owned equity in your home, you’d see an increase
in your value of over 100%.
You want to see something even crazier?
You get leverage on your home equity, which is something that most of you, some of you
might get leverage against your equity, but you mess with the stock market, but most of
You can actually lever up your home equity, right?
And so you can take out debt that’s cheap because it’s backed and guaranteed by the
government, 80% leverage at what has been almost 3% cost of capital.
No one else can get that sort of cost of capital at that sort of leverage.
You’re forced to amortize, so you build up savings in the property, and a house has dual
You cannot live in the S&P 500, you can live in a home.
So if we click on, and so the takeaway has to be those who own assets are more likely
to have a higher net worth.
And so this is a chart that I stole from the New York Times, so credit goes to them.
But if you look on the left-hand side, the blue bars, all of the bars kind of sum up
to 100% going across.
So the blue bars is the percent of families, so bottom 50 percentile of income earners,
50%, 50 to 80th percentile, 30%, so on.
And what this is saying is that the bottom 50% of families and households own 1% of overall
equities in the market.
So when you look at directly held stocks, so stocks in the stock market, they own 0%.
And if you look at the top 1% of income earners, they own 38% of overall equities, which includes
like retirement accounts and everything, remember I said that big asset class.
And they own 51% of all directly held stocks.
So if you ask why are the rich getting richer, it is because they own assets.
Assets compound over time.
There’s also a ton of tax benefits around owning assets, long-term capital gains, which
I’m sure you all know.
Another way to look at this, which I think is really interesting, is your net worth by
renter versus homeowner.
Homeowners on average have 75 times the net worth of a renter.
This is all census data.
It’s all publicly available.
I’m happy to share it.
And I think what is so interesting here is that I’m not saying the answer is homeownership.
If you want to invest in crypto, great.
You want to put your money into the S&P 500, even better.
However, the majority of Americans, as you just saw on this slide, don’t invest in equities
as much, right?
It’s just hard to conceptualize, whereas a house is actually pretty easy to conceptualize.
And because the debt amortizes, you’re forced to save over time.
It’s highly illiquid.
It’s hard to take your money out of it.
It is what makes a great investment.
And so when you look at why this chart is so high, it’s not because homeowners are saving
a tremendous amount more, right?
They’re putting money into the equity of the home.
They’re being forced to in their payments.
So despite the benefits of homeownership, it is starting to become fundamentally inaccessible.
So this is a chart, really simple, of average home prices.
There’s a bunch of different sources you can measure home prices, but you can see that
at the bottom of the recession, which was actually 2012 for home prices, the average
home price in America was $163,000, and that today, it’s closer to $338,000, so that’s
a 200% increase in 10 years.
At the same time, real median income has only increased from about $57,000 to $67,000.
So what has caused prices for homes to increase so dramatically?
If I do, I’m pretty sure that none of this is new news.
You all have been seeing how much home prices have risen.
For those of you who have bought while interest rates were still 3%, good on you, because
that is probably the lowest they’re going to be in a really, really long time.
But here’s the quick history, which is from 2000 to 2008, we were building on average
1.5 million homes a year, not billion, gosh, 1.5 million homes a year, and that equated
to roughly four to five months of inventory.
Months of inventory mean that if there were no more homes that were put on the market,
how long would it take to sell all those homes, four to five months, and that’s generally
considered a balanced real estate market.
Then what happened?
The global financial crisis.
There was a mass number of foreclosures.
The market was completely flooded, and all of a sudden, you could buy an existing home
that was going into foreclosure for $163,000, and so builders who had to pay for labor,
for lumber, right, to actually build a house couldn’t build a house for that cheap.
The cheapest that a home builder can build a home is roughly $200,000, all in cost, right?
And so if you can sit there and you’re like, I can only build a house for $200,000, which
means I have to sell it for more than $200,000, well, I can’t compete with existing foreclosure
So home builders stopped building.
They went from building 1.5 million a year down to about 750,000 homes a year after that,
and it stayed like that until about 2015, and at that point, a lot of the inventory
that came from foreclosures were absorbed, and they started actually rebuilding again,
but they didn’t rebuild at the same rate that they had prior.
We’re rebuilding right now.
We’re building probably new inventories, I’d say 1.2 million annually, and so then this
massive thing happened, which is COVID, and all of a sudden, everyone went from living
in their studio apartment to saying, I need a backyard, I need an extra room for childcare,
and I need an office, and there was this mass spike in demand after years of not building
enough inventory, and so what happens when demand starts to spike and there’s not a lot
Well, home prices took off, which you can kind of see right over here is that little
spiky part at the very end.
And what’s amazing is that it’s actually just gotten incredibly harder, not just because
home prices are getting more expensive, but because of the impact that that has in terms
of how much you actually need to save to buy a home.
So the left-hand chart shows the yellow bar is your average down payment, and you can
see that that’s grown roughly 2x.
At the same time, median income in the last 20 years hasn’t gone up, so on an absolute
dollar basis, you now need to save 2x the amount that you would have had to save back
So one, it’s down payment is an issue.
The second issue is that post-global financial crisis, rightly so, the government tightened
They said, you know what?
It turns out when you cause a global worldwide recession, we should maybe change how we’re
doing things, and so they pulled back and said, we’re going to make you have a higher
FICO in order to be able to purchase a home, which is probably the right answer, but also
pretty painful because people don’t wake up one day and they’re like, I no longer need
a home, right?
And so if you take a look at this, the average FICO for homebuyers is well above what the
average FICO is for the general population, and anyone who’s under 45 years is even lower
because FICO cures over time.
And so what does this all come together and say is that unless you, you know, have the
ability to save 2x the amount, unless you are above average in terms of FICO when you’re
starting off your life in a starter home, you’re going to struggle to actually be able
to buy a home.
Now this chart seems a little confusing, but I think it’s really important to look at and
understand, so I’ll walk you through it.
So what this chart shows is mortgage rates, 3%, 6%, 9%.
We were at 3%, call it a year ago, we’re at I think 5.5% right now is roughly where the
30-year fixed is, and then 9%, who knows, maybe hopefully not in the future.
And that says what is your mortgage tax and insurance payments, what you have to include
for a $400,000 home, which is roughly average home price, and I know a little different
in Miami, but this is kind of across the U.S.
And then I said how much income do you need in order to get that mortgage?
And you can see that your income that you need goes from about $94,000 of household
income up to about $160,000 of household income.
And then I said how many households could qualify for that, because there’s data on
how much income households make across the U.S., there are 126 million households in
And you can see that historically almost 40%, sorry, 30% of households actually could afford
a mortgage where we were before, and that number today has gone down to now 22%, and
will go down to about less than 15% of people who can actually get a mortgage on a home.
This is insane.
So over here I kind of, I like to just overly simplify things, so I kind of put it here,
which is a $10,000 increase in home prices means one million fewer families can own a
home, or a 1% increase in mortgage rates means five million families can actually own
So we’re in a little bit of a tough situation here.
So when I started Dibi, the goal was to help solve wealth inequality by giving Americans
access to assets.
This is the sole goal, the purpose, what I really believe in, which is that access to
assets and compounding wealth in something that you cannot easily pull your money out
of and you just leave it there is the way that we can help people generate wealth for
their families, for their children, for their next generation.
So the way Dibi works is very similar to a mortgage, except it’s not a mortgage.
You come to our website, you apply, we give you a budget.
So we might say, hey, you’re approved for a $500,000 home in Miami, go out shopping.
You shop with your realtor the same way you would with a mortgage, and when you’re ready
to buy a home, you just let us know what home you choose.
We say, great, we put out an all-cash, quick-close offer for you, so you can compete with every
other investor offer that’s out there.
We’ll take care of it for you because we know how to bid on these homes.
We then take care of the inspections, we cover all closing costs, all fees, everything.
We head to closing, and you commit either 1% to 2% down, which is about a tenth of a
usual down payment.
Down payments are 10% to 20%, and we say 1% to 2%, and that’s your initial equity in the
You own that.
And then you move in, you make one monthly payment, part rent, part equity, the same
way a mortgage is principal and interest, and the equity piece builds up your percent
We let you build up to 10% over the course of three years.
At any point in time, you can get a mortgage or refinance and take us out, or you can cash
out your equity and walk away hopefully with tens of thousands of dollars saved up.
So that is how we work.
We operate in 16 metros.
Our biggest ones are Georgia, Texas, and Florida.
Florida is a big one, up in Tampa.
The average income of our customers is about a $50,000 to $150,000 household income.
50% of our customers are people of color, and 80% of our transactions are female-led.
And so I think the most important thing is, are we successful in our mission and what
we’re trying to do?
So 51% of DB customers who have come to the end of their three-year lease have been able
to buy back their home.
Probably another 20% on top of it aren’t yet ready for mortgage, and so we just let them
build more equity over time.
And about 30% of people turn over, which is completely fine.
Sometimes you have an extra kid or two and you need a bigger home, and that’s okay.
We actually love that people can cash out their money and continue moving on.
Over here we have what I think is one of the more powerful things, which is the average
renter savings versus the average savings that a DB customer has in their home.
We’re almost 25 times the savings that the average renter has, and this is because they
are building up equity in their property over time.
Over here, just to show we’re growing quickly and we’re doing it profitably, I actually
think this is super important, is you can sit here and say that you are building a mission-oriented
You have to show scale.
You have to show growth, and you have to show the people there is adoption and you’re actually
having an impact.
This year alone, we’ll deploy over a billion dollars of capital.
We measure a margin as the rent that we collect, less home cost, less interest, so it’s like
a true profit all-in margin, where we’re almost probably going to be at about 25% all-in profit
And now I think we have … Yeah, thank you.
I think that there was a video, but I don’t know if they’re showing it, so we can maybe
go to Q&A if we’re running close on time.
There you go.
I know that Freeberg’s going to talk to you about consumer credit, but let me just tee
up something before.
There’s a tweet, I just want to read it to you, and maybe we can use this as a jumping
Blackstone calls homes almost as unaffordable as the 2007 peak.
They just said that today.
His name is Joe Zittle, who’s I guess a senior partner there.
But he believes a crash is unlikely due to a major difference, which is that most owners
aren’t using their homes like an ATM like they did back then.
Can you just explain sort of the broader state of housing, actually, and why some people
feel like we’re actually right at the brink of a crisis again, and some people don’t?
So the global financial crisis is very different than this, because it was obviously a housing-led
crisis, where we had people overextend, and they didn’t have enough equity that was built
up in their house to cushion a decline in home prices.
I’d say that this is a very different situation today, and I’d say that because, one, we don’t
have a lot of supply.
And so fundamentally when you’re thinking about pricing, supply and demand dynamics,
number one, we don’t have a lot of supply.
Now, what you can probably argue is there is an equilibrium point, meaning interest
rates are increasing, which is starting to stifle some demand.
Don’t get me wrong.
We’re actually seeing that a bit in the market.
And then there’s new home builds that are coming online.
And at some point, there’s going to be enough inventory coming online that there’s going
to be enough supply and a decrease enough in demand that it will impact home prices.
Now, I don’t know that that’s going to be in the next six months.
I actually think it’s going to be more like 12 to 18 months, and I don’t think that it
means that there’s going to be a mass fall off like it was in the global financial crisis,
but it will slow down the price of which homes are growing up.
How much of this is just the, like, miscast housing policy that a lot of states and cities
I’ll give you an example of where I live.
I just got an email from our mayor, and basically what it said is like in the state of California
now they’ve basically said you need to have a certain amount of housing density.
They’re trying to figure out how to do it.
They’re not going to build high rises because those aren’t allowed.
Then they, you know, you allow these ADUs to get built that qualify.
And it’s all gamesmanship because as far as I can read it, the nimbyism of not wanting
to have high density homes, and that seems to be a very just American phenomenon.
Well, I actually think that it’s a little bit that the markets just react slower.
Like this isn’t, houses aren’t equity markets.
They don’t just, you can’t just buy and sell rapidly.
It’s like, oh, I want to build an entire community of homes.
In five years, I’m going to have to now plan in order to get the government licensing,
the regulation, the permits to actually build.
And so you see a problem.
You’re like, oh, home prices are increasing.
And then it’s like five years later, you can actually do something to actually impact it.
And by then the entire market has like completely changed.
I mean, Russia invaded Ukraine and COVID took over and there was a global pandemic.
And so I think the bigger issue is that the housing market can’t react as quick to keep
up with public equity markets.
And a lot of that is because the government highly regulates the building of homes, which
takes a tremendous amount of time.
And especially right now where builders are like, I think that most builders miss their
Q1 numbers of how many houses they were actually going to build by almost 60%, which was mostly
So even when they rush it, a lot of other factors are impacting it.
And then what do you think about the, because I’ve talked about this a little bit on the
pod, because it’s something that’s really, I think, poorly understood, but important
in my opinion, where Fannie Mae and Freddie changed the upper bounds of mortgages where
they can be conforming now at like a million dollars, whereas before they used to be considered
And anyways, the reason I’m asking this question is I feel like there’s a lot of financialization
and engineering here in the housing market that is poorly understood, that in some ways
tricks consumers to getting in a little bit over their ski tips.
And then in a moment like this, where rates rise, their job’s a little bit more insecure,
this is when all of the parade of terribles happen.
So we just added a wonderful woman.
Her name is Kimberly Johnson.
That was actually our first independent.
She was the COO of Fannie Mae.
And I brought her on to fully understand as much of this as possible.
So the last time the government changed the underwriting criteria, it led to the global
So if you ask them if they’re really excited to do it another time, they’re like, no, no.
We learned our lesson once.
So I’d say that they’re actually, because they’ve been under conservatorship, so most
of Fannie Mae’s operations have been very dictated by the government, they’re not actually
taking probably the level of risk that they should in this current market.
And what I mean by that is if home prices go up by 30%, what actually qualifies as a
conventional mortgage needs to go up by 30%.
But that is such a massive change for government to make because they’re so shell-shocked,
I think, from having made a change before and it having such a negative ripple effect.
So when I spoke to Kimberly, her response was, no, no, no, no, we’re not here to start
making these changes to make it easier for consumers to get a home.
That’s your job.
You disrupt us.
You do that.
I’m not here to take risk.
But they felt the government just felt like they still, like I, they felt like that was
just a natural change that had to happen.
Raising the amount.
The upper bound cap.
I mean, of course.
What’s actually even crazier is I’m waiting for them to actually raise the debt to income
ratio because of what I showed you earlier, which is if your income is not increasing
and mortgage rates are going up and home values are going up, you now need to spend a larger
percentage of your income on housing.
That’s, it’s a massive change.
That’s a lending change.
But isn’t that up to the individual banks?
They could change.
They put overlays on top of Fannie Mae’s requirements, but Fannie Mae, because they actually put,
so when the global financial crisis happened, there were such a very high fees and penalties
that went for banks that didn’t have really strict overlays that actually had a ton of
And so now banks are super nervous to lend to people and actually take risk that they
actually follow Fannie Mae’s guidelines very strictly and actually put overlays on top
So they are more conservative a lot of times than what the underwriting requirements are.
And so in order for them to actually start to take risk, I think Fannie Mae would have
to encourage it and they’d have to do it in such a way that they don’t penalize.
Yesterday we had Bill Gurley and Brad Gershner on, I don’t know if you saw that panel.
Didn’t hear about it, no.
So you did see it or not?
So we’ve seen a lot of assets being inflated from used cars to NFTs and everything in between.
And we’ve now seen compression, and we talked about this on the pod, in every single sector.
And so we’re all sitting here wondering, what are the chances that housing collapses?
I was talking to my pal Palmer backstage, my new bestie.
Suddenly we went backstage and-
No, no, no.
Don’t ruin it.
Don’t ruin it.
No, we just sat there and we had a great conversation about 10 different things, it was pretty interesting.
So what are the chances, and we were talking about the chances of a collapse, he said,
maybe it’s 30% chance this real estate collapse, we were watching your talk, 30% chance maybe
the real estate market collapses.
What are the chances in your mind being so close to it that we will see housing collapse
and this be a bubble?
Look, there’s no question that housing growth is going to slow down.
If you look at-
Slow down, but I’m asking you, chances of a collapse.
You mean pricing?
The growth will slow.
Now, whether it goes negative or not, I think it’s more a matter of what the economy does
over the next 24 months.
But I actually think that what we will definitively see, which we have seen, I’d say in the last
two weeks we’ve seen, a slowdown in the rate of growth for homes.
Now, the global financial crisis was very different than what we’re seeing today.
And if you- Bottom of the stock market for the global financial crisis, 3909.
Bottom of housing prices, June of 2012, three years later.
Because the housing market moves so slowly compared to the equities market.
And so it is not surprising that housing is going to be the last thing that’s going to
actually start to compress in terms of value.
People live there for a while.
They can afford their mortgages.
Then their income drops.
Then they can’t afford their mortgages.
Then they get foreclosed.
Then it’s six months later.
Yeah, but also like you see the stock market drop and you’re like, I should sell my home.
That’s going to take 30 days.
Then I have to find someone.
Oh, that’s going to take another 30 days.
Oh, then I have to wait until they move in.
That’s another 30 days.
And so it’s three months before you can like make a trade.
You can’t log on to your Robinhood account and be like, yeah, no, the market’s sinking.
Let’s get rid of our house.
Can I shift the conversation for a second?
You’re a founder of a unicorn.
Here’s the big round.
Timed it right.
So, well, this is what I was just going to ask you.
Can you talk to us about your mindset in this moment now in terms of your valuation, in
terms of your cash, in terms of your burn, in terms of your employees?
What’s sort of front of mind?
What are you doing?
I’d say, so we raised a $200 million round from Tiger.
It was preempted back about six months ago or maybe even nine months ago at this point.
And I think that it’s actually interesting because I listened to you guys on the pod,
And I think that, you know, for me as a founder, when I was going through that moment, I was
like, well, shit, man, it’s a Black Friday sale.
Like I can raise a ton of cash.
I’m getting preempted left and right.
And so I actually think that founders, like obviously I should have played the game that
I played, which is like, why wouldn’t I raise a ton of capital and take less dilution?
There was nothing that was the right chess move at that point in time.
And now kind of to your point, and by the way, it’s not founder’s fault that the market
You guys gave us the turn.
No, you did the rational thing.
By the way, don’t point at me.
No, no, no.
You did the rational thing.
And so, but now, now you have to just, now I’d say, look, Divi, we make, I don’t know,
we haven’t probably put it out there, but hundreds of millions of dollars in revenue.
I burn less than, I don’t know, 5 to 10 million a month, so less than 5 million a month.
We have 300 employees.
And do I think you have to be conservative?
Do I think you had to be conservative along the entire way of building a company?
I thought my company can die at any moment, right?
And I run my company like that.
My employees joke, they’re like, you’re the most frugal person ever.
Like every single time.
We need to spend on this.
I want to invest.
I’m like, yeah.
I want to invest in the Tiger Rambler.
Do you rely on your late stage investors in moments like this to like help you navigate
or how do you do it?
Do you rely on your early stage?
First of all, I don’t think you rely on investors ever.
No, I don’t mean that offensively.
I think that some investors are great, but no one’s building this company with you.
I am building this company.
With my employees.
But ain’t nobody else there with me.
And so when times get tough, it is on you to make sure you can have a path to cashflow
profitability if you can actually raise another round of capital, but you try to support your
employees and work together to kind of weather through this.
But I don’t expect any of my investors to show up with a Hail Mary.
And I think that it’s on me to run a really strong, profitable business.
So any changes from June to now or not really?
Just kind of stay the course, get to the cashflow break even?
Like meaning nothing to accelerate it or?
So I think we plan out a bunch of different cases.
So we always have the base case, target case, and then what I call the off ramp, which is
go cashflow positive.
And every week my CFO, COO, and I get on a call and we just say, how’s the market doing?
How do we feel?
Do we want to switch from our base to our target case?
Do we want to go down the off ramp path?
This week feels the same.
The All In podcast didn’t change our sentiment and we continue on, on Monday morning as planned.
The All In sentiment index, I like it.
It’s great to have you here.
And I had had you on my podcast earlier and I had told you like, God, I thought this was
going to be the most boring podcast and it was one of the best of the year.
I don’t know if that’s a compliment or an insult.
Tell us how you really feel.
No, it was like a boring topic.
No, but again, please tell us how you really feel.
It was like a really boring topic, but a great guest and you made it really, really, um,
I think the audience-
You’re still fully on tilt right now.
I do have-
Jason, Jason, Jason, day one.
I do have, as we’re heading towards ending, I do have an intro.
Because I thought we were all going to get-
Fredenberg tried this.
It didn’t work so well for him.
Okay, well, I thought we were all going to get-
We like my intro.
Fredenberg’s mom, everybody.
So I made myself an intro.
All right, go ahead.
Give your intro and then we’ll wrap.
Which I feel like I should give, which is, um, all right, y’all ready for it?
I’m in Miami chilling with the besties on this stage in a minefield of testies.
J. Cal kindly invited me to share my passion, so here goes in true all-in fashion.
I play the housing long game as the stock market will jitter, but solving inequality
is less flashy than almost buying Twitter.
I’m the rent-to-own leader in the prop tech arena.
I’d like to reintroduce myself.
My name is Adina.
Nicely done, Adina.
That was awesome.
We’ll let your winners ride.
We open source it to the fans and they’ve just gone crazy with it.
I’m going all in.
Besties are gone.