RESI - Earnings call transcript Q4 2018 | Front Yard Residential Corp

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Operator

Good day, ladies and gentlemen, and welcome to the Front Yard Residential Corporation Q4 and Full-Year 2018 Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. [Operator Instructions] As a reminder, this conference maybe recorded. I would now like to turn the call over to Alysia Cherry, Head of Investor Relations. begin. may you Ma'am,

Alysia Cherry

Good Yard's thank conference fourth Sydney. us call. for for Front quarter morning you, you and joining Thank XXXX earnings

of information allocation release also Officer; the President of Joining XXXX Ellison, Operations. through I'd and non-historical Officer; call the today's guide Property earnings differences were investors we some Miles involve Robin materially and statements may everyone our future slide non-GAAP including potential to the that today today. to Executive actual available Web these relating to and Form Vice find me in that and Financial site created slides quarter and to of Lowe, These uncertainties remarks These the you as Senior describe measures. financial is accompany other Adams, like Chief forward-looking the the to with certain of capital SEC, our information. filings section may fourth also risks on performance Investor provide Chief We cause may those I'd well We George company's discussed presentation www.frontyardresidential.com. differ additional may useful. filed business, results the as statements. could inform statements the from like company's the company's results, risks company's earnings at discuss contain to forward-looking comments XX-K financial our our in the

site. now Officer. You the GAAP and presentation Investor George earnings George? additional to our section the can on release Executive I earnings Chief turn to within located our find will information over reconciliation Web including measures, call Ellison, these in a of

George Ellison

XXXX, external productive year but morning in results managers Residential. been move X,XXX complete, complete to from property started another we Front almost quarter year-end two this and to XX,XXX the of of some were Thanks, Alysia, Yard everyone. show. by homes own are homes our that It's from and platform and a good ASPS targeted The to move transition able by is starting mid-November. August We at very

was to goal by by the transition next now the up then year-end move goal mid-year, X,XXX by being to managed Our be homes predicting were and quarter. of move able XXXX. that complete end are the executed MSR to to We the first

while receive our complex today, can time, As The and by homes team from two of homes you families When job continuing imagine, done work quarters background we having the predicted just X,XXX our doing platform in three HavenBrook and detailed we an financial inconvenienced, results. in has is of as whole the homes one August, not to XX,XXX noise be both the another on-boarding to to over transferring in first-class hard outstanding in of and service. purchased year-end, challenging.

to of comments final performance And incredible to introduced our the today, XXXX doing results from goals the results from a make turned update a platform, the of terms, completed the the then such transition He funding non-strategic to well news of sale homes. were better well. in a quarter him the homes recap with positive and Today, fortunate member transformational management a his HavenBrook, after last quarter we acquisition. on us him happy an was asked December very about financial Rob Senior front very Despite and as integration, that at Miles Miles Operation. Vice solid keep in results we on attractive have with we the both of job. we However, than and refinancing Adams, has few great as team President we fourth Property also as of and XXX out accomplishments. expected. middle are able are the senior third being with team quarter are the in

released you stabilized X.X%, a fourth about year-end, the X.X%, rent margin turnover internally funding $XX core quarter turn Rental were stabilized at capped, of results. stabilized XX.X%, run NOI If revenue X,XXX the average and fixed XX% portfolio XX% million, was today, managed to at XX,XXX for of of blended homes through per or can was rental and increases share, rentals page years. maturity we of year-end, core weighted please had four, X.X FFO $X.XX

non-core sales. on quarter's mentioned call, XXX and about last as had for we we As identified homes up

while low; please that's Do there. legacy Rob? primarily data all show count five, let from rent month, completely remains that these rental of some our over continues this of sale Total REOs, several company up, value turnover will indication portfolio very the page a the gone, the sales just to last closed the homes. we non-core important me news but staying strong, we legacy is about consisted rental go of of turn Just XXX assets over and numbers, sale are almost pervious blended good say Rob go embedded quarters. home to good are increases to this

Robin Lowe

you, Thank George.

our a integration GAAP of property numbers was said the a $XX.X quarter, prior was and transition solid the manager improvement quarter, our impacted loss continue of Having our of million, last fourth external be quarter managers. number the are for portfolio new net we performance; said items. XXXX we property that, rental XX% to As by seeing from included over one-time and underlying quarter the

transition managers. fees manager $X.X integration same one-time $X.XX services internal to internal million include the acquisition resources, up away ongoing cost fees integration we First, while property external from our remaining as transfer of property ramp property the and represent time management cost nearly X,XXX homes expenses MSR, acquisition property a our to million Other external at manager our paying property to incurred to $X.X of them and million manager.

substantially costs these the by further second and expect reduce of XXXX, quarter first the of We XXXX. to quarter in cease

more during but with our to MSL million of XXX.X about extinguishment spread of agreement annually. related XXXX Second, interest we costs reduced the talk million later, $X.X $X.X refinancing non-recurring by spread refinancing fourth loan of quarter this or I'll this points the approximately credit quarter. expense includes basis debt the

$X.X million G&A of and that reduce expense we included expenses expect Third, course, legal, to other professional, going non-ordinary forward. about

turn $XXX,XXX around so fourth properties the number as for as are were very accelerated maximize higher with far leasing costs occupancy to of average we than available Finally, Results XX%. rents we efforts stabilized at quarter the season. encouraging for mid-February start

at transition by flat last impact, NOI continued FFO for essentially quarter. XX% the held from XX.X%, During last core quarter quarter, $X.XX to up and the increased core integration $X.XX and to margin

to core slide key we of the seven? get showing that the on we will numbers the for FFO briefly we're go items. how end through So, from I'll XXXX targets reporting are today the

of we $X.XX. savings least Further, interest as costs should of the quarter that and as to million loan to MSR the increase million the at to was MSR range or As meaning We X.X%, $X.XX we substantially already operating and We've a an annualized $XXX we increase the to to basis drive HavenBrook Morgan the per of equate we $X.XX operating of integrate to the the the efficiency them quarter, to expect some strike in fourth X% the balance further maintaining per XXXX. earlier, additional there these to away. expect the XXXX, refinance nearly rate in points points rent spreads compared loan agreement to $X.XX approximate $X.XX quarter. Stanley, divest from further new our in the on to basis collateral progress included the $XXX to be sheet. will per quarter points that $X.XX go drive NOI that kept for by we XX% efficiencies quarter MSL $X.XX loan are purchased on credit $X.XX reporting continue per in advanced homes in of at $XXX maximum XXXX $X.XX refinanced of XX%. discussed core the finally, targeting will should for legacy on infrastructures. rate items fourth X.X%. XX% in we also We quarter We're $X.XX the is loan in with drive the included see FFO level, quarter our of increase core of strengthening a per an should loan capital every in FFO In XXXX ordinary new saving per the cost not that XX% made approximately we basis all of around XXX reduction same to this $X.X assets a $X.XX of are expense rate expect end G&A a advanced a X% And quarter the new acquire we at Yard million XXX refinancing, the of reduced to quarter to a at to to total, loan on $X.XX numbers X% In per over at $X.XX that quarter. million in back be today around cost, would Front annually. proceeds continue At and quarter X% under from FFO core items LIBOR the XXX XXX.X of fourth we fourth occupancy loan, contribute

on the independent and able collateral that on XX% of NAV, to Phelps annualized. about narrow, or increase the with X.X a rate the Duff will the portfolio X.X%, our in along these duration were the were home that at average fact in at Morgan the the able This in closed and our loans loans earnings be maturity maximum for these the fixed XXXX. an have existing debt annualized books on our an capped valuation homes in third rate XX at the loan or higher spread Slide on XX & that X% and on weighted supports value of debt advanced valuation the should loan the evidence of also the the is June Freddie after We're about is around value November believe a LIBOR XXXX. we approximate during kept years. Mac The agreements approximately realize the to the now of We by or an that a Stanley homes X% the loan evidences Approximately refinance we loans to quarter, that SFRX included for meaning Additionally, increase we and or credit XX% SFRX home XX% we lower that the proceeds quarter. X.X%, loan with imply. option of achieve rate strong the

overall were homes Finally, earlier we recently non-core XXX not million, HavenBrook did our purchased fit sold criteria, acquisition. $XXX.X we of proceeds Sale rental that as the part giving XXX approximately of this a month, $X.X that Suisse homes X.X%. down reduction cash warehouse our proceeds to leverage value. We resulting about entire million gain the by Credit applied carrying on of a in line, paying gap debt a

Miles Adams

our our achieving The is laid and to morning of operating new quarter great with by Thank a I'm the foundation to towards and assembled. for all achieved I Robin, operations for like residence an was and We growth you, with everyone. objectives. team. three quarter the contribution inspiring our thank challenges. has good of goals. very extremely proud team and success. would all we've steadfast primary It start filled company you solid made recognizing that team our and our results I company's began dedication new truly each members team you've has the busy our future

residence; footprint company transition to operating best-in-class metrics. properties our second, our our First, assemble on at homes management disruption of to capable all the to expand to platform a ASPS team of XX,XXX and with minimal successfully

ourselves improvement. Lastly, to possible key company's the avoid transition during operating we in and period to decline this any where challenge metrics

transitioned a homes X,XXX as approximately homes all currently from Since George then, of of platform our are MSR the onto of total As have we of homes internal and from approximately transferred under December XX,XXX and we had ahead managing X,XXX approximately had XX, mentioned, schedule ASPS homes. management. XXXX XXXX,

has Midwest. the Tampa, company transitions Tennessee, XXXX substantially We team platform transition remaining Charlotte, with well When our members. Memphis. ahead and end we to Dallas, to approximately onto opened of the QX been expect This to in of team Houston, process, Carolinas, expansion resulted Texas, be schedule. our comprised the This and our in internal began parts include We've expanded the of complete property approximately of was has of by the platform transition XX offices XXX management Indianapolis, people.

our As residents. finding in the our to best service homes resources local of today, we believe and strongly manage

We are our continue well to confident superior our service operating growing results. team best-in-class deliver as as to residents will in customer

of peak during focused well the We our homes maintaining leasing transitioning remain QX and and season. upcoming the beyond. and and are our have building platform. improving truly the on for Even excited with overall very team occupancy We about challenges we we management to built are positioned our

service the and primary to addition In our a levels of maintaining transition. homes for turning existing focus was residents, strong leasing our team during

In which is various homes. this days approximately a unit completed we turns from transition, rate to homes above of consider fact, December of under normal we what turnover XXXX for subset would XX, XXX approximately the transition for the XX%

accelerating and of new improvement least portfolio improved of percentage challenges and team mid-February, was turns of transition the velocity, of XXXX. a was September for XX, of our stabilized result of a seasonality. metric As points an boost QX to given XX as further XX.X% basis from This to XX% allowing leasing on-boarding

ground demonstrates the this that running targets that for in are pleased team with believe achieving have poised the occupancy have achieve XXXX. an very to increase and members in occupancy. We hit We our metric improvement are outline the

the very represents rate occupancy, of turnover over achieve with of growth and XXXX. X.X%. a basis growth rate point growth of X.X% In In summary, X.X% of than points quarter turnover The we rate significant an QX improvement XX% XX% improvement, stabilize of a rental comprises The X.X%. of rate other it the renewal improving XXX many QX to of represents release XX-basis QX addition of accomplishments. rent rent X.X%, QX was of renewal solid

the track management of on property build our are We to out complete platform.

is of on about complete of QX rise. external transition and the occupancy will the from schedule the our property We ahead XXXX away end managers

to to We now company very call to which for goals look the future will with our to continuing operations the advantage in the with team opportunities. have we turn markets we take forward ourselves over own portfolio assembled homes. position pleased are I We and of back challenging XXXX our our George. and

George Ellison

Miles, work. and great Thanks,

our see XXXX on projections. reiterating rate seven, run page As you we are

X% of First, XX% of XX,XXX, let rental me to occupancy restate of some Home that count went into XX%. increases assumptions the these numbers. X%, or

So and go G&A between a fourth an between quarter expense in million annualized $X.XX per million you we which annualized in and quarter million million year are core AFFO there projecting XX% from per operating a of on are resulting interest funds see or $X.XX million the $X.XX to operations in $XXX and to these here many After in million projecting between basis, $XX share, million are $XXX targets. $XX income. of reached in $XXX in annualized $X.XX still per net be to we stated million $XXX as NOI quarter, this per variables before and margin to $XX $XX into appreciate results revenue, that share, we you can still

completed we property reaching However, goals the should stated our track be fact our record and of schedule internalization repeatedly the confidence again. that management will do that so give ahead of of will

acquisition our property we relationships with first page importantly this vendors. at with street of homes HavenBrook outside property will coincident eight, done and the done renewal end the winding management on was by the of be began our ASPS internalized main quarter. year-end recap both XXXX Let's most acquisition management and with we down

As platform by we effectively our in are earlier, us. which XX,XXX were The increasing X,XXX this mark. non-core capital P&L gone, our management REOs but sold property XXX attention sold assets said quickly homes. be close to homes from and reducing up almost above is requires both are just legacy and drag down must tough XXXX all month XXX on loans carefully this our meticulous homes we freeing non-core and we and work This of that to

in loan financing XX-year loan $XXX secured million August million front, well another Freddie as Stanley. from five Mac refinance Morgan a $XXX a with the from as year we On liquidity

effective the lowered also our our line We with Suisse rate Credit restructured and on line with Nomura.

these earlier, being maturity with of transactions debt to we five capped. fixed average stated in over years pushed or debt As XX% resulted our out

stabilized XX,XXX $XXX $X.XX homes single-family and hit home the just from the exceeded. a from Revenue XX,XXX all NOI scale rental we under affordable million per position or grow $XXX Front portfolio company million segment. critical we're Residential grew to core increased rental margin in housing committed cap Yard AFFO, leader on mid-XXs we to XX% rental FFO targeted reach to Our of whole share as reinforcing year-over-year, targets XX%

acquisition, we for but is story On the the Yard laid, goals that a our up an the bottom a operating to was for strong assets on XXXX. dividend sheet it solid already XXXX of transformational accomplishments page maintaining be right opportunistic our sets from groundwork while in value covering All Keeping and evident a the us focus was Front of eye at year. restate long eight, the pruning being with starting being it's our in are all list and Residential strong foundation this our the for unlocking non-core and that with the in real prudent year leverage, balance metrics results numbers.

Now almost to as are become first as transition and and as more starting improve in show financial of to complete, quarter results the to up platform more continue our predictable. is a homes the well will

have publicly to turn We to them, continued Sydney. then XXXX I no state will be back goals different. it will you and achieve

Operator

Our question Harter Suisse. Instructions] Thank from Credit you. comes with Douglas [Operator first

is open. now Your line

Douglas Harter

-- when synergies of the timing through get you but numbers kind I start an of margin the Robin, management the completed, is see quickly, again kind of we benefits Thanks. size internalization property when just of as the to that? are walk you expectation of as the wanted know of kind to from to should the and able

Robin Lowe

thanks, Yes, Doug.

going it's sooner come obviously. rather than to later somewhere So

of obviously property one managers all external things from quarter, I to external the ramping remarks, up managers. the at properties, take I been as same my away paying homes to with fees is time our have still last internal the all those dealing So property the said in our as said we

through -- as So we that quarter. going still we said, this with are

MSL see in the going with still But go, to are do noise X,XXX the that, obviously the we we you made have to to homes quarter. about got although left progress. quarter than quarter, of First lot great going a are fourth first we less

So and and then in and will in are quarter. as as expenses this significantly the that drive in the of the first the out some you see stuff new Miles then the to come just of get his during structure. I realize quarter, to and efficiencies team And second embedded things expect year improve course us our continues better

Douglas Harter

for And four XQ your and line Great. can same the you run just on already FFO item is interest I despite of the then if December slide I Robin? that you level kind on run or refinancing, that, of the AFFO, help contemplated just the substantial could savings rate, expense refinancing. in guess rate got that talk guess you -- number

Robin Lowe

Yes.

be conservative numbers, to in these trying We are quite Doug.

got weighted see XXX. So XXX of annualized we've the year our the as rate XX-K, will was as Today average end assume you rate. in the interest our at

there. there could opportunity So some be

Some are still not February. go the it's could us, against down sale pay in from that so and a of big our the although loans LIBOR-based, debt amount after

am is So answer. slightly being the I conservative there

Douglas Harter

Okay. Robin. Thank you,

Robin Lowe

Thanks, Doug.

Operator

JPMorgan. comes And Paolone our following Anthony Thank you. from with question

Your line is now open.

Anthony Paolone

morning. Good thanks. Okay,

that think and $XXX about million have to First the [indiscernible]? did, odd question of just the NOI then on for that you now that group was we on assets of some what dispositions

Robin Lowe

acquired low HavenBrook, most from on we The NOI quarter CS to a in we that Florida Line, selling and those of with said view South put homes quite those last we the them. was Tony, in

kind of think Tony were was that sell something do into quarter, and we last recycle lower and be And able I So answer to both yields expect NOI to sort on yes. you more me the and those it accretive? that, is the asked of the

high yield, in So we are sold that's lower and going yield stuff asset. we to reinvest

Anthony Paolone

Okay.

magnitude So it's do X%, I the of something think? mean like X%, order what's you

Robin Lowe

right you number are have think there, but the of probably don't yes. me, in region front the I I ballpark in

Anthony Paolone

balance to million at Okay. And I look the seem $XX about what of plan it held you less. what's refining $XX could over order on XXXX? adding over $XXX Do talked the remaining of of I your then for the that as about, or year you in million, the a bit, the course what's of don't like when magnitude, terms know, the sales be footprint behind

Robin Lowe

Yes, of plan sort should We be discipline and definitely in of that. it's we refining terms we doing on our keep going think to constantly reviewing a portfolio. that

of want that ones don't we of outlying ones the we be, of critical more to in obvious the and So, identified sort where sorts mass. kind build we are going already never are to areas these really

list, are we on but then review So we refine. to obviously first go going as that's continue the to forward and

Anthony Paolone

actual on peers and in some of the portfolio, then want they're think a least economics of rate rate the gap, and the there spread a And any I much just between as is? some our is -- both occupied there Okay. we what report times the about number given quarter, the is understand to

Robin Lowe

I question. sure I am not understand am I the sorry.

Miles Adams

This is Miles.

percentage, the percentage portfolio the running and on see we stabilized a points. So there occupied between what question XXX around or right the a that's whether basis is generally the gap is lease

Anthony Paolone

Okay.

Robin Lowe

answer Does Tony? understand. Sorry, your I didn't that question,

Anthony Paolone

so was XX% your understand. about your occupied just was what XX% just Yes, no, rate your leased to that's XX%, then, I is occupied. page am seven, and to And bridge suggest your goal about trying to then if I wanted exactly with XX needed,

to want bridge sure, make I am sort of the right? getting Just

Robin Lowe

an occupied That's number. Yes.

were basis So XX.X% as at have we improved said, I year-end. of We since XX points already year-end. sort

So XX% we February. are already starting

I not feel to pretty at year-end. high now least we So if by think about right getting optimistic XX%

Anthony Paolone

pick up? Right. rate closer just comparable sure that's an XXX And to I to that's in then XX, that make quarter occupancy again the to so fourth bps was want

Robin Lowe

XX. the No, that's

Anthony Paolone

XX.X%. Right the XX.X% versus

basis up XXXX? QX from So XX was yes, there pick

Robin Lowe

again. [Indiscernible]

am number. it's -- occupancy occupied the it's I saying the So

Anthony Paolone

Right.

-- net about to we and or think it. about leverage sense Okay. where for see you to the bridge a year-end think want the around XXXX, to as your And debt is goal to then, can at debt that probably you if EBIDTA give point

Robin Lowe

going XXs. know, pay low XX% XX%, NAV be -- asset, step think with probably you the if sort XX to fair low makes The bit is book it the to I that plan so we XX something leverage actually down to little as like the around is XXs, like, debt sorry, now. a you Yes, right value, of reduced right book

barrel So higher year-end. by a that's where I slightly expect to be

Anthony Paolone

you. Thank great. Okay,

Robin Lowe

Thanks, Tony.

Operator

our you. Jade from question KBW. comes following Rahmani with And Thank

Your line is open.

Jade Rahmani

very XXX acquired that think much. all Thanks those Of XXX the homes those I saw I Amherst Florida? renewal in homes. sold, that residential about were of

George Ellison

counties Yes, where that up was picked the sales by happened.

[ph] Brevard on Dade, where but that store was in think hit maybe I that on was the Florida only -- estate it that closed. picked those real -- piece just so counties that were

think Florida, other other spread I XX the places. XXX were around and were so

in the was comps bulk XXX. the South XXX priced of So of Florida, it higher

Jade Rahmani

was sale? cap What the rate on the

George Ellison

at when way The is sort metric buying growth of we look way yield. look it, and we a it I at very objective the are selling

to So one XX buyers rent divided sellers the by of -- divided that's how speak another. usually and rent times house, price by

you high and ranges probably number buying selling to when low buy you you and the from that XXs So, selling nine XXs.

the in run it why Jade, I that them, higher NOI, sellers them speak how at So out might them NOI. cuts run differently think than they run you a somebody that and definition, is buyers buying I and that can reason

answer imply question your the say that Xs assume high want XXs, you directly. if an yield would would of cash the something NOI, to NOI, them, in gross to in So is a we where times sold I

Jade Rahmani

non-core the of What's pool homes? identifiable Okay.

George Ellison

selling? You mean speaking still we're that of

Jade Rahmani

Yes.

George Ellison

of mean, I things. lot it's Yes,

know born issue, Tony, were a NPL algorithm. low we NOIs chatting were that right in and as the there issue yield you were there yields was number of out list homes the we but still as with a low, is also that legacy purchasing So of of places small were

up be So flat across pretty were cleaning places that previously because country. was distribution loan we'll always bought the

where So a handful and get twos out and sixes there's got fours XXs. still of we and of to places

be said, up that price, a and it'll Rob a culling home XXX sell can two XXXs. buy go in constant So as and you maybe for things of

small are it. we to of else be selling? want part that that'll that places What don't too would So grow. drive Strategic

Robin Lowe

Yes.

we So we earnings for if showed that you slide REOs legacy on our identified XXX just including and of sale that homes sold. Jade, are look the XX including deck, the XXX

the going So as there's go that's currently more. be saying George to pool identified forward, is we that

Jade Rahmani

RESI's give I you including to an management and G&A G&A, guess, the compensation plan is at to point, think AAMC $XX.X Can more fee G&A? optimize on stock running and RESI's Okay. update costs. AAMC I Annualized the million

the Just looking the it's to about and equity So assets, to about at cap numbers what's annual and market target? relative it's relative X.X%. X.X% to X%

that you million of a They've and net cap ticker. example, $XX NNN annual about is I think REIT, the lease got for in know, G&A, triple market billions. is the

So I they've cap. $X.X million got market think an

optimizing top I should be So G&A for think management. f the one priorities

George Ellison

can take I'll that, then Rob, start you it. and

be high the those third AMA The two call beginning would stated the on we move would discussion between of meetings they agenda cycle the quarter in November, companies and two December that were. the board of board meetings

be conversation the real of be to between but two negotiation Obviously, independent and begun. that, about is so that we'll boards the but and has the that So or will two that, asked talk also data analysis it's can't part for between boards. discussion we extent

say else that we've, everything and think, I'll it I So we have. is just all begun like on will stated has we work that on,

it So has begun.

So say all we'll on that's that.

the the the to in have you our and agree to we other specifics, stated people with that in that drive total G&A space that past mentioned. comment are know, as comparable relates it to levels G&A grow real we people As we to obviously more we

take So don't why you that, rest Rob of please? the

Robin Lowe

I'd Yes, a things. of couple say

go million costs, of course legal and of costs something to First like professional all, as I we that of expect $X.X said prepared my non-ordinary and remarks, there's during year. the in other the away

to to maybe that. able be another further something like expect or also $X.X some million realize efficiencies, We

peers got us everyone much of other I thing were I G&A you is Jade is or asset, total rental when lows compared our to to other to size. different gross don't say look at REITs and a were our you our scale The think our percentage would than start comparing they very as when right, whatever else, so

just speaks were, the compared us, gross need we while to grow rental us. sizes so won't that it's important our today we I where And is with our yes, Scale to assets that whole G&A because issue this particularly outsized G&A scale. to clearly as grow think

get And example, peers. will for clearly. sort low our of G&A be so important, we XX,XXX comparable is scale homes But our when with very to

George Ellison

So I it about wrap on in We on. calls. past would that this with you're up the this issue just these talked

that that making way able is to sure assuming with of you that that divided I very happen any go And completely on We're at aware assets the agree time. we a you work to contract be that we'll or out grow down, that point, Rob's other is if be you're down constructed, about to that how over we're companies two number that you is want controlled if will are, addressed. something that. to this of issue to going it's new how crystal clear get done, comes guarantee whatever -- to we and as driven going be and to has be will that it So has but and estate real look G&A can by

Jade Rahmani

Okay.

bad target, the XXXX flow in debt does net debt Just your XX% expense? through occupancy, bad that is at of expense your Where assumptions? to looking XX%

Robin Lowe

Jade. it's nice, Yes,

Jade Rahmani

expense is debt So bad what, X.X%?

Robin Lowe

about X%. It's

Jade Rahmani

Okay.

you be of the would midpoint XX.X% So debt expense? and bad X% expecting at occupancy

Robin Lowe

Jade. Right, Yes.

so achievable. targets are mid-February As is I these XX%, think I look our occupancy ready said very in

Jade Rahmani

that's what gave for that FFO the the would you numbers are year? you expect core and of think the target by year-end. have Do I to an AFFO and FFO you estimate total quarterly

of that. those there'll full-year Do FFO a just a have for buildup So items be AFFO? you range and to two

Robin Lowe

can see that can you how we given this to point, haven't helpful on We that… we Jade. at Yes, guidance

Jade Rahmani

you year-end? the Do cover expect dividend to Okay. by

Robin Lowe

we're the to run $X.XX we're that's year-end, we Yes, Yes, annualized AFFO buy what that so That's to rate. see the expect target that that's $X.XX showing. seeing. by

Jade Rahmani

average the Okay. expenditure, And get you some unit? on, I then would some turned, that are those own each units for spending cost of the How what turn? to hope amount turn much that the XXX was on clarity per for there's to cost

Miles Adams

a the basis net X,XXX CapEx on side. running Miles. of I'm between X,XXX. OpEx turns the to on Yes, a gross to this and OpEx X,XXX a a basis on split on to CapEx is so sorry, X,XXX in about cost side basis, range, to about a X,XXX that on a -- X,XXX on we're gross gross and -- basis seeing X,XXX about the is to net Total X,XXX And inclusive maintain X,XXX

Jade Rahmani

is of What do CapEx the in that's the portfolio think -- several be ratio dollars One, explains of And the the there this The is G&A way recognition seasoned, items. third as expense expenditure. covering factors. is a you the Is recognition. homes. the it industry I've do Two, -- invitation you less less explains you could the something lower could think That's maybe to is low for hundred homes, with there's there be then What property more of allocated portfolio than certain seen is own inclusive couple longer five do turnover years. something delaying difference? expense.

dollars below hundred that those numbers say what the several So you difference invitation homes? are would between explains

George Ellison

you referenced does was of so thing that our help is rate Yes, Certainly, turnover and rate. the that the XX.X turnover considerably. lower first

to is overall much our an size on is we that smaller or would point second smaller home basis on invitation. than The thing average

that the helps maintain. so cost to considerably And with

the two So are difference. key factors that factors I those in driving think

Jade Rahmani

Okay. commissions are those? just you through items marketing And those the or expensed fully capitalizing where that expense, statement? and -- Are on leasing is flowing then sorry, income

George Ellison

costs are capitalized. incur those paying them Yes, commissions when to third those we parties. We're

be would capitalized. they so, And

Robin Lowe

[Indiscernible]

Jade Rahmani

I What last comment, that? was catch the didn't Robin,

Robin Lowe

all forward we in-house go we up of that before, have… that saying but as box as imagine some was activities you just title we bring can more know I'm we that the you have and

Jade Rahmani

that'll so it's be expensed And in-house? when

Robin Lowe

all expensed. expensed, It's It's yes.

Jade Rahmani

those of do XX update imply XX, to trying I NAV estimate you is do and And you confirm? slides the an what then with have guess, slides Okay. that

Robin Lowe

XX.XX.

Jade Rahmani

again. Say Sorry.

Robin Lowe

XX.XX

Jade Rahmani

Okay.

Robin Lowe

the That's and a then we've index few index the shown carrying right value cost plus indices any CapEx that the right. by purchase slide MSE plus basis on

dependent discounted kind you on are number but to that obviously they cover of a the apply If come high up use a full with is this classic the NAV you me baseline. than going to

Jade Rahmani

advance rates? to Is that using are what lenders decide

Robin Lowe

slides. tend with come quite on these you you two if to what PTOs number use we're Lenders PTOs to a use showing up similar

Jade Rahmani

Great, taking thanks question. for the

Robin Lowe

Jade. Thanks,

Operator

Mike comes you. Grondahl following from with Securities. our And Thank Northland question

is open. line Your

Mike Grondahl

thanks. Hey, guys,

that those you and for your to on relates numbers maybe sort it drive of getting Just seven below of XX,XXX to X,XXX guys XX,XXX outlook homes some of what that slide homes? kind XXXX a that or or

George Ellison

Good morning, Mike.

after We go maybe debt. a there smaller is to used sale to size. XXXX large that enough paydown capital to Rob have XXX of probably amount little bit the some proceeds that

been two a at at best weeks. least there the opportunity but this pulls nice at that's that point, is for we've couple out there looking probably of So

we range. these those it fit right a so they why can buy gave And sooner we get the makes that's then could you obviously better price we numbers the if

second we negotiate to some So I there having take something and that quarter diligence. will the -- able to out the should do it have but think team few a and by I if are things to done these pricing be get in we're weeks then mean

I few And said the of the I could lower XX we if the too end if the are we get then at quickly look, the sooner quarter. hopefully And year in XX second end so, the to here I done as long to will able we be by we'll something weeks obviously the done next range. that of think better things the buy take in something buying get

why ranges. So we that of sort gave

Mike Grondahl

feel do the the with sure done doing still you okay of feel, Sure, for feel how really the do that is it and internalization Do synergy like schedule. hey - you're obviously well that about XX% just ahead good you it? that feel you now and about value

George Ellison

this is different level complete I'd say -- internalizing just dynamic. creates a things couple business -- of

you're you. and results great waiting and to waiting for not the yours both for come outside to did it's can't data you for you're really from vendors you results So job control it where wait so

at just going is touch purchased win us consumer it to he happiest keeps this when better. attacking the So to said this a allows them consumer is who inside And we directly sort of is having blocking HavenBrook that also which we the level phenomenally game.

And them. the can't consumer to so can't dealing them we through a person get to who touching get is

tremendous just best were business, the couple the they was being of going a top So macro were the then be platform held company on with you level HavenBrook last numbers that went the some but we and in sold. numbers look - they at if back trying years of at for to because a over

they won't so to allow And grow.

the this were So They from obviously team get a has when miles going. they dilute showed been going XXXX just we and they excitedly is saw enormously that bit it up to chopping because XX,XXX are team. growing at to

Joe and excited is well here he the as about with and crushing - team just So us who have been enormously it it. is

As We've we said, the end until of these sooner we we X. get these obviously the get done, imply transition numbers thought to the 'XX. just better done going numbers on Page the this like wasn't get

and responded Miles So team his that. to

better. feel So started and and pleased getting using creative how I feel we about better better we're -- I'm get incredibly business technology getting start we're just incredibly job it? done and and now the have he of his team to with the -- and I

early days, gone get turned we it. it's and in and well give going -- days, would front happy thing I of has it pleased have it's been pleased. but were very ourselves - together have them So We to a don't when and but met early that excited very we're out incredibly this it's very very and could well; very, we're - with tremendously we're poorly bad it's thing, out

Mike Grondahl

know a getting take rent? do And that know increases asking lastly, bit. you give then You've X% how George, enough there? little you enough? rent or you're have for What consistently you're insight How do had do you

Miles Adams

So, this is Miles, take I'll this.

rent get Particularly pretty a achieving on pretty before QX as very impressive indicative say much the QX Slide start look very for Charlotte, we And you a and if in has XX.X%. will market. individual Atlanta release is in in breakdown deck double-digits successful home in market growth the basis, the our process we're very, in look is key our with home to at available the been what rates. in an home. then as marking I would And in you that bear the if we're for with So, at at our growth during we're X.X% there demand aggressive strong we're a markets, trying of

it's we is a market not the - it's whether don't not. available sets If margin. the because homes saying worth. we to pricing the home aggressive, been adjust it before our a So and And want to we And tells the home have then a priced does pretty is occupied. right have market us it's once meet then always vacant the leases available validation. them to the markets, we If let negative age where we've home then or it

them days rents blend we're very, of and driving growing the on as and So, we've very demonstrated. and maintaining market cognizant occupancy greatest between levels improving

Operator

like at the turn I'm the this I you. to remarks. And company any now Thank for not questions to would showing further closing back time. call

Robin Lowe

you. Thank

George Ellison

Thanks, everyone.

Miles Adams

much. very you Thank

Operator

today's does program, you Everyone and may a you conference. for and thank participating great day. the This conclude all Ladies gentlemen, have in disconnect.

Front Yard Residential (RESI) 27 Feb 192018 Q4 Earnings call transcript