SPEAKER_00 0:00

Welcome everyone to another episode of Beyond the Case. This is a podcast where global leaders from Howard Business School's OPM community join in a personal capacity to share the real decisions, life lessons, principles that go behind building enduring companies. My guest today is Sherry Lee. Sherry, it's a pleasure to have you here.

SPEAKER_01 0:22

Yeah, thank you so much for having me, Sohan.

SPEAKER_00 0:24

Yeah. Sherry, please take a moment to introduce yourself and your business to all the listeners.

SPEAKER_01 0:28

Sure. Very happy to be here, honored to be invited in this OPM community. And my name is Sherry Lee. I'm the founder of Pybox. We build this AI agents, home repair automation software for a lot of property management companies, owner operators, and even in the future homeowners, hopefully. And uh before we build this software, we started C-Star back in 2018. We started a real estate investment for so many years, and we all we invest, we manage ourselves, and we live in the PIN for so many years because we're repairing and behalves are driving our timelines, delays, and costing a lot of money. So we build this software for transparency, accountabilities, yeah, agents to automations of the workflow. Uh and I'm OPM64. I finished my first two units already, uh, and happy to share my experiences with other OPMers.

SPEAKER_00 1:27

And what were you doing before you became an entrepreneur?

SPEAKER_01 1:31

So I spent 10 years on Wall Street before I started a C Star. Mostly real estate, private equity firms, software loss file, rates, and in the role of acquisition making investment decisions, uh, getting deeper dive into markets and the strategic move and uh you know working on different roles, GPLPs, working on multiple asset classes, including commercial real estate, multifamily hotels, that's all where I start.

SPEAKER_00 2:02

Now, typically when someone's working for 10 years, they get very comfortable in the corporate lifestyle. So, what inspired you to leave your comfort zone and start out by yourself?

SPEAKER_01 2:12

Because I think uh um, you know, initially I was always wanting to be an entrepreneur, even in my college. Real estate, as you know, that it's very multi-u-dimensional knowledge about or skill sets about, you know, development or investment, market, construction, it's all different areas. Accumulations experience is becomes a key. So I let myself to work on other companies and learning skill sets to see what their industry is real look like. Um so, but uh I think uh my my goal is to really transform this industry as a next generation using technology as you know, property management or real estate operation investment, real estate industry in general is very slow to adopt the technology as you know, it is a very old-fashioned industry. It's people business. A lot of times, um people relying on human-to-human interactions, even though some of the jobs like coordinations, email, phone calls, that type of thing, uh has to be done in person. So we think that there are a lot of opportunities for AI, especially today, with AI agent to transform this industry.

SPEAKER_00 3:30

You know, you decided to start your first company, a real estate debt fund, or sorry, a real estate fund, and you started acquiring properties, fixing them up, and then becoming a landlord. That's not easy to do because I'm a lender myself. I've seen a lot of folks aspiring to do that, but things don't go the way you plan them, especially when there's construction risk involved. And so, you know, for someone who's been sitting uh uh in a corporate role for 10 years, to go out there and attempt to get involved with real estate, including construction risk and succeed, how did you pull that off while you were also raising money for the fund that you were running?

SPEAKER_01 4:11

That's a great question. So when I transitioned from a corporate jobs to a startup company owning my own phones, raising capitals and receiving invest meeting investors, that quite a shocking period of time when I started because uh corporate jobs, you're just sitting in the desktop looking at the models, Excel, country numbers, right? Uh, prepare presentations, and the meeting, the committee rooms, conference rooms. There's all the I would say ideal world of the view without the field experience is like hands-on, looking at properties, how it really got into the gritty-nitty things and the numbers, why this is playing out in this way, right? So you have a lot of assumptions from a financial world. The assumptions are coming from industry experiences, exposure, and mostly from the operation side. So that was why, that's the reason why I feel shocked at the first place. Um, but later on, um, I think this is a real operational world for winding up property, fixing up rentals, leasing. Really, you know, sometimes I come down to you know, grinding needies like talking to tenants to figure out where is important leakage. And that's really different from Wall Street jobs, but it gives me a different approach and aspects of understanding the real world problems and give me uh exposure, uh, but also leveraging my previous systematic thinking experiences based on macroeconomics and uh system thinking to provide solutions into this operational world.

SPEAKER_00 5:47

So give us a sense of your skill. How many properties have you acquired since you started your first fund?

SPEAKER_01 5:52

We have acquired uh over 400 units of the single-family rentals over the last seven years, about 120 million dollars. Um and we have four funds. The first fund has exited in 2022 after 2018 acquisition date. And uh pretty good returns, 27% net IRR for investors. Our second fund is in the phase of exiting, uh, expecting to fully sold this year, 120 properties. We anticipated about uh 10 to 15 percent net IR for investors. And phone three, we have 250 properties still under asset management. Phone four was a little bit slow in acquiring because of a higher interest environment, but we are still looking at multifamily and debt solutions to diversify our investment strategy.

SPEAKER_00 6:48

How did you go about building a team for this business?

SPEAKER_01 6:50

I think building a team from the beginning is quite challenging because you don't have a scale. Hiring people need a scale. For example, property managers, we need at least 50 to 100 properties in one market, and then you can hire a full-time employee because all of the fees generating from 20 to 30 properties from the beginning is not enough to support a full-time role. So building a team for me was basically, I think it comes a lot of uh personal relations and referrals, uh, setting up industry connect and hiring third parties, and then transition to internal management. Internal management, um, our team, so we have built up a culture, resource-driven uh-driven, excellence-driven, operations, transparency, you know, uh integrity in terms of the discussions or trusting each other, enable each other rather than just to compete in each other. So we do have a culture built up from there, and that really helps us to encourage our teams internally and uh uh working together.

SPEAKER_00 7:56

Could you talk a little bit about the challenges involved in managing tenants? Um, because it's uh it's a known fact that a certain percentage of tenants in anyone's portfolio may end up going delinquent. And then depending on what state your property is in, it could be a tedious effort to get them replaced, or it could be less painful in some some other state. So just walk through that journey and how you had to toughen up to make sure you could manage so many properties at scale.

SPEAKER_01 8:26

Yeah, uh, I mean, managing tenant expectation, owner expectation, uh, and uh thinking through the operation side in terms of automations and the trust is a balancing work, right? So for realist, especially like managing properties because a lot of customers with which are the tenants occupying your houses, if you want to automate the whole process and regardless of how personal touch over there, personal conversations or trust creation, I mean that that part also matters. You cannot just fully rely on automation, such as sending a reminder, and you expect that the tenant will pay you no, right? Tenant trusts the people, not just the trusted reminder. So the way that it will handle is um we do have automations in the front, but we have uh person touches, calls regularly with the tenants relationships. They are able to take care of the repairs as quickly as possible and keeping them informed and putting the trust uh as a uh matter in this relationship. So that really helps. We all the years, a lot of seven, eight years, our collection risk is always above 99%. I think one of the contributors is uh we're not just uh treating tenants as a money maker machine to pay you the rent, but also how we handle this lower tenant relationships matters. That's not what AI can do, right? So I think AI purpose for us in building tie boxes, also our philosophy is um AI is here to enable trust between people, not replace the trust. Enable communication, transparency, accountability. It's all AI can to enhance trust.

SPEAKER_00 10:15

So you started in an institutional role on Wall Street, you you started your own uh real estate fund, and now you're building an AI-enabled property management system or company which can manage the properties that you own at scale, and you're also trying to use the same AI agent for other uh businesses, anyone else who wants to leverage it for their properties that they own and manage. How do you end up being so fluid in terms of these different skills that you have to learn from finance to real estate and now to AI, which is tech and staying up to date with what's the latest in the industry?

SPEAKER_01 10:53

Wow, that's a great question. I I haven't I it kind of feels like I'm jungling between these different fields, but uh I I don't want to give myself credits like uh you know I'm smart or something, but I think uh one thing is I I don't hesitate to learn, happy to learn something new all the time when AI was here and I was thinking about how we can leverage AI, uh, not just treating as a technology or engineer school thing, but how we can leave in the pin for so many years, how we can leverage AI to help ourselves, like practically, applicatively, to really make this worse uh and invaluable. So that's what um it motivated me to think about questions like that. Uh I don't feel myself is pushed pushed to to jump between areas. I'm both basically pulled by something that's worth exploring. And uh I just just you know would like to spend time on that.

SPEAKER_00 11:53

With everything going on, what what made you consider the OPM program at Howard Business Schools?

SPEAKER_01 11:59

I I love OPM. I make a lot of friends over there. Um and I learn a lot of things in the case studies as well. But but I think comparing Uni One and Unit Two, I pretty much like Uni One better because they have a lot of frameworks, like you know, two times two methodologies to give you a lot of things to think about. And based on that, we can compound it years based on the one case study. Unit two is more practically um, you know, uh internal financial management, um family business management. I think I'm not there yet for my own business. I think I'm an entrepreneur, I'm seven years old of entrepreneur. I'm still learning and growing. My business can be multiple, uh multiplied in the next few years. Um and uh I skipped to the unit three because I'm building up this new startup company tie box and uh expect to come back to finish it next year. But this is a great global network. I think the most beneficial thing I learned from OPM or from other people, from my peers, from my classmates, their experiences and exposure. Even the personality, even the culture uh give me a lot of uh perspective and uh think about something that's not possible before, but make it possible in the future.

SPEAKER_00 13:18

What about the professors? Any professor make a very strong impression on you that you still think about?

SPEAKER_01 13:24

Yes, yeah.

SPEAKER_00 13:25

Yeah. You're also a pianist, right? You've you've played at Carnegie Hall. I believe you also played at HPS.

SPEAKER_01 13:31

Yes.

SPEAKER_00 13:32

And the MIT concert hall. So talk a little bit about that and how that influences the energy that you put forth in in your work.

SPEAKER_01 13:39

Yeah, we hosted two concerts during the first two units I attended, uh, 2024 and 2025 each year, uh during the OPM uh units. And uh it's a huge organization. I got a lot of support from my classmates and attendees, a hundred people over there. Um, so I'm a pianist because my dad is a pianist and I learned when I was younger, like four years of starting. Um, and I grew up with music, and they I I like music just like uh it's a blog in my body. And uh I do have a duet. I have a friend, channelist, I'm a pianist, we have a duet, and then we perform mostly as a uh a team called uh the thousand graceful melodies. So we are performing uh a lot of times, like performing together in Carnegie Hall, Epicenter, Business School, Harbor Club, MIT, and some other universities, IBD uh universities imitations to perform together, charity events. I think a music is a part of uh my life. Like a work is a part of my life, it's not separation, it's just that cohesion is very much a cohesion thing in my life to enrich my life, to do like a meaningful um just just like a work to me. Um I'm hopefully having a Broadway show to be presented next year. We're working on a production uh to bring home repairs on stage. There's plumbers, you can see electricians and a lot of noises, right? Thunders, and that will be fun.

SPEAKER_00 15:15

Hopefully, we have a spot for a lender in there.

SPEAKER_01 15:19

Yes.

SPEAKER_00 15:19

You know, we we will um if you could go back in time and speak to the younger version of yourself who's about to quit the corporate job and start the fund, what advice would you give her today?

SPEAKER_01 15:32

I think I think a fund management is a management skill. It's nothing like, you know, one part of finish or one part of capitalizing knowing investors, and then you can be successful. It's really a management skill, it's managing different parts of the business. And uh, when you start your own business as a fund manager, um, you know, you're lucky if you have a partner, but uh, if you want to start yourself, the first thing is how to control risk. Once your first starting fund can be successful, it's building up the track records and building up your future of the trust from other investors. And uh slowly you will have more investment coming down the road. So pay attention to the risks, pay attention to anything could go wrong, and that's usually kill the deal. That's usually kill the fund. But you know, the the thing is you don't have to be super excellent in terms of return, but you cannot just lose money from the first attempt.

SPEAKER_00 16:30

Certainly. Um, is that a book that that has influenced the way you think that you'd want to talk about?

SPEAKER_01 16:37

Yeah, I I recently focused on a lot of productions focusing on readings, but uh I do have some recommendations if the book was um my bookshelf over there um behind the screen. I think recently I read a book by Kai Foodie that's a future for AI that talks about a lot of um things of what influences AI can bring to the society, not just the for technology, innovation or you know, growth of this economy, but also how you think about UBI, uh you know, society, trust, deeper relationships. Um and I think that there's a deeper philosophy behind AI behind the scene, but it's very fundamentally important. And uh uh that's a pretty pull together of your book.

SPEAKER_00 17:28

Great. Thanks very much for your time, Shari. I appreciate this and it's been a pleasure talking with you. Sounds good. All right, be well. Bye.