Peter Lohmann's Newsletter - Issue #204

Author

Peter Lohmann
August 14, 2026

A no-fluff, twice-weekly publication for the property management industry.

AppFolio’s $75M Investment into Second Nature

Remember 2025 when Appfolio was riding high?

The property management software firm had stellar second quarter earnings and its shares shot like a rocket to an all time high of $319. For a moment, it seemed as if the property management software firm – which had always lagged giants Yardi and RealPage – could leap into the top tier. 

Taking advantage of their soaring stock price at the time, it purchased a $75 million stake in Second Nature in April. The two firms said they would partner together to integrate Second Nature’s suite of offerings, including stuff like group rate internet and renter’s insurance. Second Nature themselves had been purchased by private equity company Great Hill Partners in 2022 at a 9-figure valuation.

For Second Nature it was a chance not only to garner investment but gain access to an enormous potential customer base in one fell swoop. But what did Appfolio get in return? Let’s get to that in a moment.

2026 has been a far rockier year for Appfolio. The company’s stock has dropped by as much as 50% from that August 2025 highpoint as it has been swept up in the SaaSocalypse: the broad panic that software firms everywhere will crater because of cheaper code written by artificial intelligence. 

Let’s get real for a moment: Appfolio’s business doesn’t seem to be going anywhere but up. In the first half of this year, revenue grew almost 20% to $543 million compared to the same period in 2025 and net income per share rose to $2.36 from $1.85, a nearly 28% increase. 

Wall Street analysts at Guggenheim gave Appfolio a buy rating and set a price target for the firm’s shares at $232 over the next 12 months. Appfolio stock is now trading around $200. “AppFolio is well positioned to, at minimum, preserve its relevance despite the emergence of AI,” Guggenheim wrote in the July 22nd report. 

AppFolio’s ability to simultaneously retain customers and expand revenue-per-customer is catnip for wall street. The later is where Second Nature fits in.

So with plenty of momentum all on its own, why did Appfolio pour $75 million into a relatively obscure partner?

Let’s start with the fact that property managers – myself included – love resident benefits packages. They allow us to purchase value-add products and services for residents in bulk (such as air filter replacement, pest control, internet, and renter’s insurance) and sell them to residents at a profit.

Meanwhile, AppFolio’s growth has slowed. It revealed it added 100,000 new units in the second quarter, down from 300,000 in the fourth quarter of 2025. 

No wonder Appfolio’s CEO Shane Trigg shouted out the partnership with Second Nature during its recent earnings call. Integrating Second Nature means opening new channels of revenue, and potentially gaining insight into competing platforms who also use Second Nature. It also gets them closer to the flow of tenant revenue (ie, fees) at a time when their unit growth is slowing compared to transaction revenue. When a Buildium customer signs up for Second Nature, AppFolio directly benefits.

“Second Nature, a partnership we announced last year, is gaining strong traction,” Trigg said. “Renters insurance, group rate internet, and other essential services activated in one seamless flow, turning a moment that used to be administrative into a value-generating experience for the resident and the operator.”

I chatted with Second Nature’s CEO Thad Tarkington and though he was reticent to chat directly about the Appfolio partnership for confidentiality reasons, he said that Second Nature labors to provide host of services and products that offer value to renters and convenience to property managers like me.

“Our product strategy is: what are the high impact events in a property manager’s life, the things that go wrong and how do we solve them in a way that delivers value to the resident and investor,” Tarkington said. “Our product experience, pricing, service– it’s all purpose built for the property management ecosystem.”

In case you missed it, AppFolio’s pace of acquisitions & investment has increased drastically since Shane Trigg took the top job in 2023:

  • LiveEasy (buyout, Q4 2024, $80M).

  • Lula (minority non-controlling, Q4 2024, $2M) - Unconfirmed but 90% certain Lula was the company invested in here. SEC filings confirm the amount but don’t name the company.

  • Second Nature (minority non-controlling, Q1 2025, $75M). One source told me Second Nature went on to acquire Citizen Home Solutions in Q3 2025.

  • Nomad (minority non-controlling, Q2 2026, $10M) - Unconfirmed but 90% certain Nomad was the company invested in here. SEC filings confirm the amount but don’t name the company. Nomad’s claim to fame is guaranteed rent. Coincidence that AppFolio recently announced they’re backstopping move-in funds?

As the walls of AppFolio’s walled garden are being slowly dismantled, their strategy is necessarily evolving. If AppFolio can no longer keep competitors out, they want to participate meaningly in the clear winners (or at least place bets). And… Shane’s background at Salesforce, a highly acquisitive company, surely plays a role here as well.

Four targets in 18 months… who’s next?

-Peter

THIS ISSUE PRESENTED BY UTILITY PROFIT

The "Easy" Button for Property Managers

For years, I've watched property managers spend hours chasing tenants down to confirm utilities are actually set up before move-in. It's one of those operational friction points that shouldn't exist, but it does.

That's why a lot of property managers love Utility Profit. They automate the whole thing. Tenants get a simple process, you get confirmed proof of setup, and the system handles the follow-up so you don't have to.

Here's what actual users are saying:

  • "Before Utility Profit, setting up utilities was a major hassle. Now, it's a breeze. Our tenants love the convenience, and we appreciate the efficiency and extra income. Highly recommended for any property management team!"
    - Jason H, Stone Oak Property Management 

  • "Utility Profit is our 'easy button.' Since making the switch, we are batting 1,000% for tenant satisfaction. It's so easy for the tenants to get utilities set up and for our team to confirm. The payments are a nice bonus."
    - Dan M, Keyrenter Knoxville 

  • "The streamlined process has saved us countless hours and made our move-in experience seamless for tenants. Plus, the additional revenue stream has been a fantastic bonus!"
    - Kenny H, Liv Indy

It's free to use, it integrates with your PM system, and they share revenue when tenants activate certain utilities. No markup, no upsell, no games.

Why One in Five Owners Doesn't Make It to Year Two

Ray Hespen at Property Meld shared a stat that stopped me: roughly 1 in 5 owners cancel in year one, and that number's swung hard since 2021. 83% retention, down to 75%, back up to 81%.

Mark Brower and I dig into it on our recent episode of The Crane Podcast: 
Is this just market forces or something we're doing wrong? We land on the "ninety days, no maintenance request" theory of retention, plus a wild pricing idea Mark pitched: $7,500 upfront for free management, forever.

Also available on Apple Podcasts, Amazon, and Spotify

Property Management Companies For Sale This Week

  • Boutique property management firm with recurring revenue in Denver, CO (asking $649k, $562k gross revenue)

  • Turnkey 60-door property management company in Park City, UT (asking $275k, $157.5k gross revenue)

  • 15-unit multifamily portfolio in Conway, AR (asking $2.5M, nearly fully occupied)

  • This turn-key property management company in Arizona is still available (asking $525k, $1.01M gross revenue)

  • Fast-growing PM franchise managing 1,000 doors in Coral Springs, FL (asking $300k, $342k gross revenue)

Sponsored by Findigs. Legacy application processing doesn’t cut it anymore. America's top owners and operators outsource application review from end-to-end to Findigs so they can fill more units with residents who pay. Talk to an expert.

Industry News & Events

  • ServiceTitan just cut off access to Podium’s integration. If you’re not familiar, ServiceTitan is basically the AppFolio of the trades (plumbing/electrical/HVAC). They are huge. This comes on the heels of changes to their ToS. Ominous. I’ll have more to say about this next week.

  • Multifamily Dive has a great new tracker that centralizes all their reporting on the algorithmic rent-pricing lawsuits. Dig in.

  • Tenant screening company RentGrow is facing a $2M penalty and injunction from the DOJ, apparently related to reporting accuracy and disclosure compliance.

  • New HUD rules threaten to weaken fair-housing enforcement nationwide. Here’s a specific example from Houston, with details. Not good.

Closing Thought

Did you miss it? 3 highlights from Tuesday’s Newsletter:

  1. How to design a process people actually want to use.

  2. Why you deserve to waste a little time.

  3. Hiring your first executive assistant (replay out now)

🤖 PeterBot Question of the Week

You can now register a free Delphi account for unlimited chats/minutes with PeterBot, my AI clone. It saves your conversation history so you can pick back up where you left off. If you've got a PM question you're stuck on, go chat with it (try the audio mode). It's trained on nearly everything I've ever written or said.

Software I’m using to scale my 700+ door property management company:

Note: These are affiliate links, but I’ve been recommending all these companies long before any financial arrangements came into place.

The content of this newsletter is for informational purposes only and does not constitute professional advice. I may have consulting agreements with, or financial interests in, companies mentioned in this newsletter. Additionally, some of the links included in this newsletter are affiliate links, meaning I may earn a commission if you make a purchase through these links. Always perform your own due diligence before making any financial or business decisions.