All-In with Chamath, Jason, Sacks & Friedberg - #AIS: Divvy Homes CEO Adena Hefets breaks down the state of the US housing market

Episode Date: May 29, 2022

This talk was recorded LIVE at the All-In Summit in Miami and included slides. To watch on YouTube, check out our All-In Summit playlist: https://bit.ly/aisytplaylist 0:00 Adena Hefets breaks down the state of the US housing market in 2022 16:56 Bestie Q&A with Adena: differences between 2008 and 2022, housing market reaction time, chances of a collapse, and more 30:08 Adena does a Bestie Intro for herself! Follow Adena: https://twitter.com/adenahefets Follow the besties: https://twitter.com/chamath https://linktr.ee/calacanis https://twitter.com/DavidSacks https://twitter.com/friedberg Follow the pod: https://twitter.com/theallinpod https://linktr.ee/allinpodcast Intro Music Credit: https://rb.gy/tppkzl https://twitter.com/yung_spielburg Intro Video Credit: https://twitter.com/TheZachEffect

Awesome, hi everyone, my name is Adina on the CEO of Divi Homes at the Pleasure to meet y'all. Thank you for being here. I'll be where I sit, queen of the king of the king of the king of the king of the king. All right, 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. It'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 to me. 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 US and found themselves very young, 21 and 24 pregnant and trying to figure out what they were going to do with their life.

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 house. 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, we're 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 did you're 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 take away 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 you 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% owned 76% of wealth and the next 40% owned 23% of wealth, you son 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 percentile. 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 had today. So if you were in the top 1%, your household wealth was on average $2 million 50 years ago. 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's asset appreciation. Access to assets. And when I say assets, I'm gonna use that pretty liberally.

It can mean stocks, it can mean housing, it can mean small businesses, direct investments. But all of that, I'm gonna group together as 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 equating your home, you'd seen 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 some of you might get leverage against your equity,

but you messed up the stock market, but most of you aren't. 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 utility. You cannot live in the F-MP 500. You can live in a home. And so if we click on, and so the takeaway has to be those who own assets are more likely to have a higher network. And so this is a chart that I sold 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 family, so bottom 50% of income earners, 50 percent, 50 to 80 percent, 30 percent, so on. And what this is saying is that the bottom 50 percent of families and households own 1 percent of overall equities in the market. And when you look at directly held stocks, so stocks in the stock market, they own 0 percent. And if you look at the top 1% of income earners, they own 38% of overall equities, which includes like retirement accounts and everything remembers that big asset class, and they own 51% of all directly-help 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'll know. Another way to look at this, which I think is really interesting, is your net worth by renter versus homeowner. Homeowner's, on average, has 75 times the net worth of a renter. This is all census data. It's all publicly available and happy to share it. And I think what is so interesting here is that I'm not saying the answer is home ownership.

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. It's just hard to conceptualize, whereas a house is actually pretty easy to conceptualize, and because the debt amortizes your force to save over time. It's highly liquid, 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?

It's their saving, they're putting money into the equity of the home, they're being forced to in their payments. So despite the benefits of home ownership, it is starting to become fundamentally inaccessible. So this is a chart really simple of average home prices. There's a bunch of different ways, different sources you can measure home prices, but you can see that at the bottom of the recession, which is actually 2012 for home prices, the average home price in America was $163,000. And that today it's closer to $338,000. That's a 200% increase

in 10 years. At the same time, real median income has only increased from about $57,000, 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 now this is new news, y'all have been seeing how much home prices have risen for those of you who have bought while interest rates are 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 fromated 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, 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. And so if you can sit there and you're like, I can only 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 and mentoring. So home builder stopped building. They went from building 1.5 Million a year down to about 750

Thousand 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, one point, 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 of supply, 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 at 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, meeting 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 in 2000. So one, it's down payment is an issue. The second issue is that post-global financial crisis,

rightly so, the government tightened under writing requirements. They said, you know what? Turns out when you cause a global world-wide recession, we should maybe change our doing things. And so they pulled back and said, we're going to make you have a higher fight go 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. They're like, I no longer need a home, right? And so if you take a look at this, the average phyco for home buyers is well above what the average phyco is for the general population, and anyone who's under 45 years is even lower because phyco cures over time.

And so what does this all come together and say is that unless you have the ability to save 2x the amount, unless you are above average in terms of FICO when you're starting off your life and start a 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. I'll walk you through it. So what this chart shows is mortgage rates.

3%, 6%, 9%. We were at 3%, quality year ago. We're at I think 5 and 1-1-1-1-1-1-1-1% 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 US. 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? Is there's data on how much income households make across the US? They're 126 million households in the US. And you can see that historically, almost 30% of households actually could afford a mortgage

where we were before. And that number today is God count and now 22% and we'll 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 can own a home, or a 1% increase in mortgage rates mean five million families can actually own a home. So we're in a little bit of a tough situation here. So when I started Divi, 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 it 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 $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 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 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 one to two percent down, which is about a tenth of a usual down payment. Down payments are 10 to 20 percent, we say one to two percent. And that's your initial equity in the home. You own that. That is yours. And then you move in, you make one monthly payment, part-time part equity.

The same way a mortgage is principle and interest. And the equity piece builds up your percent ownership. We let you build up to 10% over the course of three years. At any point in time, you can get a mortgage, remove finance 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's a big one up in Tampa. The average income of our customers is about 50,000 to $150,000 household income. 50% 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 Debebian 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're just letting 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 thing, which is the average renter savings versus the average savings that a divi 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. Actually, this is super important is you can sit here and say that you were building a mission-oriented company. You have to show scale.

You have to show growth and you have to show that people there is adoption and you're actually having an impact. And so 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 margin 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 for running class on time.

Cool, thank you. Thank you. I know that Freeberg is 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 off point. Blackstone calls Holmes almost as unaffordable as the 2007 peak.

They just said that today. Yeah. His name is Joe Zittle, who's a senior partner there. But he believes that crashes 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? Okay, yeah, interesting. So the global financial crisis is very different than this, because it was obviously a housing led crisis, where we had people over extend, 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 we're thinking about pricing, supply and demand dynamics, number 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 is new home belts that are coming online. And at some point, there's going to be enough inventory coming online that there's going to be enough inventory coming online that there's going to be enough supply and a decrease in 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 out. How much of this is just the like, miscast housing policy that a lot of states and cities have, I'll give you an example of what 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 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, how's our 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. 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. And we've Russian-Vated Ukraine and COVID took over.

And there's 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, how many houses they were actually going to build by almost 60 percent, which was mostly supply chain.

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 change the upper bounds of mortgages where, you know,

you can, they can be conforming now at like a million dollars, whereas before they'll used to be considered jumbos. 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 jobs a little bit more insecure, this is when all of the parade of terrible's happened. Yeah, so we just added a wonderful woman. Her name is Kimberly Johnson, since that's actually her first independent, she was the COO fanning night. And I brought her on to fully understand

as much of this as possible. So the last time the government changed the underlying criteria, it led to the global financial crisis. So if you ask them if they're like 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-conserveder ships. So most of fanning-may'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-shot, I think, from having made a change before and it's having such a negative ripple effect. So when I spoke to Kimberly, her response was, no, no, no, 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 you, 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. Yeah, I mean, of course, everyone is. What's actually even crazier is I'm waiting for them to actually raise the debt 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 a lending change, right? 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 very high fees and penalties that went for banks that didn't have really strict overlays that actually had a ton of defaults. 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 of it. So they actually 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 Gersheron on the episode of that panel. Didn't hear about it now. Oh, OK. Yeah. So you did see it or not? Yes. OK, OK.

We looked at all of assets being inflated from used cars to NFTs and everything in between, and we've now seen compression, and we talked about this in the pod in every single sector. Yeah. Except housing. Yep.

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. I'm interested in maybe we went backstage and, no, no backstage, my new bestie. Interesting. We went backstage and... No, no, no, don't ruin it tomorrow. We just had a great conversation about 10 different things.

It was pretty interesting. So, what are the chances? We were talking about the chances of a collapse. He said, maybe it's 30% chance of this real estate collapse. We were watching your talk, 30% chance of maybe the real estate market collapse. 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 there's no question that housing growth is going to slow down. If you look at slow down but I'm asking you to answer any of the next collapse. The growth will slow. Now whether it goes negative or not,

I think is 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 slow down in the rate of growth for homes. Now, the global financial crisis was very different than what we're seeing today. And if you...

Any... Bottom of the stock market for the global financial crisis, 3909, bottom of housing crisis, June of 2012, three years later. Why? Because the housing market moved 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. Because people live there for a while, they can afford their mortgages, then their income dropped,

and they can't afford their mortgages, then they get four clothes, then it sticks my slater. That's awesome. So this is 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. 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. I think I'm going to go on a cable. I'll go on to your Robinhood account. I'd be like, yeah, I know the market's thinking, let's get it over how. Can I shift the conversation for a second? You're a founder of a unicorn.

Yeah. Raised a big round. Yeah. Congratulations. Thank you. Time to write. So, well, this is what I was just going to Thank you. Time to write. So 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 the front of mind? What are you doing? Same different. Yeah. So we raised a $200 million around 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, the besties, 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 preemptive 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 founders fault that the market got overheated. You guys gave us the chance. You did the rational thing.

That's what you did. By the way, don't point it out. You did the rational thing. Rational, yeah. Completely. And so, but now. But now, now you have to just know, I'd say, look, Divi, we make, I don't know, we haven't probably put up about hundreds of millions

of dollars in revenue. I burn less than, I don't know, five to 10 million a month, or less than 5 million a month. We have 300 employees. And do I think you have to be conservative? Yes. Do I think you had to be conservative along the entire way of building a company?

Yes, every second I thought my company can die at any moment Right 100% and I run my company like that my My employees show up. They're like you're the most frugal person ever like every single time. It's awesome We need to spend a month Don't invest in the tiger Do you do you rely on your late stage investors in moments like this to help you navigate, or how do you do a new 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 anybody else there with me, and so when times get tough, it is on you to make sure you can have a path to casual profitability if you can actually raise another round of capital, but you try to

support your employees and work together 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. And so any changes from June to now, or not really, just kind of stay the course, get to the cash flow 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

a cash flow positive. And every week, my CFO, COO, and I, again, I'm calling you to 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? Nope, this week feels the same. We all in podcasted and changed our sentiment,

and we continue on Monday morning as planned. You all in sentiment index. 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. You are a... I don't know if that's a compliment or something It was like a boring topic and you educate Again, I can't tell you how you feel But it's like a boring topic but a great guess and you made it really really

Really Really educational I think you are still Fully until Wow Wait I do have that we're having towards ending fully until I do have that we're having towards ending I do have an intro Because I This didn't work Okay, freebergch mom, everybody.

So I made my self-adventure. I feel like I should get, which is, all right, you all ready for it? I'm in Miami chilling with the besties on this stage in a minefield of testies. Jake how? Jake how 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. Yeah! Oh! Nice to meet you. I'm Adina. Yeah! Nice to meet you. I'm Adina.

No! That's awesome. Thank you! Thank you. Thank you. Thank you. Awesome. We open store sit to the fans and they just got crazy We should all just get a room and just have one big hug, or because they're all just like this, like,

sexual tension that we just need to release some house. What, you're, that beat, what, you're, you're a beat. Beat, what? Let's get a few, we need to get merch. Cheese, aren't that. I'm going, darling. What?

Cheese, what? Cheese, what? I'm doing all in