Unlocking Multifamily Investment Success.

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Hello everybody.
Welcome to another episode of

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Arthur's Round Table.
Super grateful for everybody

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that's paid attention to what
we're doing here.

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It's been a lot of fun and we
appreciate the Family Office

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Insights community, sharing it
with others and listening in

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when it makes sense for you.
And if you continue to do that,

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we super appreciate it.
We're grateful to have Ryan

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Duff, who's a real estate
investor and also has a fund

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that we're going to talk about
and we're going to start with

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his origin story here, which is
always interesting and in this

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case also very interesting.
And so I hope you enjoy it and I

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look forward to and, and by the
way, Ryan will be presenting a

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family office insights platform
in the coming weeks.

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So stay tuned for that as well.
So Ryan, thanks for doing this.

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Super, super happy to have you.
You're in Boston, right?

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Yeah, thanks, Ruth.
Appreciate it.

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In Boston, yes, born and raised
here, left for a little while,

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went to school in upstate New
York, moved to Manhattan and

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then came back about six years
ago.

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And we we're currently in the
city still with my 2 little ones

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haven't haven't bit the suburb
bullet yet but I I think it's in

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the not too distant future.
It's coming, huh?

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Yeah, Yeah.
It's tough.

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Yeah.
So, so tell us how this all

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began, that we're you're able to
be in a position to deploy

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capital in a meaningful way in
the multifamily space.

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It's a, it's a, you know,
there's cycles, right?

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So, but tell us how this
started.

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Sure.
So I've been in the business

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about 16 years now.
I started at a company called

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Arbor Realty Trust.
On the debt lending side, think

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agencies, Fannie Mae, Freddie
Mac, FHFA.

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We lent balance sheet products
across all different types,

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shapes, sizes, markets of
multifamily assets and I wove my

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way through the analytical
underwriting side from screening

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deals over to the production
realm, which is where I started

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building a book of business for
the better part of about 12 to

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13 years.
I started representing owner

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operators, developers, brokers,
folks that were mom and pop

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operators all the way up to the
institutional type developer.

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And I was structuring debt
products for them, acquisitions,

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recaps, refinancings,
construction loans, bridge

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loans, preferred equity, MEZ.
And so it was at that time I

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really got a good feel for how
to invest and how to invest the

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right way with the right people
and what markets I wanted to be

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in.
And so I started doing just

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that.
Probably about 13 or 14 years

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ago now was when I first dipped
my toes in as an LP in the

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multifamily space, took piece by
piece of my Commission checks

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and started building a portfolio
of exposure and investments.

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And Fast forward, you know, 10
years after that, you know, I

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was sitting on a couple 1000
units and had the freedoms of

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passive cash flow and a couple
cycles within that time frame as

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well.
And it was about 2023 when I

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looked in the rearview mirror.
Obviously when rates started to

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run up and catch everybody off
guard a couple years prior to

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that, I found myself wedged in
between the house, my employer

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and my client book trying to
mitigate losses, loss sharing,

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avoid foreclosure and work out
events and realized it was a

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colossal waste of my time.
And so I spoke to it's often.

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More work than underwriting a
new deal, right?

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Entirely.
It's exhausting, it's emotional,

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and you don't get anything from
it.

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And so outside of just, you
know, maintaining an existing

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relationship that you've already
cultivated and nurtured and

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executed for.
But it was at that time where I

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really started thinking to
myself, given the time of the

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cycle that we were in and wanted
to feel and build something

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where I could leverage the
sourcing and the deal flow

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capabilities that I had and my
access and that access being the

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network of GP operators and
developers that I had built over

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the decade prior plus prior to.
And so I came up with the idea

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prior to even leaving my former
employer.

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I've been gone now for for two
years to build out kind of a

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conduit platform that ran a
series of micro fund strategies

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targeting all different types of
capital from the retail LP

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investor all the way up to the
institution.

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Think family office in the
middle, think Rias allocators

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fund to funds, etcetera.
And give them an opportunity and

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visibility into the predictable
pipeline of deal flow that I had

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access to.
You know, I handpicked 1/2 a

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dozen GP operators that I knew,
that I knew well, many of whom

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for 5 or 10 plus years we had
relationships dating back to, I

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would say most if not all, I had
personally invested my own

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capital with.
And I started to build a

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platform around them knowing
that I had a bit of a Moat of

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deal flow given their visibility
in their respective markets.

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And I started to introduce that
to my network.

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And Fast forward, you know, I
left Arbor in 2024 and I

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scrubbed my network, created a
database of about 100 or so

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people, 125 contacts, mostly
friends and family, former

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clients of people that I had
been organically introduced to

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overtime.
And I put together a fund.

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My first fund was I think about
6 and a half million bucks.

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And we subsequently deployed
that within the first six months

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into a portfolio of multifamily
deals, all off market.

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I believe there were six assets
in that portfolio.

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And the bell rang and I realized
that I could kind of, you know,

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consistently, repeatedly put
this process in motion with new

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and repeat investors and deploy
their capital in a condensed

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time period into off market deal
flow that nobody really knows

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exists because of the network
that I created.

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And so Fast forward to today,
you know, this is our second

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towards the end of our second
full calendar year.

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And since inception we're up to
about 90 investors.

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We've we're currently actively
raising for our 4th fund the

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first three funds, the first two
funds excuse me are fully

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deployed.
The third funds about 65 or 70%

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deployed.
Last year we invested in 10

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separate assets of about 16-17
hundred doors with a total

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capitalization around 300
million.

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Our strategy is a bit unique,
you know, I wouldn't say it is

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consistent peer-to-peer or some
of the comps in our marketplace.

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Clearly our differentiators are
deal flow, right.

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You know we are actively
building out our bench of GPS

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that constantly supply us deal
flow which precedes our equity

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raising by about 3:00 to five
months.

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So we'll, we'll make deal
commitments well in advance and

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we will back into the equity,
whether it's raising a new fund,

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whether it's putting together a
single purpose vehicle for a

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particular deal or drawing down
the existing undrawn funds that

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we have from prior vehicles.
So it's become a bit of a repeat

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cyclical aspect to the business
that we're creating.

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And listen, you know, I think as
it relates to to this year,

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we're in, we're in growth mode,
we're in scale.

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You know, we know we have the
allocation assigned to, to our

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business to grow probably 3 to 4
times over this year.

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And the source of that capital
is going to come from larger

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check writers, single source
capital writers that can, you

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know, stroke A7 plus figure
check.

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To date, as I mentioned, 8085
investors, pretty much all

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retail.
We have a couple Rias in there

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that have dipped their toes in
with us.

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But for the most part it's been
1 to $500,000 commits.

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I'm the largest investor in
every fund so far.

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So there's significant alignment
across the board with us as

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managers of capital, but also
investors into the same deals

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that we're asking our capital to
invest in.

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And so going forward, you know,
we feel that there's a huge

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opportunity in the space right
now given the visibility we have

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to deal flow to deploy into
distress situations that have

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been created and, and, and by
mismanagement, undercapitalized

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owner operators, capital
markets, distressed lenders and

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balance sheets.
And you know, we're at the

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forefront of all that from a
deal flow perspective.

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And so you know, we, we feel
that there's, there's a probably

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a 12 to 24 month window here
where rates are going to sell in

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a little bit.
Cap rates might compress,

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occupancy rates will normalize.
You know, the influx of new

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supply that we've seen over the
last couple years will will

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steady out, they'll balance out,
concessions will burn off which

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has been compressing rents for
BC assets, which is where we

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participate.
And once that happens, you know

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the demand will start to
accelerate again and rent growth

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will will, will move forward.
And you know, we've been active

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in that space and we'll continue
to be in the ones that have been

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active and not on the sidelines
are going to be victorious over

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the next three to five years.
So when you talk about your GP

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relationships and the sourcing
of deal flow that's off market,

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is it largely because they see
things before they become

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publicly distressed and they can
swoop in and say, OK, you know,

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we have certainty of clothes?
Is it something like that?

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Absolutely, Yeah, Yeah.
So you know, right now we're,

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we, we've invested with probably
8 different GP operators.

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You know, these guys are
vertically integrated, 90% of

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them are local to the markets
where they have concentration,

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portfolios, economies,
efficiencies, you know, and a

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pulse to the marketplace and and
transaction volume.

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And so, you know, when you're
actively owning and operating

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within your target areas, people
know about you, you have a

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reputation and generally
speaking, those reputations are

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clean.
And to your point, they have

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execution power, right?
And so when a deal comes up,

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generally it's off market or a
pocket list from a broker or

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it's a lender or a bank that's
looking for a new buyer because

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the existing ownership
foreclosed or worked out or.

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About to or.
About to, right.

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And so you know the distress
comes in different forms and

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what we've done is we have
regionally positioned ourselves

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across the country to have
operators in different markets

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that bring us deal flow of
similar profile and caliber,

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right.
You know, we generally invest in

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150 to 250 unit assets.
We generally invest in vintages

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from 1990 to say 2010.
They're all liars, right.

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We've done brand new
construction deals that had a

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fracture lease up strategy,
which in my opinion you know

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you're, you're acquiring a core
plus deal that's brand new, but

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it is distressed because it
hasn't been leased up

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appropriately.
We've also done on the other

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side of 50 to 60 unit assets
that we've acquired from mom and

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pop operators with massive
pricing advantages and arbitrage

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because they haven't been
marking rents to market because

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they've had tenants in place for
15 to 20 years and they don't

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operate efficiently.
So our goal is to come in and

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fractured situations and provide
scale, provide scaled equity,

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which in return commands and
leverages profit share.

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So what I mean by that is we are
passive investors.

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We often times don't require
control.

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We don't need certain rights and
remedies that AJV or a larger

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fund might require to invest.
You know, since we invest with

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the right folks that we have
confidence and a reputation

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with, we understand how they
execute.

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And so we become frictionless in
that capacity whereby we offer

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the equity oftentimes 1 to
$5,000,000 a deal and in return

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for that we command a profit
share structure with the GP.

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So we're LP's, however we are Co
GPS economically and to the

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extent there are situations
where we put up our balance

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sheet where they, you know, key
principles signing on the loan

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docs.
I often times am involved in the

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debt placement just given my
background and my expertise.

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It's a huge value add to the
operator for me to bring debt

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advisory and placement and
equity to the deal.

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You can't get much more aligned
than that as far as being up and

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down the capital stack and
having full visibility.

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And so the value create for us
is really on both sides.

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Investors have confidence
investing with us because they

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know our touch points up and
down that stack and the

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relationships that we have with
these operators.

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And on the GP operator side,
they understand how we invest

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and, and, and what type of
investor we want to be, which is

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really to stay out of your way
because we know you can execute

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and get us to our return profile
within a three to five year

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period.
So I know that's probably not

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the same across the board, but
when you say GP in real estate

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parlance, it often means
sponsor, right?

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00:14:22,840 --> 00:14:25,560
Yeah.
GP is the owner, the operator,

227
00:14:27,640 --> 00:14:29,160
the general partnership,
correct.

228
00:14:29,880 --> 00:14:34,000
Yeah.
And so give us an example of if

229
00:14:34,240 --> 00:14:38,000
AGP brings in an LP that's not
you, they're going to have their

230
00:14:38,000 --> 00:14:43,400
standard fee structure promote
etcetera and they're passive

231
00:14:43,400 --> 00:14:47,240
investors as well, most likely,
right, especially if it's a

232
00:14:47,240 --> 00:14:48,320
smaller investor.
Yeah.

233
00:14:48,320 --> 00:14:58,040
So in the case where what I was
getting at is what's the delta

234
00:14:58,040 --> 00:15:04,720
between that normal LP that that
GP would have and what you have

235
00:15:04,720 --> 00:15:08,560
aside from the help you can help
do you can contribute with the

236
00:15:08,560 --> 00:15:14,360
debt and so forth.
Are you adding, you know, 10%

237
00:15:14,680 --> 00:15:17,520
off the promote that the normal
LP would get?

238
00:15:18,640 --> 00:15:24,200
Is is it that sort of advantage?
Yeah.

239
00:15:24,200 --> 00:15:27,440
So it's circumstantial.
You know, we negotiate case by

240
00:15:27,440 --> 00:15:31,320
case, right?
So for instance, if we're

241
00:15:31,320 --> 00:15:34,160
investing 10 or 15% of the
equity, I don't really have a

242
00:15:34,160 --> 00:15:37,800
lot of leverage to go in and
say, hey, you know, Mr. GPI want

243
00:15:38,160 --> 00:15:42,400
50% of your upside, right.
And the flip side of that, if we

244
00:15:42,400 --> 00:15:45,960
are 40 to 60% of the equity,
that's a different story.

245
00:15:46,360 --> 00:15:50,400
And so there's really no pricing
metrics, if you will.

246
00:15:52,480 --> 00:15:54,320
However, it becomes a
negotiation.

247
00:15:55,320 --> 00:16:00,680
You know, I have conversations
all the time with LP's about

248
00:16:00,680 --> 00:16:03,200
investing directly in the deal
themselves versus coming with

249
00:16:03,200 --> 00:16:05,000
us, right?
What's the advantage to coming

250
00:16:05,000 --> 00:16:06,680
through Seaport into these
deals?

251
00:16:07,760 --> 00:16:11,400
Your your economics on an LP
directly into the deal?

252
00:16:11,400 --> 00:16:15,000
That might be a quarter million
half $1,000,000 check writer is

253
00:16:15,000 --> 00:16:21,920
likely a 6 to 8% annualized
yields, maybe a net return IRR

254
00:16:21,920 --> 00:16:26,200
of say high teens and then your
multiple is generally around 2

255
00:16:26,200 --> 00:16:30,640
and A5 or so year period, OK.
When we invest with the scale

256
00:16:30,640 --> 00:16:35,440
that we do, we offer the cash
flow in the annualized yields.

257
00:16:35,440 --> 00:16:39,080
We we promote everybody at an 8%
prep coming into our funds day

258
00:16:39,080 --> 00:16:43,640
one, right, no exceptions.
So you're benefiting on a

259
00:16:43,640 --> 00:16:46,000
preferred return basis by coming
into our fund.

260
00:16:46,480 --> 00:16:50,240
You're benefiting from the terms
that we negotiate at the deal

261
00:16:50,240 --> 00:16:54,240
level with the GP and that comes
in different forms, OK.

262
00:16:54,240 --> 00:17:00,040
So for instance, all GPS take an
acquisition fee, all GPS take a

263
00:17:00,040 --> 00:17:02,720
management fee, asset management
fee.

264
00:17:03,480 --> 00:17:07,280
We'll come in and we'll
structure a sidecar with the GP

265
00:17:07,760 --> 00:17:10,440
whereby, OK, we're now
participating in your

266
00:17:10,440 --> 00:17:14,440
acquisition fee.
We're not going to be charged 2%

267
00:17:14,440 --> 00:17:16,880
asset management fee.
We're going to be charged 1 1/2.

268
00:17:17,560 --> 00:17:21,240
And then for bringing 40% of the
equity, I want 15% of your

269
00:17:21,240 --> 00:17:24,560
upside.
And so I take that upside and I

270
00:17:24,560 --> 00:17:28,359
funnel it directly into the
investors upon liquidity event,

271
00:17:28,560 --> 00:17:32,000
which is generally a sale in our
case because we we invest for a

272
00:17:32,000 --> 00:17:35,360
condensed time period.
And so from an LP in my funds

273
00:17:35,680 --> 00:17:39,640
perspective, you benefit from
those three different silos

274
00:17:39,640 --> 00:17:43,240
economically above and beyond
what you would benefit from as

275
00:17:43,240 --> 00:17:46,840
an LP directly investing in the
deal by yourself, right, Yeah.

276
00:17:46,840 --> 00:17:49,840
For 250,000 or 500 even
$1,000,000 check.

277
00:17:49,840 --> 00:17:51,200
Leverage is different.
Return Yeah.

278
00:17:53,240 --> 00:17:55,520
Yeah, I mean, you know, if
you're right, so didn't touch.

279
00:17:55,560 --> 00:17:59,960
On this, but yeah, yeah,
correct, right.

280
00:17:59,960 --> 00:18:03,440
I mean we a million is 1 is on
this very small end for, for our

281
00:18:03,440 --> 00:18:05,880
investment.
I'd say generally we are two to

282
00:18:05,880 --> 00:18:08,520
six on average depending on the
deal size.

283
00:18:08,960 --> 00:18:12,400
And to give you some perspective
on how that floats within the

284
00:18:12,400 --> 00:18:17,280
deal, the equity stack, our
total capitalization on 90% of

285
00:18:17,280 --> 00:18:21,440
our deals is between 15 and 50
million, OK.

286
00:18:21,880 --> 00:18:27,080
And so when you're leveraging
that up to say 6570%, meaning

287
00:18:27,200 --> 00:18:31,680
you're getting debt financing
for 6570%, that leaves a total

288
00:18:31,680 --> 00:18:35,920
equity raise on average of about
10 to 20 million bucks, give or

289
00:18:35,920 --> 00:18:39,560
take 15, you know, 8 to say high
teens.

290
00:18:40,600 --> 00:18:44,280
We're generally sitting 3530 to
50% of that race.

291
00:18:44,600 --> 00:18:48,080
And so we're not all of it, but
we're enough of it as a single

292
00:18:48,080 --> 00:18:49,880
source to come in and throw our
weight around.

293
00:18:50,600 --> 00:18:52,800
And that comes in different
forms.

294
00:18:52,800 --> 00:18:57,040
Is, is my point economically
whereby everybody benefits.

295
00:18:57,040 --> 00:19:00,240
I could simply take that GP to
myself and, and, and, and run

296
00:19:00,240 --> 00:19:05,480
with it and, and, you know,
deliver a very respectable net

297
00:19:05,480 --> 00:19:07,920
high teen net result to to the
investors.

298
00:19:08,480 --> 00:19:11,680
But there's no added benefit
then by coming with me versus

299
00:19:11,680 --> 00:19:13,880
going directly in the deal other
than access, right?

300
00:19:13,880 --> 00:19:17,800
And so, you know, I try to build
a Moat around our value.

301
00:19:18,400 --> 00:19:23,680
And so that value is beating the
market on our management fee,

302
00:19:23,680 --> 00:19:27,640
which is only 1% and then
economically incentivizing

303
00:19:27,640 --> 00:19:31,080
investors to come with us above
and beyond the access that you

304
00:19:31,080 --> 00:19:33,720
get, right?
Because when we offer, when we

305
00:19:33,720 --> 00:19:37,120
put our offerings out to our
investors, our entire network

306
00:19:37,120 --> 00:19:41,200
sees every deal that we invest
into 60 days prior to it

307
00:19:41,200 --> 00:19:43,320
closing.
They could just as easily pick

308
00:19:43,320 --> 00:19:45,760
up the phone and call the GP
operator and say, hey, I want to

309
00:19:45,760 --> 00:19:49,640
invest with you, right.
I need to make our offering

310
00:19:49,840 --> 00:19:54,440
valuable enough to that
individual or source to come

311
00:19:54,440 --> 00:19:56,000
with us instead of going
directly to them.

312
00:19:56,880 --> 00:19:58,240
Yeah.
So they're not even tempted to

313
00:19:58,240 --> 00:19:59,080
do that.
Yeah.

314
00:19:59,080 --> 00:20:01,640
Not even tempted.
And so listen, it's the

315
00:20:01,640 --> 00:20:04,160
predictability aspect of it.
I, you know, I think the other

316
00:20:04,160 --> 00:20:07,880
thing that we've built which is
a significant differentiator is

317
00:20:07,880 --> 00:20:11,600
that each fund invests broadly
with different operators in

318
00:20:11,600 --> 00:20:14,480
different markets, right,
Because we deploy our

319
00:20:14,480 --> 00:20:18,840
commitments across portfolios of
four to six different assets.

320
00:20:19,480 --> 00:20:23,640
And so, God forbid one deal
doesn't do that well or one deal

321
00:20:23,640 --> 00:20:26,120
underperforms.
You're getting the benefit of

322
00:20:26,120 --> 00:20:30,280
blended economics across the
board, across geographies.

323
00:20:30,720 --> 00:20:34,920
And obviously the profiles of
the deal are very consistent

324
00:20:34,920 --> 00:20:37,800
from a return standpoint that we
invest in just because that's

325
00:20:37,800 --> 00:20:39,800
the space that we know and we
don't want to deviate.

326
00:20:40,240 --> 00:20:42,480
I don't want to invest in deals
that are too small.

327
00:20:42,920 --> 00:20:45,240
I also don't want to invest in
deals that are too big because

328
00:20:45,240 --> 00:20:47,920
competition with institutions
becomes a problem.

329
00:20:48,480 --> 00:20:51,960
And so we know our space, we
know our role.

330
00:20:52,240 --> 00:20:56,440
We're sitting in the middle to
upper, upper middle market and

331
00:20:56,760 --> 00:21:00,760
we're trying to scale up in that
space to become invaluable to

332
00:21:00,760 --> 00:21:04,200
the GP operators who by the way
have their own syndication

333
00:21:04,200 --> 00:21:08,880
networks, right, which is, you
know, if we're 30 to 40% of 50%

334
00:21:08,880 --> 00:21:11,880
of the equity, the other 50%
comes from their networks,

335
00:21:12,200 --> 00:21:14,640
right?
They are individuals, LP's,

336
00:21:14,640 --> 00:21:18,800
retail high Nets, you know,
maybe some fun to fund types of

337
00:21:18,800 --> 00:21:22,680
their own, but you know, I'd say
generally speaking, you know,

338
00:21:22,680 --> 00:21:27,000
we're in the top one to three
scaled investors in every deal

339
00:21:27,000 --> 00:21:31,040
that we do.
So can we talk a little bit

340
00:21:31,040 --> 00:21:35,600
about a couple years ago, the
multifamily space was super hot.

341
00:21:35,600 --> 00:21:41,120
Everybody was deploying capital
and it was a bunch of fraud and

342
00:21:41,120 --> 00:21:43,480
there was some people got
smoked.

343
00:21:45,160 --> 00:21:50,560
Is is it fair to say there's a
cycle and is it fair to say that

344
00:21:50,560 --> 00:21:55,800
you're in some way immune to
that or benefit from it?

345
00:21:58,400 --> 00:22:04,480
I'll answer A and C we're in a
cycle in different forms.

346
00:22:04,520 --> 00:22:09,960
We're in a, we're in a cycle
from a supply demand imbalance,

347
00:22:10,080 --> 00:22:16,200
OK, Obviously when rates were 1
to 5% or 4%, you know, 5-6,

348
00:22:16,200 --> 00:22:19,040
seven years ago, nobody could do
wrong.

349
00:22:19,520 --> 00:22:22,600
You could, you could put a
floating rate loan in place at

350
00:22:22,600 --> 00:22:26,320
3% and buy at a four cap and
everything would go right and

351
00:22:26,320 --> 00:22:30,440
you 22.5 extra capital.
You could get a construction

352
00:22:30,440 --> 00:22:33,640
loan and get a shovel on the
ground for four, 4 1/2% and

353
00:22:33,640 --> 00:22:36,640
deliver a product within 24
months with no supply

354
00:22:36,640 --> 00:22:40,120
disruptions and cost would
remain stable throughout the

355
00:22:40,120 --> 00:22:42,880
whole process.
That's been flipped.

356
00:22:43,440 --> 00:22:47,880
And so that dislocation has
created immense opportunity for

357
00:22:47,880 --> 00:22:53,840
those that have access, right.
I think to answer the third part

358
00:22:53,840 --> 00:22:59,880
of your question, that
opportunity is, is born from

359
00:22:59,880 --> 00:23:06,000
those moments of distress
because of inconsistent

360
00:23:06,000 --> 00:23:08,480
underwriting, aggressive
assumptions.

361
00:23:09,000 --> 00:23:12,400
And so we're now in the part of
the cycle where a lot of the

362
00:23:13,120 --> 00:23:16,360
severe distress has been
flushed, OK.

363
00:23:16,680 --> 00:23:19,560
You know, you take a look at two
and three years ago, balance

364
00:23:19,560 --> 00:23:23,320
sheets were at all time high.
You had debt funds that were

365
00:23:23,320 --> 00:23:26,760
bloated, that couldn't raise
liquidity fast enough to offset

366
00:23:26,760 --> 00:23:30,360
their deficiency.
And So what happened over the

367
00:23:30,360 --> 00:23:35,040
last 24 months is, you know, you
had a lot of refinancings going

368
00:23:35,040 --> 00:23:38,440
on, recap events.
You hear a lot about the rescue

369
00:23:38,440 --> 00:23:42,640
funds, the recap funds, you
know, lenders cutting A&B notes

370
00:23:42,880 --> 00:23:47,400
just to buy themselves some time
and try to try to solve their

371
00:23:47,400 --> 00:23:52,480
balance sheet woes, right?
The deals from those moments

372
00:23:53,040 --> 00:23:56,400
that worked, worked, and they're
now off in the balance sheet and

373
00:23:56,400 --> 00:23:59,520
they're now refinanced into a
fixed rate 5710 year deal.

374
00:23:59,520 --> 00:24:02,560
Going forward, the deals that
are left are the deals that

375
00:24:02,560 --> 00:24:05,800
nobody wants.
And so the distress on the

376
00:24:05,800 --> 00:24:12,280
lending bank side still exists,
you know, and it's because if

377
00:24:12,280 --> 00:24:16,760
you foreclose the LP and all the
equities wiped out, there's a

378
00:24:16,760 --> 00:24:19,520
loss share problem at the lender
bank level where they they're

379
00:24:19,520 --> 00:24:20,160
taking it.
Yeah.

380
00:24:20,160 --> 00:24:22,320
You have to post it to your
balance sheet that you've

381
00:24:22,320 --> 00:24:25,080
actually have a realized loss.
Right, right.

382
00:24:25,120 --> 00:24:29,320
And, and, and so lenders are
still hanging on a little bit to

383
00:24:29,320 --> 00:24:32,640
I would say 40% of that balance
sheet that they had four years

384
00:24:32,640 --> 00:24:36,480
ago, right?
The other 40 to 50 to 60% was

385
00:24:36,480 --> 00:24:39,600
salvageable and people took a
haircut, people had to cash in

386
00:24:39,600 --> 00:24:43,040
capital calls on LP's, you know,
take a preferred equity note at

387
00:24:43,040 --> 00:24:46,240
1013% just to get out of there
senior.

388
00:24:47,560 --> 00:24:51,040
But a lot of those opportunities
found buyers found homes.

389
00:24:51,480 --> 00:24:55,400
And so we've taken advantage a
lot of that to your, to your

390
00:24:55,400 --> 00:24:57,760
market cycle point.
So a lot of the distress came

391
00:24:57,760 --> 00:25:02,040
out of that moment.
However, Fast forward to today,

392
00:25:02,400 --> 00:25:06,320
you know supplies falling off a
Cliff, nobody's been able to

393
00:25:06,360 --> 00:25:09,240
build in the last two years,
right?

394
00:25:10,240 --> 00:25:16,080
They've been delivering property
between 23 and 25, which are now

395
00:25:16,080 --> 00:25:18,560
in lease up.
However, these lease ups are

396
00:25:18,560 --> 00:25:21,000
going poorly because there's a
ton of competition in the

397
00:25:21,000 --> 00:25:24,680
marketplace and they're having
to offer concessions, which does

398
00:25:24,680 --> 00:25:28,640
nothing but become bad debt and
write offs or, you know, it

399
00:25:28,640 --> 00:25:30,960
falls to the bottom line and
you're losing operating income.

400
00:25:31,440 --> 00:25:34,240
And so those situations are also
opportunity.

401
00:25:34,240 --> 00:25:38,720
We acquired a deal in, excuse
me, Charleston, SC, which was an

402
00:25:38,720 --> 00:25:42,920
extremely unique situation.
It was a 2024 delivery, 2023

403
00:25:42,920 --> 00:25:46,280
delivery.
It took him three years to build

404
00:25:46,280 --> 00:25:48,920
the property.
He was sitting on a fully

405
00:25:49,320 --> 00:25:54,800
delivered asset.
Mind you this is 260 units and

406
00:25:54,800 --> 00:25:57,560
it took him 12 months to get
utility hookups from the MSA.

407
00:25:58,000 --> 00:25:59,600
And so we sat with a vacant
property.

408
00:25:59,760 --> 00:26:01,960
He burned through his
construction loan, he had to

409
00:26:01,960 --> 00:26:05,600
refinance at a high cost bridge
loan and then he just jammed a

410
00:26:05,600 --> 00:26:09,280
bunch of heads in beds.
I call it got his occupancy to a

411
00:26:09,280 --> 00:26:13,360
point where he can list the sale
at a fraction of the original

412
00:26:13,360 --> 00:26:15,120
cost basis.
So we came into that deal at a

413
00:26:15,120 --> 00:26:19,240
30% discount on a brand new core
plus institutionally grade

414
00:26:19,240 --> 00:26:21,840
asset.
However, we inherited problems

415
00:26:21,840 --> 00:26:24,960
because he jammed a bunch of ill
credit worthy tenants in the

416
00:26:24,960 --> 00:26:27,920
property.
That said, that's an opportunity

417
00:26:27,920 --> 00:26:30,840
for a great operator to come in
who's capitalized and knows how

418
00:26:30,840 --> 00:26:34,160
to complete a lease up or do a
value add in nature.

419
00:26:34,200 --> 00:26:36,400
Although it's a brand new
property, there was still a

420
00:26:36,400 --> 00:26:38,200
repositioning that took place
day one.

421
00:26:38,200 --> 00:26:42,960
We got in, evicted 70 tenants,
so occupancy went from 92 down

422
00:26:42,960 --> 00:26:45,360
to 83.
It's now back up to 96.

423
00:26:45,840 --> 00:26:50,520
So the opportunities come in so
many different shapes and sizes.

424
00:26:51,040 --> 00:26:55,440
However, you can't just enter
the market today because you

425
00:26:55,440 --> 00:26:58,840
raised a bunch of capital and
you see rates coming down in the

426
00:26:58,840 --> 00:27:03,240
next 12 to 24 months.
You had to have been in the

427
00:27:03,240 --> 00:27:06,960
market the last 1824 months to
get the access.

428
00:27:06,960 --> 00:27:11,040
That totally makes sense and I.
Think, you know, God willing,

429
00:27:11,040 --> 00:27:14,400
we've positioned ourselves with
the right guys that have the

430
00:27:14,400 --> 00:27:17,560
good reputations that I spoke
about within their jurisdiction

431
00:27:17,560 --> 00:27:20,000
in their markets to get access
to these deals.

432
00:27:20,400 --> 00:27:23,480
And these deals are coming in,
in those different forms of

433
00:27:23,480 --> 00:27:26,720
distress that I mentioned.
So the pipeline's predictable

434
00:27:27,120 --> 00:27:30,760
for those that have been in the
right spot over the last year

435
00:27:30,800 --> 00:27:34,960
and a half.
Can you talk about location?

436
00:27:35,560 --> 00:27:43,000
You mentioned one.
Is it largely dictated by where

437
00:27:43,000 --> 00:27:48,200
you have these GPS and
confidence in their ability and

438
00:27:48,200 --> 00:27:55,280
have a property that fits the
box, or is there some geographic

439
00:27:55,560 --> 00:28:03,920
preference?
So I first launched this thing

440
00:28:03,920 --> 00:28:07,080
thinking that I was just going
to sit my butt in the Southeast,

441
00:28:07,320 --> 00:28:10,360
you know, in Mid-Atlantic, just
because those were the markets

442
00:28:10,360 --> 00:28:13,400
that I knew, that I knew well,
that I knew had a lot of

443
00:28:13,400 --> 00:28:17,320
distress because everybody
entered those markets 678 years

444
00:28:17,320 --> 00:28:20,240
ago and many of them lost their
shirt.

445
00:28:20,720 --> 00:28:23,760
There was a lot of leverage in
these markets, a lot of bank and

446
00:28:23,760 --> 00:28:27,520
lending exposure.
I quickly realized that that was

447
00:28:27,520 --> 00:28:31,760
foolish of me to even consider
pigeon holing ourselves and the

448
00:28:31,760 --> 00:28:34,160
opportunity set that we now have
access to.

449
00:28:34,520 --> 00:28:37,000
We are now nationwide.
I am market agnostic.

450
00:28:38,000 --> 00:28:43,520
That said, we gravitate towards
tax friendly environments, both

451
00:28:43,520 --> 00:28:45,000
from the landlord and the
tenant.

452
00:28:45,440 --> 00:28:48,760
We gravitate towards markets
that have good migration trends,

453
00:28:49,120 --> 00:28:52,600
good demographics, good
employment growth.

454
00:28:53,400 --> 00:28:58,680
We are suckers in the port towns
of Charleston, SC, Savannah, GA

455
00:28:59,000 --> 00:29:02,520
because of, you know, having the
import export, you know,

456
00:29:02,520 --> 00:29:05,320
situations that they do.
Markets thrive off that.

457
00:29:05,720 --> 00:29:09,080
And it's not just, you know, the
immediate employment, but you

458
00:29:09,080 --> 00:29:14,120
know, you have Tier 2-3 and four
job opportunities for folks that

459
00:29:14,120 --> 00:29:18,600
feed that type of business.
So yeah, we're now, we're now

460
00:29:18,600 --> 00:29:20,400
market agnostic.
I mean, I think we're in eight

461
00:29:20,400 --> 00:29:24,280
different markets.
You know, we are up and down the

462
00:29:24,280 --> 00:29:28,600
East Coast, I would say heavily
concentrated in the North SC,

463
00:29:28,600 --> 00:29:32,720
Tennessee region.
We are in Central Florida,

464
00:29:33,280 --> 00:29:37,360
Savannah and now soon to be
Conyers, GA, which is about an

465
00:29:37,360 --> 00:29:41,600
hour South East of of Atlanta,
which is a great re entrance

466
00:29:41,600 --> 00:29:44,160
into that market because that's
where everybody played and did

467
00:29:44,160 --> 00:29:46,480
well or not over the last five
or eight years.

468
00:29:46,480 --> 00:29:48,880
And we're getting a great, great
opportunity there.

469
00:29:48,880 --> 00:29:51,160
That's coming in from a
liquidating wreath that unloaded

470
00:29:51,160 --> 00:29:55,360
30 assets, 15 of which were
acquired by Starwood at about a

471
00:29:55,360 --> 00:29:58,400
30% discount.
And we just plucked off one of

472
00:29:58,400 --> 00:30:01,920
them.
I love Indiana, I love Indiana,

473
00:30:01,920 --> 00:30:05,040
Ohio, Kentucky.
You know, there's, there's new

474
00:30:05,040 --> 00:30:07,360
manufacturing going back into
these markets.

475
00:30:07,360 --> 00:30:10,680
There's a lot of data center
development and there's good

476
00:30:10,680 --> 00:30:13,520
growth and steady jobs, steady
incomes, right?

477
00:30:14,160 --> 00:30:18,440
We are, I say this, it's a
little cheeky quote, but we're

478
00:30:18,440 --> 00:30:21,160
trying to preserve affordable
housing stock, right?

479
00:30:21,720 --> 00:30:27,400
And people that are, I don't
think it's cheeky that that I

480
00:30:27,400 --> 00:30:29,880
mean, it's, it's a little bit of
a tongue in cheek kind of, you

481
00:30:29,880 --> 00:30:34,000
know, political politicized
quote.

482
00:30:34,360 --> 00:30:37,280
But it's real, right?
And I don't mean affordable

483
00:30:37,280 --> 00:30:42,160
housing stock tax credits and
Section 8 vouchers and you know,

484
00:30:42,160 --> 00:30:45,360
HAP contracts.
I mean middle America, I mean

485
00:30:45,360 --> 00:30:49,880
folks that are making between 60
and 120,000 a year that can

486
00:30:49,880 --> 00:30:53,600
afford 800 to 2000 bucks a month
in rent.

487
00:30:54,080 --> 00:30:55,680
And you know what?
That's going up.

488
00:30:56,360 --> 00:30:57,840
I don't care what you say,
right?

489
00:30:58,080 --> 00:31:00,360
People aren't buying homes
anymore.

490
00:31:00,800 --> 00:31:03,880
My generation and generations
beneath me can't afford it.

491
00:31:03,880 --> 00:31:05,080
They don't have the down
payment.

492
00:31:05,280 --> 00:31:07,920
That's why you saw Trump come
out the other day and try to put

493
00:31:07,920 --> 00:31:11,400
a cap on institutional ownership
of single family homes because

494
00:31:11,400 --> 00:31:13,520
he was worried about the
affordability aspect and the

495
00:31:13,520 --> 00:31:15,920
existing stock of that asset
class.

496
00:31:16,520 --> 00:31:21,120
We are multifamily.
We are scaled offerings to

497
00:31:21,240 --> 00:31:27,600
concentrate units to offer
middle America and the tenant

498
00:31:27,600 --> 00:31:30,400
that needs to rent and prefers
to rent, right.

499
00:31:30,760 --> 00:31:32,520
And so back to your point about
where we want to be, we want to

500
00:31:32,520 --> 00:31:35,440
be in good lifestyle states.
We want to be where there's warm

501
00:31:35,440 --> 00:31:37,320
weather, where people are moving
to.

502
00:31:37,720 --> 00:31:42,920
I love Nashville, TN, not MSA,
but we're heavily concentrated.

503
00:31:42,920 --> 00:31:46,600
We got a deal in Murfreesboro,
TN right now, which is

504
00:31:46,600 --> 00:31:49,760
Rutherford County, top five
growing county in the country,

505
00:31:50,280 --> 00:31:52,600
drafting off Nashville's growth,
right.

506
00:31:53,000 --> 00:31:57,560
So Asheville, NC, we're, we're,
we're delivering and leasing up

507
00:31:57,560 --> 00:32:01,880
a 319 unit new build there right
now that's best in class and

508
00:32:01,880 --> 00:32:06,800
doing extremely well in spite of
the hurricane that rolled

509
00:32:06,800 --> 00:32:08,760
through there, you know, just a
short time ago.

510
00:32:10,320 --> 00:32:13,280
Those are the types of areas
that we like to go into because

511
00:32:13,560 --> 00:32:15,840
a, there's not a ton of
competition, you know, it's

512
00:32:15,880 --> 00:32:19,160
overlooked by the institution.
Mom and pops can't participate

513
00:32:19,560 --> 00:32:21,840
and we have a foothold.
We have existing relationships

514
00:32:21,840 --> 00:32:23,640
in those areas.
Whether we're already invested

515
00:32:23,640 --> 00:32:29,600
in it at the fun level or me
personally, we know that we've

516
00:32:29,600 --> 00:32:31,520
been successful, that we have
access.

517
00:32:32,360 --> 00:32:35,840
There's regional reps, there's
site staff, there's good leasing

518
00:32:35,840 --> 00:32:39,280
agents, there's good quality
workforce in these areas.

519
00:32:39,840 --> 00:32:43,640
And these properties can
perform, you know, and they stay

520
00:32:43,640 --> 00:32:48,080
full and we can get modest rent
growth still in this

521
00:32:48,080 --> 00:32:50,080
environment.
Now you might have to manage

522
00:32:50,080 --> 00:32:53,640
through some ups and downs and
down leasing cycles, you know,

523
00:32:53,640 --> 00:32:59,480
maybe, you know, drop rents 5%,
you know, to to maintain that

524
00:32:59,480 --> 00:33:03,520
9396% occupancy just for the
time being.

525
00:33:03,760 --> 00:33:07,400
Maybe there's competition in the
market, a new delivery or maybe

526
00:33:07,600 --> 00:33:09,360
a plant down the street shut
down.

527
00:33:09,360 --> 00:33:12,360
Whatever the case may be, you
can adjust very quickly.

528
00:33:12,520 --> 00:33:15,080
And that's why we invest with
the right operators because they

529
00:33:15,080 --> 00:33:18,920
have the foresight, a lot of
which is AI right now, believe

530
00:33:18,920 --> 00:33:22,080
it or not, which is a maybe
another topic of conversation.

531
00:33:22,080 --> 00:33:25,520
But that's that's really
entering the management of

532
00:33:25,760 --> 00:33:29,240
multifamily in the
projectability of where rents

533
00:33:29,240 --> 00:33:32,240
need to be, how your
competition's doing and how to

534
00:33:32,240 --> 00:33:35,760
optimize your product within
your comp set in the

535
00:33:35,760 --> 00:33:37,680
marketplace.
So yeah.

536
00:33:37,680 --> 00:33:40,160
The research has to be a lot
easier to do now, right?

537
00:33:42,680 --> 00:33:48,000
Oh my God, Arthur, I'll tell
you, you know, maybe another bar

538
00:33:48,000 --> 00:33:50,600
of, of, of commentary, but we're
going to stay as lean as we

539
00:33:50,600 --> 00:33:53,000
possibly can for as long as, as
we can, right.

540
00:33:53,000 --> 00:33:56,200
And what I mean by that, you
know, acquisition teams are

541
00:33:56,200 --> 00:33:59,000
becoming obsolete underwriters
obsolete.

542
00:33:59,520 --> 00:34:03,280
I can throw AT 12 and a rent
roll and a pro forma or an

543
00:34:03,280 --> 00:34:06,240
offering memorandum into AAI
tool.

544
00:34:06,440 --> 00:34:08,760
There's numerous of them.
Give them some guidance.

545
00:34:09,120 --> 00:34:11,600
Within 2 to 5 minutes, it can
underwrite the deal for me.

546
00:34:11,840 --> 00:34:15,159
It can project the same for me
in three to five years and it

547
00:34:15,159 --> 00:34:16,800
can perform them all.
And you know.

548
00:34:18,920 --> 00:34:22,920
And and be the.
You still need the sniff test,

549
00:34:22,920 --> 00:34:26,120
right?
But it's more more likely than

550
00:34:26,120 --> 00:34:30,560
not to be accurate.
You need a human element, but

551
00:34:30,560 --> 00:34:34,080
that human element is no no
longer a team of 6, right,

552
00:34:34,520 --> 00:34:38,199
Right.
So we we draft a lot of the

553
00:34:38,800 --> 00:34:43,080
communications and the marketing
details and their performance

554
00:34:43,080 --> 00:34:45,880
from the operator themselves.
So a lot of that work is handled

555
00:34:45,880 --> 00:34:48,719
for us.
Obviously, you know, we recycle

556
00:34:48,719 --> 00:34:51,760
it and reintroduce it in a way
that is digestible for our

557
00:34:51,760 --> 00:34:56,880
investor base, which I think is
pretty unique and user friendly.

558
00:34:57,400 --> 00:35:02,880
But you know, we can rely and
outsource so many things these

559
00:35:02,880 --> 00:35:09,160
days, which are labor intensive
in nature, whereby we can just

560
00:35:09,160 --> 00:35:12,400
focus on raising capital.
And that's really what our goal

561
00:35:12,400 --> 00:35:15,200
is each and every day, every
week is introducing our

562
00:35:15,200 --> 00:35:18,840
platform, which is I think had
some pretty good success in a

563
00:35:18,840 --> 00:35:22,160
short amount of time.
And the access we have is our

564
00:35:22,160 --> 00:35:24,200
Moat, right?
I mean, you know, in order to

565
00:35:24,200 --> 00:35:28,240
survive in the next 5 years with
the takeover of AI and

566
00:35:28,240 --> 00:35:31,480
technology, you need a Moat or
you're, you're becoming

567
00:35:31,480 --> 00:35:35,440
obsolete.
And our mode is the access to

568
00:35:35,440 --> 00:35:44,120
the deal flow that we have.
So, Ryan, the deal, do you

569
00:35:44,120 --> 00:35:48,680
anticipate that there's more
deal flow than you can fulfill?

570
00:35:49,240 --> 00:35:53,800
And if you had unlimited amounts
of capital, could you fill the

571
00:35:54,200 --> 00:35:56,520
pipeline, let's say if you had
$100 million?

572
00:35:57,160 --> 00:36:02,200
And the second part of that is
at what point are you not

573
00:36:02,200 --> 00:36:07,720
interested because you'll get
negotiated out of the market

574
00:36:07,920 --> 00:36:10,120
because institutional money will
come in.

575
00:36:10,400 --> 00:36:12,920
Is it a $300 million asset?
Is it for?

576
00:36:12,920 --> 00:36:18,560
Is it fair to even ask that?
It's a fair question.

577
00:36:18,560 --> 00:36:22,640
However, I've thought about it.
You know, as I mentioned

578
00:36:22,640 --> 00:36:26,280
earlier, we don't want to
compete with the institution and

579
00:36:26,280 --> 00:36:30,920
I know that the space that we're
actively playing in now is not

580
00:36:30,920 --> 00:36:36,320
of interest to the institution.
They first of all, economically

581
00:36:36,320 --> 00:36:40,000
speaking, they can get away with
yielding far less than I want

582
00:36:40,000 --> 00:36:43,320
to.
So they're entering the core

583
00:36:43,320 --> 00:36:45,960
plus markets.
They're buying the 3-4 caps

584
00:36:45,960 --> 00:36:50,120
because they have more patient
capital AB they can get away

585
00:36:50,120 --> 00:36:53,120
with a three, 4% return.
I'm not doing this for.

586
00:36:53,120 --> 00:36:55,920
A return my investors, also me.
With that.

587
00:36:57,240 --> 00:36:59,040
Right.
And isn't it also true they can

588
00:36:59,040 --> 00:37:03,720
get away from that because they
have investors or balance sheets

589
00:37:03,720 --> 00:37:08,640
that don't pay taxes,
foundations, you know, etcetera,

590
00:37:08,640 --> 00:37:13,680
etcetera, etcetera, right.
That sure that everybody has

591
00:37:13,680 --> 00:37:17,000
their reasons, but I think you
know to your allocation

592
00:37:17,240 --> 00:37:23,800
question, my goal is to get to a
point where you know within the

593
00:37:23,800 --> 00:37:28,200
current deal profile that we
invest with and without getting

594
00:37:28,200 --> 00:37:31,840
too crazy on the bench of GP
operators that we deploy into,

595
00:37:33,960 --> 00:37:39,240
we can comfortably deploy 50 or
100 million a year and not be

596
00:37:39,240 --> 00:37:44,280
100% of the equity that is
required to close these deals.

597
00:37:44,280 --> 00:37:46,640
I think last year I did some
math the other day because I had

598
00:37:46,640 --> 00:37:48,920
this question asked by an
investor.

599
00:37:49,160 --> 00:37:51,960
I think the total equity raised
within the deals we invested

600
00:37:51,960 --> 00:37:55,000
last year was about 140 million
something in that range.

601
00:37:55,440 --> 00:37:58,680
And mind you that's across 10
assets, you know, with an

602
00:37:58,680 --> 00:38:03,160
average purchase price of say 20
to 40 million, OK.

603
00:38:04,440 --> 00:38:07,440
And so we're a small part of
that now, right.

604
00:38:07,440 --> 00:38:11,440
But the idea the goal is to
still still play in our space,

605
00:38:12,240 --> 00:38:18,760
however scale up to the point
that is irreplaceable from AGP

606
00:38:18,760 --> 00:38:21,000
operator standpoint to have us
in the deal.

607
00:38:21,440 --> 00:38:24,760
And when you get to that
threshold, our economics become

608
00:38:25,120 --> 00:38:29,040
extremely outsized and and
everybody on our platform

609
00:38:29,040 --> 00:38:31,920
benefits.
So I don't want to get too big.

610
00:38:31,920 --> 00:38:34,880
There's no reason to right.
You know, I think and, and also

611
00:38:34,880 --> 00:38:39,280
to that point, we benefit by
cycling equity quick.

612
00:38:39,760 --> 00:38:43,920
And so you know, even if you
know you have 100 million of

613
00:38:43,920 --> 00:38:48,400
commitments for the year,
ideally the original funds and

614
00:38:48,400 --> 00:38:51,200
the original deals you invest
with are liquidating on the

615
00:38:51,200 --> 00:38:54,080
other end.
So you're constantly cycling

616
00:38:54,080 --> 00:38:58,320
through your capital sources in
a point where the returns, you

617
00:38:58,320 --> 00:39:00,680
know, ideally compound and
people reinvest.

618
00:39:00,680 --> 00:39:05,840
We have a 25% reinvestment rate
from prior fund investors into

619
00:39:05,840 --> 00:39:07,800
more recent ones, which is
fantastic.

620
00:39:07,800 --> 00:39:08,920
It means we're doing something
right.

621
00:39:10,040 --> 00:39:12,320
But I don't want to compete with
the, the institution.

622
00:39:12,360 --> 00:39:15,560
There's no need.
You know our our economics, our

623
00:39:15,560 --> 00:39:18,520
leverage, what we command, our
relationships.

624
00:39:19,080 --> 00:39:21,880
We want to play in our mid
market space and there's no

625
00:39:21,880 --> 00:39:28,480
reason to jump outside that.
So on the cash, on cash 8% that

626
00:39:28,480 --> 00:39:32,440
you're giving your investors, is
that essentially pass through

627
00:39:34,360 --> 00:39:37,280
from the GPS?
Yeah, Yeah.

628
00:39:37,280 --> 00:39:40,960
So it's a good question.
So as A at the fund level, we

629
00:39:40,960 --> 00:39:43,480
offer an 8% pref to the
investors.

630
00:39:43,960 --> 00:39:48,920
That 8% pref is not 100%
satisfied at the deal level.

631
00:39:49,720 --> 00:39:53,880
So it takes a liquidity event to
catch up and then to hit the

632
00:39:53,880 --> 00:39:57,280
waterfall, right.
So I would say on average, we

633
00:39:57,280 --> 00:39:59,760
have a 2 pronged barbell
approach.

634
00:39:59,760 --> 00:40:01,480
I call it.
We have a value add approach on

635
00:40:01,480 --> 00:40:04,400
one side, which obviously are
assets that are a bit more

636
00:40:04,400 --> 00:40:08,920
distressed, mismanaged,
neglected, you know, we're

637
00:40:08,920 --> 00:40:12,560
coming in, it's a heavier lift
type reposition play.

638
00:40:13,200 --> 00:40:15,000
There's no yield on that day
one.

639
00:40:15,080 --> 00:40:18,080
There's probably no yield or
cash flow on that month 6.

640
00:40:18,720 --> 00:40:23,000
Generally, the idea is to target
stabilization between month 12

641
00:40:23,000 --> 00:40:26,400
and say 14.
At that point, you're yielding 6

642
00:40:26,400 --> 00:40:29,600
to 8%.
On the other side of the

643
00:40:29,600 --> 00:40:32,080
barbell, you have our core plus
strategy, right.

644
00:40:32,360 --> 00:40:36,760
Three out of our last four deals
that we acquired are producing 7

645
00:40:36,760 --> 00:40:40,240
to 9% annualized cash flow day
one.

646
00:40:40,880 --> 00:40:44,720
So our investors benefit first
quarter post closing, they're

647
00:40:44,720 --> 00:40:49,160
getting distributions.
However, 40 or 50% of their

648
00:40:49,160 --> 00:40:52,200
deployment, their commitment
might be in that value add

649
00:40:52,200 --> 00:40:56,880
bucket, in which case it takes
12 months or so for those assets

650
00:40:56,880 --> 00:40:58,960
to catch up to that number,
right.

651
00:40:59,440 --> 00:41:03,800
However, generally speaking on a
value add deal, you put some

652
00:41:03,800 --> 00:41:06,800
type of short term debt
instrument in place with no

653
00:41:06,800 --> 00:41:10,920
prepaid where you can refinance
once the asset stabilizes and

654
00:41:10,920 --> 00:41:14,080
you can return 3050 plus percent
of everybody's commitment in

655
00:41:14,080 --> 00:41:16,360
that deal and then it starts to
cash flow.

656
00:41:16,760 --> 00:41:21,560
So we have the beauty of of
investing in different types of

657
00:41:21,560 --> 00:41:26,120
buckets where our investors
don't have to wait or get locked

658
00:41:26,120 --> 00:41:30,160
out five years and wait for a
portfolio roll up on the exit to

659
00:41:30,160 --> 00:41:33,480
see anything.
We offer cash flow, we offer

660
00:41:33,480 --> 00:41:37,000
liquidity events mid term, mid
fund term, which is five years.

661
00:41:37,000 --> 00:41:38,480
I have a one year extension
option.

662
00:41:39,040 --> 00:41:42,960
However, you also get, you know,
the benefit of of liquidity

663
00:41:42,960 --> 00:41:46,680
events and.
Along the way, yeah.

664
00:41:47,040 --> 00:41:50,240
Opportunity along the way and
staggered, you know

665
00:41:50,240 --> 00:41:52,440
opportunistic exits, right?
Each deal is going to sell when

666
00:41:52,440 --> 00:41:54,960
it's ready.
So within your 5 property

667
00:41:54,960 --> 00:41:58,000
portfolio per fund, you know,
we're investing in different

668
00:41:58,000 --> 00:42:01,680
markets with different
operators, all of whom have a

669
00:42:01,680 --> 00:42:03,760
three to five year rough hold
period.

670
00:42:04,120 --> 00:42:07,120
These deals are going to sell in
year 3 and year 4 and Year 5.

671
00:42:07,480 --> 00:42:10,960
And so you're not waiting for a
roll up at the exit to get your

672
00:42:10,960 --> 00:42:13,360
liquidity event.
You know, we're popping these

673
00:42:13,360 --> 00:42:15,720
things once they're ready.
You know, if we get an off

674
00:42:15,720 --> 00:42:20,360
market bid, if we get, you know,
if we stabilize and decide to

675
00:42:20,360 --> 00:42:23,080
list it, hopefully rates settle
in at that point.

676
00:42:23,080 --> 00:42:24,760
I think we can all agree it's
probably going to be a bit

677
00:42:24,760 --> 00:42:27,560
better than it is today.
However, I do think we're in a

678
00:42:27,560 --> 00:42:30,040
new norm, a new band on on
rates.

679
00:42:31,200 --> 00:42:33,880
I think it offers a little bit
of protection and, and, and

680
00:42:33,880 --> 00:42:37,640
downside risk hedge against that
for everybody and every type of

681
00:42:37,640 --> 00:42:41,120
investor from from the LP, you
know, to the institution.

682
00:42:41,920 --> 00:42:46,240
It's got a little, a little bit
for everybody, you know, and

683
00:42:46,240 --> 00:42:49,240
that's the goal.
That's the goal is, is to create

684
00:42:49,240 --> 00:42:52,520
consistently consistency beyond
the cash flow.

685
00:42:52,520 --> 00:42:54,880
There's tax, massive tax
advantages by investing in

686
00:42:54,880 --> 00:42:56,840
multifamily real.
Estate, yeah, I was going to ask

687
00:42:56,880 --> 00:43:00,280
you what the does all that all
the goodies pass through the K

688
00:43:00,280 --> 00:43:06,040
ones, the cost SAG the the
depreciation, all that business?

689
00:43:07,440 --> 00:43:09,880
I like that all the goodies,
yes, all the goodies do pass

690
00:43:09,880 --> 00:43:14,960
through and that's a major
benefit to being a real estate

691
00:43:14,960 --> 00:43:17,240
investor, right?
And passively, I mean, you know,

692
00:43:17,240 --> 00:43:21,160
we have all the all the
depreciation from the Cal seg

693
00:43:21,160 --> 00:43:23,680
analysis and that that's not
performed in year 1.

694
00:43:23,680 --> 00:43:27,960
It's two or three that flows
directly on everybody's K ones

695
00:43:27,960 --> 00:43:30,640
down to the investor level.
They can offset, you know

696
00:43:30,880 --> 00:43:36,840
ancillary income, W2 revenue,
you know our distributions and

697
00:43:36,920 --> 00:43:39,960
recaps refi's when we're
returning principal tax free,

698
00:43:40,560 --> 00:43:42,280
right.
You don't pay capital gains on

699
00:43:42,280 --> 00:43:43,160
those.
That's not a.

700
00:43:43,360 --> 00:43:44,200
That's not a.
Trade.

701
00:43:44,200 --> 00:43:46,440
That's not a taxable event.
Yep.

702
00:43:46,480 --> 00:43:50,520
And so, you know, it becomes a
system where you know, you can

703
00:43:50,520 --> 00:43:53,480
expect quarterly distributions,
cash flow, you know, you can

704
00:43:53,480 --> 00:43:56,560
expect a little bit of a gift.
So goodie, you know, fall flow

705
00:43:56,560 --> 00:43:59,440
through down to your K1 on an
annualized basis.

706
00:44:00,520 --> 00:44:03,640
You know, and then the exit
optionality I think is a major

707
00:44:03,640 --> 00:44:07,240
feature of what we offer is
something that you know is

708
00:44:07,240 --> 00:44:10,760
predictable and expected between
years 3:00 and 5:00.

709
00:44:12,120 --> 00:44:15,640
And if the, if the GP doesn't
like kind exchange, you just

710
00:44:15,640 --> 00:44:18,440
benefit from that as well,
right, If if you decide to

711
00:44:18,440 --> 00:44:22,920
participate in a new asset.
Yeah, I, you know, I'm not.

712
00:44:22,920 --> 00:44:26,280
I don't love that idea, you
know, I've been.

713
00:44:26,560 --> 00:44:30,760
Really hard to do right?
It's hard to do because you got

714
00:44:30,760 --> 00:44:33,800
to, you got to there's, there's,
there's carried provisions,

715
00:44:33,800 --> 00:44:38,680
there's tick exchanges, there's
obviously you have to go through

716
00:44:38,680 --> 00:44:42,320
AQI qualified intermediary.
It's got to be, you got to solve

717
00:44:42,320 --> 00:44:43,840
for equity, you got to solve for
debt.

718
00:44:44,920 --> 00:44:48,760
And I can't predict whether my
investors want to participate in

719
00:44:48,760 --> 00:44:50,720
that, right.
So I guess that's a wedge that I

720
00:44:50,720 --> 00:44:54,440
have not experienced yet,
Although chances are, you know,

721
00:44:54,440 --> 00:44:59,240
we're now in 12 assets or 12
properties, some are portfolios.

722
00:44:59,600 --> 00:45:02,760
It's going to happen and I'm
going to have a conversation

723
00:45:02,880 --> 00:45:06,360
with the investors within that
fund that's invested in that

724
00:45:06,360 --> 00:45:07,440
deal.
Hey, what do you want to do?

725
00:45:07,960 --> 00:45:11,080
Chances are nobody's going to
have a problem with it because

726
00:45:11,200 --> 00:45:14,640
if we've done the right thing
and the operators performed and

727
00:45:14,640 --> 00:45:17,280
everybody's been successful,
multiplied their capital, why

728
00:45:17,280 --> 00:45:20,080
not do it again, Right.
Exactly.

729
00:45:20,120 --> 00:45:24,480
And so that is a feature that we
haven't toyed with or had to yet

730
00:45:24,480 --> 00:45:26,600
just because we've only, you
know, been around for a couple

731
00:45:26,600 --> 00:45:30,280
years at this point.
So, but you know, every day is a

732
00:45:30,280 --> 00:45:33,240
learning curve.
You know, things pop up, you got

733
00:45:33,240 --> 00:45:36,160
to solve for them.
But we have a lot of, you know,

734
00:45:36,160 --> 00:45:40,560
good investors in our network.
I'll give you an example.

735
00:45:40,560 --> 00:45:43,160
You know, there was an investor
in our second vehicle, our

736
00:45:43,160 --> 00:45:47,720
second fund, we were probably
60% drawn down on, on their

737
00:45:47,720 --> 00:45:49,800
commitment.
I got a call from this

738
00:45:49,800 --> 00:45:54,400
individual and they basically
told me that life happens.

739
00:45:54,480 --> 00:45:59,120
I, I can't, I'm, I'm maxed out.
And when you have a closed fund,

740
00:45:59,960 --> 00:46:01,240
obviously you got to solve for
that.

741
00:46:01,600 --> 00:46:06,320
However, I reached out to that
fund investment group, it's

742
00:46:06,680 --> 00:46:09,120
probably about 30 or so
individuals in that group.

743
00:46:09,640 --> 00:46:13,280
And I say, look, I shared the
story within a matter of hours

744
00:46:13,280 --> 00:46:16,320
that allocation was absorbed it.
Was sucked up.

745
00:46:16,880 --> 00:46:17,880
It was.
Sucked up.

746
00:46:18,160 --> 00:46:22,760
And so that's the power of the
network that we're building, you

747
00:46:22,760 --> 00:46:25,360
know, with interested parties,
people that believe in what

748
00:46:25,360 --> 00:46:29,280
we're doing, want more, feel
like they didn't invest enough,

749
00:46:30,440 --> 00:46:31,840
you know, when they first
committed.

750
00:46:32,280 --> 00:46:34,800
But that's also why we're
reintroducing new vehicles.

751
00:46:34,800 --> 00:46:36,360
I've had that question asked a
lot too.

752
00:46:36,360 --> 00:46:37,760
Why are you putting out so many
funds?

753
00:46:37,760 --> 00:46:39,800
Well, I talk to people every
day.

754
00:46:39,960 --> 00:46:42,880
And, you know, if I put a fund
out, we're trying to wrap one up

755
00:46:42,880 --> 00:46:46,240
in the next 30 days.
If I have 50 conversations with

756
00:46:46,360 --> 00:46:50,320
individuals or family offices
that have interest in the next

757
00:46:50,320 --> 00:46:54,720
three months, and I have the
deal flow and the allocation in

758
00:46:54,720 --> 00:46:56,400
that deal flow.
Let's go.

759
00:46:56,840 --> 00:46:58,400
Let's put another one over the
market, right?

760
00:46:58,400 --> 00:47:01,640
Capitalize on that momentum.
And so that's kind of the thesis

761
00:47:01,640 --> 00:47:04,600
that we've adopted in a short
period of time that makes this

762
00:47:04,600 --> 00:47:08,200
strategy very predictable,
repeatable and deployable.

763
00:47:09,480 --> 00:47:12,760
Is the is it qualified investors
only?

764
00:47:15,080 --> 00:47:20,600
Everyone's accredited, you know,
we generally run 5O6B and C type

765
00:47:20,600 --> 00:47:25,000
offerings.
You know, we I'd say our minimum

766
00:47:25,000 --> 00:47:28,440
is 100 grand.
You know, we have a few inside

767
00:47:28,440 --> 00:47:32,120
that we have several entities
that have come in that are three

768
00:47:32,120 --> 00:47:34,680
or four or five different
individuals, say family or

769
00:47:34,680 --> 00:47:37,520
friends that have put 3 or 400
grand in.

770
00:47:38,560 --> 00:47:41,520
You know, I would say our
largest investors you know are

771
00:47:41,560 --> 00:47:45,320
around 1,000,000 bucks which
includes myself.

772
00:47:45,440 --> 00:47:49,280
And you know we are actively in
discussions with a couple

773
00:47:49,280 --> 00:47:52,280
families, a couple RI as folks
that are going to provide some

774
00:47:52,280 --> 00:47:56,960
scale in two different forms
either in the fund commingled

775
00:47:56,960 --> 00:48:00,080
with other LP's.
However, we've also launched a

776
00:48:00,080 --> 00:48:05,400
separate JV Co GP strategy for
larger single source capital

777
00:48:05,400 --> 00:48:09,040
check writers that want to
commit 5 to say 20 million of

778
00:48:09,040 --> 00:48:12,400
their own, deploy it in the same
fashion, but might have their

779
00:48:12,400 --> 00:48:16,320
own profile of deal.
And so for instance, you know,

780
00:48:16,480 --> 00:48:20,160
Family Office XYZ wants to
commit 5 or 10 million bucks,

781
00:48:20,440 --> 00:48:24,440
but they only want to be on 200
unit assets in the Southeast.

782
00:48:25,720 --> 00:48:28,760
You know, we're confident that
our bench and network of

783
00:48:28,760 --> 00:48:32,160
operators can supply that deal
flow to that source.

784
00:48:32,600 --> 00:48:35,920
And so that becomes a bespoke
strategy that's a bit of a

785
00:48:35,920 --> 00:48:39,560
different silo introducing the
same deal flow, but to a

786
00:48:39,560 --> 00:48:43,480
different type of capital.
And so really that's a network

787
00:48:43,480 --> 00:48:45,080
that we're trying to crack into
right now.

788
00:48:47,320 --> 00:48:51,480
Yeah.
So you, you mentioned one more

789
00:48:51,480 --> 00:48:54,520
thing before we wrap it up, if
it's OK and you we can talk

790
00:48:54,520 --> 00:48:56,080
about whatever else you want to
talk about.

791
00:48:56,080 --> 00:48:59,920
But I was interested to know a
little bit more about how you

792
00:48:59,920 --> 00:49:07,560
feel we've maybe reached a new
level in interest rates and what

793
00:49:07,560 --> 00:49:15,080
you're thinking is around that?
Yeah, I try to ignore it.

794
00:49:15,160 --> 00:49:18,520
I mean, you know, we've been in
a band of I'm calling it the new

795
00:49:18,520 --> 00:49:22,480
norm as I mentioned, you know,
you can't run a business,

796
00:49:22,800 --> 00:49:25,520
particularly with the activity
that we try to have and really

797
00:49:26,280 --> 00:49:30,400
get too hung up on that.
You know, a way around is to

798
00:49:30,400 --> 00:49:34,520
assume alone, which we did about
5 deals last year.

799
00:49:34,520 --> 00:49:40,120
We assumed interest rates that
were originated 3-4, sorry, 4-5

800
00:49:40,120 --> 00:49:43,800
years ago that have a good term
left to maturity, say five

801
00:49:43,800 --> 00:49:49,880
years, 2.9 to say 3 1/4%.
And so, yeah, it's lower

802
00:49:49,880 --> 00:49:51,400
leverage.
Yeah, you have to raise a bit

803
00:49:51,400 --> 00:49:54,600
more equity to acquire these
deals, but positive leverage day

804
00:49:54,600 --> 00:49:58,080
one, these properties are
yielding significantly out the

805
00:49:58,080 --> 00:50:00,720
gate.
There's some value add ramp up

806
00:50:00,920 --> 00:50:04,600
as well.
However, on the flip side, you

807
00:50:04,600 --> 00:50:10,760
know, in our business, FHFA is
very incentivized to put capital

808
00:50:10,760 --> 00:50:12,960
out the door, right, from a debt
standpoint.

809
00:50:13,480 --> 00:50:16,680
And so there's a lot of levers.
And I know this because I was in

810
00:50:16,680 --> 00:50:19,280
the business for 15 years,
something called mission

811
00:50:19,280 --> 00:50:22,600
critical business, where there's
an affordability aspect.

812
00:50:22,880 --> 00:50:27,440
So for instance, you know, there
are calculations that peg your

813
00:50:27,440 --> 00:50:31,440
current rental rates to median
incomes in various markets

814
00:50:31,440 --> 00:50:34,960
across the country.
And if you are if you qualify as

815
00:50:34,960 --> 00:50:39,480
a certain ratio, you get a
certain spread reduction on your

816
00:50:39,480 --> 00:50:42,960
interest rate.
And so the agencies Fannie and

817
00:50:42,960 --> 00:50:46,600
Freddie and HUD which are the
largest capital debt provider of

818
00:50:46,600 --> 00:50:50,640
liquidity in our business
incentivize operators to go

819
00:50:50,640 --> 00:50:52,960
after assets that are considered
affordable rich.

820
00:50:53,400 --> 00:50:58,160
And so that is a way today to
acquire a deal with a five year

821
00:50:58,160 --> 00:51:02,800
fixed rate loan inside 5%.
You have a four handle 4849 in

822
00:51:02,800 --> 00:51:06,520
most cases with non recourse
with interest only you know

823
00:51:06,520 --> 00:51:08,840
maybe some exit flexibility on
the prepaid as well.

824
00:51:08,840 --> 00:51:12,600
So we know what levers to pull
in the interest rate environment

825
00:51:12,600 --> 00:51:15,920
game to make sure that our, you
know, investments are safe and

826
00:51:15,920 --> 00:51:19,560
sound.
I would say going forward, look,

827
00:51:19,560 --> 00:51:22,640
listen, I don't think we're
going to see a lot of rate cuts

828
00:51:22,640 --> 00:51:26,160
this year.
And the reason being is because

829
00:51:26,160 --> 00:51:28,960
our GDP is on a hockey stick
trajectory.

830
00:51:30,000 --> 00:51:31,680
We do have a new chair coming
in.

831
00:51:32,120 --> 00:51:34,640
It's going to probably take
three to six months for him to

832
00:51:34,640 --> 00:51:36,560
implement any type of policy
change.

833
00:51:37,200 --> 00:51:42,600
And you know, there's a lot of
macroeconomic and geopolitical

834
00:51:42,600 --> 00:51:48,000
events taking place that
implement and inject volatility

835
00:51:48,280 --> 00:51:51,640
into Treasury markets.
And so the only hook that you

836
00:51:51,640 --> 00:51:58,080
have is to either reduce the Fed
funds rate, say a quarter .50

837
00:51:58,080 --> 00:52:02,400
basis points, purchase bonds,
which Trump has touted he wants

838
00:52:02,400 --> 00:52:05,120
to do.
However, what people don't

839
00:52:05,120 --> 00:52:09,880
realize is that multifamily and
commercial real estate investing

840
00:52:09,880 --> 00:52:13,800
in general is pegged off long
dated treasuries.

841
00:52:14,480 --> 00:52:19,800
Long dated treasuries have a
predictability to them whereby

842
00:52:19,800 --> 00:52:25,240
they forecast market conditions
6 to 9 months in advance.

843
00:52:25,640 --> 00:52:30,080
And so if the market is
projecting a rate cut of say 50

844
00:52:30,080 --> 00:52:34,080
basis points, you know in Q2 or
three of this year, it's already

845
00:52:34,080 --> 00:52:39,280
baked into the 10 year treasury
and so it's pushed out, right.

846
00:52:39,320 --> 00:52:43,400
And so regardless of what the
Fed decides to do, it's such a

847
00:52:43,400 --> 00:52:45,840
nominal move.
It doesn't move the needle in

848
00:52:45,840 --> 00:52:48,840
our business.
And so you can't really when

849
00:52:48,840 --> 00:52:50,720
you're investing and you're
consistent and you have the

850
00:52:50,720 --> 00:52:53,920
action and activity that we do,
you don't really look towards

851
00:52:53,920 --> 00:52:55,720
that.
You look three to five years out

852
00:52:56,280 --> 00:52:59,960
and you try to normalize your
predictions and your assumptions

853
00:53:00,280 --> 00:53:03,520
in a way that, OK, great.
If the market stays where it is,

854
00:53:04,080 --> 00:53:06,080
here's our result, I'm OK with
that.

855
00:53:06,680 --> 00:53:10,440
If the market cooperates or
maybe rates come in and there's

856
00:53:10,440 --> 00:53:13,840
a little cap rate compression.
Even better.

857
00:53:13,840 --> 00:53:16,800
Yeah, Bravo.
But you know, I, I think it's a

858
00:53:16,800 --> 00:53:18,840
new norm.
I think, you know, we're not

859
00:53:18,840 --> 00:53:23,200
going to see a 10 year treasury,
you know, inside 4% for the

860
00:53:23,200 --> 00:53:28,680
foreseeable future.
You know, it's just, it's not,

861
00:53:29,000 --> 00:53:31,840
it's not supportable.
And quite frankly, you don't

862
00:53:31,960 --> 00:53:35,160
really need to do it outside of,
you know, trying to force people

863
00:53:35,160 --> 00:53:38,160
to buy homes.
You know, businesses are

864
00:53:38,240 --> 00:53:40,800
performing right?
And they're changing guard and

865
00:53:40,840 --> 00:53:44,800
technology's advancing.
And, you know, unfortunately,

866
00:53:44,800 --> 00:53:46,560
there's going to be a lot of.
Economy's goodness.

867
00:53:46,560 --> 00:53:50,760
If that's a term, it's good and
people hate to admit it.

868
00:53:51,280 --> 00:53:53,840
They hate it simply because of
the man up top.

869
00:53:53,840 --> 00:53:58,560
And it's not about politics.
But you know, unfortunately the

870
00:53:58,560 --> 00:54:01,480
gap of the haves and the have
nots is widening, which is going

871
00:54:01,480 --> 00:54:04,520
to be a forever issue.
But I think for us and, and for

872
00:54:04,520 --> 00:54:07,440
our marketplace right now,
predicting rates in, in

873
00:54:07,440 --> 00:54:11,240
12/24/30, six months is a
useless endeavor.

874
00:54:12,240 --> 00:54:14,640
And I think we're in a new norm.
I think things are getting

875
00:54:14,640 --> 00:54:16,440
reset.
I think valuations are getting

876
00:54:16,440 --> 00:54:21,600
reset.
And for us, you know, the good

877
00:54:21,600 --> 00:54:25,080
thing is, yes, rents have come
down or plateaued in, in many

878
00:54:25,080 --> 00:54:29,240
instances, but that's a supply
issue, not a demand issue.

879
00:54:29,800 --> 00:54:31,320
Demand will continue to be
there.

880
00:54:31,320 --> 00:54:34,720
It will accelerate.
I think we are 7 million units

881
00:54:34,720 --> 00:54:38,640
short across from a housing
standpoint on the supply side

882
00:54:38,640 --> 00:54:40,720
across the country.
You can't build.

883
00:54:40,720 --> 00:54:41,760
Yeah, that's what they're
saying.

884
00:54:41,760 --> 00:54:43,600
Enough time?
Yeah, for.

885
00:54:43,960 --> 00:54:46,080
For.
Occupancy rates not to maintain

886
00:54:46,080 --> 00:54:50,000
a north of 90% level.
And so that's my prediction.

887
00:54:50,040 --> 00:54:53,840
I, you know, could be wrong,
could be right, but we don't run

888
00:54:53,840 --> 00:54:56,240
a business in, in our platform
based on predictions.

889
00:54:56,320 --> 00:54:59,880
You know, we, we try to stay
within, you know, the, the, the

890
00:54:59,960 --> 00:55:04,040
goal posts of, of what we have
and, and, you know, make sure

891
00:55:04,040 --> 00:55:06,440
that the people we're investing
with are the right guys to

892
00:55:06,440 --> 00:55:10,360
steward our capital.
Yeah, totally makes sense.

893
00:55:10,760 --> 00:55:13,280
This has been super helpful.
I really appreciate you doing

894
00:55:13,280 --> 00:55:17,280
this and thanks for, I mean,
there's lots of good Nuggets in

895
00:55:17,280 --> 00:55:19,160
there.
I know people appreciate it.

896
00:55:19,800 --> 00:55:24,760
And we also look forward to you
as you know, coming on and

897
00:55:24,760 --> 00:55:28,840
telling the stories to the
investor community for FOI too.

898
00:55:28,840 --> 00:55:32,240
So Ryan, thanks for doing this,
really appreciate it.

899
00:55:32,520 --> 00:55:33,360
Thank you.
Nicely done.

900
00:55:33,360 --> 00:55:35,560
Appreciate.
It yeah, no, likewise it's, it's

901
00:55:35,560 --> 00:55:38,320
a great opportunity.
You know, as I said, it's a it's

902
00:55:38,320 --> 00:55:45,040
a huge gap in when what I'm
trying to fill right now is, is

903
00:55:45,040 --> 00:55:47,520
the capital sourcing from these
mid markets and upper middle

904
00:55:47,520 --> 00:55:51,680
market type family offices.
And so we're putting resources

905
00:55:51,680 --> 00:55:54,800
towards it.
I'm trying to educate folks on

906
00:55:54,800 --> 00:55:56,920
what we're doing, how we're
doing it and why we're

907
00:55:56,920 --> 00:56:00,600
different, which I think is, you
know, something that is, is is

908
00:56:00,600 --> 00:56:03,440
hugely important in today's
environment with a lot of noise.

909
00:56:04,760 --> 00:56:06,440
There's a lot of noise and you
are different.

910
00:56:06,440 --> 00:56:08,840
There's no question about that.
I can confirm it.

911
00:56:08,960 --> 00:56:13,080
So and we look forward to having
you in a in a couple weeks to

912
00:56:13,080 --> 00:56:17,000
talk to the rest of the group.
So all right, Brian, thank you.

913
00:56:17,240 --> 00:56:19,600
I appreciate it.
Thank you, appreciate it.

914
00:56:20,200 --> 00:56:21,880
Thank you everybody for joining
us today.

915
00:56:22,200 --> 00:56:23,480
We'll talk to you soon.
Bye.

916
00:56:23,480 --> 00:56:23,640
Bye.