Why Billionaires Choose Funds Over Single-Asset Deals

The big appeal of a single asset investment is I get to choose if I want to put my money into this investment or not. And there's this illusion of control.

I would rather play the game that I know I can win rather than the game that maybe I'll win and I'm arrogant enough to believe that I'm smarter than everybody else and I'm going to win tomorrow. Don't look for moonshots.

The majority of Warren Buffett's net worth was built after the age of 60 because he understood the power of compounding wealth. The reason that most high net worth investors fail to get similar results is that they're unaware of the silent killers in their portfolio. So today I sit down with Bob and Ben Frazier to discuss why sophisticated investors are moving from one-off syndication deals to evergreen funds to faster compound their wealth over time. Let's dive in. So Ben, let's just start at a high level. What is the difference between a single asset deal and an evergreen fund? Like, walk us through what one actually looks like from an investor standpoint.

Yeah, well, the difference between a syndication and a fund is actually pretty simple. A syndication is generally a single asset, or sometimes one or two assets put together that are purchased at the same time. There's a single business plan and a predefined time period that that business plan is targeted to be accomplished and then sold. Usually in multifamily or commercial real estate, you see anywhere from a 3 to 5 year plan for a single asset. A fund is, is generally going to be more than one asset. And then there's two types of funds. There's closed-end funds and open-end funds. So closed-end funds are more akin to a syndication in that you have a start period, usually a deployment period that you're investing in buying assets. And then you have a harvest period, which is, you know, executing those business plans, and then a wind-down period where you're selling those assets. And those, because it's more than one asset, have generally longer timeframes, say 5 to 7 years. This is very common say, in private equity or venture capital, also in real estate. And then what you said is an evergreen fund. And this is not a newer concept, but it's maybe less common in real estate. But there's a lot of reasons why it's pretty attractive. And an evergreen fund is an open-end fund that basically the intention is to operate into perpetuity. Right. There's, there's no plan to wind down the fund. And so these are generally going to be what's called a NAV-based fund where you're valuing the shares of the fund on some predefined time period. You operate the assets, you know, whatever the business plan dictates, and you're bringing new capital in, you're bringing new assets in, you're selling assets, and it's all kind of can happen within the fund at any point in time. So those are kind of the 3 main structures of investing. What most people have invested in generally in kind of the syndication world are single asset syndications.

Yeah, let's, let's dive into that because I do think it's really interesting when you look at the last several years. I mean, including here at Aspen Funds, this single asset model really grew in popularity almost to the point from an investor standpoint, as I've gotten feedback where folks really didn't want to do a fund, they almost saw it like as, as more risky. I would love to hear y'all's insight on why you think this single asset model grew in such popularity kind of in this syndicator space since 2020.

You know, as Ben said, The single asset syndications are really around, there's a business plan. So, the idea is you're going to execute a plan. And so, a lot of what happened was these value-add plans. So, you take an older property, you renovate it, and then you increase rents and then you exit. So, there's kind of a window of opportunity. And what happened is there was a very strong market. Multifamily was dramatically increasing. Meanwhile, Sunbelt states were seeing a lot of demand. And so it was all up into the right. And so you execute this business plan, you catch a tailwind and execute this little plan. And that worked for a minute, right?

I think some of the reason the popularity really increased is partly due to the simplicity, right? It's here's the asset, here's the location. Here's the business plan. Here's all the things we're going to do. Do you want in? Do you want out? And it's, we raise the capital just for this deal. Once we have that amount of capital, it's closed, we move on, we go and execute that plan. So I think it's very simple, which is attractive. And you also couple that with the huge syndication boom that we saw in the last commercial real estate cycle where Everybody became a professional real estate investor and started raising money from their friends and family and started buying commercial real estate with low down payment loans through bridge lenders. Anybody that could fog a mirror could make money in real estate because everything just always went up for many years. So I think with those things together, it created this huge popularity. I think what's really interesting now on the backside of this cycle where A lot of deals are struggling, values have reset probably 25% to 30%. The illusion of investors' ability to select the deals that they think are going to outperform versus not, I think it's kind of been stripped away. Because the big appeal of a single asset investment is, I can decide if I like this business plan or not. I get to choose if I want to put my money into this investment, this Property or not. And there's this illusion of control where you think, "I get to decide which deal my money goes into." But the problem is, as LPs, most LPs are not professional investors, and you discount many times the actual real key risks, which are things you can't control, like interest rates, like market risk, like supply, and other things that are outside of just the asset itself. And so, The idea of a fund actually reduces and minimizes a lot of these, what I would call idiosyncratic risks, or risks that are associated with one particular asset that you can't necessarily control.

Bob, back to your original point about this, you know, going after a single— before we talk about, you know, more of the downsides and why evergreen models that we're moving towards here at Aspen— to summarize, or summarize for us, where a single asset deal maybe can actually outperform, or why at, you know, let's say for several years, even you decided to do single asset deals.

Yeah. And if you happen to time the market right and you geolocate your investment properly, they can outperform. Right. And, and, you know, how many people made money, Ben, in multifamily in 2021? Right. And 2021, everybody made money. Why? Because the market went up, did a hockey stick. And when the markets go up, everyone's a genius, right? And, and so there's a lot of geniuses that suddenly were made. And so you time the market right. But, you know, my, my experience as even a public markets trader, to try and time the markets is nothing you're going to do consistently properly or to pick the right properties consistently, you know, so you pick the high growth markets. Well, all of a sudden everybody picked the high growth markets and now it's overbuilt. Oversupplied, right? So there's whatever you do, there's no staying power in being right in that, right? It's right for a minute and then it's not right. And so I think a better approach is really the billionaire approach is it's really be diversified, right? It's, it's just don't play the game. Don't look for moonshots, right? Don't play the game. I'm every time I step up to bat, I'm going to hit it out of the park. I'm going to hit a home run. No, let's get base hits and let's do a whole lot of base hits. And let's compound, right? And, and let's minimize our downside, and let's, let's make good solid upside consistently for a long period of time, right? So that's really a better, a smarter game to play than to try and say, I've, I've got the angle on the market, I, I know smarter than everybody else on the planet how to make more money, and, and I'm going to outperform everybody else.

I want to hit on that because I think it's a really, really great point because In single asset syndications, it's really easy to manipulate the numbers to show a very high target of return. And because it's just one asset and the capital is deployed immediately, a lot of times you can show a really high return if you just look at when the dollars come in, when the dollars come out. The problem is that it starts to train people to expect home runs on every deal. And the problem is when you start to expect a home run, you're going to be Babe Ruth, you're going to hit out of the park every single hit, you're going to start to take more risk than you maybe even think you are. And if you have a couple losses, it completely destroys all the work of the home runs, right? And it's very hard to make up the losses, um, from the home runs. And then you kind of get into this self-defeating cycle where now you have to take more risk to compensate for the other losses. And you kind of go—

it's a good point, right? Because like, if you're marketing, you consistently market an 18% IRR or 20% IRR, and then the market compresses, which we saw happen, and you're— and you can only raise money at 18%, well then how do you go make a 12 to 14% deal work? You have to start assuming higher rent growth, right? Bigger exit caps or smaller exit caps. So I think that's actually a really good point, even as from a person who stands on the capital raising side, I can relate to that, right? Because it, it could get harder if you, if investor, you know, if you're marketing or you're giving investors this expectation and all of a sudden you can't go hit that anymore, right? What you have to go solve for that.

I think that's such a good point. Let's go back to, you know, go back to another point I want to make here. The, you know, being able to, to find the win, being able to, to basically guarantee the win or select the win. So, you know, let's just, let's just think about inflation. And, you know, all the listeners here, you think about where you live. What do you think? What is inflation going to do this month? Right. Well, how many people would, would have a high confidence on their number? Right. Anybody out there? Right. Probably not. But let's say 20 years from now, do you think the rents in your neighborhood are going to go up or down? Right. They're going up.

They're going up.

And would you say that with a 99-plus percent confidence?

I mean, you could historically look at, look at that and say it's probably—

Absolutely. Okay. And this, this goes to the tides versus the waves, right? You cannot— no one— and I have been in the market a very, very long time and I've been multiple markets for a very long time. You cannot predict the waves, the wave that's coming and how high the next wave that hits your, your knees. You don't know if it's going to be super high or, or, or not. You just don't. But the tides, you can know. And, and, and, and a tide— let's call inflation a tide. There is going to be inflation. And, and the reason is the fractional reserve banking system. And I can go into the whole math why but we will have inflation and it doesn't have to be extraordinary amount of inflation. It just has to be a little bit of inflation and you make a buttload of money in real estate. Real estate captures that. It's like having this giant spinnaker in your sailboat and a little breeze picks that, this sailboat called real estate picks that thing up and you start flying across the water. So that's what I'm gonna bank on, right? And I want a vehicle to capture that. I'm not gonna try to, I don't want to any longer try to capture what's gonna happen this year, right? Or this month, right? And I'm gonna buy the piece of property 'cause it just, nothing happens that fast. You can't execute a transaction that fast. The chances of you hitting the right geography, you know, and the right property instantaneously and executing in the right timing is just low. It's just low. And if you did, it's probably more to do with luck than brilliance. And, you know, so I would rather play the game that I know I can win, right? Rather than the game that, hey, maybe, maybe I'll win. And I'm arrogant enough to believe that, that, you know, I'm smarter than everybody else and I'm going to win tomorrow. Right. And let's just play the game that we know we're going to win.

So you guys have kind of talked about this, you know, the selection of the deals. But there's— from an investor standpoint, there's also something that you both have really started to reel, not just to me, but to our entire investor base, is there is another silent killer to wealth creation in a single asset deal and maybe more than one, right? But I know there's at least one silent killer that in a single asset deal is not talked about a lot. Bob, you want to— or Ben, either one— talk about what that silent or silent killers are? And I can even pull up some of the charts from, from our recent deck if that would be helpful. But I would love to start, you know, dive into not just from the asset level, but actually from a capital deployment standpoint, why single asset deals can break down from a wealth creation standpoint.

They're inefficient in terms of cash deployment. So in single asset syndications, and there's a, there's a game that, that, that syndicators and sponsors play. And I highlight this in the book and the little subchapter called The IRR Fallacy. And actually point out, did you— you know, every investor is taught, and you're taught in school, right? The ultimate return metric is IRR, internal rate of return. And what it is, is that it's the value of money divided by the time that that money— over the time that money is earned. What it means is this, that the faster the money is returned to you, the higher your IRR, right? And so there's actually a scenario where you can make less money. Having a higher IRR will actually make you less money. And I point that out in the book, and it's not that difficult. It's just having, you know, front-loaded returns. And, and, and so the IRR fallacy is, is, is, is, is real. And, and so, so we, we, you know, by, by simply, uh, but it, but it's, it's only, you can only capture that IRR if you can make, if you can take your, that cash that you're getting back and deploying it in to, in a vehicle this, that that is as good, that returns as strongly. If you can't, then you have drag, you have deployment drag, and you have, you know, where that capital is not deployed properly and therefore it's not earning. And so the idea is you do multiple single asset syndications and even if they execute the business plan, which as we point out is, you know, it's hit or miss, but let's say they do, well, now you've got a drag where you wait to deploy and that cash is not being utilized. You know, so, so there's, there's this, there's this gap in, in compounding. And I point out, and then you can— it's very simple, do a spreadsheet with some math— that literally you earn 40% more returns by simply not having those gaps over a 20-year period. You know, if you have multiple gaps over 20 years, add to the fact that every time you have this gap and you get your money back, you're paying taxes. Well, that also stops compounding. So now the new money you're deploying is taking a hit. So you stop compounding at every location. Every time you're rolling, rolling a syndication, you're stopping compounding again. And so I point this out in some of these spreadsheets and, you know, you know, and hopefully we'll have a chance to, you know, we should put those in the portal where people can start to see and play with their own scenarios and see what we're talking about. And the numbers are material, massive difference.

Yeah. It's interesting because we did a lot of research. I mean, this is stuff we knew intuitively, but there's also some really cool research that we've found that compare these evergreen models with more traditional syndication models. And the IRR fallacy holds true, where you can actually have a higher IRR, which is the gold standard of what every investor thinks that they want. But you compare the syndication IRR, which is slightly higher on average than maybe an evergreen model, but you look at what you're left with, which is equity multiple at the end of the day. And these are, these, these were models that were done over a 10-year time horizon. And in every case, you have more money than you in the evergreen models than you do in the syndication models. Your equity multiple is materially higher. Because like Bob said, you don't have the drag from redeployment, and you also don't have the tax hit that you have to pay while you're redeploying. And both those things are very, very powerful killers of compounding. And we have some charts that Bob's referring to that we can put in the show notes here. But it's something a lot of people don't think about because they assume that if I just get higher returns, higher IRRs, then I'm going to come out ahead. But that's actually not the case. The real way that you come out ahead is consistency of being deployed, not taking big losses, and compounding over a longer period of time. And with, with those 3 things, you come out way farther ahead. And you're also not having to take as much risk, right? Because you can accept a lower rate of return that you can compound over a longer period of time and you actually come out ahead than higher rates of return on shorter time cycles that are taking more risk and paying these taxes and cash drag, etc., etc.

And can we say too that it's easier? You know, you go sit on the beach instead of redeploy every, every couple years, right? Yeah, yeah, yeah.

And I'll speak from the sponsor side, which I think is hope from the investor standpoint. Like, it's It's nice to be able to put on a scoreboard your successful IRRs, right? Because like, if you had— like, to your point, uh, Bob, a lot of this industry is IRR-driven. That looks really good from a sponsor standpoint, but if an investor is seeing that, they're saying, oh great, this sponsor has really good IRRs, that looks good on a scoreboard. But maybe what we're not accounting for, haven't accounted for, is how that translates to the LP. From a wealth creation standpoint. That is the—

exactly, you know, you know, I'll tell you how we could boost IRRs in every one of our syndications immediately is we simply do a draw. And instead of— when we, we take a commitment, we don't actually take your cash until we actually deploy that cash. And so do you make— do you make more money if we wait? If we— if you wait 90 days or 120 days to send us your cash, do you actually make more money? No, you don't. But our IRR would be higher because we're taking that cash, we're holding that cash for a less period of time. See, because it's money divided by time. So, as soon as you can reduce time, great. But time does not— you know, that's for us what we're offering our IRA. But then your realized IRR is far lower than my delivered IRR because you have to deploy because you're sitting on cash. Etc. So there's that, that's, that's the point. And as well as every sponsor, no one looks at after-tax returns, right? They, they look at before-tax. And the truth is, syndications are extremely less tax efficient.

Can you explain that real quick? Because I think that's a little confusing sometimes. Before-tax return, uh, before adjusted for taxes and after adjusted for tax returns, what does that mean?

Well, how many, how many IRRs have you seen in your syndications, Ellis, where someone is saying here's what you're actually going to make after tax. No, they look at— the sponsors are looking and telling you what they're going to pay you, not what you're going to pay at the end of the day. By the way, after you pay your taxes, you're going to have this. No one's doing that. And, and, and so, so, so it, it hides— it hides the fact that, that really, you know, you have to pay taxes in the middle of that. And, uh, and, you know, the sponsors, we're not paying those taxes. The— you as the investor are paying those taxes. So again, delivered IRR is a lot higher than realized IRR from an investor.

If we're going to get into, into the whole tax conversation, so this is another big, big area to discuss with these types of structures, is recapture, depreciation recapture, right? Right.

This is another misunderstanding about a lot of silent killers we can add to the list to get depreciation You get losses, you know, and it's simply not that good a deal.

Yeah. And the simple explanation of it is if you invest in an asset, single asset syndication, that gives you losses year one from bonus depreciation, you can use those losses against other passive gains personally, which is great, right? You can offset some gains. When you sell that asset, you have to pay taxes on those gains, but you also have to pay taxes on the recapture, the depreciation that you took and used.

Every time you took, you're going to pay taxes on that, ordinary income taxes.

Yes. And this is actually really interesting because this is a recent change in the tax code that I've not heard, honestly, anybody talk about, but it is massive in that historically the recapture taxes used to be at long-term capital gains rates, tax rates, which were much lower. They have changed that to be ordinary income rates. So now there is no benefit to take the losses except for time value of money, meaning you can take the losses now, you can defer the tax that you will have to pay for a few years. But it materially changes the, the math behind recapture. And a lot of investors don't understand it because it's not usually talked much about at the sponsor syndication level. Because, hey, we're selling this deal, we have all these losses year 1, that's the immediate adrenaline high that you get as an investor if you get these losses, but there's no discussion about what happens when this asset sells. And the other real big issue in a single asset syndication is you do not get to determine the timeline of when that asset gets sold. Right. And this is something else to your point on from a wealth-building perspective, is you want to be in control as much as possible for when you pay those taxes and when you have capital to deploy and be able to match that as best you can. Because in a syndication, you're on the syndicator's timeline. You're investing in the deal when they have the deal. And maybe you've been sitting on the cash for 6 or 12 months because you didn't have anything else to invest in. That's creating cash drag. And then they decide to sell the deal 3 years later. Well, what happens if you had a huge income year? You have no other passive losses to offset that gain. You have to pay the taxes. You don't get to decide when, when you pay those taxes. And that's where an evergreen model can actually shift that position of control back to investors. To a certain degree, you can decide when you want to pay those taxable gains and when you have more capital to invest into a fund and you can match a lot better and accelerate the kind of wealth-building curve.

And just on this, let's just stay on this topic for one more point here. So, when you're— is depreciation a good thing? I mean, I still see these syndications coming out, so much depreciation, we're going to give it to you and everybody gets excited. But for most investors, it's only— you can only deduct it against passive gains. And most investors don't have a lot of passive gains. In fact, very few investors have passive gains. So it ends up— you end up not being able to take it and it doesn't make sense unless you become a real estate professional, which means you're in the business, a professional real estate person, and which is very difficult to do. And it's very problematic. A lot of people try and cheat on it and it's not a good idea in my opinion. But, but so, so there's, there's this, there's this really is not that much of a benefit, you know, and then, but it is benefit, by the way, inside an evergreen fund because you can use that, what depreciation you do take to offset the passive gains you are generating through rents and income, right? So you can actually wipe those out. So it does, it does benefit, you know, but then also back to your point of time value of money, Ben. Okay. Yes. And maybe again, if you can deploy, so let's say you get a little, you pay a little bit less taxes your first year because of depreciation, so you you were able to use it because you're a real estate professional or whatever. You had, you had passive income sufficient, you have a little bit more gain, but then do you deploy it or not? Probably not, right? Or does it sit there? And then, by the way, 5 years now, if your income is higher, you might be in a higher tax bracket and you end up paying higher, higher ordinary income taxes, right? Just, you know, we see as you get older, your income just rises generally. And so you keep moving up brackets. So again, time value of money is a misnomer, or can be.

So I want to ask you specifically, like, how then does an evergreen model work? And I want to ask you because we spend a lot of time, and you spend a lot of time specifically thinking about this because you wanted to invest in more evergreen type models. And so if someone who's never done an evergreen type fund, like, simply just— does that mean I'm all— my capital is forever in this fund? I mean, talk about some of the things that you thought through in building an evergreen fund and why that was important in starting?

Yeah, we, we tried to think through everything here and we're just tickled over what we were able to come up with, you know, but think of it like a mutual fund, right? Where you, you invest, here's the share price, right? Then you invest in this mutual fund at the share price, you buy a bunch of shares and then that is priced on a regular basis. In our case, it would be priced quarterly. So you would see your share price. right? And, and that share price is going to increase over time, generally, hopefully. And, and assuming that we're executing and the markets are favorable, you're going to see it go up, but not, not with much volatility because it's not like this is being traded, right? It's not like the price is being determined by the amount of buyers and sellers in the market. The price is being determined by the underlying assets. You follow me? So as these assets are increasing in value very slightly over, over a period of time, very gradually, the price of your shares go up. So there's not a lot of volatility. And then at some point you determine in the future you can sell those assets because we have an internal liquidity program. So you don't— in a mutual fund, you basically, you know, buy shares from other investors and sell shares to other investors. And in this case, we won't do that. We're going to redeem your shares. So the company will buy your shares from you, you know, and you will buy shares from the company. And so we'll redeem your shares and you buy shares. And so, and we do it at this at this net asset value. Um, so, so it's much simpler.

So you're not locked in in that sense, meaning like it gives you control— to Vince's earlier point— of when you want to enter and when you want to exit. Maybe there's a lockup period, maybe there isn't in an evergreen fund, but evergreen doesn't mean forever. It just means I can come in and come out relatively when I want.

Yeah, and, and to be perfectly clear, we do not have the amount of liquidity. You know, the great thing about the public markets is liquidity means you always sell your shares, right, of, you know, whatever your company is. You can sell those stock, right? The problem is you may not— you can always sell it, but you may not like the price you get, right? If there's a big run on it, well, you can sell it, but you may be taking a massive hit, right? You can see— I mean, I remember, you know, I remember during the dot-com crash, Amazon dropped, you know, I think 95% of its value, you know, in a matter of a few months.

So you could get out, but just with a lot less.

You can get out. If you want to have $0.05 on the dollar, you know. So, so in, in this, we're— there's no market. So these shares are not— we don't have to find another investor willing to buy your shares. What we're doing is we're, we're using internal liquidity means which are much more limited, right? We don't, we don't have access to unlimited capital inside the fund. So, so it is a best efforts, right? It is a best efforts. And if everyone wanted their money back at exactly the same time, you know, there's no way we're going to be able to do that. We're planning on maintaining, you know, 20% ish liquidity you know, that, that kind of number. So as long as no more than 20% of the people want their money back in any given year, we should be fine. But if more than that, then we're going to be gating it and pro rata. So everybody's, you know, so you could end up in a stuck scenario a little bit, but, but, you know, less stuck than a syndication, but a lot more stuck than a public market, but, but also preserving value. And I would argue that's actually a positive. Liquidity can be your worst enemy. I remember my dear old mother, when I was a stock trader, telling me, "Bob, sell everything now. The sky is falling." And it was always at the market bottoms. So we're tempted, right? We're all tempted to sell when everything is— there's nothing but bad news and everything. And that's actually the time to buy. And the same thing, we're tempted to buy when there's nothing but good news. And that's actually the time to sell. We're not good choosers of when to buy and sell based on our emotions. Our emotions actually mislead us. So I would argue that, that having a limited liquidity actually helps you be a better investor and be a more disciplined investor. Um, and in this case, if there really is a massive market sell-off, you probably don't want to be selling into that. You probably want to do your best to preserve value and, and let the storm pass and then sell it after. If possible. And that, that's what we would endeavor to execute as operators.

Yeah, one thing I want— you mentioned the book, and in the book you talk about, you know, what billionaires do. And one of the things they do is they invest in real estate for the tax benefits. I think what's interesting, as personally as someone who's invested in single asset deals over the years and now learning more about evergreen models, is something you said is you actually don't really get to take advantage as an LP in single asset deals because you just, you can't use all the benefits. You can't 1031 in most cases, right? You, you really are—

the biggest tax break is 1031s, and the big boys can do 1031s because you, you have to own the asset entirely in your name. As a limited investor, limited partner, you can't do that. You can't do 1031s. But if you invest in Evergreen Fund, we can do 1031s inside the fund. And that was one of the reasons, you know, You know, it was this, this fund was really— I started getting dissatisfied about a year ago with, with all this, all the syndications. I started thinking through after, after reading, writing this book, realizing that very few investors are actually able to take it, do the things, the billionaire model. And I thought we, we could design a fund that helped people do the billionaire model. And, and that was really the genesis of this fund.

But I want to ask from an LP standpoint, because it is a fund If they're— let's, let's say someone's now interested in investing in an evergreen fund model. They've only really done single asset type deals, maybe like myself. So now they can't really go do due diligence on a particular asset. What becomes the important questions from a diligence standpoint as a passive investor?

Yeah, great question. And I think that's, you know, a lot of the initial pushback that, you know, some, some of us might have with funds is exactly that. Well, I don't know what deal I'm investing in. It's like, well, you're investing in lots of deals because you're coming into the fund and it's diversified. But here's the thing is you actually still can do the diligence on the deals, but it's usually more than one in a fund. And a lot of times you get that information, you can review the budgets and the pro formas and the assumptions and those kind of things. So, you actually can do it. It just looks a little bit different because it's not maybe a single glossy package with the pictures of that one asset. But the other things to really be thinking about investing in a fund is it adds this layer of structure that you also need to be aware of. We've talked a little bit about, but what are the liquidity constraints? Understanding that. So if I do want my capital back, what are the constraints around that? Is there a certain time period that I have to put a notice in? Is there a limit on how much I can take out? How is the net asset value being calculated? Because in an evergreen fund, you have to strike a NAV, strike a net asset value, and basically value the portfolio at different intervals. And so do I like the methodology that is being used to do that? Do the fee structures make sense at the fund level? But then here's the other big thing that I think is a really important point for people to understand. Due diligence is not a one-time thing that's done right before you invest. And this is where a lot of LPs go wrong. They do due diligence, quote unquote, before they invest in the deal, and they invest in the deal, and then they never think about it again. That's, that's a problem, right? But in an evergreen model, you can actually track exactly what's going into the fund in real time and look at the assets that are being added. And if you decide, hey, at some point, I don't really like the portfolio, if there's liquidity, you can actually get your money out, right? Whereas in a syndication, you can't. So I think there's actually some real big benefits from that exact concern that you get in a fund that you don't get in a syndication. And you can track as assets are being added over time. And it should not be a one-time thing, right? Because we've said this before on other podcasts, and Little bit of an aside, but most Ponzi schemes don't start out as Ponzi schemes, right? No one goes into an investment to start a Ponzi scheme. It usually happens over time because of other factors that are putting pressure in a business. And so it's important as LPs to track things as they evolve. And that can be done in a fund much easier.

Guys, awesome conversation today. Hey, anyone listening, Part 3 of Bob and Ben's book Invest Like a Billionaire is really the how-to section, and it goes over how billionaires beat the tax man, organizing and structuring your investments. And so just want to highlight that section of the book. Guys, thanks so much again for today. Awesome conversation. Hey, for more insights from Bob, grab his USA Today bestselling book Invest Like a Billionaire and join our free online community for extra resources, educational content, and the chance to connect with other investors just like like yourself, just head to InvestLikeABillionaire.org. That's InvestLikeABillionaire.org.