Multifamily Mastery with Sapan Talati

Hey everybody, welcome back to the New and Experienced Investor Podcast. Today we're diving into multifamily investing and what it takes to build a strong portfolio in today's market. Uh, this is definitely a show you don't want to miss. I'm one of your hosts, I'm Alex Barnett, I'm the new guy.

I'm Joe Homs, and I guess that makes me the experienced guy.

You betcha, bud.

Okay.

Um, today, yeah, like I said, we have an awesome guest. Uh, he's He's the co-founder of JT Capital. It's a firm that manages over $750 million in multifamily real estate. It's all about disciplined growth, capital preservation, and finding smart ways to structure deals in today's tough market. So, uh, before we bring him on, let's talk really quick about our upcoming meetup.

On the 19th of this month, it's a little bit of short time because There's a holiday, uh, the last Monday of this month, which is when we normally have it. I don't even know what holiday it is. I don't even—

people want to barbecue, spend time with their family. Annoying.

Is it Mother's Day?

No, that's the 11th. You better not forget that, Joe. I swear I'm gonna text you.

That's coming up next weekend.

Okay, do you want me to— do you want me to give you the answer my dad used to give me?

Oh God, what?

My mother's not living anymore. So, who do I celebrate?

Your wife.

Same thing, my wife. She's not my mother. Yeah, that's on my kids.

Oh, I see what you're saying. So, you're good. We're having a party.

Yeah, I'm good. Don't you think?

Yeah.

And then she gives me the look that the producer just gave me. It's like, come on, Joe, that's not right. Yeah, I—

You can't win with these women.

I thought you were gonna say every day is Mother's Day.

Oh, no, no, no, no, no. And then, you know, I think there needs to be like a time limit, you know? It's like, I've been married for almost 47 years now.

47 years? No, 47 years, because you just celebrated.

That's right. That's right. You guys, yeah, you guys came and had lunch with us. Yes. 47 years. So, it's like, I'm good for everything, aren't I? It's like, you know, if I miss Mother's Day, Father's Day, Father's Day, I don't even My kids don't even talk to me or anything.

Oh my!

I'm texting them all.

Yeah, please text them. You know, let them know I'm still here. You know, they don't miss Mother's Day. They do. They they they take care of Mother's Day.

Right. Father's Day, they're like, oh whoops.

But they do this too. They go like, and I'm sorry we're off topic. Yeah, we're gonna take mom out to you know blah blah blah restaurant. You want to go? Yeah, you know why they invite me? Yeah, so I can pay. How does that work? It's your mother. You should be paying, not me.

You know, the bill comes. They're like, "We have to go to the bathroom." Yeah.

Okay, back on anyway. Yes, the 19th. Guest to be determined.

Okay, it we had a blast last time doing stand up and connect.

Oh my God!

Don't know what that is.

Wow!

You need to be getting to these meetups. Also, this show is live right now, so jump in the chat. Share the episode far and wide and drop your questions. And we'll be picking some of our favorites, you know, to ask our guests during the show. All right. So to kick things off, let's do our 2 investing tips of the week really quick. Mine is always think about the downside in these deals. Before you jump into the deal, ask yourself, you know, what happens if things don't go as planned? You know, the pros always have a backup plan.

My tip is networking, and at our meetup, was it Monday? Oh my God!

Yeah.

At our meetup, one of my agents said that he had a motel or something in Orange, multifamily obviously, that he was going to convert, and I passed that information along to our guests.

Yes.

So please do some networking.

Share the deals that you have out there and, um, you know, be kind to others.

Amen to that. All right, let's go ahead and bring him in. Sapan Talati, welcome to the show. Great to have you here. How's it going today?

Going well. Thanks for having me here, guys. Appreciate it.

Absolutely. Let's go ahead and jump right into it. Introduce yourselves to the, uh, audience here. Like, how'd you get into real estate? What were you doing before that? What led you there?

Yeah.

Path was pretty straightforward. I was in management consulting. Clients were in real estate. Didn't really have a choice earlier on my career. Just kind of jumped right in. Right. You know, City of San Jose, San Francisco, their housing departments were some of my clients among some other private equity groups. And so we're looking at their loan portfolios, getting a real deep understanding on how the multifamily sector worked, working with construction on the lending side. Got to a point where, look, this is really fascinating. I want to work my career towards this, you know, ultimately. So that was the end goal. Here we are today, you know, so it's been about 15, 17 years I've really been in this.

Flies by, doesn't it?

It does. Too quick.

Or not.

Right.

Yeah, exactly. Okay, maybe can you break down— you talk about management, asset management. Can you do like maybe a bigger picture for like a newer investor exactly kind of what you do?

Yeah. So asset management, multifamily, it's got a couple different ways you can look at it. You got property management. So let's just say you own a multifamily asset, you got your onsite property management team, they're doing their typical property management. You want to have an asset manager, preferably within your own firm, overseeing, or think of it checks and balances, overseeing that asset, overseeing the property manager. Are they hitting the metrics, especially key metrics? weekly, monthly, annually, how are we setting the budget? What's the variance? Are we above and below? And so I think of asset management as integral to the overall performance, right? And then you got your property management. So it's kind of bifurcated, if you will, just to simplify everything on that side of it.

Gotcha. And so within multifamily, you guys are acquiring these properties, raising capital for it, and then managing And then is that— is that correct?

That's right. So we look, we go out to market, we look for assets that kind of fit our criteria depending on the geography. We'll go out and acquire them, we'll vertically manage it. So we've, we've got a property management company, we're fully vertically integrated, and then we got our own asset manager who oversees our own property management company to make sure things are moving as planned. Right. Where are we executing our business plan, whether it's a 3-year, 5-year, 7-year hold? And then we'll evaluate what's the next move from there. So that's kind of how we simplify what the asset management, property management, and then what we do. The other part of our strategy, which we haven't mentioned, right? We've got a private credit fund. So we're also out there loaning money in various parts of the capital stack, whether it's pref, mezz, structured equity. And it's been more relevant in today's environment, especially when it's tough to find good deals that pencil out. How do we get capital to work? How do we get it out there where we're getting good yield? not necessarily tied up for long term, especially since we're seeing a lot of LPs that may in some cases just want short-term exposure, getting good yield. And so how do we put that to work? And so we've been doing that through the credit fund, particularly to the opportunities in today's environment.

Gotcha. Now, you mentioned it's so hard to find good deals right now that pencil out. I mean, we hear this even in— we do single-family homes.

Yeah.

Down to mobile homes. Where are these deals? Why is it right now that it's so tough to find a good deal?

Great question, right? And I think it comes back to where are you investing? What are you looking for? A couple examples, right? We have investments out in Florida compared to some of our stuff up in New York. Florida right now as a whole, and I'm generalizing, right? A lot of supply concerns. And so you have the same thing across the Sunbelt, Texas, out towards Phoenix. And if you've got a lot of supply, right, where are you going to get that rental pop? Because the name of the game here is can we increase NOI? Very difficult today to increase NOI when you have a lot of headwinds in today's environment. That's not to say it'll be there in perpetuity, but today, headwinds are insurance. You've got a lot of supply, so you can't push rents. You're looking at concessions. And so deals may or may not pencil out just because you have to have patient capital where maybe a few years out until you're able to see some of that meaningful growth. On the other side, we've got the cost of capital has increased. We know we're not in that low interest rate environment that we were at previously. We have sellers who are trying to figure out how can I maybe potentially save my deal? I'm kind of being forced to take this out to market, right-size it. And so you've got somewhat of what we call price dislocation, right? It could be maybe about 50 basis points on a cap rate basis where we may want to see it priced slightly differently than what the seller's looking to get. And with that discrepancy, it's always tough to find deals that pencil, especially when the rates are also volatile. We've looked at a number of deals that maybe make sense, maybe not, but the debt, we've seen this over the last 6 months. There's so much volatility in today's market rate. There's been tariffs that were announced. Are we having tariffs? Are we not? To the extent that we're seeing institutional capital maybe just saying, look, we're going to go pencils down for the moment until we have a little more certainty. And I'm generalizing here, but again, it's just, there's a lot of uncertainty. So we want to look for deals that still pencil, Maybe your IRR is mid to upper teens, but out of that, some component of that needs to be current cash. 6%, 7%, 8% is what I want to see maybe in my in-place day 1 cash-on-cash return. So I don't want to see 90% of my return coming as an 18% IRR on the exit because I just don't have that much conviction. I want to see that coupon from day 1. And so if I want to get that to be there, I've got to get a price point that makes sense against relative debt. Oh, by the way, we don't want to have high leverage. 65% more comforting than seeing a deal where, okay, great, we can get 75% LTV on here. Are we borderline reckless? And so that's where you're seeing really tough to get deals to pencil out today. And so when, where do you look? Well, we're finding great opportunities in our credit side where we're getting 16%, 20% yield. We've got good downside protection. Because we got a lot of equity sitting behind us and we're not taking on risky deals. We're not coming in at 80+% on the LTV side, but really just looking at it as gap funding, filling in areas within the capital stack that were previously financed by smaller banks that have retreated from there or vacated that part of the capital stack. So maybe they're getting up to 55%, 60% on the LTV. We'll come in, fill in that 60%, 65% slip, or maybe up to 70%, depending on the deal, depending on the location. So that's how we're seeing deals that do pencil is really more from coming in in that structured equity component. That's not to say you can't find deals out there to buy for yourself. It's just become enormously challenging.

And where is it that you're finding deals? And are you doing any type of creative financing on any of them?

Yeah. So deals we've been actively pursuing have been in the areas that has been our bread and butter. So really Texas, Central Florida, all the way up to Jacksonville. We've made offers on a number of deals, just not where the guidance has been. Unfortunately, we've missed the boat on most of those. And that's okay. We try to find out who the buyer is, who the deal's ultimate Transacted with, we want to know who's placing capital. They may end up becoming a co-GP partner, or maybe that's someone that may want to invest through us, but really just want to see how they're looking at it. How are they getting these deals to work? Because maybe they have a different criteria that we're not seeing. It's just kind of keeping your ears to the ground. On the other side, the second part of your question was just creative financing. Creative financing. Thank you. So that's where I think a lot of the money's being made right now. Shorter-term stuff, short duration, where unless you're able to find good distress, which I think is really getting solved behind the scenes, You're not seeing really a whole lot of distress coming out into the marketplace. And so whatever distress you're seeing while it's being solved behind the scenes, it's not true distress. Generally, it's just distress because of the loan. Like the asset itself is not distressed. And I think we've all heard that. That's where the creative financing can come in place, right? You'll have operators that don't want the egg on their face. They just want to kind of have like a hope note, if you will. You've got lenders in some cases that are below UPB. Is there a way for us to structure something that helps that lender? convert that from an NPL to a performing note. And in some cases, create maybe being the B-piece buyer yourself and converting that below-UPB note into something that's performing. So that comes down to relationships, but there's creativity that you can certainly do. In some cases, if they're looking to refinance out because there is enough juice there, maybe you can creatively come in, create a structured equity component with a kicker on it, and then the current sponsor Falls into a hope note, but they're they're okay, right? Meaning they haven't had their asset taken from them or foreclosed. The lender's okay because they're made you know they're paid in full, and then we're able to potentially take over a deal at a better basis. So you look at that as can I get asymmetric returns? So am I writing a check for five million, and am I getting maybe thirty-five forty percent of the equity on a fairly large deal? That's very attractive if it's in a marketplace that you have strong conviction in. You don't want to just do that in any market, but. Markets that you understand well, maybe you have an existing portfolio because we talked about earlier, you're saying, what's your plan B? Things do go wrong. If you don't think anything's going wrong, it certainly will, right? Whether it's rates are going to stay elevated, maybe go up higher 2 years, 3 years from now. Maybe there's more deferred maintenance on that than you perceived initially. Again, you got sponsors that are in trouble. They may not have capital. And so they've let their assets deteriorate a little bit and they've been kind of putting lipstick on it. So you have to plan for the worst every time you look at these assets and not assume that this— I've got a great deal, but you got to do your DD on that due diligence.

And the properties that you're buying, are you buying them like, you know, general description? Are you buying them from big boys or are you buying it from somebody, you know, like let's say me who owns a 60-unit multifamily complex and I'm too old and I don't want to deal with it anymore and I just want to get Sure. Who are you buying from?

Yeah, so we've largely been buying from the bigger shops out there.

Okay.

Yeah, there's, there's one, like, I like the smaller stuff. I think there's a lot more juice out of it for our, our business. Like, we're not structured for smaller assets. You know, I kind of have a rule of thumb, you know, 80 or less. Typically it works differently with your property management company above 80 and just generalizing here in our markets. I'm able to put full-time onsite a team, right? Leasing manager, community manager, maintenance. And so there's different efficiencies to be had, and we've priced it according to that. We're basically set up really to take on '90s and newer asset quality in marketplaces that generally have, I'd say, strong economic growth. So we're not really in so many challenging environments. And there's different outfits that are, you know, that just kill it in that type of a scenario. That's just not for us. We tell people all the time, we're not going to be your highest yield shop. We focus more on downside risk protection. So kind of like the word I like to use, risk-adjusted return. That's what we really focus our returns on.

Got it.

That comes in handy right about now, I would say. I mean, have you seen shops open and close since you started? Raise, they maybe they get over their skis and then all of a sudden it's like they're out, they're out of the game.

Yeah. Even before, right? Well, even before recent, we've seen that. And sometimes it's just one of those where I think there's a group right now where we're looking at some of their stuff where exactly what you mentioned, in over their skis. They got some great debt, what at the time sounded like great debt, low interest rate. Rates popped up, rate cap expired, no more extensions left. What do you do? And then you got some healthy assets that maybe you're able to possibly take those out to market, get some equity there to help this other deal out. Maybe not. You said earlier networking's huge. I agree with that. That's like one of the greatest backup plans. If you've got a solid network, you may be able to network your way out of a bad situation. You may have that one equity checkbook that might take most of what you have, but again, they're able to help Prolong, or what I like to say, keep you in the game, so to speak, right? If they're able to help figure out a rescue for you. But to answer your question, yeah, absolutely. We've seen that. We're still seeing that.

Right, right. And you mentioned a story earlier. Maybe we could touch base and kind of do a little deal breakdown of somebody was in foreclosure and they were going to foreclosure in 30 days. Maybe you could talk about that one really quick.

Yeah, yeah, yeah. It's not something we normally do, but going back to the way I like to structure deals and I find fascination behind that.

Absolutely.

The more complex, I think it's the more— there's more juice out of it because a lot of folks won't touch it. And again, you got to find your niche, right? We're not the big boys out there. So where do we, you know, what value do we add is what I always tell the team, right? We're not out there to just go buy, buy a deal, put Freddie on it or, you know, agency loan and then call it a day because I'm not really adding value to my LPs because they could go do the same. So yeah, that deal we were talking about, I thought was pretty interesting. Get a call from an LP. Hey, we're going into foreclosure in about 30 days. It's just like, what am I going to do? Why are you calling me? I'm not a I'm not a developer, right? It was a mid-construction takeover. But ultimately, we figured out a solution there because of the multifamily you know opportunity in in a marketplace we loved DFW, and we know you currently a lot of supply, but we're timing it in a manner that it made sense. And so we said, okay, we'll take a look at it. We were able to dip into our fund, our credit fund, and basically work out a way to acquire that in cash with another partner and essentially flipped out of it, meaning we decided not to participate in the development opportunity. What we ended up doing is essentially just flipping it out. It saved the LP from facing foreclosure on their capital. We got a nice return in exchange for it. And then the developer likely is going to develop and enjoy the, you know, probably the fruits from whatever work they put in. So that's an interesting deal because we're in a time, at that time, a lot of construction lenders were largely pencils down for mid-construction takeover. I think they're looking for clean deals, ground up in development. And I can't speak too heavily on construction. It's just not my area of expertise, but something that's mid-construction, it's got a lot of risk factors in it. I like this largely because it was about anywhere from 30 to 50% complete. There were several buildings that were pretty close to being TCO'd, and the value of the land was really the cost that we were able to acquire it at. So there's, there's value there to begin with, and some other intangibles that made it attractive for us from a downside, you know, perspective, where we felt comfortable. Worst case scenario, we'll sit on this and we'll develop it ourselves. We can ride it out 2 or 3 years. So we've looked into it. It's more than just Did we just put cash into it and flip it? You know, we're not wholesalers, but it was an opportunity, kind of plan B and C. What would we do worst case on this?

Yeah, absolutely. And are you— do you see that a lot where somebody will start a ground-up project? And then, I mean, how does that happen? How do they just— they just run out of money?

They run out of money. They're behind schedule. I mean, we've seen a lot of things, right? And so we don't really touch a lot of it. You know, we do see a lot of it come across. We've passed on all of it except for this one. But yeah, there's a whole host of reasons. I think in some cases it's really just been the cost of supply materials, right? They misjudged their, you know, their pro forma delays. And so yeah, and then they dried up. In some cases, lenders, you know, just kind of stopped. And so that's the stuff I've seen. You know, we're not deeply entrenched in it. And so we try to work with— one thing I have been finding a lot of, and we're looking on it, is just developers that are trying to get out of that construction loan into something that's more perm, they're not finding the rates that they anticipated when they started this in, you know, '22, '23. So they're rushing through to get the lease up just so they can get off their books. And so in some markets we're seeing maybe 2, 3 months, not 3, but 2 months worth of concessions trying to get that lease up in, you know, in under a year, getting up there as quickly as they can. They take a little bit of a haircut. And then we're looking at it as we're picking up maybe 25, 45 basis points discount to that Class A, you know, relative to the marketplace because We're basically factoring in those concessions that now we're going to take over and have to burn off. So that could make sense for someone that's looking for more of a yield play and just a slight basis play on it. Not a big fan of basis plays, but just again, just kind of mentioning that's some of the stuff we are seeing.

Okay. So you think the big boys are human and they make mistakes?

I do think we're all human. At least for now. For now. Like, I think the big boys have a war chest and they have— they're set up differently where mistakes happen, but they're able to self-solve those mistakes a little bit, you know, a lot easier. They've got different tools, right? Or tools to play with. I think the smaller outfits out there may not have necessarily the war chest or the tools, right? The right tool in the tool belt to maybe navigate through certain scenarios. So it's not that I don't think it's just the mistakes. I think it's just your ability to navigate through it as well.

Right.

Are you surrounded by the right folks? Do you have, again, using the tools to kind of navigate? You know, bigger guys may have Fund A, Fund B, Fund C. You know, you can, you know, a poorly performing fund can maybe buy out the other fund. You can do an uproot roll-up. There's different things you can certainly do. But if you're smaller, you may not have that available. You may be strapped for cash. Your, your LP base may not be liquid where the capital call, if it needs to be on a one-off asset, you know, is not there for you, then what? And so you're kind of playing in a different ballpark. And so it comes back to what's your plan B, plan C, plan C? And I still think of if you're smaller, network is everything because that's going to be your extension of a tool belt, if you will. If you're larger, you don't necessarily need it because you're probably able to self-solve on a generalization.

Got it.

So I'd say first thing, just don't over-leverage your deals.

Yeah.

What I'm trying to picture is, is, you know, like a shop. And, you know, let's say the 3 of us worked at the shop. You're obviously the smartest person at the shop right now. Just listening to you talk is like, there's a, there's a lot of abbreviations and stuff that I kind of picked up, but, uh, you know what you're talking about. Okay, so Alex brings us a deal, and it's not as good as we thought it's going to be, but we end up moving forward. What happens to Alex after that deal blows up?

You lose the company car.

Is— yeah. Is there, in the corporate world, is there like a punishment or, I mean, do we give Alex a second chance? Is he married to the owner's daughter? What does that look like? I know it's a little bit off topic, but what does that look like?

That's a good question. You know, I don't have the answer to that. I think it just depends on how much I like your smile.

If I'm going to invest money with you, what are you going to do to convince me to invest that money with you?

You know, I don't want to convince you, right? I think you need to trust me and you have to like the stuff that we're investing into.

Okay, well, how do we get there?

Yeah, I'd have to show you the deal. I'd have to walk you through my assumptions.

Okay.

Clearly, I'd want you to ask me questions about me and, you know, our track record. I mean, there's a little bit of courting process, right? Because the first thing is I wouldn't, I wouldn't approach you with a deal to begin with. Like, I'd actually want you to get to know me and get to know you and, you know, think of like, is this a guy I actually want investing in a project and vice versa? You know, do you feel comfortable Investing money, you know, with with me. I just think that's just really important, you know, and just treat it like one of the big boys. You go to institutional capital; they're not going to write you a check in 30 days or 60 days. I mean, that initial process is a courting process, and and so I I think you have to treat it the same way. You know, unless there's yeah, there's ways to shorten that. Sure, you can you can paper it up in certain ways to protect yourself and whatnot. But but at the end of day, I still found that the best partnerships have been with guys that have gotten to know you or girls have gotten to know you. And, and you have that trust factor because if when there's a situation where things aren't moving the way you want, you don't want to feel threatened. You want to be able to have an honest dialogue. And that really kind of drives like the best outcome. And I say that not from a legal perspective, right? Like, sure, you can have a, you know, we've all seen certain LPs, maybe they're, you know, they've got a bit more thrust, you know, than you'd want to see. And they start to throw around certain jargons and it kind of creates friction versus I think it's really just look. I'd want to understand you as an investor. What are you looking for duration-wise? What's your return profile, your metric? What's your risk appetite? I think those are all important because does this particular project align right with what you're looking for, what your expectations are? Are you understanding that this particular project may not have the cash flow on a monthly, quarterly, or annual basis that you might be seeking? And so then I need to tell you, look, I know you, you know, this isn't the right investment for you. If we've established that kind of trust, then I think it makes more sense for you to invest into me. But if we can't have that, then, then, you know, you're just setting yourself up for friction, you know, in that relationship.

So if I said, yeah, I want to invest, you know, $100 million in your company, but I want an office next to yours and I want to see everything that you're doing every day, am I a good investor?

For you? I'd say you're certainly front of line in that conversation, right? But no, not necessarily, right? We've turned down money, you know, we still do. We turn it down all the time. You know, it's more detailed than just that, because the equity check's kind of like that shiny thing in front of you. But really, I want to know what's under the hood, you know, and if I have $100 million, you know, like if I'm in your shoes, I'm investing, you bet you I'm gonna be asking for every bit of teeth I can put behind that check. And so does that teeth align, you know, with the operations that the way, you know, where you're investing, it's set up? So like, let's say you did have $100 and you, you do want to invest. Um, actually you have the $100, so you're going to invest it. And, uh, you know, what would you want to see? And, and so—

An office next to yours.

So in that, that office that's overlooking the Pacific, right, where you get the sunset, um, and the computers are strategically placed where that light just keeps hitting you in the eyes, right? We would, you'd want to see, you know, can, can, can the group hit what you need to see on a monthly basis just from a reporting, you know, like you're going to want proper reports that give you comfort. You're going to want to see transparency. You're going to want to make sure your money's protected. You know, is a document, you know, drafted in a manner that, you know, really you feel protected, but you're not, right?

So not only am I vetting you and your company, but you're also vetting me back.

Correct.

Okay.

Yeah.

Okay. I understand that.

Yeah.

No, we have some serious— So no office. No office.

We got enough.

You get the suite. You get the suite.

Okay.

Yeah.

So I mean, as being— I mean, you're one of the founders of JT Capital, right?

Correct.

Okay. So you've had to take a leadership role within the company. What do you do to kind of keep morale high and to keep the team motivated?

Yeah, I think it starts with just finding folks that want to kind of believe in your mission, believe in what you're doing, and like the culture. I think it starts from the culture first, right? And so I was reading something earlier today where if you have one toxic individual, that's far worse than just having a number of folks who are just underperforming.

Mm-hmm.

And it gets you thinking. I think Tony Hsieh once said over at Zappos, right, you want to hire the guy that's smiling because you can't teach someone how to smile. And so same thing, you want to hire, or at least I like to partner up with folks that just, you know, they're go-getters, they're just motivated, they show up every day and they're like, look, we're going to go kill it today. And like, they just love what they do, like that passion, right? And when you have that, you just have a strong bond. So it's kind of like going to work out with a buddy. Like there's going to be days you just don't feel like working out, but your buddy's going to pick you up and be like, hey, we're going, we're going. Once you're there, you're kind of in it, right? And that's what you want in your team. So like, that's what I look for. And so for us, it's not so much of how do we keep people motivated, it's just we've got a great team. I like our team a lot. And like, we all show up, we have a great time together, we're always looking at deals, and, and, and we're very constructive, right? It's not so much, you know, after hours. We don't have like a 9 to 5, but, you know, as an example, maybe you're putting in extra hours on something, we're all very much like, hey, you know, can we help you out, Alex? You know, what are you working on? Is there something you can take off? And like, it's just that mindset, right? So I think it's just really hiring folks that have that same mindset As you, which goes back to you want even LP partners and just everyone around you. If you surround yourself and your business around that, you're just gonna have a good time doing what you're doing, and hopefully that leads to success as well.

We have a good time. Alex is the yes man in our organization, and so I always have to check with producer because she gives me the correct information. You know, Alex agrees with everybody, says, hey, we can do it, we can do it. Make it work. And then producer says, yeah, no, that's not gonna work.

It's a balancing act, you know?

Yeah, it is.

That's great.

It's good to have.

I'm a visionary. Okay, I'm a visionary. I can see it. See the big picture.

Okay.

I just like shutting it down.

Yeah, yeah. She loves shutting it down. So it works. It definitely works. So you've, through your 15 years, have seen cycles come and go. What has that taught you, like, you know, kind of weathering the storm and how has that changed your outlook on risk?

Yeah, it hasn't changed too much, right? Because I think, you know, risk is always going to be there. Market cycles are there and we know that. And I think the biggest thing is just understanding when you're in a good market cycle, just don't lose like your vision of make sure you got good debt, right? So don't over-leverage yourself because there will be a time where you're stuck. I think that's the biggest thing, right? Is just making sure you're properly leveraged, you're calculating your risks. And the other thing is, even before you get into a deal, a lot of times you already know what you're getting into. You know what that possible return could look like. But more importantly, give yourself options. One example I'll give you, what kind of debt are you putting on there? Are you locking yourself into a 5-year, 10-year situation, or is it like a short-term 3-year bridge? You're going to have a balloon payment. Do you have optionality within there? Right. So, so you can maneuver as the markets change because one of the beautiful things of real estate, it's not volatile. It's not, it's not like the market. You wake up the next day and, you know, it's up or down. We get to start to see patterns, right? Your leases, at least in multifamily, are 12-month leases, you know, give or take. And so, you know, your income is not volatile. And so you have time to maneuver. It's just make sure that you're able to put yourself in positions to do that. Now, we can't always do that, but I think that comes back with experience of being able to structure your way around certain scenarios as well, which comes over time, right? Less so if you're earlier on. If you're earlier on or kind of younger, goes back to find yourself a mentor or mentee or somebody that you can work with and/or just make sure you have a vast network so you can pull into those resources, dip into that knowledge base, if you will, to kind of find the guidance that you might need. I mean, that would be my advice, right? Outside of Unless you're at a large shop, established shop.

Who was your mentor when you were starting out?

Probably the consulting side of it, to be honest. I come from a little bit of a different experience, right? Because I was probably more formal training on that side versus starting from scratch where I had to learn how to underwrite, et cetera. I wasn't really— I already had a template. There was guidance of what we needed to do, how to do it. I'd say my mentor was probably my senior managers, right? And just kind of learning from there. I know there's a lot of, I guess, gurus out there that teach. You know, I don't— I haven't subscribed to any of them, so I don't— I don't know the quality of that. But what I would do is certainly go find somebody that's willing to take time to help you look at deals, maybe go tour deals, go walk on assets. There's a lot to learn just from walking the assets, you know, on your due diligence. I mean, there's— I think you're always a student, right? And it depends on the vintage. You know, older assets are going to have a different way of managing it versus some of the newer stuff. And then again, who you're buying it from, you know, who's the property manager on there? Different property management companies will manage it differently. So knowing those little nuances, I know we're all in single family here. And so for example, know your backyard, right? Depending on who, you know, that seller is, it's going to be managed differently. You know, like DSTs may make their money based on a certain operational, you know, efficiency, and that might lead to better value add for you as an example. And someone else that's a value add owner, they may not leave a whole lot on there for you because you already know how they operate. So it kind of comes back to like, if you know your backyard and you're investing in maybe certain select markets, you get to know who the buyers are, you get to know how the property managers are, and that might be one way of doing it. And so I tell people, if you're kind of getting into it or you're younger, don't be in 10 different markets, don't be in 5 different markets. Find 1 or 2 markets and then within there find a couple submarkets that you can really learn, you know, that, that side of it. And more importantly, physically get out there, walk those assets and find someone that you can add value to.

Great advice.

Yeah.

Absolutely.

I know. You can't really go wrong with that. What would you, after these 15 years, 15, 17 years, tell yourself at the beginning? Well, what's some advice you'd give yourself at the beginning when you're first starting your company?

That's a great question. Some days I wish I had time to sit there and kind of reflect on that. I think, you know, in retrospect, right, if I could have told myself that, it just would have been planning on where do we want to be, you know, so far out and just honestly just kind of planning that. It's changed so much over the years as market cycles have changed, right? You know, we started a fund and so we've been adapting. But I think going back, it's just having a little bit more of a path where as you're building a portfolio and I learned this a little bit later, It's not so much just going out and buying assets, right? It's, I like to think of it as each time you look at an asset, is this feeding into the overall growth, right? Am I building a portfolio that, you know, a lot of times when you buy an asset and you think it's one-off, but think of it as a portfolio. Like maybe you want to be a Freddie Select sponsor, $100 million a year, then you start building towards that. Or maybe you want to at some point exit in a certain manner where you create a REIT and you can kind of move everything in it. Like, so just I would say think about how you want to structure your business and don't buy in different places just because it checks out. You know, what's, what's that look like? The other thing I'd say, I mean, there's a lot of things I could say, but these are things like I think about now more so than I did earlier on, whereas you're strategically acquiring assets so that those assets can have more value when you're looking at the next one because you're able to use that to help you versus each one just a standalone. And then same thing with structuring, right? And so you wouldn't necessarily know that earlier on and earlier on, I wouldn't necessarily give this as advice, like on your first acquisition, right? But it's just stuff I think you want to think about earlier on and go out there and learn more so than a little bit later. Because at the end of the day, knowledge is king, right? And so if you know that, you can start making different decisions for whatever fits you.

Yeah. Would you have been more aggressive or less aggressive?

I don't know if I'd be more aggressive. I think knowing what I know now, I can be more aggressive, right? But I think being aggressive too soon is also detrimental, right? Because you end up in over your skis, or you may have good leverage on your assets, great assets, but you don't have the team, right? I always think of how do people hire so many people so quick that you may not be hiring the talent that fits overall what you're looking for either. So you want to move slowly, right? Same thing. If I'm an LP investor, I'm investing in you. I want to know that you've been through Different cycles. I want to, I want to see that you've full cycle turns, different market cycles. I want to see that growth. I don't want to see you scaled from 0 to 3,000 doors in 2 years. Like that, that doesn't really make me feel comfortable.

Hmm. Yeah, yeah, exactly. And I mean, in the beginning it's so hard to be like, people do it though. Hey, in 20 years I need to have this, this, and this.

Yeah.

But I think you're going to have that clarity when you're 40 years in, bro. Can't you just imagine that?

Oh yeah.

40 years in when he's got that office next door to me.

Yeah, exactly.

But like, you know, when you're in the beginning, you're just, you're hungry. You're just, you want to do a deal, even though you are, were as calculated and, you know, you had, you had the downside and the upside all worked out. Having the bigger picture, I think, can only come from the 15 years of experience.

Right, that's exactly what I'm saying, right? Like, when you find that person or group you want to go work with or mentor or mentee, you can, you can start to learn a bit too, right? Remember, like, I think experience is something you obviously get, but knowledge is also something you get. So you can, you can use someone else to kind of shorten that, that learning curve or that experience curve, if you will. Um, and that's what I was saying, just go out and find somebody that's willing, that has the time or is willing to take the time, or go work at a place that can put you in the position that you need to be. If this is something you want to go do, right? There's a lot of people that are entrepreneurial. That doesn't mean they want to be entrepreneurial. You can be an intrapreneur, right, and still have that entrepreneurial experience while working at a large outfit. You can be that creative, nuanced person, just find a place where, you know, they have room for that or they have an appetite for that. So I think there's a lot of ways to solve what you're looking for career-wise, especially within real estate. It's a, it's a vast network, right? And I don't know the statistics, but isn't it most of multifamily is owned by mom and pops out there anyway? So it's a pretty fragmented, disaggregated, uh, industry even today. And so there's plenty of room out there.

Do you think this is something— your job is something that you, you really, really have to like, you know, especially to be successful? It's not something that, you know, some kid, I guess You went that path, but some kid graduates from college and says, yeah, I want to do this. You really have to have a passion for it, I would think. I have a passion for it.

Yeah, I mean, you have to. Yeah, I mean, there's— because it's not a 9-to-5 job or 8-to-6 or whatever I think, you know, is out there. I mean, I think it's like a 24/7. Uh, yeah, you know, there's plenty of nights, weekends, holidays. I mean, we're picking up the phone.

Mother's Day.

Mother's Day.

Are you taking vacations, Sipan?

I do. Okay, good. Not as many as you.

Just please.

Because it doesn't feel like work, right? How's it a vacation? I feel like every day, just about every day is like a vacation. Right, for sure. You could work your schedule around it.

Oh yeah, exactly. No, no, you got time for you.

He's here.

You got time.

He's here.

He's here.

Freaking 4:30 on Thursday.

He's here.

Someone else is running the office right now. Right, exactly. That's great. Now we're past 100 days into the new administration. Our president right now is a frigging multifamily developer. How do you feel about how that's going to turn out in the next 4 years for your business?

You know, tough to say. I, I try not to get into the politics, politics of it, right? What I try to do is I try to understand the policies that they're likely to You know, kind of pursue, if you will, and try to remember I said it's not an overnight business. You know, we don't have volatility, but we have policies, and there's a lot of dialogue, and a lot of that starts to affect how regulatory may change, and it's not overnight. And so you can start to plan your business, you know, kind of around that. I don't know right now; it's kind of too soon, right? And I know initially we were kind of hesitant. You know, wait till the elections are over, make some decisions then. We've now seen terrorists; we've seen volatility. So it's been tough, right? And so. It depends on what school you're from. Some of the more sophisticated groups out there that have a lot of capital could look at their base and say, look, we're not going to move on anything until we have 2 good quarters of good data. Then you're going to have another group say, well, if you're going to wait for 2 quarters, you've missed the opportunity, because now everyone else has come back in. I think it depends on how you look at it. For us, it hasn't changed much. Obviously, the interest rates have somewhat settled from 3, 4 weeks ago when we saw the volatility. For those who are listening in, the CMBS market literally imploded, where we saw the spreads just widen so far out that I think they even put a freeze on it for a day. Those are very challenging things to work through if you're in the middle of an acquisition. You may not be closing for 45, 60, 70 days, but in the meanwhile, your execution on debt is changing significantly. How do you plan for that? I think that's where we're seeing folks just say, look, we're pencils down until we have a better read on it. Then you have others who are like, look, we're still in it, but we're going to come in more on that yield credit stack. We're not as worried about it because we're locked in. It's tough, right? And so my read on it is I don't have a read just yet. I mean, we're ears to the ground and waiting to see where it kind of starts to shake out before we can really anticipate where it's been, 'cause it's been a little unpredictable, to be honest.

Yeah, really.

If I picked up my phone and talked to Donald right now, what's on your wishlist? Like on my wishlist, which I think is gonna happen with this one big bill, Uh, no tax on Social Security. I mean, that's obviously good for me.

Yeah, we got a couple years.

And then, uh, the 199 deductions for investors is also good for me. And I think we'll see those 2 things. What, what, what are you looking for? You know, when I put you on the phone with Don, what are you going to tell him? What, what advice?

Yeah, I think just honestly interest rate stability would be great. You know, we're not looking for—

we're trying to fire Paul, but he's not going easy.

Yeah, that's an easier ask, right? Yeah. But look, I think with that, we can start to plan around a lot of the other things, right? I don't want it so much so where it's too easy because then all the other, you know, competitors and everyone else is starting to go out chasing the same deals. Like, I think of it this way, right? When some groups are pencils down, if rates are a little bit higher, you got less competition. So you got a little bit of flexibility. Or do you want rates to be a little bit lower and you have more people competing and then you're going to pay more for the same asset? And I think right now is more of an opportunistic time than it will be when you start to see more of that equity flowing back in. Goes back to what I was saying earlier, right? The smaller banks have largely vacated temporarily that part of the capital stack. We're not seeing a whole lot of competition. Yes, there's folks out there writing that bite-sized check in a $3 to $9 million space all day long. There's not as much as we've seen before, and the cheaper cost of capital is not there. That's why we're able to go out there and say, look, it's a 16%, 18%, 20% per annum yield on this. And by the way, we're going to give you a conversion option so we get some type of asymmetric conversion on that equity, very attractive. But I also know that's not a sustainable, you know, opportunity. That window will eventually close. Some other things we're seeing, right, because of the lack of transaction volume, we're starting to see— I think I saw a chart the other day— private equity groups that typically are out within 5 years, you know, they've been holding on to the longest we've seen in a number of years. I think the average hold is 5.7 years right now. So that means they're not taking it deals out to market. So what does that mean? We're probably going to see more of an increased appetite for the secondaries market where— so these deals aren't necessarily selling, but we're just seeing the LP capital being recapped out or recapitalization. And so that's becoming pretty attractive. So when you ask like what I think with Donald, right, I think stability in interest rates help because it helps lead to those conversations of like, how can I recapitalize out, you know, a number of LPs frees up a lot of equity, which you hope to roll into new acquisitions. And so like if you have that foresight and stability, it helps. Right? So again, it comes back to how do I structure around what's out there versus asking for you know the stars and stripes. Interesting though, one thing I I don't know if this is actually going to happen or not, but I saw Ron DeSantis kicking around. What was it like eliminating property tax?

Yes.

Yes.

That'd be pretty neat. But yeah, I'm also thinking how is he going to do that?

That's my question too. You know, like how is he going to do that?

Don't don't they make a big chunk of their revenue as a state?

Yes.

Their property tax.

Yes. And property taxes here pay for schools. And, you know, a bunch of other stuff. So, I mean, if schools are failing, that's a different story. But, uh, yeah, I, I, I've seen the same thing, and he's not the only one. There's a couple of other states looking into, into that as well. But where do you, where do you make up that revenue?

I don't know, but I'm glad I'm not the guy figuring that out.

Yeah.

Yeah.

All right, we're at the part of the show where I've— we've curated some videos, and I'd love to get your reactions on these. Producer? Do we have, can we get a question from the chat really quick before we jump in there?

Yeah, we got Liz in the chat. She says, what's your playbook for spotting overlooked or undervalued multifamily assets that others might miss?

For us, it's been relationships, right? It's going to vary from person to person who you ask, but us, it's been relationships. And I say that just because we're living in it right now. We've Remember the flip we talked about came from a relationship. We've got a handful of others that we're looking at right now, all came from relationships brought to us, not even marketed, and just say, hey, look, we've got some situations here. This might be right up your alley. Do you want to take a look at it?

And so sure.

And so it could be overvalued, could be undervalued. But nonetheless, the biggest thing is it's not going through a broker, it's not getting on market, and it's just really coming where we're having an honest, transparent look at it to see if it's something we like. If not, we just, you know, we simply pass on it. So that's how we've been doing it. I don't have an answer for how other folks would. It just comes back to how you structure it. I think, you know, the biggest thing is just, just keep looking, underwriting deals all day long. You know, we've been doing that internally as well on market stuff. We underwrite, you know, a number and it's just things aren't penciling out. But what I can tell you is that a year or 2 or 3 from now when that deal makes its way full circle, You'll have already looked at it before and you'll have some more data points. So, you know, you got to think of everything as an opportunity and not think of it as a waste of time.

Yeah, I love that. I love that. And you know that, like, again, that comes with your time in the industry. People have you in their phone book. So they go, hey, let me call Sven and see what he can do.

That's chill.

Yeah. Let's see if he can help us out. All right. First video.

What do we got? We've got 2025 multifamily market outlook.

If you want to buy multifamily in 2025, here's what I want you to know, folks. Values are down. Okay. In the 4+ market, we're down by 10%. In the 5+, so between 5 and 20 units, we're down by 15%. Guys, this is not rocket science. Buy low, sell high. Guess what? You get to buy low right now. Do you believe values are going to be better 5 years from now?

Yes.

Do you believe there's demand for rentals? Yes. Do we believe that there's a housing shortage in California that is never going to be corrected? Yes. You buy when prices are low. Are interest rates high? Yes. Should that stop you?

No.

Reach out to me to have a conversation.

I love when it's simplified like that. 90 seconds.

Right.

It's really not that complicated.

No, not at all.

No thoughts.

Anybody can do it.

Anyone can do it. Yeah, I guess where's the bottom or where's the low price, right?

Yeah.

Yeah. I mean, I love when I see— and it's not that I see the video, just like, uh, I get these, you know, investment opportunities all the time. Oh yeah, it's, it's 25% off peak or 25% lower than the peak pricing. And I'm like, but I don't care what the peak pricing is. I'm pricing it based on today.

And so Yeah, you mean you don't subscribe to the, this is a pool-sized lot, or you can build an ADU back there. I'm not buying an ADU. I'm buying what I'm looking at.

Okay.

I want you to buy potential.

Yeah, I think of it that way. Right.

Yeah.

And then second, you know, where am I? What's my debt pricing look like? So sure, even if it— let's just humor it for a second. Prices are low. But, you know, am I paying for a low enough price that I'm cash flowing today or am I still, you know, negative? And I don't want to be negative. Am I able to absorb, you know, insurance? Right. We— California, Texas, Florida, mostly Texas, right now California, we're seeing significant increases in insurance. Right. And so if I was selling something and you came back to me and I asked you, did you price in insurance? Did you go talk to a broker? Because I want to know I have certainty. So I'm like, did you price in year 2, year 3 on you being able to buy it? And you said, yeah, I did. Here's my quote. Okay, got it. But as an LP, I want to know, did you price in year 2, year 3? You're not going to get a bindable quote, but you should have had conversations where, you know, are we anticipating another 10 to 15% increase on insurance? I can't tell you how many models I see out there where it's like 2% increase across the board on all of OpEx. And I'm like, you're not in the weeds because it's not— I guarantee you 2% isn't going to be the rise, right? Insurance is going to be a significantly different number. Taxes in certain parts, especially Texas, we're still seeing significant significant increases on tax. So even if you're able to go find a great tax accountant or someone that's going to be, you know, in your back pocket, that on your purchase price can get it to be at 70% of acquisition price and whatnot, that following year, it may be closer to 95%. And what are you going to do with that big jump? Like, is it— are you still at the bottom? I don't know. And so you really got to think of more than just buy low, sell high. You know, I mean, I agree with the statement, right? But I'm just saying there's, there's a lot more to it that you certainly need to think through. So just because it's low doesn't necessarily mean it's going to be the best.

Yeah.

Amen to that.

That's, you know, one nice thing about multifamily is I want cash flow now. Right. You know, instead of single family where, oh my God, you're never even going to get close to cash flow here in California. You know, maybe an appreciation play, but never cash flow.

You got to shove 15 people into a single family.

Yeah. Yeah. What do you call that? Co-living. Co-living. Okay.

Oh yeah, that's something we could ask Donald. Can he reestablish cost segregation, right? The 100% day one depreciation was beautiful.

Absolutely.

Yeah.

Put a word in.

There you go. I'll call him later on.

I'll call him later on.

Okay.

All right.

He's busy right now.

Yeah, he's pretty busy.

I'll call him.

Okay. Our next video is What you need to know about modern fraud.

When you talk to different owners across the country, what are some of the challenges that they're facing?

Well, the 2 big ones that come at the very, very top of the list, the first and foremost one is fraud, especially in very specific markets. The prevalence and the sophistication of fraudsters today is so far and away more advanced than what it was when I was running properties. When I was running properties, you worried about, okay, is that money order being augmented in some way, shape, or form, or is it counterfeit? Is it going to bounce now? You're worried about, are they going to come in, take up 90 days worth of rent, turn it into an Airbnb, case the rest of the apartments for what their travel patterns are and coming and going so they can rob those? And by the time you finally get the eviction, before they actually move out the day beforehand and steal all your appliances. That did not exist in that type of thing 20 years ago when I was running things.

Will you talk?

He's spot on.

Whoa.

There's, there's, there's a lot more on that for that video.

I bet. Yeah. I mean, we've just seen, um, just with around here that people are, I don't know where they're getting this information, but now they're able to sort of play the eviction game and, and just keep it going on and on and on. And, and almost especially up in LA.

Yeah.

You can't even get 'em out now.

No, you can't. Yeah. There's, there's, there's ways to squat and there's like the, you know, the guidebook on how to squat.

Yeah.

Yeah.

I'm like blown away that, you know, on the regulatory side, we haven't seen more support, you know, to kind of eradicate this. But that's not my area really to comment on. The only thing we can do is just work with it. And honestly, I think of what I was saying earlier, like understanding regulatory, you know, has a big component of your business. It's something you should, you know, you should know what you're— what that looks like so you can structure, whether it's structuring the lease or like what kind of residents or tenants you're bringing in. And what kind of assets you want to buy, because I think it's difficult when you're in a bad spot versus if it's something that could have been preventable, you know, from earlier on. Interestingly, some tenant fraud—we're seeing fraud, you know, up and down anyways, right? Just for example, we've seen assets where the property manager will move people in, right? Not have a lease signed, and is just taking the money directly from, you know, quote unquote, a resident that's there. I mean, that's just one example, right? You see all sorts of stuff. Like you'll see, you know, maintenance materials disappear because your maintenance crew has some other job on the weekend, you know, and they're using the supplies from here. So there's just like all sorts of fraud that goes on. And that's where like, yeah, I think we were talking about earlier, asset manager, you know, property manager, you want to keep things honest, but it's also finding the right systems and processes so you're able to track materials, reorder points, right? You really want to know What's your? You know, I think those metrics, right? So for example, like we all know what our unit turn costs like, but you want to know, you know, on like how much are we using of different things, and just almost think of that systematically because if you notice some stuff off, like if you know some variance there, you're able to start looking into why is that, right? When we're buying a deal as an example, we actually look at the work orders. We want the general ledger specific to you know the to work orders because a lot of times those T12s, the broker or M and all that's not disclosed if there's like an actual. Issue with maybe the pipes underground. Yeah, sure, you can go get, you know, camera it. But what you end up doing is, you know, by looking at the work orders, if you start to see certain invoices that are specific to certain types of needs, that starts to tell you a whole different story. And so then you can start planning for CapEx, you can go back to the seller, hey, were you aware of this, right? Like stuff like that. And I'm sharing this in the light of fraud, because I've seen where some sellers have literally painted their roofs black hoping that you didn't realize that the roofs were actually aged, right? Or painted certain things and there's black mold. Like, there's a lot of this stuff out there, which goes back to the earlier comment I made, right? Go out there and walk these assets with someone that's experienced because there's a lot you can learn just from, you know, physically being out there and having those conversations. So yeah, but he's, he's spot on and it is getting more sophisticated.

Freaky. Yeah. Oh my God.

I think we got one more. Ready for the last one?

Mm-hmm.

Okay.

Big hot topic now. AI powered strategy.

When you think of AI, one, how do you frame it up? What is AI to you? And then where do you really see the implications coming for the multifamily industry?

The first level is, as you've said, ChatGPT. So ChatGPT is, an AI module that has been trained on a lot, a lot of data, which I'm hoping our viewers and listeners are utilizing today in a lot of stuff in their daily life. Anything from, hey, help me do a grocery list to travel plans to stuff in my business. The second level of AI is how do we take ChatGPT and we make it more specific, more specific to an industry, more specific to a vertical. Imagine ChatGPT has super specific context on multifamilies. And then the third and final level is vertical AI agents. It's basically how do I make AI run by itself?

When you think of AI, are you utilizing AI at all?

What's AI?

I gotta know.

He's spot on there too. Interestingly enough, we're actually working on a full vertical of our own within that. And yeah, I do, we're big into the, I wouldn't say prop tech, but the AI space of it and technology and leveraging it. And I think that is the future.

Mm-hmm.

I think you're falling behind if you're not going to take the time to learn or be aware of it and how to implement it either in your business or be able to just find folks who can help you with it. Right? You don't have to be a dinosaur. Like, none of us went to school to learn AI. So it, it, it's, it's new. And it's, the information's all out there. But I, I do strongly advocate that learning how AI is going to impact multifamily or, or anything, you know, in general is something you should certainly be doing.

Is there anything specific you can share about how you're integrating it?

Yeah, I think it's a full vertical, right? I mean, the LLM models, AI, like ChatGPT, Claude, I forget what version that is. They're good to an extent. I think the next thing is really just AI agents where they're kind of like your employees and they're able to do automated tasks. We're not fully there yet, but there's technology that's going out that way, finding good developers who can help you code that to what you need for your specifics. I think some of the larger companies are building specific LLM models for their own business. I know for us, we use it in our own where like our files are on a repository. You can literally ask questions and talk about it. It's pulling from our own database of like all the files. Like going back to if you underwrite all those deals, you have all that data in there, you're able to start talking to it in a manner that's conducive to your own business. And that's not going to be available on ChatGPT. It's going to be coming from our own data warehouse. So, I mean, that's just a simplistic example, but it certainly helps us, right? And so, The same would apply to anybody in their own business. And I think taking it a step further, right, when they're literally on an org chart and you got AI reporting into its own AI, which is a little bit more advanced. Again, none of us here can code, but it's finding maybe external folks who can help us with that. I think that's when you've kind of unlocked some new value there.

Yeah.

The future.

The future, man. Yeah, no, and it's coming really fast, it seems like. Of course, that's how that technology works. How can people reach out to you if they are interested in getting in on a deal or sending you a deal?

Yeah, our website, jtcapitalgroup.com. Just find us through there. Obviously you can reach out to me. My email is just sipan@jtcapitalgroup.com. Simplest ways.

Perfect. What do you got for the next year or so? Any deals coming down the pipeline that you're excited about?

Definitely anything we're doing, we'll be excited about. We got deals that we're looking at all day. We've got some of these below UPB, some truly distressed deals that we're working through right now in our pipe. We've got a few deals we've actually capitalized through our credit fund, waiting for those to finish out full cycle. So yeah, that's what we're working on right now. We'll see what the rest of the year looks like from the interest rate perspective and just in general. We're hoping for more transactional activity.

Awesome. Well, Sapan, thank you so much for joining us. Yeah, yeah, it was a blast and definitely got a lot of, got a lot of knowledge. And, um, I hope you guys enjoyed it. If you did, please share this episode far and wide. And, uh, we will be back here in 2 weeks because I'll be out of town next week. Really? Again? But, uh, yeah, we'll be back in 2 weeks.

Where are you going next week?

Uh, a buddy's wedding up in Northern California.

Okay. Everybody's getting married.

Everybody's getting married. So yeah, it'll—

When are the married people going to start having children?

Yeah.

I'm getting old. Okay? I'm getting old. I'd like to see a child in the near future.

Okay.

Perfect. Your mom and dad called me and they said, Make sure you mention that on the podcast.

Okay, okay guys, we're out of here.

Goodbye.

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