From Multifamily to Market Mastery: Raising Capital in Uncertain Times with Hunter Thompson |

Hello everyone, and welcome to the Raise Capital Legally podcast and YouTube channel, your go-to source for insights on raising capital the right way. We dive into topics that matter most to real estate syndicators and fund managers with live Q&A opportunities before we wrap up. I'm Krisha Young, your co-host and business development director at Syndication Attorneys, and joining me is attorney Kim Lisa Taylor, founder of Syndication Attorneys. Now, before we get started, please note that audio and video from this event Will be posted on our podcast platform, YouTube channel, website, and social media, and will be made available to the public. You can go ahead and ask questions at the end of the broadcast by raising your hand or typing it in the Q&A. Please note that information discussed during this event is of a general educational nature and should not be construed as legal advice. Now, today's topic is From Multifamily to Market Mastery: Raising Capital in Uncertain Times with Hunter Thompson. In this episode of Raise Capital Legally, Kim Lisa Taylor and Krystal Young welcome Hunter Thompson. and founder of raisingcapital.com and creator of the Raise Masters coaching program and popular live events. Hunter is also the author of Raising Capital for Real Estate. Hunter shares his journey navigating market cycles, insight into the multifamily asset class, and why high projected IRRs can attract and mislead new investors. We also dive into the critical role of advertising compliance, how to structure investor deals in challenging times, and the growing importance of business acquisitions alongside real estate. Whether you're raising your first round or navigating new terrain, this is a conversation you're not going to want to miss. Hello. Good morning.

Hunter, thanks for being here.

Yeah, I appreciate it. I'm honored to be on.

Yeah, well, Hunter is— I'm honored that he came because Hunter is a rock star and, uh, he has created a pretty powerful business and a pretty significant number of followers. I'm always happy to see Hunter at events because I know it's a quality event when I see him there. I think he's pretty discerning about that. But also, you know, I just think, you know, it's great to get his perspective because when you talk to us, if you're part of our pre-certification programs or masterminds or anything like that, then you're getting the legal aspect. So we're, we're helping you, you know, create legally defensible relationships to create legally defensible documents and understand structures, all that stuff. But Hunter's out there in the weeds doing the capital raising. So he comes to it from that perspective of not only doing it himself, but helping hundreds, I'm sure, maybe even thousands of his coaching students become successful at capital raising. So, uh, I'm super excited that you came and I can't wait to hear what you have to say.

Yeah, I appreciate it. Like I said, it's an honor to be on just because, you know, like you said, your perspective is more on the legal side, but I will say that you do a very good job of being very entrepreneurial-focused. You want people to help them get deals done. And I, of course, when I say it's an honor to be on, it's good because, you know, part of my business is to attract attention and to be loud. And we're going to talk about what that means for different people. But, you know, being loud isn't usually the most like buttoned up, you know, like most attorneys wouldn't say, hey, you want to do this super compliantly? Just go be as loud as you possibly can. But as you know, being loud is part of being a good marketer and marketer how you raise capital. And so this is a good meeting of the minds here, and I'm excited about the conversation.

Excellent.

So tell us your background. How, how did you get started in real estate?

So my background is pretty diverse when it comes to the capital raising side of things. And now I'm very, very focused. And it's been a long 15-year journey of what I've done. But really what happened is that I graduated college in 2010, and because I wasn't really impacted by the crash, I saw it as a massive opportunity to go all in on real estate. And I think one of the things I'm excited to talk to you and your audience about today is just the nature of cycles, the mentality of it, how people get squeezed, what that does to their business, and why now is such a great time to go all in. But I've got to say that I had no idea what it meant to go through a cycle when I was getting started. You know, my perspective was, what's wrong with everyone? It's the best time to buy ever. Every metric you would use to indicate that would be that 2008, '09, '10, '11, '12 would be a historically significant, great time to buy. And I was basically like, you know, frankly, I'm just being honest. It was an exercise in hubris. I was like, is everyone dumb? Like, buy low. And so I had no idea why someone wouldn't be able to buy low. I figured it out, though. Trust me, over the next 15 years, I figured out why market cycles happen and why it's more powerful than human cognition and Balance sheet protection. And really, it's unrealistic to think markets won't move in cycles. But at the time, I had— there was something to it, right? I wasn't impacted. You know, I had some money I could invest. And so that's exactly what I did and was really fortunate in terms of the market cycle. And I always was very aware of this. I was aware that the market cycle was in my favor. But the thing I always tried to be very cognizant of is a secondary impact of that was that when I started my career, a lot of people that were not as savvy were wiped out. And so when I would go to build my network, I was basically building it with the people that had made it through that nightmare. And I was even in California, so that was even more pronounced, meaning that the market there was decimated more than most of the other states. And so the people that I rub shoulders with quickly were people that were buying, you know, $10 to $50 million deals across multiple different asset classes. And so my vision was to start to play with them as quickly as possible and to skip some of the strategies that most people start with. So that was my entrance into this space, and we can kind of take it from there, wherever you want the conversation to go.

Yeah, that's a pretty, uh, you know, it's really insightful because Yeah, you know, some of us were in the market before that all happened. And, you know, there were a lot of people that were licking their wounds around the time that you started in the market and they were still trying to recover while there were other people like you that are just entering the market going, look at all this opportunity. And the people that did invest in 2010, they did very, very well. You know, they just a few years later, the, you know, the prices were still depressed. And they were able to get in, the interest rates were reasonable, and those properties escalated in value very rapidly and recovered beyond what they were prior to that. So, the people that did jump in when you did, you know, had the benefit of that. Well, so now you've seen a market cycle, you know, we've gone through the last few years. You know, how do you feel about it now?

Yeah. So, I mean, There's so much to talk about. And I think that I'm uniquely positioned to talk about it because, like, I have no problem being honest around my own conviction in my own thoughts. I just am an outspoken person just by the nature of the way that I speak. Like, this is what it is. But also because most of the things I've said over the last 15 years have been recorded. And so I kind of have this automatic accountability to where if I say something over and over and over and over and over again, I got to remember it. And so I can't just backtrack on it. And so I I think that a couple of things that happen, and I'll summarize what a market cycle feels like, right? If you time it right, what ends up happening is that everyone thinks you're totally insane when you start, right? If you time it right, which is what I did, right? So it's not easy for me to go all in in 2010. Going all in in 2010 is that every networking event you go to, people got their hands in their lap, in their head, right? They're pulling their kids out of their college because they can't afford college. They're going through bankruptcy. A lot of them are going through divorce because Financial challenges put a huge amount of pressure on relationships. They got all this stuff going on. They're going through foreclosures. They're going through all these challenges, and that's what I'm surrounded by, basically. And then on the other side of that, you've got everybody that you respect—your friends and family and maybe some of your former mentors—being like, "Did you not read any article about this tailspin of foreclosures that's just getting started?" That was the narrative, by the way, in 2010. It's like it's just getting started. Just wait, right? There's about to be this global. Of foreclosures that's going to freeze the market for years. And so that's how I started. But I just, I knew that when it looks like that, that's a good time to start a career. So what ends up happening is that you start to develop your own sense of right and wrong. You get your mentors that are going to help you navigate these choppy waters and you establish rules of thumb. And this is where things start to get interesting. You Based on market conditions, you can plant your flag in the ground and say certain things. And some of this is going to sound silly, but I'm just going to be honest. This is the nature of market cycle, right? Hey, I'm only going to do a deal if it produces 10% cash flow year 1. Like, that was a rule of thumb that I had. And my vision was, how can this ever go wrong? I mean, 10% cash flow year 1, if I'm borrowing money at 5% and I'm buying 8% cap rates and it's cash flowing at 10%, I just don't see how this is not going to work to some degree, or I'm wrong, or it's not going to last. And so, I was right. It was right, and it didn't last. And so, what ends up happening is that rule of thumb has to become 9% and then 8%. And then, so you start tweaking this thing that you're planting your flag in the ground, and that starts the beginning of the change of the cycle. I'll give you another example. Hey, what is wrong with everybody? 10-year fixed-rate debt. What are you, dumb? And then guess what? You have to start making decisions regarding, okay, 10-year fixed-rate debt. That's your rule of thumb. You're going to stick to that.

Cool.

Well, now you can't invest in Tampa anymore. You can go 45 minutes outside of Tampa. Now you can't go 45 minutes outside of Tampa. Now you can't be anywhere in Florida. Now you can be only in North Carolina, but you can be in Asheville. But now you got to be 45 minutes outside Asheville and you just start clicking it back and clicking it back and as the market corrects, all these rules of thumb that you thought were just ironclad start to be silly. And you can either sit and stop doing deals in 2013 or '14 or '15, or you can start changing based on market conditions. And so I saw a lot of people— and keep in mind, while this is happening, something really interesting is happening is that you're right. If you time it right, you're right for years and years. And what? Your conviction increases, your balance sheet increases, your notoriety increases. Holy crap, everything I touch turns to gold. And then 2017 comes around and there's chatter regarding debt, federal debt, personal debt, corporate debt. There's a debt bomb that's going off. Everything's going to change. Some people maybe start getting out of the multifamily sector in particular because it's overheated. And then at that point, you have years of, you know, balance sheet protection, making money. You start to go from how much money can I make to holy crap, we've got to offset some of these gains. This is how a market cycle sounds again, right? And then you start to realize that every year that you're participating, that these other people aren't participating, you're growing not only your net worth, Net worth and network, but you're growing more strategies and relationships. And what are those people doing that are sitting on the sidelines? Those mentors that you had, maybe they were wrong. All those people that told you about fixed-rate debt and ten-year financing, they were out of the out of touch. And then this can go on for years. That's the crazy thing about a market cycle. It can go on, and I'm just being honest about this. I it is more than the human brain can. Manage, especially someone like myself. I mean, you got to be a confident person to be a market participant at all. So take any confident person, give them 15 years of a market run-up, and they, they can't help but start thinking that they should go bigger and play bigger and bigger. And here's where it gets really interesting. In this run-up, when all you're focused on is doing things like offloading gains, trying to offset gains so you don't get destroyed on taxes, at some point, You and everybody else goes, man, I shouldn't have been playing so small. What was I doing following all those rules? How much money did it cost me if I just had this strategy and this aggressive thing and, and I had used higher leverage and floating rate debt? And now it's time. Now I'm gonna actually go for it. Now this is the moment. It's 2021, and guess what? I'm gonna play bigger than anyone. And that's when you know it's about to be over. That's the moment that you know, guess what? Music's about to stop. And it's not like I like BK'd myself or anything like that. I just, I felt it happen. I saw it happen where I was going from how can we just plumb, like pull liquidity into assets that create depreciation to pause. No more talk like that. We got to have a budget meeting. I haven't had a budget meeting my whole life. My wife, what are we spending on pet snacks? We got to have a conversation. So that's the nature of a market cycle. And it's something that is such an important part of this business. And the reason I want to do this, I'm trying to be funny and there's some truth in what I'm saying. But the truth of the matter is, this is what makes this business fun and lucrative and also makes you a better person. Because I'll never forget— I know this is long-winded, but kind of setting the frame here— I will never forget it. And I'm going to give a shout out to the individual personally. I was at a conference around this time period, 2020, 2021, and I was at a panel where I saw someone speaking named Michael Becker, who owns a podcast called Old Capital, and he's got a lot of experience. And he was kind of talking about the kinds of deals he was doing, sub-60% loan-to-value, fixed-rate debt. And like, everyone's kind of nodding along, but I'm like, this isn't real. Maybe, you know, I had a little bit more experience than the other people in the audience. I raised my hand. I'm like, hey, what's your cost of capital? And he's like, 10%. And I'm like, okay, so good for you. I can't raise money at 10%. Are you doing no deals? And he's like, yeah, we're basically doing no deals. I'm like, okay, you know, think about that based on the hubris of the conversation. I'm coming from a place of like, you're the kind of people that cost me millions of dollars in this run-up. So now I have this opportunity to say this, but like, guess what? That isn't going to work for me. I'm not going to sit on my butt for years. And he goes, I'm not going to be sitting on my butt very long. You're about to find out the deals I'm about to be doing are about to be very available very soon, my friend. And that was basically it. It was a respectful conversation, but he was, he was basically like, The deals you're doing are the deals I'm about to buy. And that was it. And there was certainly some truth to that. And that is how you play the game. You have to come in with evangelism and conviction. And I think there's a lot— it's very difficult to learn from other people's stories. You have to have some of it happen before you realize that you have to take risk-adjusted bets. But just know, if you play it right, eventually you will be on a panel where the next generation is saying you played it too safe, and you're going to say, just wait.

Because it is going to happen again. But I mean, the truth of it is, yes, you have to understand market cycles, but you also have to look at the big picture. We had our in-house editorial journalist team create an article called 100 Years of Investing in Multifamily Real Estate Versus the Stock Market. And what we saw is the real estate kind of went, or the market just kind of, you know, went along dips and dips and peaks. But the real estate market, you know, look at any piece of property on the planet that, you know, was sold 100 years ago and look at what it's worth now. Okay, so what's happened in between? It's gone up, it's gone down, it's gone up again but higher, down, up again but higher, down, up again but higher. It keeps going higher and it's always gone higher for 100 years. And I think that is something that you can kind of think about. You just got to be careful because in the market cycles, you get in on that dip and you, you know, you buy at the wrong time, you sell at the wrong time, maybe you don't get that benefit of that next rise. And so part of it is you got to be able to hold on. And being able to hold on means you do have to manage some of that risk upfront. So first you have to understand the market cycles, but you also have to maybe don't over-leverage your properties in certain market cycles. Right. And, you know, plan to, to refinance or something on the way out. Be careful. I started in this business in 2008. And at that time, of course, what we saw in the crash, the Great Recession, was that the people that really lost and the people that actually had to declare bankruptcy were the people that had short-term maturity dates. on their debt, and they couldn't wait until the market cycle, you know, recovered and went higher again. They were caught at the downturn where their property values were depressed. They couldn't refinance, and they had to. So the banks ended up taking it back. And then what the banks did is they put all that stuff back out at a lower rate for the next buyer, and the next buyer bought it at a steep discount, and they got the run-up. You know, so I think that, you know, you really do have to have that, either that vision on your own or you have to have that knowledge. I mean, the people that I know that do have that vision, you, you know, some of the other real estate trainers out there that have that economic and financial background that can see through those market cycles and what you should be doing. And a lot of us, you know, we're just ordinary humans. We don't have that right now. We've got AI so we can, you know, augment our brains with that somewhat. But you also have to take that that with a grain of salt. And, and the reason I say that is because what I'm learning, as in we're using a lot of AI, is that asking the wrong question will always get you the wrong answer, you know. And so you've got to actually have the foundational knowledge or, you know, work with someone like you so you even understand what's the right question to ask and what are the right follow-up questions to ask. Because if you don't have that basic foundation, you're going to ask the wrong question. You're going to get told no, Can't do that, uh, when it's actually like, oh yes, you can, but here's how. And it's, you know, um, so we've, we've seen a lot of that, uh, a lot of that in our, uh, in our industry. Um, so tell us about raisingcapital.com and, you know, its purpose, and then also Race Masters. What, what are your focuses here?

Yeah, sure. So I mean, a lot of that story was kind of a funny story about where I'm kind of mocking myself. For those that aren't aware, you know, I've raised over $100 million in my career. I started as a capital raiser, raising money for other people's deals. The first deal I ever did was to partner with a group that had over, I think, $400 million under management, or actually I should say $100 million under management. And I partnered with them through a kind of fund of funds SPV type of strategy. I didn't know the term fund of funds at the time. I kind of thought in my head, I didn't make up fund of funds, so please don't take that out of context. But to me, I was like, I have an idea, let me run it by an attorney. And so I didn't learn about it and then do it. But later I found out that's a very common structure. It's called fund of funds and allowed me to partner with other operators and bring capital to their deals without a lot of experience in operations because I found this great operator. I kind of deferred to their expertise but used my ability to raise money for their deals. This is something that's become popular now. But, you know, the first time I did that formally was in 2014, and then started raising money in that capacity until around 2020, where I became a registered representative under a broker-dealer because I didn't want to have that intermediary entity. I wanted my investors to invest directly with the operator. And so in this case, you've probably heard about how you're not permitted to get paid to raise money unless you're under a registered representative, you are a registered rep under a broker-dealer. So in that case, I wanted to not have that unless thing. I wanted to be able to do it, and I did that. And so I did that for about 2 years and at some point in 2022 when interest rates were raised, you know, faster than they raised in 40 years, I saw a massive opportunity in multifamily, severed my relationship with the broker-dealer on good terms, of course, and then went to start and move to Phoenix, which is where I am now, to buy deals directly. I have a partner in this initiative, which is— his name is Tyler Lyons. And for the last 3 years, that's all we've done. Is buy our own deals as an operator. So the reason I say all this is that because of my background, I mean, there are— I don't want to say a ton of, but there's definitely many people that have raised $100 million for retail investors. You know, you and I both know who some of those people are. There's not that many of them, but very few of them have the background that I have, which is extremely diverse. I've seen the inside of all these different businesses because my entire career leading up into 2022, I was a capital raiser for other people's deals. So I saw incredible sponsors that do everything correctly. I saw other businesses that did things very poorly and everything in between. And because of my background and some of the stuff I've done, I thought it would be helpful if I wrote a book about my experience. And the success of that book encouraged me to launch raisingcapital.com, which is a coaching program. So I know that was just— I had to at least balance out all the funny stories about me embarrassing myself earlier, but that's kind of my background and that's RaisingCapital.com is an e-learning business. We grew that business extremely rapidly. You know, that story that I was just outlining, you know, we're not talking about $10,000 and $20,000. You know, we scaled from $0 to $10 million in 31 months. We did $20 million in less than 4 years. We had an incredible launch and scaling of a business. And it's something that I'm very, very proud of. And so that's what we teach, how to launch and scale these capital raising businesses. And I'm uniquely positioned to do that.

That's fantastic. And what is RaiseMasters?

So RaiseMasters is our coaching program that where we kind of give away— I mean, I try to give away my secrets for free, but it's more about the community, the coaching, one-on-one support, getting your specific questions answered. So as an example, I mean, you know this, especially when it comes to the regulatory environment, this is a constantly evolving, changing And potentially very lucrative or very catastrophic financially industry. So just like stepping on a pothole, you just don't want to do that. And so it's pretty easy. It's like if we can save you from one pothole or get you one extra deal or avoid one deal going south, it's a no-brainer. And I know you know that, which is why you also had success with your coaching industry, is that it's— you should pay for coaching in this business. You should not try to figure it out on your own.

We tell everybody that the clients that come to us, I mean, we've represented, I've represented over time over 450 clients raising over $4 billion. And, you know, the ones that have gone on and done either multiple deals or started small and gone big have all started with a coach. Others that come without a coach, they'll do 1 or 2 deals or they'll stay really small or, you know, maybe they do 3, 4 deals, but then they're kind of out. You know, we don't hear from them anymore. They're gone. And you know, and sometimes they make some pretty catastrophic mistakes on those first deals by you know buying the wrong thing or buying at the wrong time or getting the wrong financing. And you know, and sometimes they come to us when it's too late for us to help them. You know, they're like, "Hey, I'm closing in two weeks," or they're they're you know saying something like, "Well, I offered my investors this," and it's like, "Well, okay, then you know I guess you're going to do one deal like that, and you're going to figure out that's not the way to do them. But we're here for you. You know, we're here." come back with your pain and we'll help you figure it out for the next one. But, uh, yeah, so they, they make mistakes, they, you know, and I always say don't make $100,000 mistakes with other people's money or you're going to be short-lived in this business. Uh, you know, either that or you're going to be making it up out of your own pocket and you're going to be setting yourself back. So yeah, having a coach is super critical. Knowing how to underwrite, how to vet, uh, the operators, you know, what deals to invest in, what deals not to invest in, because there's a whole lot of people out there that really, you know, they'll just throw numbers at the wall, right? And, you know, hey, if the investors will buy it, then we'll do the deal and it has no basis in reality. You know, I actually know there's some crowdfunding platforms out there that kind of got a little heavy-handed about dictating terms as to what their the people that put their stuff on the platform were going to offer to the investors, and they made the terms really so untenable that we had several clients that had used them in the past that just said, no thanks, you know, no thanks, we're not going to do it anymore because number one, we can't promise that, and number two, you know, that's— that doesn't make any money for us. It's just not going to work, and we're going to be out of business. So, you know, that, that was a short-lived phenomenon, unfortunately. But, uh, all right, so let's talk about how you—

Do you mind if we talk about that real quick? Because this is the other— is it okay if we just discuss what you just mentioned? Because—

Any way you want.

Okay, so this is the beginning of the new cycle, right? And so what we see now is that there are people that have been investing now for 2 or 3 years that are getting into the space and going like, what's wrong with everyone? Go in right now, morons. And it may remind you of my tone of 2010. It's like, what's wrong with everybody? They don't know yet what it's like to have a capital call. They don't know yet what it's like to see fraud take place in a deal and realize, geez, I mean, that's hard to freaking do due diligence on. 7 years ago, we did due diligence. you know, 7 years later, this person connects fraud. So much has changed in that time. I mean, they don't have the full context, but they have conviction and evangelism. And then they start to have success stories, and that creates FOMO with their coworkers. And then you have the beginning of a market cycle. And what ends up happening is that when the cycle starts to happen, those same rules of thumb, whatever they are that they will create, they will start to realize that they can't substantiate. They will not be able to be market participants in '27 if they keep them, and they will start cranking them up and they'll start looking for more exotic products. They'll start looking for more unique and risky loan products. They will search for higher and higher IRRs because they got a 13 on their first deal. They look for a 15, they got a 17, they will look for a 23, and they'll go from Main Street, main markets, multifamily To self-storage, to crypto, to Doge, and they will. And they will. That's how the market cycle works. And I wanted to do this interview because I like you, and I know I've got respect for what you're doing. But I want to speak to those people because the truth of the matter is, this is good. We need market participants. We need young, hungry, convicted, or people that speak with conviction. I don't know if that's right. Convicted. We don't want convicted people.

Let's go back forward.

To, to bring this industry back to life. And if you can learn from some of the lessons that I've talked about, I want you to. But just know it's okay if you fall for marketing and misleading information and you change your rules of thumb along the way, because it's hard to do. And it's all right to do some deals that go bad because All those books you read about the market cycle before you got in the business, there's a reason there's so many about them, and there's going to be so many more. The point, though, is that you have to keep going. If you bail, you can't win, and if you stay, you can't lose.

Well, with a grain of salt here, if you have bad deals, guess what? From a security standpoint, you have to disclose all the deals you've ever done—good, bad, and ugly—and it's actually to your benefit and to the benefit of your investors to do so. Contrary to. Popular belief. Because if you tell everybody we've done 80 deals and, uh, 10 of them, you know, they were okay, and 2 of them just absolutely dogs, people lost money— if you tell people that, then they're going to realize that first of all, you're being honest, and second of all, not every deal is a great deal. And, uh, you know, so they assume that risk by knowing that information up front. If you conceal that information, guaranteed it comes out in the SEC complaint. You know, that says, hey, they had other deals that failed and they didn't tell anybody about that, and they concealed those facts. It was fraudulent. So, you know, just be aware that if you are in this market cycle and you do have some tank deals, then you need to have a— you need to refine your story to include that experience and what went wrong, what you learned from it, what, you know, how you tried to mitigate it, everything that you did. to try to make it as, as good as possible for investors. And if you're transparent all the way along the way, even if your deal is going down in flames, if you start stepping up your communications, telling people what's happening, all the things you're trying to do, listening to their suggestions, making reasonable business decisions, you won't get sued. But if you stick your head in the sand and you don't tell them what's going on, and you, you know, you— worst case scenario, I had somebody who's an attorney Erroneously, my belief, told them to, you know, disconnect their phone number, move from their office, stop answering their email. And, you know, that person ended up, you know, they're not doing this anymore, right? But the people that actually can withstand the loss can explain to the investors what happened. They don't get blamed because everybody knows you fought tooth and nail. You did everything you could to try to save it. It just happened, and they've accepted that risk, and they're not going to blame you for it. So just you know keep that in mind if you have deals that are tanking right now. Also, how do you you know how you react to a deal that's tanking is is really telling about your character and tenacity, right? Because you have to be able to explain to the investors if you've got to do a capital call. Let's let's talk about that for a minute, Hunter. You know when we have people that have to do capital calls, we want to help. help them, uh, you know, come to us, tell us what's going on. Here's some ideas on how you can get people to participate. Maybe offer them a little sweeter deal than you did before. It's like, okay, hey, this is our screw-up, we're gonna eat it, we're gonna raise another million dollars, but you're gonna get 100% pass-through on that million dollars that's raised, and you're going to get paid before everybody else. You know, if your deals, if your offering documents are crafted correctly in the beginning, you'll have some flexibility to be able to do what you need to do to get that Maybe at you know a little bit of a loss to yourself, but you're keeping your reputation. You're you're salvaging your investors who should always be top of mind. You know you have a fiduciary obligation to treat their money better than your own, to take care of them better than you would yourself, put them ahead of you. So I think that you know how you approach your investors when you have these situations is a huge determination on what success you have. You know, if you go to them, pitch to them, here's exactly what's going on, here's our projections, here's what's going to happen if we raise this money, here's how it's going to help us, and here's what's going to happen on the other side, then they're far more likely to invest and to make that capital call than they are if you're just like, hey dude, we need some more money. You know, what do you think? What's your experience?

Yeah, so I've had experience with capital calls, and the reason— there's a couple reasons for this. One is that we have been participants in all different markets and all different market cycles, but also with a bunch of different operators. So we have a very diverse approach. And so we've done a lot of deals. I don't even know the numbers of deals, just a considerable amount of deals prior to making the pivot in 2022 to buy deals directly. Now, obviously, since we made that pivot, we've never done a capital call, but a lot of that's because of market timing. I'll give you an example. When you have a very diversified approach, unique things happen. One of those was we bought a self— excuse me, a senior living community in February of 2020. February. So obviously, in a state where it became illegal to visit your loved ones in seniors communities.

Wow.

So people had to make the decision, I may never see my father or mother again if I put her in this community. So, I mean, it basically froze the industry in some states. If you've looked into it, most of that relief money, like trillions of dollars, was moved around. A ton of it went into the seniors industry because it was going through a— it was like, that's like the epicenter of what went wrong, given what COVID was, what the risks were, and that whole thing about you can't go visit your loved ones. So long story short, in that particular situation, we were able to conduct a capital call in which we were able to put in the money on behalf of our investors because it was a manageable amount of money. But I've also seen deals where, you know, as an operator, going back to my previous perspective and rules of thumb and things, I would always negotiate for there to be no dilutive penalty that wasn't— that was more than 1 to 1 if there was a capital call. So I would say the documents had to say, as an LP investor, but I represented, you know, quite a lot of money at the time, I would say, you know, because I was raising capital, I would say, There needs to be someone that says there's never going to be a requirement to put in more money. If the manager says that there's a capital call, so be it, and investors can put in more money, but there's no penalty for non-contribution. That was like, I was fighting on behalf of investors and I thought that was the right thing to do. Now that I know a little bit more and have seen how this goes, that is not what's in investors' best interest. The reality is when you go through a capital call, unless there is a penalty for non-contribution, you're basically going to hear crickets because most LP investors don't fully grasp the nature of the situation. As an example, in the capital calls that I've seen, let's say that it's a 17% capital call. You have investors go, oh my gosh, it's going to be diluted by 17%. And there were savvy, competent LPs that we would have to be like, that is not why we're sending this email or why the sponsor is sending this email. It's because there's going to be a foreclosure unless they're able to raise an extra 17%. So I wouldn't be worried about the 17%. It's more like the other 100%. That's the concern. And this took a lot of calls. Now, now, because interest rates rising, a lot more investors have been through a capital call, so they understand the situation. But if you're just thinking, Oh, it's a 17% dilution. Dude, keep it. I'll take the 17% dilution. Why would I put more money in a distressed deal? But the truth of the matter is, you're trying to protect the next 100%. So when you think about it like that, even still, it's difficult. So a structure that I've seen sponsors implement successfully, that I've never implemented, but I saw it and I was like, that's unique, and I think it's probably appropriate. When there was a decision that there was going to be a capital call, there was a vote to create a new class of shares, which would create about a 6% to 8% cash flow for additional capital that was being contributed. But here's the X factor. Anyone who contributed their entire investment, including their original investment, was moved to a senior position in the capital stack. So the penalty for non-contribution which you can totally do, you don't have to contribute, is that you would be junior to anyone who contributes. And so then it's on you. So without going into more details, you can kind of think about that internally, like if that would be appropriate. But there's no penalty for non-contribution in the same way that it's like we're going to seize your assets. It's more like you can make the decision if you want to essentially accept that you will likely not recover your additional investment. That's totally okay. It's your decision. And the reason I'm speaking like this is that I rarely hear people speak like this because it sounds like it's not investor favorable. But what I have found is that investors don't fully grasp that they are in fact facing a foreclosure, and that needs to be elevated to their attention to effectively navigate it without a foreclosure happening. Now, sometimes Maybe foreclosure is the only realistic scenario in which this is going to happen. Sponsors tend to not want to have that happen, even if it is the right thing, because it's a reputation hit. You have to tell the story, you have to disclose it and all that stuff. So it's a delicate dance. But this is something that went from, if you've ever had a capital call, you should never be invested with, to, well, of course you've been in a capital call, you were doing deals in 2021 in a prime market. That's kind of where the conversation went. That's just my perspective. What, what is yours? I mean, I like to hear about what I just outlined from you.

Differently. You know, for the reasons that you stated, there's a lot of people that are just like, there's mandatory capital call provision, I'm not doing it. So we actually build into our documents that the manager has a lot of discretion in what they need to do. First, they go out to everybody and ask for a voluntary capital call. But what happens is we, we end up saying, but it's first come, first serve. So if everybody raises their hands, you want to keep your position, That's fine, where it's pro rata amongst everybody. Of course, that never happens. But what does happen is 2 or 3 people say, I'll do it. And especially because of the way that we've structured it, it's like if you go out to the voluntary, nobody agrees to do it pro rata, or not everybody agrees to do it pro rata. Now you start taking these other people that have raised their hands and you can start negotiating with them. You can create a special class, you can create, you know, a priority class. You can offer additional incentives to everybody saying, you know, hey, we'll do the 100% pass-through on whatever money, we'll make it a prior priority return over everything else, you know. So we've given our clients a lot of latitude to be able to do whatever they need to do, including bringing in private equity as a superior class. You know, so, but now what I've seen a lot, a lot out there is there's a lot of inexperienced PE out there, right? There used to only be very experienced private equity that kind of got it and understood what the constraints were with the lender. And now I'm seeing people like, oh yeah, well, you know, sure, we'll give you a loan and then we'll do this and we'll do that. And it's like, well, you can't do any of that. That's all prohibited. The lender's not going to allow it. It's, you know, your loan agreement. So, but what you can do is you can bring in, in fact, this has been suggested by some pretty prominent lenders. You can bring in a private equity class, give them 0% ownership rights, no right to take over the property. As long as they don't have a right to take over the property, lender doesn't care about them. And but give them— they could force a sale. So if they want to force a sale because you're not performing, you're not paying them what you're supposed to be paying, they have the right to do that and you have to cooperate. And, you know, maybe they have some right to, you know, look at things you are doing with the money that they're providing. And maybe have some say-so over how that money is being spent. So you can do that and you can pay them, you know, 15%, 20%. That's what they're usually wanting now, someplace between 15% and 20%. So, you know, we have— we leave a lot of flexibility in our offering documents because of the real experiences that our clients have had over the years. You know, we've seen so many different situations that we, you know, every time it happens and we're like, oh God, that was a pain. So let's try to streamline that. Let's make it easier for the next client. And we just update our docs. And from then on, it's an easier provision for everybody. You know, same with transferability. You know, you get people who want to, you know, get out, you know, and then, and a lot of times if you don't let them out, they're going to, they're going to file a lawsuit. You have to get them out or you don't want them in because they're causing trouble in other ways. You know, so we make sure that the, the management has the ability to get rid of those people and to do it in a way that doesn't doesn't create some detriment to the other investors. So, you know, that, that's kind of our take. But, you know, I like what you said. It's nice, you know, if you can get your attorney to draft the documents in the first place so that you don't have to take a vote in order to take a capital call or to take a superior class. That's even better because, you know, we do want the management to have the discretion to save the deal even if the investors don't understand that it's in their best interest.

Yeah, there's definitely something to that. And it's just, it's a balancing act. And it's one that I'm glad we're having this conversation. Other people are as well, because I certainly didn't fully grasp the implications of what it would actually be like. Like, to your point, speed is probably the most important thing. So if you're struggling to get these votes across and this kind of thing, it can really matter if you got 30 days to solve the problem. And yeah, it's one of the many lessons that we learn as things change.

Yeah, absolutely. And, you know, and it's an evolving process. I mean, I know that I'm sure when you do your next deal, you're, you know, kind of taking in your collective experience from the prior deals and saying, wait, we don't want it to say this, we don't want it to say that. Let's, let's change these provisions. Let's make it, you know, work in case this situation should arrive again. And that's how we're constantly evolving our documents. I mean, if you looked at our documents from 2008 versus what they are today, that probably couldn't even be compared by AI because they're so different.

This entire conversation regarding capital calls, this is just my personal perspective. Things are so different now in the debt markets that basically every conversation you've heard about a capital call is because the interest rate essentially doubled during the hold period. And without that happening, most of these deals, you're just not hearing anything about that. Now, it could be said, easy to say without that happening. Yeah, I understand. But I just I just want to make it clear, we had in that deal that I referenced before regarding the floating rate debt, we had an investor that reached out and said, how is it possible that there's a capital call? The property's 95% occupied and we've owned it for years. And by the way, they mentioned, I have 17 LP investments. This is one that's performing best and it's the only one with a capital call. And I just asked, how many of them have floating rate The answer was one, this one. It's like, that's the obvious situation. So, in the deals that we're looking at now, at least at Acim Capital, we're using fixed-rate 5-year financing, where the likelihood of a capital call is dramatically reduced. It doesn't mean it's off the table because weird things happen, but like the nature of the cycle, to Michael's question regarding where we are in the cycle, you can tell where we are in the cycle based on what debt terms can be used in primary markets in multifamily. That's like the number one indicator, right? Meaning, if you can use 5-year fixed-rate agency financing at 70% and make deals pencil at a reasonable cost of capital, call it 15% IRR, you know that you're in the 2012, '13, '14 range of the cycle. And that's where I think we are, is 2014, because the economy isn't destroyed. That's unfair, right? 2008 was a very different situation. The capital markets are strong, agencies are participating, lenders are lending, but you have this dramatic price reduction because of the rise in interest rates, especially pronounced in prime markets, which is why— I don't know if you can hear, but in the background, I've got a 2-month-old. My entire family, including my wife and my 2-month-old and my 2-year-old, moved to Phoenix to go all in on what I believe is a once-a-generation type of opportunity. So that's my level of conviction. And, you know, I want yours to be the same in your business.

All right, everybody, we've got 30 people on this call, and some of you have to have questions beyond our friend Michael, whom we have interviewed. I see a couple of people we've interviewed on our podcast before, Michael Menino and Norman Hamden. You guys should check out their podcast that they did with us because it was pretty awesome too. This one has been really phenomenal. Hunter is a hard guy to pin down. He's a busy guy. If you're not in his coaching program, you're probably not going to get access to him. You have access to him right now. If you're not asking questions, why? So in the meantime, have a good show.

I'm hearing a lot of things here. If I may reflect back, from what I'm hearing is Like that we're in the beginning of this new cycle, and you know the most successful people are going to be the ones who have this like innocent optimism and this conviction—not convicted—almost like a naivete and a hunger, right? But with you know the smart thing is to align themselves with a coach such as yourself, Hunter, that can. Guide around the potential pitfalls because you've been there, done that. And people who also have integrity and who aren't conflict avoidant if there is a necessity to have these capital calls or talk to the investors or something like that. People who are open to learn and grow. So it's like that balance of like that, yeah, I've got this with like, and I know nothing, like that real balance there of personality. And then of course, course aligning with a law firm such as ours, um, where like this— I was thinking about this, I was like, okay, well, um, I'm like, we put this, these provisions in our, in our documents because we've seen this, right? And so it's one of those things that you don't think to ask about when you're getting your documents created by, by an attorney because you just don't know to ask or to look for something like this, right? Um, unless it's like you've had experience or it's happening to you right then and there, right? And so aligning yourself with Coaches such as yourself and a law firm such as ours, people who've been in the industry for a really long time, seen these cycles go up and down and kind of like have made provisions in one way, shape, or form to kind of like protect you in a way from not having the same pitfalls, right? But I mean, like any new thing can happen, you know, but I think aligning yourself with as many players in the game who've been there, done that, and can support you in this is a smart way to go about it, especially as a first-timer. And I agree with the coaching thing. You really should have a good coach, whether it's somebody like yourself or a mindset coach or something like that. It really does elevate your game.

Well, for sure. And then one thing that I'll say that was just, I was very fortunate that one of my earliest mentors We really dove into these PPMs and operating agreements in a way that I didn't see any LPs do. And so, we looked for certain things like distribution requirements, reporting requirements, capital call provisions, manager's rights. These are things that was like my first deals, I was reading PPMs in a way that most people weren't. But if you're an LP or a capital raiser, or by the way, an operator, I found things in operators' deals that they didn't know about because they had never really read that. And by the way, like, that's not me from like a personality standpoint. I'm not like that weird nerdy person reading legal documents, but I felt like it was a requirement for me to be a fiduciary. And I mean, not a formal fiduciary, but I mean, I was taking responsibility of this business. And so, you should take the same approach. I'm sure both of you are aligned with that. But then in doing so, you start to uncover— this is really interesting. I thought back, this is kind of odd. And I don't even know if I've ever talked about this before, but when I started to read such a volume of these documents, I realized that there was a spectrum of how each provision could go. And it made me realize this is kind of a process of how the Constitution was written. It's so weird. I was like, you just kind of take it for what it is. But no, this is a process of debate. Should we make this slanted this way? Should we use this term in this direction? And every single operating agreement has things that can be slanted in different ways. So for example, Kim Lisa Taylor mentioned in her capital call provisions, it is slanted towards the operator having more control, and she has her justification for that. If you only were to read documents drafted by her, which by the way are great, you would maybe think that that's just the standard, but you would lose the sense of perspective. Here's an example. Once you see a capital call provision that sounds something like this, and if you don't contribute, we will attach a lien to your bank accounts, take your firstborn, put a 15% interest rate. I love that. I've seen stuff where that's what it feels like. But if you only saw those documents, that's what you would think was standard as well. So it's really important to understand this stuff. And if you're going to take this business seriously and if millions of dollars are at stake, you should. It's really important to have an attorney in your team. But at the end of the day, it's on you. You got to own that this is your business and your career and your money and your investors' capital. You can't just trust one person's opinion. You got to really curate your own. And I got to say, because of my inclinations, because of my personality, I'm very proud of myself that I went through that process because it elevated my, like, my understanding and my ability to explain this, that, and the other thing. So if you haven't yet done that, I mean, it's a great exercise. Not a fun way to spend a Sunday, but it's a good exercise for you and your business.

Well, and you know what, maybe it just kind of reminds me, maybe we should do a podcast on, you know, what to look out for, like what provisions you should really watch for in an operating agreement that you might not want to have. And that's one of the things we do is for passive investors, you know, we have a nominal rate that somebody can pay us to actually look through the deal that they're going to be in as long as we didn't write it, you know, or one of our clients isn't the sponsor, then we might, you know, then we can look at that and say, hey, okay, just be aware it says this, it says this, it says that. You know, and like you said, capital call provisions are critical. You need to understand what they mean. Removal provisions for the manager. You know, there's people that, you know, somebody sticks their head in the sand, they stop responding, they're locked up abroad or, you know, in jail or for some other thing. You've got to have the ability to still function and to get rid of them. You know, you need to have the ability to vote on any major changes to the operating agreement that are going to affect your return. Because if all of a sudden the manager decides, hey, I'm not making any money here, I'm just going to change the split around and give myself some more fees to your detriment, you don't want them to be able to do that. I also don't like those provisions that say that the manager has power of attorney over anything that they want to do in the future with this deal on your behalf, and they can do it. You don't even have to know about it. So I actually never saw that.

That's super— I mean, that would be a red flag to me.

You know, and, and, and I'm also contrary in a couple of other things, like on, uh, capital transactions. I think that, you know, from a, from a syndication standpoint, if you're doing a capital transaction, a sale or a refi, and you get cash out, the first thing you want to do is pay back your investors' capital. Don't make up their arrearages and their preferred returns, because that can come later. And if you never make the, you know, preferred returns or the, the target returns you thought you were going to make, you're not going to to get sued for that if the investors got their money back. You make up all those returns and you fall short on giving their money back. Guess what? Lawsuit city right now. Now you're being— you're in a different position. You've still got liability for that money you didn't get back. In their minds, he kept my money, he didn't give it back. And, you know, you'd have been better off give the money back. Everybody breathes a sigh of release. Everything they get on top of that is gravy. You know, they're just excited at that point. So just, you know, kind of in a nutshell. Well, we do have a question here. Hunter, can you comment on target IRR, cash-on-cash hold time in today's market?

Yeah, absolutely. I actually can't see that question, so if you can post to the chat, that'd be super helpful. And by the way, while they're posting that, you mentioned AI earlier. We have an AI masterclass coming up. Can I talk about it just really quickly? It's AI Capital Masterclass.com. I don't think I can post in the chat, so it's AI Capital Masterclass.com, and it's free, and it's awesome, and I'm super excited. It's it's as you know the AI in preparation over the next twenty days. It's going to change. You know what I mean? Because it's just constantly changing. So check it out. AI Capital Masterclass.com.

Okay.

Your mind is a strong deal. Maybe cash on cash. Thanks. I would say that in a primary market like Phoenix, you're going to typically see a 15% IRR or a 1.9x kind of multiple over a 5-year period. That's what—

Let's just clarify, this is not overall returns. This is what you're offering investors, right?

Good freaking question. But yes, net LP investors. And so by just to clarify, Sometimes groups will talk about gross IRR, which is prior to the split. It's an important metric. But if you're looking at it and you're thinking that's what's coming to you, you know, it's a different situation. But yeah, LP IRRs, target IRRs on a gross pre-waterfall split would be like that 17 to 18% range, cash on cash starting in the 3 to 5% range. When you look at markets like, let's say, Houston, you're going to see a 7— you're going to see a 16.5, 17% IRR. And the reason for that is Because there's been uncertainty in Houston. There's hurricanes, there's property taxes. Phoenix has a lot going for it, including sub-30% operating expense ratios. And by the way, that's for real. So when you see that, the market accounts for this stuff. Our position has just been we like predictability. So there's no hurricanes, no crazy volatility in insurance costs. Property taxes are limited to 5% per year. But the point is, In the past, my younger 27-year-old self might have been like, 13 cap rate? What is everyone, an idiot except for me? You know, I'm going to do it. And so I didn't. Well, you got to take 6 connecting flights to get there. You got to ride a donkey to meet the property manager. So, so like, just know that most likely you are not smarter than everyone. This stuff is accounted for, but there's still great opportunities out there.

So we are— I'm so sad because there's so many more things I want to ask you. I feel like we need to do part 2. I do want to mention a few things. We had an event, a virtual event. Vinky Loomba, who's a client, and I did a virtual event called GoBeyondMultifamily.com. And what we— the reason that we did it is because we had— we have so many clients that were doing deals while all of our multifamily clients are like, we're sitting on our hands, we're not doing And so, we just wanted to expose everybody to all these other asset classes. And, you know, so you kind of alluded to this a little bit in the beginning, you know, and our thought is, hey, you're not just a multifamily investor, you're a real estate investor, and you should be able to spot any good real estate deal in any market, you know. And if you're nervous about that market or that asset class because you don't know it, then go get a coach in that asset class and team with somebody who has experience in that asset class. so that you can now gain experience in that asset class. And now you have 2 asset classes you can do, and, you know, and you can keep expanding throughout your career. What do you think of that as a strategy, Hunter?

So I'm going to be brutally honest here. This is a tie-in to Michael's comment, which I, I love, and I was hoping we would get to address it. So Michael commented, there's a quote by Warren Buffett that says, get greedy when other people are scared and scared when other people are You think it's time to get greedy. And I do. But this is where things get tricky, is that when you have that kind of— like, some people have different strengths and weaknesses, right? Like, I'm the kind of person that probably sells too early if I let my own emotions get to me. But I certainly would be open to going all in when other people are retreating, right? That's just like a typical— that's how I'm cut. That's the cloth I'm cut from. Other people have different things. But It is way harder to do than just to to know. Like imagine this: 2008 happens, and you're like, "Oh my gosh, it's on! I'm gonna get greedy." What does that actually mean? You watch transaction volume plummet by 90%. You can't get a loan if you've got a $30 million net worth. And so you go, "I'm going for it," and for four. For 4 years, you sit and do nothing, basically nothing. You can scramble, you can buy deals in cash maybe, but you can't raise any money. It freezes. And so, it starts to play tricks with your mind. You're like, there's an opportunity cost. Maybe you're a competent W-2 employee, you can make $20,000 a month. Over a 4-year period, you're talking about serious money that you're not going to be making. not selling any deals during that period. And then it slowly, slowly starts to turn around. So I just want to give a shout-out to Michael Frasson. This was very good, but I just got to give that caveat, which is that when it is actually tough, it is actually tough to do anything because you only make money in this business when you're buying and selling deals. And so, from my perspective, this happened on 2 states of the cycle. One, when things were very slow, but 2, when things are very hot. When things are very hot, people start looking for exotic products. products that will produce similar returns to what they wanted to get a couple of years ago in less prime asset classes. Me personally, I will never invest unless it's like a business or something. I don't think I'll ever send another LP check to a non-real estate deal. And the reason for that is that now that I actually know real estate, I like actually, actually, I would never be able to simulate that kind of market advantage in anything else, nor am I interested in it. But that's just my perspective. And trust me, if you had the same experience as I had, you probably have a similar experience. It's just very, very difficult to understand the risks appropriately. If you are gonna do it, I would assume that you would try to do it with the same level of intensity and focus as you had your other business, but you'll find it's, it's hard to do. That's just my perspective.

But the, the whole focus of our, our summit was not It was other asset classes besides multifamily.

Oh, okay.

You know, that was the whole point that, you know, we had multifamily clients that are like, hey, I can't find anything that works. I can't get the right loans, blah, blah, blah. And, you know, but yet we had all these other successful clients that were buying mobile home parks and RV parks and, you know, vineyards, marinas. You know, every building you drive by on your way to town, you know, somebody owns that. it, right? And somebody's making money off it. So you could be that person. Totally.

I think there is a categorical shift in risk when you go away from real estate. That's really what I was trying to imply. Like the difference between multifamily and self-storage, I wouldn't say it's immaterial just because of the institutional interest in multifamily. You know, you get my point. But when you start getting into carbon capture fund, it's like, who knows what the risks are of You just don't know. You just don't know.

No, that, that's a completely different thing. And you really got to get educated before you do that. We actually are doing business offerings. We have a couple of very experienced business attorneys, securities business attorneys on our team who— and we've written a book that's going to be coming out probably sometime within the next 30 days called How to Legally Raise Capital for Startups and Small Businesses. So it's really, you know, if you do have a different idea besides real estate and you do want to explore it, you know, hey, they don't all fail. Some do, some don't. But, you know, you've got to, you know, figure out still how to get money in the beginning before you get to a point where you can get angel investors, before you can get venture capital, or before you can go public. And, you know, so the rules that you learn in real estate, the securities rules, Are the same, and they are the same. You've got a couple of additional tools that are available to you in those markets as well. So, you know, it's you know you're an investor, you're real estate investor first. That's great. If you have another business idea, or if you know somebody else that does, you know, please send them our way. You can learn about our services at syndicationattorneys.com. We are adding a ton of new services. to what we do. We have a compliance review department now. We have hired an attorney who specifically does advertising compliance. If you're going to be a fund of funds manager and you do need to register, we can help you evaluate where and whether you need to register for the type of fund of funds deals that you're doing. We have an attorney specifically on staff that has that experience. She sets up RIAs, she sets up broker-dealers. Um, we have, uh, oh my gosh, Pre-business offering, and we have our pre-syndication agreements where you can get into our weekly masterminds and everything that we do. So just check out our website. There's all kinds of new stuff there. We actually are in the process of developing a brand new site. See a change in that pretty soon. But we've got a lot of exciting stuff happening right now, and we want you all to be part of it. So if you're not a client yet. Become one. Check out Hunter. You don't have a coach, Hunter would be a good one. He's definitely got that vision, that insight, and check out his offer.

And again, yeah, how do people reach you, Hunter?

Go to raisingcapital.com if you want to book a call with my team and kind of look at your business and see where you're at, if we can potentially help you. If not, we can give you some free resources. is just go to raisingcapital.com. And again, that AI masterclass is going to be a ton of fun. So I would definitely check that out. I'm going to learn so much over the next 3 weeks. Like, I'm just super excited. It's such a nerd thing to do, but it's— I'm stoked about it. And hopefully that'll be a cool way to take the next step.

Sounds fantastic. All right. Talk to you later, Hunter. We will definitely have you come back. Thank you so much for coming, Krishna. Thank you. And you guys go check out our YouTube channel, Raise Capital Legally. Please subscribe. We want to build our subscribers. So please help us do that. This will be posted there in a week or so, and you can see all the other great podcasts that we've done, one with one of our active participants today, Michael Menino and Neriman Hamdan. So make sure you check out theirs as well. It was pretty awesome. Okay, thank you.

Thank you. Thank you. Bye.