How to Prepare for Multi-Family Investing in Times of Rising Interest Rates with Jake & Gino

YouTube. Give it just a second, and then I'll start with the intro. And there we go.

We're coming for NMHC, Gino. We're— we got a target on them right now.

Okay, so welcome to Syndication Attorneys free monthly podcast where we talk about topics of interest to real estate syndicators, with opportunity for live questions and answers at the end of the call. I am attorney Kim Lisa Taylor. Before we get started, please note that all of our podcasts will be recorded and may be used for future promotion, posted on our website, or broadcast in a podcast available to the public. If you don't wish to have your voice recorded, then please schedule a one-on-one consultation instead of asking questions during the live podcast. You can also put your questions into the Q&A and we'll read them with just your first name, so there's a little anonymity there. And The information discussed during this free podcast is of a general educational nature and should not be construed as legal advice. Today, our topic is how to prepare for multifamily investing in times of rising interest rates with our esteemed guests, Jake Stenziano and Gino Barbero of Jake and Gino fame. So these guys have become kind of famous in the last several years. And didn't you tell me one time that your podcast has over a million downloads?

We have, uh, over 4.5 million downloads right now, but we get about 150,000 downloads a month. And Kim, esteem, that, that's a big word for Jake and Gino.

So I'm getting confused, you know. Gino, I'm getting confused because for a minute there she was saying this is free to all the people out there, and I was like, okay, maybe she's the unattorney then because there's never free time with an attorney. But then she gave that kind of disclosure at the beginning, so we came back into the legal realm. So we're finding our way today.

Okay, I'm Gino, he's Jake. And we're not attorneys here. We're not giving legal advice. Kim's the legal expert. We're going to shed some light on the multifamily space today, hopefully.

Yeah. Well, you know, you guys are experts in the field and you've certainly made a name for yourself doing this. So we've got a lot of attendees already, and I know there will be a lot more people that are going to listen to this later on. But I'm just— I'm flabbergasted that you have that many podcast downloads because you guys have to be like in the top 1% of podcasts. Uh, out there.

Kim, it's been a grind like everything else. We started back in 2015, and I, I promise, I, I didn't know what a podcast was back then. I really didn't. Jake said to me, let's write a book. So I listened to Jake. Let's start a podcast. So I listened to Jake, and we started. Just the first, first couple of shows are pretty horrific if you go back and listen to them. If you want a good laugh, go back and listen to them. And probably 900 shows later, we're getting there. We're getting pretty good. It's just about persistence. and patience and willing to work at it. And I think what we try to do is we try to be the guides on our podcast. We're not the heroes. Everyone listening to the podcast is really— are the ones who have the questions, and we're trying to gear all the content to them. And it's been really a lot of fun. It has been because the amazing guests we have on. We've had you on countless times, all the experts, and it's like a free little mastermind for us. We're able to speak to T. Harv Eker, who I admire. I mean, we had Javon McCormick on a couple of weeks ago. We've had Steven Pressfield on. How would we ever be able to speak to these people without having the podcast? And just, you know, it's sort of selfish.

We had the CEO of WD-40 on yesterday.

Yes. Gary Ridge.

No, but it's like, it's a multifamily podcast, but it was so cool because he's been there for so many years and he's grown the company into a multinational, you know, organization now. And the learning lessons and the takeaway on culture and business growth and development are just fantastic. So, it's selfishly. The podcast has become a free networking opportunity for the two of us. And to Gino's point a minute ago, we started our partnership, getting to know each other in 2009, really started looking for deals hard in 2011, didn't close on anything until 2013, and really didn't get a lot of momentum until, I'd say, halfway through 2014. We were up to about 200 units at that point. So, it's like anything. It takes time. It takes reps. And then you get that 10,000 hours. That's that magical number that People talk about so much, but so many people, whether it's beginning out in multifamily or starting a podcast, those first few years are tough. And then eventually, they feel like, oh, I'm not getting traction, and they quit. And so, the biggest thing I could say to anybody is if you're going to do this, you're going to do any kind of media, multifamily, whatever, stick with it. Create a solid plan and stick with it for the long term. That's really where the fruits and the rewards come to fruition is that long-termism and hanging in there, not the get-rich-quick shiny object. Oh, the sky's falling now, getting outta crypto. Oh, gonna get back into crypto. Oh, I'm gonna flip houses now. Oh, I'm gonna do multifamily. Pick a lane that you really believe in for values-based reasons and stick it.

Well, I agree with that. And I've got several clients that are illustrations of that. I, you know, I've got one client that I saw him go from, you know, just ordinary guy leaving a previous job, previous profession, starting in multifamily, and 8 years later buying the house of his dreams in one of the most expensive markets in the country. You know, taking international trips with his wife and sending his kids to the best colleges that you could possibly imagine. And another set of clients started out buying $3 to $5 million deals, and now they're buying $30 to $50 million deals, like 2 or 3 a year. So, they've slowed down a little bit right now, but, you know, that was in a 6-year period of time. So, you've got to stick with it, but it's not as long as you think. And if you look into the future, it's like, what are you going to be doing 6 years from now? Either the same thing you're doing now, which is nothing, or something different because of all your efforts in between. You know, so you just got to stick with it and realize it's a climb. You know, you're climbing a mountain.

When you speak about that, Kim, it's important. Dr. Ben Hardy wrote the book Your Future Self. He's written The Gap and the Gain and Who Not How. They're all really good personal development books. And what we're all saying here is give yourself permission to suck because you're going to suck for a little while. And no matter what you start, I mean, becoming an attorney, you got to go to 3 years to get your degree, and then you've got to pass the bar. So, there's a lot of hours put into it. So, the term investment of loss. Starting something, taking a step forward, then taking 2 steps back, then 1 step forward. And I think any avenue in life, you need to do that. And you can highlight successful students, your successful students. It's really the persistence. And number— the other thing that Jake probably forgot to mention is the accountability. We have a great accountability amongst ourselves where we don't let each other down.

Yeah.

So, when I have to be on a call, I'm on a call. When Jake's on a property tour, I'm doing something else. So, that accountability, I think, has helped us in our partnership, whether it's the education, whether it's the, you know, investing in these properties, whether it's the property management. build-to-rent. We're doing development. There's a lot of things that we're doing, but we're holding each other accountable. And it'd be really hard for me to do this by myself at such a high level without having someone to push me. And he's pushing me at the same time.

I agree with that 100%. You know, my husband has been a big force behind me because he was self-employed for 30 years. And I don't think I would've had the courage to do it if I hadn't been in the company of somebody who just kept saying, you know, don't worry about it. Whatever you're going through right now, it's going to pass and you're going to get more clients and it's going to work out. And it certainly has. So, yeah, If it's not a spouse, get a partner, somebody that can kind of, you know, keep you moving forward, keep you interested, and keep you accountable.

Kim, I want to stick with this for a second because what you described right there was the same thing that so many folks go through when trying to enter the multifamily space. And it's what I experienced. I didn't know many entrepreneurs, actually zero. I didn't know any business owners except for Gino. And so, the idea of owning larger properties, of being a multifamily entrepreneur seemed like this pie in the sky that it was this thing up there that other people did and it wasn't for me. And similarly to your experience with your husband there, maybe not having that business ownership experience and just not knowing what it is, so it becomes scary.

Yes.

And when things become scary, that's when the resistance creeps in and we back away from it. So, having that accountability partner and groups of people around you with that exposure and experience can help nudge you in the right direction because I don't believe multifamily investing is rocket science. We break it down into buy right, manage right, and finance right, and create frameworks amongst those pillars. And that has helped guide our way and making sure that we're buying deals that make sense and fit our parameters. And I think a lot of that has been done through our doing and managing these properties, but also my exposure to Gino, and then him, his experience of being a business owner-operator, but also him getting educated prior to my knowing him in the multifamily space was tremendous.

So, yeah, so well, and you said another cornerstone there, education, right? First, you got to get the education. And then you really need a coach. All of our successful clients have started out with a coach and have stuck with their coach for the first 2 or 3 deals until they didn't need them anymore. But then they still hung around the community because, you know, they get the feedback, they get the motivation, they get the excitement of going to the events and, you know, and just hanging around with you guys.

But shared resources too, like Who are they using for cost segregation? What vendors are they using? And then that's a big component of it because multifamily is a team sport. It's really hard to do this business by yourself.

That's right. That's right. And that's one of the reasons to go to events like what you guys put on, because you're going to meet all these providers, service providers that provide all these different services to syndicators. And as your business grows, you will need them all. And, you know, you get to meet them face to face, it's a better connection. And you have a better understanding of where they fit into your organization. So, So that's great. All right. Well, um, let's see. So I think we've talked a little bit about, you know, like how you guys got started. You know, Gino, you, you had a restaurant, right? What made you make the switch into investing?

At the time, I had 4 kids. I've got 6 kids now. And everyone was always telling me, how are you going to pay for college? How are you going to pay for all these weddings? And I'm thinking, I don't really know. I mean, the restaurant's doing okay. And the recession hits in '08. I mean, seems like it was 100 years ago. And it's very eerily similar about what's going on when I decided to to get into multifamily. What's going on right now? Interest rates were going up. Interest rates are going up right now. Is there a recession? I think anyone who's logical and semi-intelligent can understand that. Look back at history, 1970, '71, '80, uh, 1990, 2000. Look at all the recessions. Rates went up before. They're slowing down the economy. There's inflation. There's an opportunity right now. Jake and I had the opportunity back in '08 and '09. It was called the buyer's market, and that's why I got into it. I got into it because I wanted to quote-unquote, create some passive income. And I thought that multifamily was the vehicle. I've gotten into a couple other investments that were terrible. The investments weren't terrible. I was terrible. I didn't know how to invest in mobile home parks. I didn't know how to do strip malls. I decided multifamily, I can buy a 3-unit or a 4-unit and figure it out. And then when I did, I'm like, huh, I need coaching. I need to figure this out. And then I saw the basic human needs, food, clothing, and what we call apartments. Those are the 3 basic human needs. And for the last 20 years for me, It hasn't changed. And for us, when we started out, it was just the right time. But that was the right time for us back then. 1% GDP growth, $300 for a 1-bedroom apartment. Consumer sentiment was terrible. So, was that the right time? I just think there was an urgency for me to say, I got to figure something else out.

Demand was much different too, Gino. There wasn't the population growth that we saw in the markets that we're in now. And so, when you said $300 apartment, look, it was a different time. The interesting thing is, from when we started looking at deals in 2011, pretty much anything we would've purchased from, say, 2011 to 2018, we'd be making money on right now. Then it started tightening up a little bit. Here's the thing, we're talking about syndications a little bit today. Ultimately, there was a lot of money flushed into the economy, so investors were giving syndicators their money to go then place them. So there was a higher demand on assets.

Yes.

So what happened? Asset prices really skyrocketed. I was literally on a property yesterday, meeting with a broker, and he was basically trying to gauge where I was, and I wasn't really sure what was happening. And he was saying, so where are you right now? I'm on the property. I'm in Tennessee, bro. Yeah. What's going on right now? But basically, he was defining the types of investors and buyers that he's seen right now, where some people are very pleased and they're happy. And I think other folks are struggling to engage their investor base right now on deals because A lot of Northeastern investors right now are saying, okay, I went through 9/11, then '08, and now COVID, and now this. So people are tightening up and they're fearful. And it's one of those classic things where if you look to guys like Warren Buffett, it's be fearful when others are greedy, be greedy when others are fearful. Much easier said than done. And right now, folks are getting clenched and tight right now and maybe not wanting to just say, okay, I'm good for $250,000. I'm good for $100,000 on the next They're getting a little bit scared. So now, what's happening is the supply of cash flowing to the syndicators is drying up a little bit right now. Therefore, deals are sitting. We looked at a deal a month ago, should have had a call for offers in and be halfway through due diligence right now, and it's still sitting in call for offers. That's telling me demand is slowing down. The deal that we looked at, I said, when's the call for offers date? We're not really sure yet. These are all things—

Yeah.

When we get a write-off, that's when it's over, right? Right.

But this is 6 months ago. That is not there. So the really interesting opportunity right now is that if you can communicate this opportunity with your investors and the people that are supplying the capital for your deals, truly, you're going to have a nice selection, I think, in the next 3 to 6 months of really good cash-flowing deals. And I think setting your parameters up on the front end, so we've only done $8 million in transactions this year. It's kind of a slow year for us, but Typically, we'll do syndications every once in a while if it's a bigger deal or whatever, but we like buying deals in-house quite a bit as well. And so for us, maybe we're a little bit more selective. And I think there's a lot of opportunities coming in the horizon that are going to be strong cash flow positive deals. And that's ultimately what's the distinction for us when we're looking at these, because we want really strong cash on cash because that's ultimately the biggest benefit for us buying these because we hold them for the long term and we want to build our cash flow month over month. Get the cost segregation and keep it relatively simple.

Kim, I know— This is a question a lot of people are thinking right now. So, how are we going to find cash-flowing deals when prices are high and interest rates are high?

What do you say? No, that's a great point. And I'm already seeing it. Like, there's a deal that we're really close on right now and it's already come down about $500,000. So, from where it was, and the numbers are lining up and it's a cash-flow-positive deal out of the gates. And that's what we're looking for. And so there's another deal that one of the— I'm not going to get too specific with it, but there was a 200-unit I was looking at yesterday. Purchase price really strong, but they're struggling from a delinquency standpoint and a loss to lease. And so the loss to lease is a little bit further down the road. We can talk about that if you're looking at actual cash income, but there's a management play there. So will that cash flow from day one? Probably not. But can the right operator turn that around? I think so. A group out of state having a very slim management profile, meaning that they're probably understaffed and having a hard time staffing. And being out of state, they're not probably putting the attention and focus on it that they should be. So there's an opportunity there for the correct group to come in and beef up the management, get the non-payers out, and run it like a well-oiled machine. So these are the things that we're seeing. So even though that one may be a little step away, the path to me is extremely clear, that deal I just looked at. So I think the overwhelming sentiment for us Right now is that, yes, things are tightening, but there's also a lot of opportunity on the horizon. I think we're on the cusp, and I think it's 3 to 6 months out before you really start to see the floodgates open in terms of true opportunity. And also, there's deals that we looked at—

Let me ask you about that. Is that because you think the sellers are starting to come down on their prices because they're sitting on the—

Yes. Yes. But also, it's going to be interesting to see some of these bridge deals that may have traded in the last couple years where there's short-term financing in place, what happens with those? That may or may not be an opportunity. I'm speculating right now, but I'm interested to see also where those go because there's deals that we were passing on. And here's the difference too. And one thing that we like to do is actually on the front end, if we're going to do something that requires bridge, we actually like to do community bank debt on the front end because we're going to have a 5-year term.

Right.

And I get it. Everyone's going, well, recourse, recourse. Fair. I get it. We're comfortable taking that recourse component on the front end because we'll get an 80% loan-to-cost on the front end. If you can swallow that recourse component, and then we're not tied up for that short-term placement of the debt. We have 5 years and then a better relationship with the community bank, and the prepayment structure's very negotiable. So if we want it one year, we can get it sometimes 2 years and then roll it out to agency. And that's been really our playbook and our comfort level.

Well, and that's consistent with what I've been telling our clients as well, is don't do any bridge loan that's less than a 5-year term because the people that really got caught last time in 2010 were the people that had 3-year balloons and the The loans came due at a time when the prices were still depressed. They couldn't refinance for the value of the property, so they ended up giving it back to the bank. And the ones that signed the recourse loans were the ones that ended up declaring bankruptcy.

And don't— and manage your exposure to that too, right? Like maybe 1 or 2 of these at a time. Don't have the bulk of your portfolio into these like turnaround jobs. I think that should be— yeah.

Can I make a couple of points here? I think it's important to look back at 2018 and 2019. That's when we started our boot camps at Jake and Gino. And everyone's saying the market's at a high, the market's at a high. I was saying that. And 2020, the market's at a high. And now 2021. And now you can look back. The only time you know when the market hit a high is when you look back and go, oh, that's where it was. But there's a couple of things that you can feel about what's going on with this market. We were buying stabilized assets with bridge debt. You do that when the market is at a high, right? That's the first component that I saw.

Yeah.

The second component, there was tons of 1031s going on. I think 1031s have slowed down. I think the third component is when People are buying assets and they're flipping out in 18 months. They're not operating these assets. They're just, you know, hot potato. It's like that is slowing down as well. So, you're seeing all those components. So, I'm here to tell you there is an opportunity and there is going to be the opportunity. And I think the other thing is when you talk about syndicators and just regular investors in general, they've been underwriting with these rents to be going up 8% to 10% to 12% and they've got interest only. Interest only is burning off. So, principal is going to reset. That's a big component. I've been calling this for years. It's just that they've been saved by rents going up 10% to 12% a year. I don't think rents are going to drop. They're just going to decelerate. They may go flat for the next couple of years, but if you're underwriting for 8% to 10% rent growth, that's very dangerous. And I think a lot of people have done that over the last couple of years, and that's going to—

Well, and Gino, can you capture your loss to lease? Like, if you've been getting a higher market right now and say you've turned In the last year, your rents have gone up $300, and maybe you've got 50% new residents at that higher rate. How hard is it going to be to close the gap on those remaining 50% to get that extra? That's going to be the interesting component that I'm very, very interested to see where that goes.

Well, one of the things I suggest also, and you guys can tell me if you think I'm wrong about this, is I suggest to my clients that maybe now is the time, don't get the 85% LTVs. Because if we anticipate there's going to be a price drop, then raise a little bit more from investors, explain to them you're doing this to manage their risk. They're going to get slightly lower returns for the first few years until there's an opportunity to refi. But it's going to manage their risk. And there's a lot less likelihood that that project is going to end up getting, you know, foreclosed or have to give it back to the bank.

I would agree with that. I mean, we're at 65% LTV in a lot of our deals. We just refinanced a deal at 50% LTV, 10-year interest only with a 10-year term. So, I mean, we're comfortable comfortable with going with less leverage on our deals right now. And the banks have done that. This is not an '08 scenario where you're doing 75 or 80. A lot of them have really pulled back as cap rates have really compressed.

Agencies have been stingy.

Yeah. And I've actually seen some people even talk about cap rates decompressing in the Midwest because they're saying to themselves, hold on a second, rents aren't going up like they used to. These valuations are crazy. Interest rates have gone up. So, I even hear people talking about cap rates decompressing. I mean, when's the last time you heard that word come out? So, even the discussion of that happening is like, wow, okay. People are feeling something different. And we haven't had this feeling in— what has it been, 8 or 9 years? It's been a long time since we've had this feeling of uneasiness, of rates shooting up this quickly. They shocked the system, I think, by raising rates to 7%. It's not that 7% is high. It's traditionally around 7%. That's where interest rates have been traditionally. It's just that you've done it so quickly and it's just like people weren't used to it. And all of a sudden the residential market had a lot of listings, a lot of houses that freezes up, and then it's just going to start bubbling into, into the commercial sector, I think.

Well, those are all great points. So, do you see any movement in like seller financing or, you know, people, sellers becoming more receptive to lease options? Are those some tools that investors should be learning right now?

Our coach, Bill Hamm, wrote the book Creative Cash. We launched it with him. You know, Bill, first 400 units, then walk into a bank. Jake and I have done about $20 million in seller finance deals. It's really incumbent upon the market. So, if you're in a buyer's market, we started out in 2013, our first deal. Our very first deal was owner-financed. Our 4th deal in 2015, we closed in August of 2015, was a 281-unit deal, $11 million. That was all seller-financed, the whole down payment. It's because that part of the cycle was really great. I mean, banks were tightening up. It was harder to actually go out and get leverage on these assets. That's coming back in the next 12 to 18 months. It's not that you weren't able to do it over the last 3 to 4 years, but why would sellers want to seller-finance a deal?

Yeah.

You just put it on the market. 50 people bidding for it. But now, as there's more motivation and as these mom-and-pops, as we like to call them, they're a lot harder to finance. Go out there. What I would say about seller financing and master lease options, go out and underwrite it as if you're going to buy it traditionally. And then when there's no other way to buy the deal, say to them, hey, educate them. First of all, let them understand what it is and say, you're going to get paid, you're going to get paid in installments. You may even save some capital gains on it. Let them know that it's a great tool, but don't go in headfirst just with seller financing. See if it works traditionally and if it doesn't, That's going to be, I think, the rage in the next 12 to 18 months. I'm looking forward to it because I love seller financing. Yeah.

Let's talk about what environment creates this, though. And you just nailed it, Gino, without really honing in on it.

Expanding upon it, huh? Sorry, brother.

No, but I want to be clear. So, if folks haven't experienced it before, they haven't done a seller finance, donor finance deal, whatever you want to call it, this is when there's expectations from the sales side, the seller, And the market's not connecting. So when these deals sit for a minute and they're not getting what they want, they have to look to creative options to move the property. And in every scenario where we've done a 25-unit, we've done a 300-unit owner-financed, funniest statement I'll never forget, title company has given us the keys when we're closing on this 300-unit deal. And we actually got the prorated rents handed to us at closing. And they're saying, you just bought this deal and got paid at closing. Because we got the— and they're like, how does this happen? And it happens when demand starts to go down and a seller wants to get out of a property. And so, this is the time in the cycle where you're going to start to see opportunities like this arise. And Gino made the point, if you're getting 10, 15 offers at a time, why the hell are you going to consider doing— it just doesn't make sense. But if you need to get creative to move your property, these are the times where these types of strategies really work.

Well, I agree. Uh, you know, this is the time to dust off your toolbox and, uh, start getting creative. So read Bill's book. Bill's a great guy, and, uh, I have not had a chance to read his book yet, but that's something I should do as well.

I'm sending it in the mail. I'll send it to you in the mail.

Great, I'd love that. Would love that. So how can somebody get his book if they want to read about that?

Just go on Amazon, Creative Cash, and you'll, you'll see it'll pop up. It's a nice red book. And there's one other thing that Bill talks about. We coined the term the SPY technique, and it really talks about a negotiation technique. It's S-P-Y. And this is for anyone who wants to be creative. And this can be— this is, I think, to me, any facet in any life. You're trying to create value, and that's what seller financing is. You're creating value. So, the S stands for the seller. So, if you're going into a property and there's a seller there, is that seller going to benefit from seller financing? I mean, is that an option for them? It doesn't matter if it's great for you. Who cares about you in the situation? You're worrying about the seller and creating value. We often forget about that. We think the seller wants the highest price. Maybe the seller just wants to create some mailbox money. Maybe he wants to defer taxes. Maybe they don't know what to do with the money coming back to them. You have to find that out. So, the first part is learning what the seller's problems are and seeing if it fits. Then, the next one is the property. Jake did touch upon earlier about your buy criteria. Does it fit your criteria? Is it a deal that you'd want to hold for the long term? or for whatever you're trying to do. And then the last one obviously is the why, is you. You're the last component in this. I mean, you don't worry about yourself until you've solved the first 2 issues. Then, hey, it's all about you at the end. But worry about the seller.

Right. Well, and we can help structure, you know, in situations where there's partial seller financing, right? You can't— you still can't have mezzanine debt. You still can't have second position loans. The lenders won't allow it. So, the way to work around that is through your actual deal structure, which, you know, you're corporate securities attorney, hopefully us, can help you structure. So we can do a fixed return class that's just for the seller that can be bought out in whatever time period they want to be bought out, you know, assuming that you're going to be able to get a refi or you're going to bring in more investors at that time in order to do that. And so you've got a special fixed return class for them. It has the exact same terms you would've given them in a promissory note, but the lender will accept that because— and they don't have any voting rights. Either. So, you know, they're, they're happy just to get, you know, they get paid next right after the first position lender, and then you go into your equity investors. And I've seen that structure work very well for a lot of our clients.

What Kim should be saying is right now, do not structure a promissory note or do any of this without the help of an attorney.

You'd be— You don't write it on the back of a napkin.

And yeah, you'd be a moron if you didn't get the help of an attorney. I'm just saying, $1,000, whatever it costs, it's not expensive, and you need To— you actually need to record it. You need to do a lot of work for it. You need to create the note. So please don't skimp on that. Get the help of an attorney to help you with seller financing.

You know, you can't be throwing her price structures out there. Inflation's real. You might be undercutting her right now. You know, just take it easy.

All right.

Well, I'm just throwing out a number.

You can't use a promissory note unless it's 100% seller financing. It's your first position lender is going to say, where'd this money come from? And you're going to go, oh, the seller. And they're going to say, well, we don't allow subordinate debt. So you got to figure out a way to get them into your LLC. And you have to explain to them, we can give you the exact same terms that you want. It's just not a promissory note. And then we—

That's awesome. And you're not necessarily— and there's different ways to do this, but you're not asking necessarily the seller to carry the note for the whole property. And you may not even have to bring any money to the table. I think the structure that's worked best for us is there's a bank involved. The seller brings the down payment, and that's your note to the seller. Ultimately, and you may be able to get into the deal with nothing. And I'm not saying this is common. We've done it a handful of times. So I just don't want to be like, oh, every deal I'm going to do is— it has to line up. There has to be an opportunity. A property has been sitting. They want a certain price. This is typically the structure, but I like that a lot when they're bringing the down payment and then that note you're giving to them. And that works pretty well.

Okay, great. So what should people be doing? I get a lot of people saying, we can't find deals. We can't find deals. What should What should they be doing?

Even recently, because I think this is— I'm starting to see the turn. And again, it was a slower year for us up to this point, but I think closing the year out, we're starting to see it. And the interesting thing is too, networking with the brokers right now. Gino was joking yesterday that he's actually getting brokers to proactively reach out to him because for a minute there, they were kind of sitting the feet up on the desk, listening to some Kenny Chesney, a little Jimmy Buffett, sipping the margaritas, and life was good. But now they're like, I got to get on site and do a property tour? I got to pick up the phone and call the G-Dad now? So, I think that the best thing you could do right now is remain humble because the market is shifting, but build that rapport, start to get on site, talk about what parameters you're looking for. And this is one of the things we stress most. Have clear buying parameters. Know what you're looking for, what kind of return, what kind of vintage, and share that to a certain level with the brokers so they know when something comes across their desk Maybe it's off market. They can say, oh, I was talking to Gino the other day. I know they love 2-bedroom townhomes in this market. I got something like that that may be coming down the line. They think of you first. So, I think getting very clear and sharing that criteria, but going on the offensive right now, doubling down with the brokers because opportunities are starting to pop up right now.

What about direct financing or direct marketing to sellers? Is that effective?

I'm howling because that's our deal dogs. And so, we've been doing that for a while. And actually, the deals that we've closed this year, That's how those deals have come to us. So we run a little component department out of our company or whatever. We have a handful of guys. That's all they do. And they call the owners up. It's a very typical thing. And you can scour a specific market really well so that you're getting in front of these things. The thing I will say about this though, is it's typically for the small to midsize deals.

Right.

When you start to get into these bigger groups, there's There's kind of a wall up and it's hard to break through. So, our guys don't really like to go after the 150+, but the sub-150, sub-100 deals, a lot easier. And I think the mobile home parks are much easier for this as well. So, their business that they run is they go after mobile home parks and then they do mid to small size apartments for Jake and Gino.

So, Jake—

Well, a lot of people think that it's not possible to syndicate small deals, but it really is, especially if you've got multiple deals, right? So, let's say you go out and you find 3 or 4 multiple deals. You can actually do one group of investors for all those deals and offer them the diversity of having a portfolio versus a single property and relying on that to generate their profit.

Yeah. And this happened to us, Kim, just recently is, so our Deal Dogs got a deal for us and that turned into 3 deals with one seller. And then we performed at a high level. That person referred us to 3 other folks. So, that one deal started this domino effect And look, they were all about the same size. They were 30 to 50-unit deals, each one of them, but they're all in kind of the same area. And it started this down, worked out fantastic for us. A lot of the same kind of product that we're looking for, vintage, yada, yada. And so, we found this little vein there that we're able to tap. So, don't sleep on it.

Yep. All right. All great advice. So, what about people who are new to syndication? What should they be doing right now?

I think they should just call Kim because you remember back when I was a little baby in diapers and we got you on the phone, I don't know, 5 or 6 years ago, and it was like 6, 7 hours and you're like, dude, I'm telling you the same thing over and over again. I'm like, Kim, Kim, am I hearing you correct? Can you tell me this one more time? And the problem is that Kim is like this skilled legal ninja and she's talking to me where it's just like there's this barrier to understanding legal jargon. So, she had to say, all right. Jake, this is what I'm trying to say to you. And she was very sweet about it. And she held my hand and walked me through the process. So I think it's finding someone that knows the process and don't just try to wing it. Don't just try to get your own forms and docs and this and that. This is a team sport. Get with professionals, make sure you build a team of professionals around you that's going to guide you and be your guided mentor through the process. Otherwise, you're going to end up in rough shape. So look, this is not a shameless plug for Kim. We've used her multiple times. And I think the key is to build your team and the folks that are needed to get this work done because I didn't know much about syndication. We were JV. We're buying for cash flow guys. And without Kim, I think it would've been a disaster for us.

To get back to your previous question though, there's a couple of things that you should be doing as well. You should be sourcing deals, but also sourcing capital. If there's no deals in the market right now, you should always be looking for capital because as Kim will tell you, I'm not the legal expert. You need a substantive relationship. So, when you find the deal, if you don't have the investors, well, that deal is pretty useless to you. You can't fund the deal. So, you should always be looking for that. I think the other thing you should be doing is you should be really networking with— you talk about brokers, but you should also be out there going to these events and networking and building your systems. We could talk hours upon systems, but how are you talking and corresponding with your investors? Do you have a CRM platform? All these things that when you're slow, you should be working on the business in those areas. How does your website look? How does your response look? How are your lead magnets? This is all stuff that you should be doing in conjunction with looking at deals. And that's why Jake said multifamily is a team sport because we couldn't do all this. We had our business going on. We had to create what we call Ramp Partners. It was a subsidiary because all of a sudden, that's a syndication business. We have investors, we have asset management fees, we have acquisition fees, and that's where education comes into it. I mean, if you can't invest in your education and learn the process because syndication moves really fast. And if you don't know the steps, if you don't know that you need an operating agreement, you can't start, you know, raising capital and putting money into a bank account. account unless you have all your docs. And you're 40 days into it, you're like, holy crap, I don't know that. You lose all the momentum and you lose the deal. So, understand the process. It's just another layer of what multifamily is. But if you don't know that process and if you've never done it before, hook up with people who have done it and possibly maybe try to join somebody else's group and see if you can add value to their group. I think that's something else that people should be doing, going out there and seeing who else is doing it, maybe partner up with somebody else. who's got success and who has the credibility in the space.

Well, and I know how people can meet other people who are doing this that they can team with. Any ideas?

Jake's the pitch man. Give it to me, brother.

Hit me. Look, obviously, we have the multifamily event, Multifamily Mastery 5, November 5th and 6th in Orlando. This is— we're gonna have over 1,000 people. This is going to be a really phenomenal event. And, you know, all the vendors are going to be there. This is a place where you can meet experienced people. You're gonna have people that have done 10,000 units there. You're going to have people that have done zero units and everything in between. But I want to touch on what you're saying there a minute ago, Gina, because at every part of the cycle, you need to work. And I think people are looking for everything to line up and be easy and be perfect. 6 months ago, there's no deals. Wah, wah, wah, wah. But there's money coming to you. Now, in my opinion, I think there's going to be deals, but guess what? It's going to be harder to raise money. Wah, wah, wah. There's no money out there. Look, you need to work. You got to go out there. You got to create these relationships. You got to build the team. And there's going to be points every few months where the market's shifting a little bit one way or another. And if you're not tending to your business, and if you're not building relationships with brokers, you're not building relationships with investors all the time, you're going to get left behind. So, I think the big ring-the-bell moment, guys, we got to work. Okay? We got to get out there. We got to hustle. It's not going to— and I was picking on the brokers a little bit where 6 months ago it was really easy. They got to get back into it right now. Maybe they had a little relief, a little break because it was just money was pouring in. But look, you got to work. There's going to be points where the market shifts and there's going to be deficiencies. And the people that win in this game are the ones that can solve those problems. You solve the problems, you win in real estate. That's, I think, the basic outline.

You win in life.

That's right.

Any entrepreneurial venture, you win in life when you can solve problems and create opportunities.

Gino's going to be singing at the event, by the way, Kim.

One of the things you've been talking about is that your business is very dual-faceted, right? You have to learn how to find deals, how to run deals, and all of that, but you've also got to be creating a ready, willing, and able database of prospective investors.

Yeah.

I run a mastermind every week just for clients of our firm. Anybody that want— any client of our firm that wants to can show up. And, you know, we go through, you know, hey, what do you say when you meet somebody who asks, what do you do? And we make them practice, practice, practice, practice your elevator pitch until it doesn't sound, you know, like you're stumbling over words and And they've got it down. And then we talk about what did you do last week? And what are you doing this week to further your syndication business? And it needs to be 2 things. You need to be working on finding deals, and you need to be working on finding investors. And you need to be doing that every single week consistently and perseverantly, like you said. And if you're not doing that, you're not finding deals. I get people that are, you know, like, well, I've been analyzing this deal for like the last 6 weeks, and I'm thinking about putting in an LOI. Okay.

That deal's gone.

How many LOIs do you guys put out a month?

That deal was gone 5 and a half weeks ago. So, let's— and we made this mistake back in January. There was a deal that we were looking at. We knew the market. We felt it was right. But we had to be cute and go inspect all the units. Well, guess what? Jake and Gino didn't get that deal. We should have got— we should have said, you know what? Here's the LOI. Put it in. If we find something egregious— and we didn't do that. And that is such a learning lesson. Get the deal, do as you say, analyze the deal as quickly as possible. If you can get on site, great. If you can't and you feel okay about it and there's no material defects, you don't know how the roofs are, you know how the interiors are, you need to put in those LOIs and you need to do it quickly.

Yeah.

Now, the market's shifting where you may not need that extreme speed, but still, it shows the broker that you're serious, that you really take the business seriously, you respect their time. And it's just one of those things where you feel it, you need to slam it, you need to get Kim, I can cut a deal up in 10 to 15 minutes, honestly.

Like, I can cut a deal up in 10, like, and that doesn't mean I know I'm going to buy it, but I know if it can be removed off my desk because it's not even close. How do you do that? You have clear buying parameters. And we stress this all the time. We ask people, do you have clear buying parameters? And a lot of people are like, what do you mean?

They're usually like, huh? What's that? Huh?

Huh?

Yeah. But it's like, if you know, and so, fortunately, we own 1,500 multifamily units and every month we're looking Profit per unit. And we go through, we have a draw report, and we analyze it. Here's the draw for the property. Here's how many units.

You divide it.

Profit per unit was $250. And we look at this over time to find out what's performing well in our market and why. When you have this type of data, and look, if you have 100 units and they're varied, you can still do this. It makes it much easier to go in and look at vintage, look at construction, know what you're looking for. You're going to create your budget for expenses or have a guideline of what you think it's going to be. Then your accounting team or whoever's on your team is going to construct that so you know exactly. But look at the deal. What's the actual income? Roughly, where are you going to be at on your expenses per unit? What's the debt? We know all this stuff. There's a few components. Is it even close? If it's not even close, you don't like the vintage, you don't like the unit mix, what are you doing? Onto the next one. Gosh, Mr. Broker, this deal looks so good. We're just not there on it for a few reasons. But thank you so much. Let me know when you have another one. Remember, we love 2-bedroom townhomes in the west side of town. Can't wait to catch you on the next one. What are you looking at? 6 weeks? That's crazy.

6 minutes.

That's just, that's too much.

All right. Well, we've got some people who wanted to ask some questions, so I don't want to disappoint them. Hey, Todd, you asked if I could unmute you and I tried. It says you're muted.

Is this Gino's account?

No, I hope it's not on my account.

It's not.

He's got to be doing my tax returns right now, bro. Don't be on the Zoom call. The 24th.

Finish my taxes. The 24th, Todd. You got to get him in.

Yeah. So, Todd, you were asking if I could unmute you and I tried, but it says your Zoom is outdated, your Zoom app.

You got to update the Zoom terms, Todd. You got to update them.

So, if you want to type it into the Q&A, we'll ask it. Okay. So, Let's see. How do you get deal flow starting out in this type of market?

Yeah, I think that's a really interesting question because going 6 months ago, if you're saying like, I want to go, I'm starting out in the market, I want to go after a 150-unit deal, and the broker says, well, tell me about your background and experience, that's going to be tough because ultimately they want people that'll close. You're competing against very high-level people. Depending on what your goals are, we recommend everyone starting with a credibility book. You know, a little bit about your background, and also leverage a group or a community. And this is not a plug for Jake and Gino, but a lot of our students come into the community, they network with other folks, and they talk about the group or the community in their documentation, okay? In their brag book, if you will, in their credibility kit. And so, I think one of the great things about Multifamily Mastery 5, these different things, you meet people with aligned values and you can put the group Okay? That's done X amount of units, if you're open to that. And that helps present yourself better to a broker. If not, you may have to start with something smaller. Talk about your current business experience, what you're doing, your business plan, how you've been educated. That goes a long way. So I think if you have zero experience, zero credibility, it's either getting in a like-minded group, finding people you can partner with, or starting out smaller and being okay getting into it a 10 or 15-unit and then climb the ranks. Look, we started with a 25-unit. We didn't have experience. We didn't have credibility. We had a credibility book. It actually helped big time when we went for our financing. I remember taking it, sliding it across the desk of the banker. He went through it and he said, I typically don't see this. And then it gave me an opportunity to detail our business plan and our experience. And I think that helped us get that 6% rate back in the day, right, Gina?

Woo!

We got—

Well, a lot of people don't know that.

I was still pissed about that.

We have an entire marketing department that has professional editors and graphic designers that can help create those credibility kits for you. We can help with your pitch decks, with your one-pagers, with your websites, with your lead magnets, all that stuff that you ultimately need in order to be successful in this business and to show that you're in business, right? You have to have a professional appearance so people know you're in business. Yeah.

I think it's either aligning yourself with folks that have been there and done it or starting a little bit smaller and working your way up through the ranks. And I don't see there's anything wrong with either route.

Same thing is a leverage business, right? You leverage off other people's experience, you leverage off other people's money, you leverage off bank loans. You're looking to leverage what you're learning now and bringing in all these other aspects of it to help the whole deal come to fruition.

Do you mind if I add a couple of points to what Jake was saying?

Go right ahead.

I think the first thing we all need to do is select the market, become an expert in that market, And I think the next thing is you need to get on property tours. Jake was on a couple of property tours yesterday, building the rapport with the brokers. All of a sudden you're talking to the broker and, well, Jake was telling the broker what happened about that deal last month. You know, breezeways were terrible. And the broker's like, yeah, 3 other groups told us that. So all of a sudden you lend yourself credibility because you're speaking to them in their lingo. And all of a sudden they may have an off-market deal and maybe say, hey, I've got this deal. It hasn't hit the market yet. Let's go take a look at it. Or you get to the top of their list if you go out to these property tours and you show yourself that you're really serious. You're not a tire kicker. You're not an investor from California. That wants to invest in Florida and can't get to these properties. They're going to talk— brokers are going to talk to people who show up on their deals. They don't want to go out to coffee. They don't want to go out to lunch. They want to show you deals. So, get on tour and get on property. You'd be amazed at the things you can learn because then when you're on there, you can leverage their experience, understanding what income is supposed to be, understanding what's going to happen with tax rates, understanding what the expenses are in the market. And then all of a sudden, you can build a rapport with that broker. The next deal that comes up, Okay.

All right. So, Deepak asks, what do you think about assisted living and senior active living facilities?

Jake?

Yeah.

I like it.

No, it's fine.

I like it.

We tend to really stay in our lane, though, as Gina was just alluding to. So, I'm not opposed to it. We typically don't do college. We don't do senior living. We really just do— we don't do HUD. There's small components of this sprinkled in throughout our portfolio, but really, we like market-based multifamily-type acquisitions. And it's to give us understanding and scale, and we like to just duplicate the process. So I don't have a problem with it. I've spoken to some guys about what they're doing with it. And the different kind of data that's out there showing that it's going to be positive for a long time because all these aging populations and things like that, it's just another type niche to get into that we kind of want to stay in our lane and just get really good at what we're doing. So I would say that if you're going to go into that, lean into it hard and kind of make that your baby and become the expert on the senior living stuff. The components I probably wouldn't like about it is just the operational. There's more operational things you're dealing with. Yeah. I'm sure there's some extra work and issues that come along with that. I'm sure it's a very profitable business, just not for us.

Demographics is the number one thing. If you're into it and you like demographics and you're in a state that has an aging population, that's why Florida's great. The elderly are moving down here and there's just opportunity with that. But like Jake said, we just want to stick with multifamily. So, for us, it's a great niche. I mean, just like mobile home parks, great niche. We just never found the desire to do it because when we talk about the blue ocean strategy, we want to become the Chick-fil-A of apartments. And when we're out there learning how to manage apartments, we all of a sudden pivot to mobile home parks or even RV parks. RV parks have been all the rage the last couple of years.

It's a big deal, guys. Just making those pivots is a big deal. We had a great RV deal in front of us, and my question to the team was, how are we going to manage inventory? What are we going to do when the potato chips and the firewood comes in? And what are the protocols for this? These are the systems that come into place, though, that people don't really think about And if you want a well-oiled machine, you want high performance, high-performing teams, and you start to consistently add these different layers, it's not that it's not doable, but it's going to create problems. And the better you— and the more dialed in you can get, I think the better off your customer service is going to be, the more profitable you're going to be, the clear understanding of the goal to the team is going to be there. So consider all this. And my only statement again would be, if you're going to go into it, go into it heavy and hard and make that your baby.

Yeah. That's right. Yeah. And that's my advice too, is, you know, stick with your niche. I mean, we're a very niche practice and it's been very successful for us. You know, we do syndications, we help people structure deals for their real estate investors. We did bring on an attorney that can help with non-real estate deals. But, you know, for the most part, our primary focus is helping people who are buying real estate figure out how to structure their deals with investors, set up their corporations, and then comply with securities So, if you can be that laser-focused in your business, all of our most successful clients are in a niche. We have some that just do self-storage, some that just do mobile homes, some that just do multifamily. So, pick your niche, become an expert in that before you start chasing the next thing.

I appreciate it though, Kim, because when we started out, I thought we could do everything. I think we can be everything to everybody for every market segment. We can buy all the real estate. And it just, it makes it much harder when And ultimately, as your company grows, when you want to become a market leader and perform at a higher level, to be everything to everyone. And that's where it starts to get difficult. Yeah.

Well, and even the biggest funds that I see, private equity funds that I encounter, are all really laser-focused on one thing. I get clients that come to me and want to do what I call kitchen sink offerings. They want to do a fund. They think that it's going to be so easy to raise all the money in advance, and then they can get all the deals that they want and they can buy any kind of deal that that they want. And I can tell you that they are rarely, rarely successful unless they have very specific experience in those specific areas. Maybe they can narrow it down to 3. Like, I've got a developer who's developed multifamily and shopping centers and self-storage, and he does well with all those 3 things, and he has for a long time. So he's okay to do that. But if you're not that person, you can't do it. And you're just going to waste your money on a fund. You're gonna waste 60 days setting it up. You're going to talk to a bunch of people about it. You're going to raise, you know, you're going to have a $5 million or a $50 million fund and you're going to raise about $100,000. You know?

I get fearful from unique differences just in multifamily. If I'm looking at a deal and there's a little component that we don't have much experience with, I tend to, you know, tense up a little bit and I'm a little less aggressive with it. So, even to that extent, you know, not saying I wouldn't buy it or something like that, but that's, you know, just how I think our business All right, let's go to another question.

Catherine asks, how does one seller finance a down payment with agency debt? That's that structure I was talking about where we bring them in as a special class. The seller becomes a separate class in your LLC. They get a fixed return. And you can do this with other investors. Maybe you have some investors that don't want equity, but they just want a regular fixed return. So maybe you offer them 9% and you let them get paid right after you pay your bank debt. They're the first class in your LLC that gets paid. And then you go split between your management team and your equity investors. We write a lot of offerings like that, and we usually write it so that the fixed return class can be bought out on a refi, you know, so you can get rid of them. Beautiful.

Sometimes—

wow, man, Kim's just like, get out of my deal, get out of here.

Well, some people only want that. They just want to be in for— they don't want to be into a 5 to 7 year deal, right? All right, so Ryan asks, mentioning deals on Facebook or social media for 506s, what can we say? What can't we say? What's the law? The law is that you can't advertise deals, 506 offerings, on any kind of social media. You can only offer them, which means you can only talk about them, to people that you already have established a preexisting relationship with. So you have to go out and develop contacts, go to the Multifamily Mastery event, get a bunch of contacts, go to your local philanthropic events, local Chamber of Commerce meetings, go places in your own community that you can meet investors. Follow up with them. Establish a pre-existing substantive relationship. There's an article on our website. If you go to syndicationattorneys.com, go into the library. There are over 60 different articles there. There's also frequently asked questions on all of our previously recorded podcasts, over 60 of them. So you can go there and get an article that's called How to Create a Substantive Relationship. I highly recommend everybody get that article and read it because it actually tells you what the SEC believes is necessary to have that relationship. And that means you have to understand that person's finances. What does that mean? You got to have a conversation with them about their finances. You have to ask them questions, right? Because you don't know, even though your neighbor drives a nice car, maybe he doesn't have any money in the bank. And, you know, he doesn't have—

Is that financed? You pay cash for that? You got, you got the money or what?

So you've got to ask, you've got to have those conversations. And only after you've had that conversation and you you've taken note of that conversation in your database, then can you start offering them 506 offerings. So until then, you cannot.

Kim, have you seen regular just syndicators who have 506? Can they— do you see them go online and say, hey, Jake and Gino here, sign up, you know, to our— sign up to our website? And they— have you seen investors do that without specifically mentioning a deal? But then let's say they get the deal under contract before they speak to the person, they still can't show that person even though they've signed up because they haven't had had substantive relationships or that contact with them, correct?

This is where your lead magnet comes in, right? You have to have something to offer. You've gotta offer something of value, of educational content or something that people want before they're gonna give you their contact information. Yeah. So if you have that kind of a lead magnet, you can create a free report, you can create a checklist, you know, whatever you can think of that, that investors might want, you can then offer that to people in exchange for contact information. Then you can do the follow-up. Yeah. Dating process, right? You want to— you meet someone, then you follow up with them, you have a conversation, establish rapport, you determine whether they're suitable to be in your offerings. That's what the SEC says you need for that substantive relationship. You have determined their suitability to be in your offerings. That means you're not taking their last $50,000. They're not relying on income from your deal to pay their monthly bills. They can recover if there was a loss. If they didn't get their money back, they could financially recover from that. And they meet one of the criteria of either an accredited investor or a sophisticated investor by virtue of their previous experience or investing experience.

And that's why we go to Kim, because Jake and Gina would not have been able to say that eloquently. And not really—

I'm not sure how—

we're not lawyers.

All right. So somebody asked, an anonymous attendee, when you started, did you syndicate the first deal or was that just both your cash?

The first deal—

I didn't know what syndication was when we got our first deal.

Well, remember, let's talk about the first deal. There wasn't much money back in 2013. The JOBS Act had just come out. Then 2017, I think syndication started ramping up with, you know, when Trump did the cost segregation and all. So, the first few years, there wasn't a lot of capital in the market. It wasn't like it is over the last 3 or 4 years. So, we just started buying deals ourselves. We were able to refi the money out of that first deal. Get the second deal, the second deal, the third deal. We, you know, we refinanced over $20 million out of our portfolio and continued to buy. Our first syndication came in November of 2018. We decided we want to learn this, we want to teach it to our students. So, we syndicated our first deal, then we syndicated our second deal in October of '19, and then our third deal in January of 2020, around that time. And we've had 3 syndications. We've gone full cycle on 2. We still own 1 right now. So, it's been a mixture. Like you said, the syndication is a tool in the toolbox. Tools are Creative financing, we've done syndications, and we've done joint ventures with us as well.

Excellent. All right. So Roger asked, Kim, do you send out a recording of these events? Well, it's being simulcast right now on YouTube. So as soon as it's over—

You got to pay for the recording though, right?

No, you're going to be able to go to YouTube.

She's just giving away the floor.

Yeah, yeah, we give away a lot of educational content. You know, that's, that's our thing. So yeah, you can get it off YouTube, you can subscribe to our YouTube channel, which is Syndication of attorneys PLLC. Also, we're gonna be putting this up on our podcast, which is Raise Private Money Legally. Raise Private Money Legally. And by the way, I just wanna let you guys know that we are coming out with a new book. So we're doing a second edition of my book, which was originally published in 2019. It's gonna have a lot of new content. We're gonna do a relaunch of that. So if anybody's interested—

When?

Um, it's going to be coming out before the end of the year, so I'm working on it right now. But if you want to reserve a soft copy of it, you can text the word syndicate to 844-796-3428.

No, no, text it, Gino. She's saying text it. He's writing it down. Sorry, what was that number again, Kim?

Type syndicate to— and I'll put it in the chat.

I was actually going to repeat it, Stenziano. I was going to give her a plug and go. 844-796—

844-796. 844-796. 3428. And let me just send this out to everybody. And you can get on the list to get that book. Let's see, Jake, Gino put the link to the Multifamily Mastery 5 event in, but you only did it to the panelists. So, I'm going to resend that to everybody. If you want to sign up for their event, it's a great event. It's just action-packed.

Right around the corner.

There's a ton of educational material there. You're going to meet a lot of people. You're just going to get energized about your business. And you're just going to be so glad that you came. So, don't miss that event. You really have to.

Hit the lazy river. It's an A++ property. It's all first class. I think Gino's providing like some Starbucks maybe. No, it's going to be more than that. But it's going to be really, really phenomenal. We got Ryan Serhant, Julius Thomas, Pace Morby. Gino's going to be there. He's doing a little Little opera stint. Little opera stint.

Excited to see that. Yes.

Got our boy, Lucky Wren, up there bringing the pain. So a lot of really high-level speakers, a lot of high-level investors. We got an operator panel, a lot of good stuff. I'm very excited about the event.

Well, and if anybody wants to know about our services, you can schedule a free call with one of our staff at syndicationattorneys.com. There's a button there that says schedule a consultation. You'll get some options. You can pick who you want to talk to. We would love to speak to you. Just a couple of quick questions and then we'll wrap up. Kim, do you also help with structuring JV deals? Absolutely. And then Roy asks right after that, well, what's the difference between a JV and a syndication? The difference is in a joint venture, all investors are actively involved in generating their own profits. And that means they have to have more than a voting right. They actually have to have participation and they believe that they are generating their own profits. They're not relying on somebody else to do it for them. So when you fall into the realm of having passive investors that are relying on you to generate the profit, then you're selling something called an investment contract. That investment contract is a security, and that's what triggers having to comply with securities laws, which means you have to have the right disclosure documents. You have to do filings with the SEC and with the state securities agencies. And so it just becomes a bit more expensive and a bit more cumbersome, but you stay in control of the deal. You don't have a bunch of other people telling you how to run the deal, which is the problem with some joint ventures. So anyway, a couple of— some people have said great content. Thank you all. Have to drop off. But anybody that wants to schedule an appointment with me, you can do so at our website. So if you do that dropdown and schedule a consultation, you'll see a place that you can schedule a call with me. But we would love to see you all at the Multifamily Mastery 5 event. We will be there as sponsors. And we're excited to be there. We've sponsored from the beginning and we have no intent to stop. So, all right, you guys are awesome. Any parting words?

No, looking forward to seeing everybody. Looking forward to seeing you, Kim. Maybe we'll catch you in the lazy river. Maybe Gene will do a little surfing there. It's the financial vacation for smart people. Thank you so much for your time today.