March 2026 Meetup - Reading the Market: Economic Indicators Every Investor Should Know

All right. So as I mentioned just a couple of minutes ago, we are just finishing up our breakout groups and we're doing our monthly meetup. This is March 2026. We're going to be talking about reading the market economic indicators every investor should know. So hopefully this will be a good overview and then we can have some good discussion on the recording. Some people don't like to be recorded, so feel free to put Q&A in the chat box as well. And Shelby, feel free to interrupt me if you see any questions that are brought up, or we can wait till the end. So with that said, we go to the next slide. Shelby, can you do the next slide on your side? Oh, sorry about that. It's not wanting to work for me now. Okay, hold on, let me try again. We'll try one more time. Is it working now? Yes. Okay. All right. Oh, too, too many. Sorry. You're good. All right. So like I said, it's a team, team effort tonight. Shelby on my team and I'll introduce her shortly. She's helping with the slides and that way it freed me up to do more of the talking. All right. So this is the Multifamily Passive Investor Meetup. We meet on the fourth Monday of each month at 7 p.m. As I mentioned earlier, this is no sales pitch or anything. It's just constant information, great networking. Today we're going to cover, you know, what's going on in the market where operators are seeing pressures, lessons learned from active assets, how to, how to protect downside and shifting cycles. These are all the things that we talk about, you know, month in, month out. And, you know, hopefully be good conversation and some things that you can take away. All right. Next slide. So my background is all been in commercial real estate really since 2000 2007. I was in the Marine Corps from 2003 to 2007. I started in real estate in 2000, about 2004, where I bought my first single-family while I was in the Marine Corps. We've scaled the portfolio to about $60 million assets under management, and 2 weeks from now, April 1st, we will have over $100 million assets under management. So we will almost, uh, you know, I would say double, but we'll grow drastically in size over the next couple of weeks from development and acquisitions that we're doing. Primarily, we're focused in Houston and San Antonio. Those are the primary markets that we've focused in, primarily in apartments. But our portfolio also includes build-to-rent communities, RV, boat, and business storage, and retail office space. For the past 16 years, it'll be 17 come June. Prior to— well, I guess it'll be about 19 years of commercial real estate, but of that 19, 16 years was with CBRE, a large Fortune 150 commercial real estate company. My background, as I mentioned, is just— it's all been in commercial real estate. I have an MBA from University of North Carolina, a Master of Arts in Economics from University of Oklahoma, and my bachelor's at National University. All right. Next slide. All right. And this is Shelby. So Shelby has been with us for over a year and she handles our asset management or investor relations and working with the asset management team to deliver excellent results to our investors. She's, I would say, like my right-hand lady in all things investor relations and administrative type tasks. So a lot of the things, a lot of the touchpoints in the relationship building is with Shelby. So if anybody is looking to build a relationship with CRE Partners, obviously I would love to have that relationship with all of our investors. But Shelby is also— adds an extension to the team so that way we're providing excellent service, whether it's the K-1s that we're working diligently on to get those out by month end or our monthly investor updates, our quarterly distributions, or just questions that happen during investing, Shelby is that person that, you know, will work closely with investors. All right. Next slide. So our business plan is really we raise money to buy assets, we acquire value-add real estate, we execute the business plan, we distribute return to our investors, and then we implement our exit strategy and distribute profits. We're active investors. We're the ones doing the heavy lifting while our investors are passively involved. A lot of their work is done upfront. So the stuff that you're doing right now by getting educated, that's heavily upfront. So that way you can make the right decisions on, you know, based on what you're comfortable in investing in. And so a lot of that happens upfront. And then once an opportunity comes, obviously evaluating that deal and such. So but all the heavy lifting and such from finding the deals, getting the deals under contract, doing due diligence, raising the capital, implementing the business plan, distributing the cash flow, dealing with all the taxes. I mean, it's a full-time job. We've got 4 full-time team members at Sierra Partners and then myself. And in the near future, we'll be adding an analyst as well. So full-time work. And that's the things that we really prioritize on our team is investing as we grow, we're investing in the team so that way we're delivering a solid performance for your investment. All right. So enough about us. Let's go to the next slide and really why we are here today. So why economic indicators matter and some of these are going to be definitions on the slides. It's really there as I talk through a lot of these, but we're moving, we're in this transition market, we're not in a broken market. We were in a market over the last, you know, I would say 2021 to 2023 was a much easier flow of money. Disciplined capital is more here to, you know, today versus it was then. There was a lot of deals that were aggressively purchased. And, you know, just given the frothiness of it during that market, a lot of it dealt with COVID and other indicators, but as we've moved on to today's market, there's a much more disciplined capital. The cap rate compression is bringing up new pricing discovery. The growth-driven returns that were being executed a few years ago, much easier than they are today, whereas today execution is driving the returns, whereas before buying a property and holding, you know, having the management company do a half-assed job, you know, still brought great returns, whereas now you have to be in the weeds working with property management. Fortunately for us, like, that is our— that's what we enjoy the most is the asset management part and working the day to day. But a lot of groups, you know, they don't enjoy that. And that's brought a lot of people out of the space that probably shouldn't have been here in the first place. And so the markets is transitioning where, you know, we're focused heavily on the fall, on not the volatility of the market, but just misreading the cycle of where money is flowing. Again, from an easy money standpoint to a disciplined capital, these markets, you know, ebb and flow. I've been in the industry long enough where, you know, when times are good, times are good, but times are bad, things get a little tough. But just like any investment, I would argue that that the best time to buy is when times are tough, when money is hard to deploy. These are the times to invest. When I remember when I was getting out of the Marine Corps, 2007, 2008, joining CBRE, I was broke as heck. Like, I didn't have any money living in Washington, D.C., and I saw the market crash and I'm looking at the stock market, I'm looking at real estate. I'm like, man, I wish I was in a position to buy. Well, now you've, you know, many years later, like we are in a position to buy real estate and invest in stocks. I definitely have the macro positioning of like, hey, invest and diversify. I'm not ever going to say just do real estate as a whole. So let's continue talking through some more indicators and again, hopefully add value. So we go to the next slide. We're going to be talking today about inflation, interest rates, employment trends, consumer confidence, credit conditions, housing supply, rent growth, and occupancy. It's a lot of content and probably about 20-25 minutes so that way we can open to Q&A. So I'm going to try to go through these fairly quick. A lot of it's going to be a little higher level and then, you know, we can dive one-on-one into these conversations or as a group we can dive in a little further. So if we go to the next slide. All right. So let's start with inflation. So inflation isn't gone. It's sticky in the wrong places. Like, it's, it's definitely heading in the right direction. So it's, it's cooled. But man, if I had this conversation 2 weeks ago, it would have been a different conversation than I am today. So with Iran and the tightening of the oil markets, you know, we're already seeing a huge spike in gas prices, but you think huge, like just a few years ago we were about the same price per gallon as well. So, you know, it all from a macro standpoint, hopefully, you know, they can get it a little under control. But that oil definitely impacts inflation. And we have to look at, you know, not only, you know, just price of goods, but also insurance, taxes, labor. That's all still elevated. And when we look at the real estate impact, expenses will reset to higher permanent, longer expenses. Rent growth doesn't always mean it's going to be keeping pace with the expenses. And so as an operator in real estate, what we're really trying to do is assume higher expenses across the board for longer and not have the reliance on rent spikes. So we're no longer underwriting upside. We're really trying to underwrite durability. Now, part of this, though, it's like if you save your money, then you're losing money. And when inflationary times, you know, exist, like investing in hard assets is the best thing we can do from an inflationary standpoint. Now, I'm not a financial planner. These are just things I've seen over the years. But if you are seeing, you know, inflation, then typically salaries and growth from that standpoint will encourage, you know, potentially higher rental growth, etc. But it also makes it harder for like people to go get mortgages. And we'll talk about interest rates shortly. So it creates this inflated renter pool. And so all these things impact purchasing power. You know, what we're seeing, you know, with the Fed and the political environment, you know, all these things are impacting inflation, borrowing, operating costs, obviously affecting, you know, the rents and expenses. And so we're going to continue seeing inflation. But the best time to invest, you know, when there's inflation is in these hard assets, whether it's, you know, in my opinion, you know, multifamily, is what we focus on. But, you know, commercial real estate in general. And the reason is, is because rents increase over time, like my office and retail properties, those are still doing 3 to 5% rent growth depending on the lease. And so those are keeping up with inflation when other, you know, investments and, you know, just cash under the pillow, you know, is losing, you know, value. And this is where diversification for me is important. So if we go to the next slide, so interest rates, so interest rates were declining and now they're ticking back up. And as we know, it's the cost of borrowing money. It's part of the capital stack. There's an equity equation and then there's a debt equation. Equity plus debt is the capital stack. So when we're buying properties, we are not overleveraging with the debt stack, you know, finding a middle ground, whether that's 60, 65%, no more than 70% of value is something that we're, we're looking at. But we have to look at the cost of borrowing the money, which, you know, the higher the rate, the higher impacts there are to financing cash flow. It definitely impacts property values because cap rates are expanding, you know, in line with interest rates. It does change the deal structure and leverage requires stronger underwriting discipline. So I think, you know, from an overall standpoint, the market has accepted that there's no quick return back to 3% to 4% debt. And for many of us on this call, like, we remember, you know, much higher interest rates. So the higher interest rates really doesn't concern us. We all knew, like, it seemed pretty, like I said, frothy and too good to be true for many years when, you know, rates were, you know, incredibly low. Now, what I am seeing in the lending market is the volatility has decreased, but the cost of capital is still restrictive. And I say that because, you know, there still is this pricing battle between what sellers need to sell for. Mind you, like when they bought the property, rates were much lower, so they're not able to refinance it. Because the rate is so much higher, they would have to bring in more capital for the deal to survive. And if that deal were to sell today because of the rates being higher, they're not, you know, getting what they were potentially underwriting. So, you know, the cost of capital is just restrictive in the sense that the realities of what's happening in the actual, like, commercial real estate market and what the values are there's still a little bit of a disconnect. In 2026, that disconnect is getting smaller and lenders are not as patient where they were working with borrowers to try to restructure the deal, kick the can into a future year. Now what we're seeing is starting a reset. And this is what we saw back in 2008, 2009. Why I get super excited because that opportunity back then, I wasn't prepared to go buy and, you know, get prices at a much discounted rate. You know, buy at the bottom. And so but part of this deals with interest rates and the volatility. So buying and making a deal work with fixed rate debt is extremely, in my opinion, important. I'm already seeing people talk about bridge debt and I'm not a bridge debt fan even when it's used to do what it's supposed to do, and that's bridge the debt to, you know, fix a rate once the properties been turned around and such, and we can talk about that separately. But right now the deals are not penciling basis unless the basis is right, meaning the price of the property is, you know, much lower than what it was just a few years ago. Leverage needs to be conservative, in my opinion, you know, going back to 60, 65, no more than 70%. And I still think refinancing is still a risk between 2026 and 2027 maturities. So for those that may not know, the properties on the multifamily side are 30-year amortized loans. Think about like your house, you know, it's amortized over 30 years, but there's a balloon payment typically between 5 and 7 years. So if somebody bought in, say, '21, '22, and they're now, you know, forwarding to 5 years later, 2026, 2027, they're not able to, you know, refinance and sell. So now these are great opportunities, buying opportunities for people like us and you as investors where we're able to get in and find really great opportunities because of those maturities. There's no other choice other than them having to sell. So from an operator takeaway on this slide, like debt structure, fixed rate is important, extension optionality You know, if it's a 5-year fixed rate, does it have any 1 or 2 year type extensions? And I always think like bad debt just kills good deals. Good debt can save average deals. And what we saw over the last few years, and I was guilty of it too, I had one property of all the properties we had, one property that had bridge debt and we converted it over to a fixed rate debt, which is good. But and that's why I'm just so scarred on bridge debt. And, you know, these variable rates. So I will say interest rates will probably, especially if we're going to continue the Iran, you know, whether it's a war dispute, you know, whatever they decide to call it, that definitely is going to shake the markets and we're going to see Treasuries continue rising. Even if the Fed sticks in, comes in and says we're going to lower it, it doesn't really impact the Treasuries because the Treasuries are really dependent on the bonds and future pricing, right? So we'll see where that goes. But right now in our portfolio, for those that are investors in our deals, it's fixed rate. So I'm not really worrying about what's going on in the outside market. And if rates increase, well, when we're buying new deals, again, we're going to be fixed rate debt. We're able to look at like what the pricing of that property would be given the information that we have when we close that deal. Right. So that's why I'm just, again, going back to a fixed rate debt I think is huge. I forgot the next slide. All right. So employment trends. So employment overall is still relatively strong. I think if you go out, you know, we've been on this 9-month trip, RV trip. We've got 2 months left. I see a lot of people eating out. The theaters seem to be pretty full. My kids went to— what was it— K1 Auto. And, you know, it's crazy how much some of the stuff in these dinners, all these costs. And but I'm seeing no matter what city I'm in, that people are spending and whether they're getting higher in debt or they're spending their cash that they're working on, it doesn't really matter. What's happening is that we're seeing people feel pretty strong or comfortable where their employment is. Now, the last, you know, couple reports have shown a decline in employment. Heavily of that is technology. So any cities that have a lot of technology-based jobs, we're seeing, you know, a resizing because of AI that's coming in. And so some cities that, again, are more tech-driven, you're going to see some resizing of, of that, in my opinion. We— one reason why I love Houston, love San Antonio, because it's extremely well-diversified and it's not just one industry. So from a wage growth, there is definitely cooling on that. I think employers and even, you know, myself, like we're always looking at like what's going on in the market and trying to stay on top of like, hey, is it the time to grow our business or is it time to just hold back and be more defensive? And so with these layoffs that are happening, again, heavily on the technology side, we're also seeing, you know, just across the board, like wage growth cooling. And so what does that mean? You know, affordability, housing matters. And so it's one reason why we haven't gone to like Class A multifamily, because I've seen ups and downs with Class A multifamily. Yes, it's newer, it's nicer, but when things get tough on people's wallets, they don't necessarily need those granite countertops or those hardwood floors or those nicer upgrades. They can typically go down to like a Class B type property, which what that really means is an older property and save some money so they can still have leftover money to spend on their weekends. Demand's still going to be there. Less pricing power, more concessions we see on the real estate multifamily side. But again, a real resilience in workforce housing. We don't need a booming economy. We just need a stable tenant base. And that's what we typically see during COVID when people were losing their jobs or money wasn't coming to them. We saw the government, you know, step in and assist. And you think about it, it's like the government doesn't want a bunch of homeless people, you know, out there. So in a worst case, and I don't think we're even close to like a major recession, I think it's ticking up. Like I've seen some economists think, you know, 30% odds, maybe it's going up a little bit more, but there's still a lot of strong employment and money out there. But from an underwriting standpoint, when you're looking at deals, it's important to be in markets that are growing. So if you're in markets, maybe in the North, Northeast, like, you know, consider looking at maybe other markets that are more landlord-friendly. More growth, less taxes, you know, jobs are moving. And it's not to say all the North is bad, right? Because it's not. We've toured it and seen. But when there's a lot of regulations and a lot of pro-tenant, and again, it's not getting into a political standpoint, more so it's like, hey, as an investor, why— investing is already a risk, so why add more risk in being in markets that aren't investor-friendly, right? And so this goes into the employment trends with job growth and salary increases, etc. All right. So if we go to the next slide, consumer confidence. So consumer confidence, how do I say this? So consumer confidence is less about what people can afford and more about what they feel comfortable spending. Confidence, in my opinion, it's fragile, it's mixed. And right now I'm not seeing it collapsing. I'm not— you know, I still see a lot of people out again spending money, investing, doing things that are a little bit more cautious, though, don't get me wrong. Like, but I think for the most part, people are still confident. And it's hard to do like one of these presentations because it's sort of like it's whiplash, like you know, depending on what is going out in the tweet market, like you don't know what really is happening. There's this constant whiplash, which is why I really love real estate because like I don't have to worry about geopolitical or a tweet or any other issue outside the 1-mile radius of one of our properties. Rents are still due on the 1st, the 5th of the month late letter goes out, and on the 10th of the month we're evicting. It's a pretty, you know, it's a consistent basis no matter what's going on in the world. But going back to consumer confidence, like consumers, I think, are getting more cautious. Just talking to investors, even some on these calls, like people are a little more cautious or more selective. They may be slowing discretionary spending. Again, I have not seen that in my travels. I think people are spending and, you know, I still think that's still strong. And I think that's happening because they still feel confident in the market, even if the there's some bumps in the road along the way. But what's going to continue impacting consumer confidence is continued market volatility, the geopolitical events, interest rates staying a little higher. But I think it's going to be a slow sentiment of weakening than a fast weakening. So I think, you know, from my opinion, overall consumer confidence is strong now. All of us that's on this call, we're all sophisticated. We wouldn't be spending, you know, a Monday night or listening on the podcast while you're driving if you weren't a sophisticated person or trying to get, you know, more in tune with what's going on in the investing world. And so with that, like, we are seeing what's going on and we're, you know, like, hey, being a little bit more cautious, but that cautious really just means we're just looking for really great investment opportunities. Right? And, you know, have a good story, have good basis. And so as a consumer of real estate, like, I'm confident, but I'm confident in buying deals that have a really good story and those opportunities that cash flow day one, even when, you know, rates may be a little higher. Real estate does hit demand like before data shows it. What I mean by that is like people don't immediately lose jobs. But they will delay moving, upgrading units, paying rental increases. We'll see that early on and we'll see that. And that helps us in the Class B section because we're not doing these massive upgraded units, but we are seeing an uptick in renewals or, you know, when the market gets really bad, they start moving in with each other. Right. And they start— then I start seeing 2-bedroom apartments and 3-bedroom apartments. Lease faster than the one-bedrooms. But confidence shifts behavior before it shows up in occupancy or collections. Rent growth is definitely impacted now on new rents coming in. It may be slow, but the existing tenant base, you know, who may already be way below market, there's still increases there because there's nowhere for them to move and, you know, not pay higher rents. But there was some negotiation on rental increases. What we typically do is like a 5% rent increase on letter, but then we'll settle around 3%. I do see renters, they'll look around a little bit more, but once they realize like the cost of moving, getting their utilities set up, you know, there's, there's a lot of expenses and inconvenience that goes with moving. So typically they'll still, you know, sign and renew. Our portfolio as of today, our whole portfolio is over 90% occupied other than one property, which should be 90% this week. And so we're seeing a strong occupancy across the portfolio. And I think a lot of that is due to, you know, people just maybe a little uncertain about what's going on. So they might as well stay, save expenses from moving. We will see some flatter rents. And I think that's part of this consumer confidence as people are willing to renew if they start seeing a little flatter rent. But on paper, occupancy is going to be strong. There's going to be more concessions, maybe a little higher delinquency. But from a macro standpoint, I do think that, you know, multifamily is going to continue on a path of growth. It's just not going to be the growth that we saw a few years ago. And honestly, that's okay because historically it wasn't as hot and as sexy as it was a few years ago, it had been like this slow, steady increase and it made people, you know, comfortable with their investment that it was in a stabilized, you know, fairly secured asset. All right. We'll go to the next slide. So and I just have a few more slides here. So credit conditions. So this is coming from on the banking side. So it's going to impact the loan availability. It's going to affect refinancing acquisitions. Tightening of credit, slow transactions. It's interesting because I read that, you know, the banks, you know, they have these requirements of reserves. And, you know, what's been floating out there is that that reserve requirement is actually going to be potentially less, not only for the larger banks, but for the smaller banks, which is great because that's an incentive. It incentivizes lending and more opportunities. So depending on what happens over the next few months, you know, we could see based on legislative measures where there's more liquidity in the market because those reserves are backed down. But the banks are going to be more selective. They're going to have lower leverage and they're going to have slower execution. They're going to be working with teams that have shown a proven track record. So if there's anybody that's looking to get into real estate yourselves, you know, partnering with people who have been doing it and have had experience and hey, that experience also means going through some bad transactions because over the years you know, not many people, you know, home run on all their deals. And that's okay. It's the experience, it's the opportunities for these people to show that, hey, this is what they've learned from it and move forward. So lenders are not necessarily saying no to people, but, you know, think of it like a team sport, right? So if a lender has some reservations, finding out what those reservations are and trying to find somebody who can join the team to help you know, give them more comfort, more confidence in lending. So it's one of those things where you, you have to understand during this time, and that's like what we do on a day-to-day basis, is like work with lenders, understand, you know, what are they selective about, you know, what is their comfort on leverage and try to meet in the middle and try to provide solutions. They're in this to lend money and we're in it to, you know, take money to, buy assets, you know, for our investors. So both sides want the same thing. It's just trying to find that middle ground where everybody's happy. So right now, and this is what it was like in '08, '09, the best pricing, the best opportunities are going to go with groups that have liquidity relationships. And this is like community banks and, you know, relationships with brokerage communities. These are things like those are tough getting into this business right now. When those relationships haven't been built over the years. With that said, like, you know, this is a great time to, you know, get part of real estate investing when it's tough because, you know, you're sort of in this downswing. And as the hockey stick goes up, those are the opportunities where we can all capitalize on. So the capital advantage market, it's not deal flow market, it's a tight credit market. The best buyers aren't the smartest, they're just the most prepared. They've got the team on liquidity, the experience, and the ability to execute and the relationships. And that all comes with the preparation. So from a credit condition, you know, I definitely can see maybe a little higher rates, but hopefully you're doing deals that are fixed rate debt. Even on my construction office retail in Bryan that we have open right now for equity, like that's a fixed rate deal for a 5-year you know, interest only, it's a 30-year, you know, full amortized deal. But, you know, the fixed rate is just huge, you know. But and then also looking at like the loan, you know, for us, we were comfortable with, you know, 58% loan to cost. And that's, you know, lower leverage is good. It helps keep things structured. And so you're going to see a lot more of that as we are trying to reduce risk for our investors. All right, let's go to the next slide. All right. So housing supply, this is what a lot of people are saying, like why not to invest right now in multifamily. And I love that because when people are not wanting to invest in a certain asset class, these are the opportunities and the opportunities to buy more. And because everybody just has like this herd mentality, it's like, you know, I own some cows and when the cows go a direction, they all go the same direction. And it is, it's true. Like investors have this herd mentality and they'll go into car washes, they'll do ATMs and they do all these things. But like how many corners in your neighborhood needs a car wash? And it was just because people have gone those directions and looking for best investments that they feel is important. We've doubled down on multifamily and the reason is, is because even in a supply, like there's a— we all know there's an overage of supply, but when you look out 3 to 5 years, there's nothing new coming on board because there's no permits. There's— everything is really slowing down. And you see that in these expansion and recession, you know, during expansion mode, times are good. That was the frothy moments there a few years ago. People are investing on cash flow. Developers try to get ahead of it and they develop, they invest, and then we start seeing this tickering off. And then that's when supply— if you're in a strong market like for us in Texas, San Antonio, Houston, these are growing markets. That those, you know, over time those apartments will be taken. Right. And, and then you don't have much new supply. So what we're betting on and what we're really looking at and talking with CoStar and our broker relationships is like what happens in 3 to 5 years from now when there's no new supply, continued occupancy continues increasing, and then there's not a lot of supply left. Well, that pushes Demand up pushes rental growth up. And so we're seeing that now. The short term, if you just have your short-term goggles on, yes, you know, there is going to be rent pressure, there's going to be lease-up competition. But typically everybody on this call, like, we're not looking to invest in a deal and sell out in 2 years. You know, it is a 5 to 7 year hold period. And so looking at a longer lens, I think, is, is good. You know, starts, as I mentioned, are going to be down significantly. Future supply cliff coming 2027, 2028. I think there's going to be a very tightening of supply in certain markets today. The pain may be high for operators. You know, you may see higher occupancy, higher concessions, but tomorrow, in my opinion, there's opportunity. So the deals that you buy in the supply wave are the ones you benefit from after it passes. And so just something to think about when, when everybody is talking so negatively about a certain investment, right? When you look historically, you know, just I just think you should look at like what are the supply starts happening and where is the demand for that particular market. All right. So let's go to the next slide. All right. Rent growth. We talked about this a little bit, so I'll be pretty quick on this, but Flat is a new win for now, meaning like we don't want to see negative growth and we're not seeing that on our portfolio. We are seeing 3 to 5% rent growth. A lot of that is from existing tenants that are just way below market. And so we're pushing those rents up in a, in a way to work with the resident. You know, we're not wanting them to move like heads in beds are important, but flat or slightly negative in many of the markets across the US I think is a win. Occupancy, It's holding, but it's going to require concessions. And, you know, we are getting questions from lenders like, why are we, you know, providing some concessions here or there? And it's like we have to stay with the market, you know, if we want to be 95% plus occupied, you know, there's going to be concessions. Is that forever? No, because we just talked about supply and the demand of multifamily in particular. That balance is going to, you know, change in the next couple of years. So from rent growth to expense control to operation in this market, net operating income, revenue minus expenses, NOI is built, you know, through the discipline of expense reductions, not being a slumlord. You know, that's not what we're trying to do, but we are trying to focus on reducing expenses through our bidding, seeing what we can do in-house, being very strategic on our capital spend. Just because we have reserves doesn't mean we need to spend it. And those type of disciplined and conservative actions helps, you know, maintain a portfolio over the years. So again, when we're looking at properties and I suggest when you are looking at properties to buy, look at the leverage, look at the cash flow, see if it's fixed rate debt and where's the rental growth and the occupancy on their portfolio. Look at bad debt. Just because occupancy may show 95%, you know, once you back out bad debt, which is all the write-offs, you know, where does that come in? And, you know, hey, if it's still cash flows with the conservative bad debt collections write-off, then great. But if they're not being conservative on write-offs but yet being aggressive a little bit on the occupancy, just some questions, you know, to ask. All right. Go to the next slide. And we just have a few more here. All right. So let me go back. No need to go back to the last slide. But what I want to be— what I really want to close with before I, you know, find out these slides, you know, low maturities over the next couple of years are going to give huge investment opportunities for investors. People are not able to refinance. They're not able to sell at a profit. And so these are great opportunities for those that are liquid and able to invest, in my opinion, this is the time. This is the '08-'09 of, you know, earlier in my days to, you know, what I'm seeing now. Now, it's not the same environment. You know, banks and their behavior are still tight on, you know, on lending. You know, they're wanting to see strong balance sheets, they're not overleveraging. So those are things we want to watch out for. But we also want to see like what the new legislation will bring with lowering reserve requirements. We also, as investors, I think you need to look at like construction starts in the market, not deliveries, because the deliveries are going to be much higher over the next year. But over the next few years, that is going to drop off the cliff, which are great opportunities for us right now. And then we're going to look at insurance trends. One of the things that I would say to look at it is definitely an NOI killer on insurance. It's one reason why I don't invest near the coast. San Antonio and North Houston are markets that I'm focused in. I'm not near the coastal areas. And so these are, you know, things to consider because these are things out of your control but yet can kill net operating income, which kills distributions. I would say right now we're sort of in this distress light stage, not 2008-style distress. I think the lending market is not as bad as it was then, but we are going to see repricing. We are going to see overleveraged sponsors that are not able to continue on with the debt. I think bridge debt deals are going to continue struggling. And it's sort of scary that people are already talking about bridge debt on some of these new deals. I just think it's, it's when you're seeing that it's groups that are lacking capital a lot of times. And so, you know, they're, they're overleveraging because they don't have the equity to bring in the deal and that just creates risk. So I'll end with this, like markets like this, like average operators will struggle, overleveraged operators will definitely fail and you've seen it. But disciplined operators, the ones that are saying no to more deals and getting in and maybe doing like 2 or 3 deals a year, they're building their best portfolio in these times that are going to really provide great outcomes over the next few years. All right. So we go to the next slide. Oh, actually, this one, check out our podcast, Building Passive Income. We've got a lot of social media platforms as well, our website. Again, it's just a lot of content. If we go to our next slide, passive investor coaching. So definitely continue joining us on these monthly meetups. But passive investor coaching, it's free. It's about 5 hours of content that you can watch at your own time. Again, there's no sales pitch. It's free. It's just educating investors and getting you accelerated in your path to investing in real estate. So passiveinvestorcoaching.com, again, passiveinvestorcoaching.com if you want to check that out. Can we go to the next slide? All right, cool. So enough of me talking. Any questions? I think there were some in the chat box. Actually, no, no one there. So what exactly does the 60 to 70% capital mean or referring to? So Typically, think of— so the debt piece and the equity. So debt plus equity is going to be your capital stack. So typically the debt can be, you know, could be 50%, it could be 60%, it could be 70%, it can be up to even 80%, you know. So the debt piece for us, we try to target 60% to 70% on the debt. We don't want to over-leverage our debt, which what that means is we have to bring in more equity. And, you know, equity is tight right now, but we find it's important to not over-leverage the debt. So that's what that means. It's just trying to find an optimal balance between debt and equity that reduces risk for everybody. So great question. And you are— those on the call, you are muted. So definitely unmute or put questions in the chat. I'll give this a few more minutes or— and then if there's nothing, I'll stop recording and then we'll— we can have a few more minutes of discussion too, because I know I put a lot out there. So with recent market pressures, are you relying on broker relationships to find deals or are you looking at bank-owned properties? So we— that's a great question. We haven't gone the route of bank-owned properties. Mostly for us, it's just because of bandwidth. But what we are doing is going after one. We're, we're searching for an analyst and that analyst will be out of our Austin office working with our senior portfolio manager. Their job would be really going out and searching for those off-market opportunities. And we bought one of our properties during this where you can find true owners and then just start building the relationship and going out and trying to buy the property direct. So that is one of the things that we are doing. But there's also— we have access. It's expensive and we pay for it. We have access to loan data, so we're able to see, okay, they're a year out from maturity. We can see what properties that are expiring from a debt standpoint, and then we can start going after and building relations. It's a relationship and opportunity. Now, a lot of these operators are stressed. They're not able to potentially return capital back to their investors. And so, you know, it's a relationship trying to build. So it's a little bit of both. All of our deals, though, once it goes on the market, we don't buy. All of the broker relationships we have know that we won't buy once it goes on market. We're not going to be the best and final or the second best and final. It has to come before it goes to market. So it was a great question. So does it make sense to buy large larger door amounts or for depreciation or more depreciation. So buy larger door amounts for more depreciation. I don't know. So, Lawrence, like I had a call with our tax person today and, you know, those that invested in our deals in 2025, you know, should see about 100% in tax depreciation. So, you know, we Right now we're sticking to like $10 to $15 million worth of assets or like when we buy, definitely I would say 100 doors or more is more efficient, more so because of the operation. So the lesser the doors, it still has the same amount of costs for maintenance and management salaries. So when it's 100, 150 units, you know, those are good, good amount of income to offset, you know, expenses that you're going to have regardless. So if you are focused on depreciation, though, you know, big beautiful bill, it's all 100% depreciation. Now, know that like land is not depreciated, so it may not always be 100% dollar for dollar. Yeah. So great question. So what's rationale for doing retail and office with the state of our economy? One, there is a need for people like myself who want to create culture and educate our team and can't really do that perfectly. And no one's going to be perfect, but doing it in the office, people still need to go see a chiropractor. People still need to go see a dentist. People still want to do golf simulations when they're trying out their clubs. The retail and office is still in demand. Now, restaurants, I would not invest in restaurants, maybe do a coffee shop. But we are developing an office and retail and a very high, like, visible corridor. You know, 80,000 cars pass by this property. A lot of our groups are engineering, legal, financial firms, and those, you know, will require, you know, in-person and such. The days of like everybody working from home, I never got on, got on that bandwidth. Like our team, we work in the office Monday through Thursday, Fridays we have off. So there's a little bit of flexibility. But what we're seeing across markets are people having to go back to work and it's just going to be more and more prevalent. Now, every market's different. Like, would I do office and retail in Austin? No. You know, but even Austin, you look at a lot of those buildings downtown, like most of those are leased. They're leased by Facebook, Google, Indeed, these big tech groups, they're just not occupying it and they're doing these massive layoffs, but they still are paying rent on it. The Bryan College Station one, it's located near like the IMAX theater, a bunch of restaurants, retail. We're doing a development on apartments, so it should bring, you know, great demand for the area. So it's a really great question. And there's also depreciation out of that too. So once it's developed, we'll have depreciation and the tenants Unlike multifamily, tenants in office and retail pay a pro rata share of expenses. So if taxes go up, insurance goes up, nothing better inflation-proof than office retail tenants. Better management percentage too. You mentioned your portfolio near doubling in the next coming weeks. What were you able to add and what some of your negotiating wins for the deal to pencil out? So yeah, we're developing a $32 million Class A multifamily. And Brian. Now that process has been about a year and a half of doing. It's a HUD loan, 82% leveraged at a 5.48% interest-only loan. It's an incredible loan base. It definitely helps us move into institutional capital. We still had to bring in about $6 million for the deal, but $6 million on a $32 million project is incredible. And, you know, people are like, well, why would you do that? Well, this for us is like it's a construction to sell. Like we're, we're going to be selling to an institutional buyer when that, you know, in 2 years. But that portfolio is growing. We're also doing office retail development and then we have a hotel development that's going to be around the corner. So 80% of our portfolio is day one cash flowing multifamily, my bread and butter, what pays my bills and allows me to do my 9-month RV trip without having to go to the office. And I can pay my investors Quarterly is through multifamily investments. K-1s are going to come out in the next 2 weeks and provide a lot of people offsets on passive income. So that's going to be my bread and butter forever. I'm going to die on that sword. I lived the office retail with CBRE. I've seen the ups and downs. Multifamily is bread and butter. 20% of our portfolio is going to be Bryan College Station. It's where we live. It's what we know. We've got relationships with city council, the mayor. We see the growth and being right in Central Texas or right in what is Central Texas, but the Texas Triangle, we're seeing a lot of opportunities. So we're going to develop and we're going to be a big part of the change that's happening in Bryan-College Station with the growth. So that's, that's going to be part of the portfolio. But our bread and butter and what we're going to continue doing is multifamily. And, you know, negotiating wins for the deal to pencil out, like we just have to underwrite more deals. And say no to more opportunities. Again, fixed rate debt, being conservative on taxes, meaning 100% of purchase price. Like there shouldn't be a question on taxes. It should always be 100%. What I was seeing when people were winning deals and getting frothy and just stupid, we're doing like 75% of value for taxes. Well, in Texas we don't have income state tax. It's all about property taxes. And so, you know, day one you're already risking Flood markets. There's already a risk in real estate. You know, it's just don't be investing in flood markets. People may disagree with that, but why add another layer of risk with things you just can't control? These are great questions. Any other questions? So the multifamily raise, we've already raised that capital. So that was done before we, we went to a few of our investors and did that. And the office retail is filling up as well. And that's part of like having like, you know, the person who asked that question's got a great relationship with us and very grateful for the partnership. But those are like doing this call like get to know Shelby, get to know myself. Like, we want to understand what your comfort is in investing. Some people need— want that cash flow day one. Most of our investors, though, they don't want to leave their day job. They enjoy being doctors, professionals, whatever. You know, they're not going to leave their day job. They enjoy what they do. They just want the benefits of real estate without having to deal with it. And so once we understand what type of investor you are, whether it's cash flow, equity upside, time horizons, risk factors, you know, when these opportunities come, we can go direct with you on that. And that deal we closed April 1st, we'll start construction. That's another thing, too. You know, before we go out on equity for developments, we've already done all the permitting, civil engineering, site plans. And a lot of that is through our, you know, there's a debt partner side. So So for those that are interested in doing more of a debt side, you know, that those are opportunities. So when we— that allows us to go buy the land and go through all the entitlements and opportunities that way. And then we return that capital during a certain amount of time once we raise that capital. So very few of those opportunities, but those do exist. If, you know, people may have like an IRA or something, they're willing to to do that on. All right, so I'm going to stop recording, and then if anybody wants to talk when it's not recorded, we can go from, uh, go from there. So