Latest / Real Investor Radio Podcast / Ep 50 | Self-Storage Industry: Market Fragmentation, Risks, & Raising Capital with Jacob Vanderslice

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Ep 50 | Self-Storage Industry: Market Fragmentation, Risks, & Raising Capital with Jacob Vanderslice · Real Investor Radio Podcast

• Craig Fuhr (00:12) Hey, welcome back to real investor radio. I'm Craig Fuhr joined again by Jack BeViere. And we're joined today by Jake Vanderslice from Van West Partners. We just had a great first episode with Jake. Jake, welcome back to the show. Great to have you. Thank you for your time. Jacob Vanderslice (00:27) Thanks fellas, good to be here. Craig Fuhr (00:30) So we were talking in the last episode about your sort of maturation process through the, you know, real estate investing from firefighter to single family guy doing flips to really growing that platform to, you know, really top 1 % in the country with what you did in single family flips, you know, sort of got tired of the high transaction, you know, high cost of operations. And then you made a made a pretty hard pivot into self storage and today Van West Partners manages, I read on your website that you guys have raised over $250 million for your project. So we're just jumping back in from the discussion from the last episode, I would encourage everyone listening to check out that episode first and then jump in on this one. So Jack, where'd you want to pick it up? Jack BeVier (01:23) Yeah. Can we talk about like, what's the self storage market look like in terms of who the players are? You mentioned the REITs. I've seen. Single family operators get into the, the, you know, the real smaller unit tertiary market side of things. Like what's that spectrum look like of, of, of operators and product types. And how do you, how do you think about that and where you guys think the sweet spot is so to speak. Craig Fuhr (01:51) Jake, before you jump in, if I could just share, I'm sorry, just a quick data points here that I took before we came on the came online today. 36%, I'm sorry, 37 % of all self storage, roundable square footage is owned by five public companies. 22 % is owned by sort of large and mid sized companies that operate more than 500 ,000 square feet. And then still 40 % of the market is those mom and pops. that are sort of much smaller, you know, single to, you know, a few units or properties, I should say. So still a fairly fragmented market, but it feels like it's, you know, it's not 20 years ago. This isn't the Wild West. It's consolidated heavily. Jacob Vanderslice (02:36) Yeah, it's still fragmented, but it's becoming less of a niche. Niche? Niche? Niche? I'm not sure how you say that. Yeah. Yeah. Asset class. You know, five years ago it was very much on the periphery and now it's a widely accepted institutional strategy. By virtue of the REITs, all the PE in the space. To answer your question, Jack, you've got... Craig Fuhr (02:42) Good enough. Jacob Vanderslice (03:02) Again, a lot of equity in the space that wants to be in the space that maybe isn't in the space much and very little deals for sale. So just like everything right now, there's a lot of cash, deal flows challenging. There's a wide bid -ask spread between buyers and sellers. You know, I'm singing the tune right now across pretty much all asset classes, maybe not office, but that's kind of the state of the market right now. So in terms of our, our competitors out there, if we, If we see a widely marketed deal, there's one prolific broker out there, a guy named Nick Walker with CBRE, and we know him fairly well, and it's kind of a joke. If we offer on a Nick Walker deal, we're never going to get it. We're getting beat by, we might offer 7 million and it might trade for 10. I mean, we're getting blown out of the water, just massive deltas. So the buyer type on that is probably large private equity. institutional pension. And a lot of buyers right now are solving to return targets that are in the high single digits. So I'm not talking about a cap rate, obviously, I'm talking about an all -in IRR. Somebody might pay the equivalent of a 7 % or 8 % IRR on a deal, which is a very low return. So the competition remains very, very heavy. We cannot compete generally on widely marketed deals. Most of the deals that we bought, and I want to predicate this statement too, the term off -market gets thrown around a lot. It's an off -market deal, it's an off -market deal. Most of the deals that we buy, I think over 70 % are truly off -market. And these come from broker relationships. So a broker will get a seller's ear, he'll get comfortable with the seller's pricing expectations. We've closed five deals with them in the past and God bless brokers. They've helped us build our business, but they want their fee, right? And whether the price is low or high, it's not a big delta in their fee and they want execution and they want surety. And if you've executed with them before, they want to bring you more deals. So most of our deal flow will come from sources through broker relationships. seller profiles, you know, the term mom and pop gets thrown around a lot. That's been written heavily in the storage space the last few years, but I would say to put a finer point on that, the operators are generally smaller regional players, onesie twosie players, and they might be okay at operating, but generally their expense loads might be bloated. Their revenue management is not very dynamic. And we're talking about cap rates on the last episode. Craig Fuhr (05:27) Mm -hmm. Jacob Vanderslice (05:47) We might be able to pay that guy a four cap and he's 75 % unit occupancy. And you're probably wondering, you guys are just like all the other idiots out there paying a four cap. Why are you doing that? Well, we see a very obvious short -term path to growing that NOI pretty easily, relatively. So that's kind of our seller profile. Maybe they've owned it for 15 or 20 years. They've got a low basis. They want to sail off into the sunset and sell their two deals to us. But... The REITs are less active in acquisitions lately. The most active shops out there right now are large private equity. There's a shop called Andover, another company called Merrick Hill. They're a top 10 operator. They're buying a fair amount and they'll buy deals down to $2 million, which we hesitate to ever do because as you guys know, doing a small deal takes as much time, if not more time than a big deal. You still have to deal with your banker. your third prior reports, your K1s, and they'll do deals up to whatever amount, portfolio acquisitions for 100 million. So most of the activity out there right now is large private equity, less so on the REIT side. The REITs are not as active in acquisitions as they were a couple years ago. Craig Fuhr (07:05) What's a typical deal look like for you guys and what's your mix? Or what and what is your appetite for, you know, ground up development in, you know, a better market where you can see upside potential there? Jacob Vanderslice (07:19) Yeah, well, let's talk about development first. So as you guys know, development's a terrifying animal, right? When you're buying an existing building, whether it's multifamily, industrial, or storage, you can see historic revenue. And you can kind of know that reasonable downside, I can at least eke out the NOI that the prior operator has. And I'm a little bit better than that operator, so I can probably do better than him. Development, you've got market rents and everything, but there's no trailing data. You've got the risk of bridge debt. You've got the risk of cost overruns, time. But the main risk in development is, of course, rents and your lease up. If you're a little bit, let's say you underwrite a buck 50 a foot and you end up stabilizing the buck 30 a foot, and that's dollars per square foot per month, that's a material swing in the overall return. Right. So development's risky. but we are doing development, but very few and far between and very kind of strategically. so we built a $15 million project here in the Colorado front range in Longmont and we, we delivered that in December. So that's early stage Lisa, by the way, December is a terrible time. Like if you get the worst month to open a storage facility, it's December. And I'll also tell you that, I don't think we've ever had. Craig Fuhr (08:29) the worst. Jacob Vanderslice (08:38) in our entire real estate careers, whether it's a little fix and flip or a big storage acquisition, we've never had a deal on time and on budget. It's typically one or the other. So in the case of this deal, we were four months late getting it done, but we were really far under our budget. So we'll take four months, but December is a terrible time to open up. And then we have another deal that's all in at $25 million in a dense location. in Southeast Denver, infill project, big traffic counts on the thoroughfare. And that's a five story elevator access climate control. It's about 1100 units, 92 ,000 feet. And that should deliver in February. So when I say February, that's probably like May, right? And that's all in at 25 million. So we do development, but it's you've got inflated hard costs still. And when I say inflated, Inflated infers are going to go down. They're not. Construction costs, when they go up, they stay there and they might plateau for a while, but they're probably not going to plummet. So you've got very high, hard costs relative to what you saw two or three years ago for all the reasons we've talked about forever. It's really tough to raise capital, which I know we're going to transition to in a moment. And your debt terms on that development deal, you're probably getting 50 % leverage and you're probably getting SOFR plus 400. which puts your interest rate at today about a nine handle. So it's basically hard money, right? Or it was hard money, now it's not anymore. So they're tough to get finance, it's tough to find land that makes sense and they're inherently more risky. So we look for development projects, but we're not doing them actively right now. We did do one deal that we closed on yesterday in Jacksonville, Florida. Jack BeVier (10:08) -huh. Jacob Vanderslice (10:31) And we bought a 40 ,000 foot facility built in 2021. There's some excess land and we're going to build another 29 ,000 feet of net rentable square feet. So that is a development project, but this is single story. It's non -climate controlled. The building form is very simple. We'll still be either later over budget, I'm sure. But it's an easier development project than it is. Yeah. Yeah. A lot less variables. Yeah. But most of our deals out of our portfolio. Craig Fuhr (10:44) Mm -hmm. a lot less variables. Jacob Vanderslice (11:01) especially the last couple of years, have been value at existing facilities. So there's already a storage facility there. We'll come in, we'll implement some capital improvements, we'll rebrand it, but again, most of our value creation is on the management. Jack BeVier (11:14) Is there like a segment of the market from a product point of view that is, like not investible by the large, you mentioned the private equity company that'll buy down to $2 million. Is there like, but what, but what's that box look like for them? Right. Like, or can I, as somebody who like, as, or as someone who wants to get into the space, look for a mom and pop deal, use my direct mail skills to try to get in front of a self store mom and pop self storage owners. get in there, run it better, put some money in, do a value add project, and then believe that I'm gonna have an exit to that, you know, at three million bucks to that private equity guy. Or is it, no, there's like, you know, two different markets. There's like the institutional eligible product, and then there's the rest of the market that gets traded amongst regional operators and mom and pops. Jacob Vanderslice (12:09) Yeah, most operators, whether it's large PEE, REITs, whoever might be your buyer, they'll buy in smaller tertiary sub markets, but all of us want to see residential density. We want to see rooftops. You might be able to put into your model a 10 cap deal. in a small town in Kansas, but no one's going to buy that. You know, a farmer might buy it or something, but it's your exit on that is questionable. So we, we, we generally stay in markets with a good story for, for density, for population growth. But these larger buyers, if they're going to buy a two or $3 million deal, like we mentioned a moment ago, they're typically going to want to see. that acquisition in a sub market where they already own other inventory. It's really tough for anybody. You know, I'd say we're kind of medium sized. It'd even be hard for us to go into a brand new market and buy a deal for 2 million. It's just like, we got to see a good story for either buying additional product or we need to be buying it next to or near something else we already own. But if you're trying to go out and get in the space and find a deal, you can exit to an institutional player. You're just really thinking about normal real estate nuts and bolts, supply fundamentals, rents, population growth, housing density, the potential for new supply. Yeah. Craig Fuhr (13:29) traffic. It feels like Jack, those deals that you were speaking of, at least with the investors that I know in the space now, they're all just trading amongst themselves. You know, I bought this place in Kansas, I did some value add, you know, I'm looking to trade up, I'm going to find the greater full and it's going to be a guy who's probably just breaking into the space and he's got some, you know, he's got a pocket full of capital and he's ready to go. It doesn't, you know, Jake, have you Are you at all surprised though, that you now have institutional money that's going down to that $2 million? Because I don't know that like, would you have seen that five years ago? Would you have seen that? You know, that kind of money going into maybe a slightly smaller market slightly, you know, considerably smaller deal? Or has that been something that's been around for a while? Jacob Vanderslice (14:26) No, I don't think we would have seen that five years ago. I think there's kind of a desperation to get money out. And if there's a deal that makes sense for them, they're probably going to do it. That's a low, even for a small syndicator, that's still a pretty tiny deal size. But they'll do it if there's a story there. But that's certainly been a shift. And briefly too, that's one of the problems among many. We can go through all the downsides of storage if we want to, but... Craig Fuhr (14:35) Yeah. Yeah, yeah. Jacob Vanderslice (14:54) One of the problems with the asset class with, with especially new large institutional players. So we talked to a shop the other day who raised, they've got a $600 million fund raised and they want to put half of it into small Bay industrial and half of it to storage. And they want to get deployed like in the next 18 or 24 months. And the problem with storage is the check sizes are so small relative to other asset classes. So you'll hear about apartment buildings trading for 150 million, right? Some community that somebody built and, you know, black zones coming in and buying it or Northwood or whoever it might be. Some of the bigger single asset storage deals might trade for 30 million. Craig Fuhr (15:17) Yeah. Jacob Vanderslice (15:36) and that's, that's, that's a, that's kind of an out of bounds number. Most of the deals that we buy are, I would say they range from, you know, five or 6 million up to, up to 15, generally not much higher. We do have that $25 million development project, but that's a, that's kind of an outlier. So as you're looking at scale and you've got all this cash to deploy, you've got to do a lot of deals. And if your average deal size is say 10 million and you're leveraging it at 50%. Craig Fuhr (16:00) deals. Jacob Vanderslice (16:05) That's $5 million per transaction. That's a lot of transactions to get to a hundred or 200 or $300 million in equity deployed. So it's tough to get large amounts of money out into the space unless you're, unless you're finding a portfolio acquisition, which those do happen. But typically, you're going to pay a premium for that scale. That seller is probably going to see some cap rate compression and you're going to be the buyer that's paying for that cap rate compression in exchange for getting a large amount of equity out versus kind of deal by. ideal. Craig Fuhr (16:37) I want to get into what Jack was saying in the last episode about your, you know, how you all have raised capital. But one of the things that I find interesting is sort of the evolution of storage. And I've seen guys with models that are doing storage. you know, they'll take a like you were saying adaptive reuse, like an old Kmart or, you know, a large shopping center, and they won't just turn it into storage, the traditional, you know, 10 by 10, it would be more of like, no, you can bring your boat in here and keep it inside, stuff like that. And so what are you excited about? As you see the industry maturing? you know, on the horizon, are you guys looking at any sort of different types of storage? Like I was literally reading about a very large facility that's opening up in Fort Lauderdale for wine storage. And they're getting, you know, they're not getting 85 bucks a month. And so, you know, what's your take on, you know, where the industry is going and maturing? Jacob Vanderslice (17:37) Sure. Yeah. We've done some wine storage. It's definitely a tiny percentage of your total revenue. We'll figure out whether that's niche or niche someday here. So we have... Craig Fuhr (17:46) Have you? That's awesome. Very niche. We'll ask the English majors. Jacob Vanderslice (18:01) You know, within kind of the broad brush of storage, you've got like interior climate control, boat and RV storage. You've got exterior covered boat and RV storage, and some operators will just do boat and RV storage. Like we've got a project in Tucson we've owned for a couple of years, and there's some developments going up around it that's purely covered and powered boat and RV storage because they've got HOAs down there. You can't park it in your driveway. It's generally nice weather and it's obviously hot in the summer. So you want, you want a covered space and you want to plug the, you know, plug in your low volt, your low volt too. We haven't done that before. We might at some point, we, we do have a boat and RV parking on most of our assets, but it's, I don't want to say it's an afterthought, but if we've got some excess land on one that say it's dirt, we'll spend a hundred grand to pave it and stripe it. And you know, we'll get 20 grand a year in revenue. Obviously that's a good term, but it's only 20 grand. We've looked at more primary use boat and RV deals, but it's not our business. And it might be something that we look at at some point, but we've typically stuck to just the traditional either multi -story, single -story, climate, non -climate controlled self -storage facility. But as far as where the industry is going, automation is definitely important. The customer service experience, believe it or not, we're a retail facing business and we're almost a retail shop more so than we are a real estate investment company. And if you think about the storage consumer, let's say you're going to Starbucks in the morning and you got your mobile order in, you're going to the office, you walk into Starbucks, you want to be there, right? You're excited to get your coffee, you know, the music's playing, it smells good, you get in and get out, you drive to work, start your day. No matter how good your circumstances are. Maybe you got a new job and you're making a lot more money and you're building a new house. You still are not excited to go to your storage unit, right? You're never like, I'm going to my storage unit. This is going to be awesome. So that even though the industry is kind of shifting towards automation and so are we. Craig Fuhr (20:03) So true, so true. Jacob Vanderslice (20:10) We still believe that having that human element there is important because a lot of people are going to store for bad reasons. They're getting divorced or their parents passed away or they lost their job and they have to downsize to an apartment from a house. So having having that human element there to make that customer experience seamless is important. but also offering optionality to guys like me and probably you who don't want to interact with a human. We want to do it on our phone. We want to get our gate code and sign our lease online. We don't want to go into the leasing office. We just want to show up and get things done and leave. So we're looking at a lot more automation than we have historically, but we still have that human element on our... Craig Fuhr (20:37) Right. Yep. Jacob Vanderslice (20:54) Development project I mentioned a few minutes ago in Denver, the locks on each unit are Wi -Fi enabled. And it's called a no key system. And you could use your phone app to go unlock your unit. So you don't need a padlock. You're not dealing with losing your key and having our onsite cut the padlock off because your kid stole it or something. So a lot more automation, big fundamental shift to. Unmanned sites were, we experimented with this some years ago. It didn't go very well. But there's shops out there like 10 federal, a lot of their deals are unmanned. Extra Space bought a large portfolio a couple of years ago in the Southeast that were mostly unmanned sites. So the REITs are getting into it also. But when you don't have somebody there, bad things happen. There's plenty of bad things that happen in storage. And if there's a person there, that helps mitigate. those bad things. Jack BeVier (21:52) Hey, how stupid of an idea is it to turn some of these office buildings into self storage? Like land constrained places that you can't build, you can't get land for cheap, but now you're going to have these office buildings selling well below replacement costs. Like someone, I assume someone's already working that or that it's a stupid idea and you're going to dump. Craig Fuhr (21:56) Mmm. Jacob Vanderslice (22:10) No, it's not a stupid idea. It's tough though. And we've actually done that. One of our deals with that original partnership was a deal in a sub market in kind of central Denver called Capitol Hill. And they had owned this pretty tired 1970s six story office building. And their original idea was to do a condo or a multifamily conversion. They had a parking issue. So plan B was, all right, we got this JV going with storage. Let's convert this thing into storage. and the main challenge from a construction perspective with office building conversions is the, the structural loads. So office is not built for structural loads that self storage needs. So storage needs, I think, I think it's 125 pounds a foot and offices built it. I don't know, 75 pounds a foot. I'm not exactly sure on this, but, to convert it, we spent almost a million dollars in installing the equivalent of carbon fiber paper mache on the Craig Fuhr (23:09) Yeah. Jacob Vanderslice (23:09) structural members and I'm not an engineer, but I walk in there and I'm thinking, man, this, this is the stuff that gets this, you know, this. Yeah. Yeah. And it's just like a bunch of dudes in there. It just taking these sheets of carbon fiber, putting some glue on them and wrapping around these structural members and check the box. Your floor, your floor, floor loads are good to go. So it can be done. but it's, Craig Fuhr (23:16) It's an eighth of an inch thick and it's supposed to hold load. Jacob Vanderslice (23:34) It's by the time you go through all the efforts, sometimes it might just make sense to build a new facility, right? But there could be some opportunity out there. We've looked at a few office conversions the last few years and just haven't gotten into pencil, mainly because of rents, right? It's always about the relationship between rents and your cost basis. That's what matters. And it's expensive to convert those, and it's pretty rare you can find a deal at a basis that makes sense in a market that makes sense with rents. But it can be done, and we've done it. Jack BeVier (24:06) So yeah, let's switch gears and talk about raising money. You guys have, well, you had to get good at it. Were you raising money in your single family business? And how did the transition, you talked about the road show with that first partnership. How, like I guess, what was your experience? What was that learning curve like? What do you do? You know? Craig Fuhr (24:27) Yeah, what's a roadshow look like when you're trying to go out and raise 100 million bucks? Jacob Vanderslice (24:32) Well, I mean, back in the day, it was just a junkie pitch deck and a hope and a prayer and a sparkle in the eye, right? Yeah, exactly. Exactly. Yeah, in our single family space, we had a lot of unsecured basically, Mez debt lenders. They were with us forever. Craig Fuhr (24:40) Friends, families and fools as my mentor used to say. Jacob Vanderslice (24:57) We use hard money quite a bit to buy our deals. We use our own equity. We had some, you know, some 50 50 partnerships just, just like you Craig way back in the day. I'll put up the money. You take out the prok. And man, I would take that deal today, by the way, that doesn't exist anymore. Yeah. Yeah. You put out an offering with 50 50 and you're going to get laughed at. so our, so we had, we had, we had done a number of, of syndications in our. Craig Fuhr (25:10) Hell yeah. Jacob Vanderslice (25:23) adaptive reuse retail Jack leading up to getting into storage. So we kind of learned a little bit about making a PPM and doing the offering and some of the regulatory aspects of it. But it was all kind of long -term relationships and referrals. So, you know, the bar wasn't set too high because they already knew us and liked us and trusted us. When we launched Fund One, that was our first kind of meaningful sort of fundraise for a private placement vehicle. And we go. Jack BeVier (25:54) Which show, which you do see a private placement just for anyone who's not, who's listening and doesn't know what that is. So you know, it's when you're raising money, you're technically selling securities and you can't sell securities without a license unless you operate under certain sec exemptions, regulation D in the securities law is where these exemptions are written out. And so there's subsections of reg D that, that we, use or that when you're raising money, you have to comply with. So section five or six is where the really gets spelled out. So reg D five, when you hear someone say a reg D five or six dollar, say B or C usually or D. That's where the details of the, of the offering have to comply with. And so we're really in the weeds here, but. You know, it matters when you're raising money. And so to ask you the detailed question. So were you doing a 506C so that you could do general solicitation or did you do a private club friends and family deals? Jacob Vanderslice (27:04) Yeah, it was a C and we always do C's and the difference between high level a C and a B is a C you can only accept accredited investors, which means you need a certain income and net worth threshold. And it kind of varies a little bit between whether you're married or single. So that's a C offering. You have to be accredited, but we can generally solicit. So if we wanted to, we could put up a billboard on the highway saying invest in our fund and that would be, that would be allowed. the B offering allows you to accept a certain number of unaccredited investors, but you can't, you can't generally solicit. So you can do a marketing blast with a, with a B offering and we market, we do a lot of marketing. That's always an evolution that we're always trying to get, you know, less bad at over the years. But yeah, our first phone, first phone was a C offering and we got our low hanging fruit in first. And it was a very relative to the size of a fund. It was very small and we wanted to make fun one small, open and shut. we only to allow us listening, myself included, it seems like a lot of money, but for a fund it's not. So we only did about 30 million in deals. And it was roughly 20 million in debt and 10 million in equity. And, and fund sizes are expressed in the amount of equity they're raising and not the size of their asset base. So even though we might have 30 in deals, it's still a $10 million fund. So that was fun one. And that was an eight. We just existing relationships and we did some marketing as well. But I would say our average check size was probably one 50 or two somewhere in there. Jack BeVier (28:29) How much you got to? Jacob Vanderslice (28:42) but we got a lot of our low hanging fruit in first guys have been with us for a long time. And then we built some new relationships and some referrals out of it. so that, that was over our first deal was in June of 19 and we closed the fund in August of 20. and obviously those COVID months for like, what do we do? And it turned out we should have bought a lot more who knew how good it was going to get. Right. None of us did. so that was our first kind of, mass marketed vehicle. And we had done a lot of deals, obviously, in storage up until then, but it was with a captive institutional capital base with a little bit of friends and family mixed in. And then Fund2, we launched in early 21, and we ended up raising just under 40 million in equity for Fund2. So it's about 100 million in assets. And I'll tell you, back in 21, money was falling out of the sky. It was, I mean, it was just like, I would have four or five zoom calls a day. Each zoom call would commit a hundred grand or more. And we ended up getting close to our maximum offering size in the fund. And we couldn't go any bigger without going through a lot of approval process and redoing our documents. So we closed it just under 40 million. But this capital raising effort really is your, first of all, as you guys, more than appreciate, accepting money from somebody into your deal is a sacred responsibility. We haven't met many of our investors. Whatever, they're in New York, they're scheduled a Zoom call, we get to know each other, they sign their docs and they fund. And it's stressful. It's a big burden to carry when people trust their money to you and they have zero control. and they're relying on you to go out and execute. So we, as we kind of got a little bit better at fundraising, a fair amount of webinars, just like you guys do, lots of podcasts, we're on podcast today, obviously, very detailed quarterly reporting, really just taking every effort we possibly can to show our investors that we care, we understand what we're doing, this is what's going on for better, for worse in the portfolio. And then as you kind of shift gears to 2022, we launched Fund 3 in early 22. We did our first deal in April of 22 in Fund 3. And capital raising started to become a lot more difficult in the middle of 22. People were seeing the rising interest rates. They were seeing the market fundamentally change. And a lot of our existing LPs and potentially new LPs too. we're taking a kind of wait and see approach. And to a degree, they're sort of still doing that. They're still sort of, they're deploying more capital, I think the last three or four months than they were last year. They're kind of getting used to the new environment we're in. They're believing in the visibility to the notion that maybe interest rates have peaked. Maybe they're even gonna go down at some point. Who the hell knows? So many mixed signals here the last month. But raising capital is generally about just knowing, liking, and trusting. And it's not so much pitching, it's educating. This is what we're up to. It's not, give us your money. This is how storage works. This is our track record. This is our business. This is how we create value. But really, the last half of 22 and most of 23 were very challenging from an equity raising perspective. Craig Fuhr (32:15) Jake, how do you get linked into that network? You put together the most amazing pitch deck, you're ready to answer all the questions, you've got the knowledge, you've got the experience. And I'm a guy and I wanna break up to that next level, I'm not trying to tell you how to train up your competition here, Jake, but how do I get linked into that high net worth individual that I'm gonna do a Zoom call for? Jack BeVier (32:15) So good. You get the best game ever. Craig Fuhr (32:44) Where did you get the entree? Who rolled out the red carpet for you there? Jacob Vanderslice (32:47) We actually applied, we weren't great marketers in our single family space, but we had to learn marketing to get deal flow, you know, direct to seller, PPC, all that stuff. And we applied a lot of those principles to capital raising. And I think raising money is about two degrees about content production to providing meaningful content, you know, video contact or content written analysis on the state of the market. But if you're trying to raise money. what you, what you want to become is, is kind of a thought leader in your space. and just establish credibility as far as the groups that we've gotten money from. I mean, it's all been kind of just random over the years, I guess. Like we have, this guy became a really close friend and close relationship, but his, his son. Cold LinkedIn me by the way, I'm very, I'm sorry if you're the same or not the same, but I'm pretty anti -social media. I just, I can't stand it. I've never had a Facebook account. or Twitter or Instagram. And my partners forced me to get on LinkedIn, like three or four years ago. And I was reluctant to do it, but I finally gave in. And anyway, this guy's kid linked in me to sell me life insurance. I was like, I appreciate this kid. He's a hustler. I'll schedule a quick call with him. And we got on the phone. He's like, my dad's based out of Denver. He runs a registered investment advisory. And he's interested in storage, by the way, after we talked about life insurance, we got together and. Yeah, exactly. Craig Fuhr (34:10) It was like the guy cutting the lawn just happened to be there when you needed them the most. Jacob Vanderslice (34:15) Yeah. So we got together and got to know each other and he started recommending us to his clients within his registered investment advisory business. And they'd given us a bunch of money over the years and I'm on a hospital foundation board with them. Now we play golf. there's other groups out there too, that, there there's a, there's a group called the five or six group. It's an online forum of a bunch of investors that kind of chop up deals and they post information about sponsors. Sponsors cannot get access to it, but if you end up getting a 506 member who likes you, they can kind of help support you and put you on the forum and you'll start getting calls and emails. We're in freedom founders, which I'm sure you guys have heard of at least you, Jack, David Phelps, Dennis Investor Group, who raised some money from there over the years. A lot of it's been just, you know, referrals and networking. And one guy tells his buddy and buddy schedules a call. It's a slow evolution. But to raise money, you really got to get that first deal done. And that's probably your friends and family or your uncle or something, just people who know you well. Craig Fuhr (35:02) Love Dave. Jacob Vanderslice (35:23) It's really tough to get the first one done, but once you do and if it goes okay, that helps just start establishing your credibility. Craig Fuhr (35:29) Do you find that the folks that invest with you come back for more? Are these repeat investors or is it always, you know, we're going out to raise another 150 million and we're going to talk to a whole new set of people. Jacob Vanderslice (35:42) Yeah, it depends on the deal and kind of the month, but the most recent data point I have is this single assets indication that we just closed on that I mentioned on the last episode in Jacksonville, Florida. That deal, we're doing two rounds of funding. We're raising equity to buy it, and then we're going to raise some more equity to complete the expansion. But on the first round... I would say probably 70 % of our capital commitments were from existing investors and they're either in one, two or three or one of our single asset deals. So to answer your question, yeah, a lot of them come back and a lot of people will take their approach and 50 grand is as much to you as it is to me or anybody listening right now. But a lot of people will say, I'm going to start with 50 and kind of see how things go. And if I like your reporting and your results and I'm feeling good, I've got more, but give me some time. So if you perform, whatever performance might mean these days, don't lose all their money, I guess. If you perform, they'll often come back for more because the guy that puts in 50 often has a lot more to put into a private real estate vehicle. Jack BeVier (36:51) Are you guys raising a blind pool where you haven't identified the assets that you're going to invest in yet? Or are you investing on a deal by deal basis? And why? Jacob Vanderslice (37:06) Yeah. So our, our fun vehicles have been blind pools. we obviously have a buying box, you know, we're only buying storage and we're trying to meet, you know, meet whatever minimum IRR or multiple targets. but that, those have been blind pools. And for those of us listening, you may not be clear on what that is. A blind pool fund purely means the funds got a buying box, but, you may not know what deals the fund is going to buy and where, because it's, you know, it's got a two year deployment period. As we close out fund three, which hopefully will be this month, we're almost done with it. We've got 11 assets in fund three. We're not ready for a fund four. And the reason for that is not that we're not ready because we're tiny or whatever, but... What would fund four do that's different? There's not a lot of inventory. You know, there's not a ton of distress out there. So for the rest of this year, it's going to be single asset syndication vehicles, which purely means that instead of investing in a pool of assets, you're investing in a deal by deal basis. And someone might have different return targets, maybe a different waterfall. but we just don't see any justification yet to launch a new fund that would need a lot of volume to justify its existence when. the first deal that we closed in 2024 was in the month of May, right? And that wasn't from a lack of effort and necessarily a lack of capital. We just weren't seeing deals that met our risk adjusted return requirements. So we were, and we're also, we got a few other shifts kind of underway. We've raised money from ultra high net worth individuals like CEOs of publicly traded companies, family offices. But our last institutional relationship was about 10 years ago, back in our single family days with Starwood. And we've made a lot of effort in the last year, year and a half to start sourcing more of those institutional check sizes. So we've got a joint venture that we inked in Q4 last year with a big shop out of Boston who's allocated 150 million. But that's not a blind pool by any means. It's basically like, all right, if you guys bring us deals that we like. we'll do these deals with you under this arrangement, and we'll do up to 150 million initially over two or three years. We don't want deals so far, again, because of deal flow. So we're doing more targeted institutional capital raising, but we're also still raising from our existing capital base, and both are equally as important. What you don't want to do in general, I think, is get beholden to one source of equity. and kind of stop the rest of your pipeline because that source of equity might have a change in investment committee for whatever reason. They read the wrong headline, one of their investors back out, and suddenly your spigots shut off. So I think having a diverse capital base is really important. Jack BeVier (39:58) Is the like the institutional like, how do you think about that from a strategic point of view? The institutional is it's an easy button, but it's lesser economics because they've got more leverage. Jacob Vanderslice (40:08) it's certainly not an easy button, but it certainly is, lower economics, right? If someone's going to allocate 150 million to you, they're going to cram you down on your waterfall and your fees. And, those that was listening, you might think, these dirty sponsors charging fees. Well, fees are how we keep our lights on, that it's, it's how we survive and kind of feed our families during the whole period. Our big payday is after we. pay our investors all their prep or their preferred return, and we give them all their money back. And that takes a long time. And that comes from cash flow, from refinances, strategic asset sales. So fees are how we eat along the way. And generally, if you're dealing with institutional capital, they're going to say, all right, we're going to give you guys a lot of money, but here are your fees. And the second downside to institutional capital is generally, if they're coming in for 90 % of the equity, they're going to want management rights. So they're still looking at you to go out and execute the strategy and source the deals and do the property management and the tax prep and the reporting. But they're going to require approval for big decisions like a refinance or a sale. You can't just unilaterally say, we're going to go sell this deal. We could do that in our fund vehicles. And of course, we believe we're making decisions if we buy something or sell something that are best for our fund and for our investors. But it's up to us to decide whether to do that. And in the institutional world, they're calling the shots in many cases. If they're sitting as a limited partner, it's co -mingled in a fund, that's a different deal. But if it's a programmatic joint venture, which is most of what institutional capital wants to do, you create a partnership and within the LLC agreement, it says, hey, the money calls the shots. So that's one of the downsides. Jack BeVier (41:53) So I'm very biased on this point, but like, it sounds like a job to me, right? Like working with institutional capital, like you neither have control nor phenomenal economics. Isn't that just a job? Jacob Vanderslice (42:00) yeah. Yeah, it's, well, it's whether it's them or so, you know, I'm self -employed, right? You guys are self -employed. I don't feel self -employed. I got hundreds of investors and bankers and partners that I got to go work for and report to. Right. And so it's just. Craig Fuhr (42:22) and do a dog and pony for every time you need money. Jacob Vanderslice (42:25) Yeah, that's right. Yeah. It's, I mean, to a, to a degree, whether we're self -employed or not, we're all kind of working for the man and some, in some facet, maybe, maybe Dominion is not, and you guys are rock stars, but we, we, we certainly are. but you're, you're right. But in exchange for that and to be clear to you, yeah, generally an institutional JV will have management rights. And obviously you're all friends until you're not, but the circumstances are going to be fairly rare where it's like, there's a disagreement on selling, right? It's, it's, I mean, they're, they're capitalists. They understand return targets, understand multiple and IRR. you know, if things aren't going well, that's where disagreements can be, right? You're failing your, your, your pro forma, your, your, your bleeding and OI, your operating expenses are going up. You're doing a bad job managing. That could be a different story. but yeah, you're right. to a degree and a lot of people, a lot of sponsors out there are always kind of dreaming of, I want to get that bigger check size someday. And again, like anything, the grass is not necessarily greener. And these guys are great partners and we hope to get a lot of scale with them. But with that scale, you're giving up economics and autonomy to a degree. Jack BeVier (43:37) So in self storage right now, what's harder to find right now, equity or deals? Jacob Vanderslice (43:42) Well, first of all, I'll say that the day that our capital raising and our deal flow are in balance will be never, right? It's always too much deal flow, not enough capital. Yeah, it's too much deal flow, not enough capital, and the pendulum shifts. But I would say it's so dynamic. I would say it's more deal flow now. Typically, Craig Fuhr (43:52) It's a dream, man. It's a dream. Jacob Vanderslice (44:08) As hard as capital raising was the last two years, we have not gone under contract on a deal and not been able to close it because of a lack of money. There was one deal last year. Let me think here, it was early 23 actually that we were short on funding. We asked the seller for an extension. We just weren't going to get there with our raise in time for closing. And the seller was having seller's remorse and he used that as an excuse to back out of the deal. So you could say that that one is maybe an example that we wanted to buy that we couldn't, but aside from that, we bought everything that we put in a contract that we wanted to buy. and how we had more deal flow, we probably would have bought more deals. So I would say both are challenging right now, but especially this year, deal flow has been the construction point for sure. Jack BeVier (44:58) And you feel like the equity side of things is loosening up in the process of loosening up. Jacob Vanderslice (45:02) Yeah, it hits and misses. We had a huge December in capital raising, people trying to get money out for the holidays, the year, get their depreciation for 23. January and February were pretty dismal, and March, April and going into May have been really good. So it's such a lumpy wheel. And I don't know the reasons for it. Maybe sentiment's improving. We did sell a couple of deals. Like I mentioned on the last episode, about three weeks ago, we shipped about $5 million out to our investors and we recaptured a lot of that. So that's included in our kind of recent numbers. that wasn't necessarily an organic capital contribution, right? We gave them money back. So they gave it back to us. but we feel like it's picking up a little bit and it just kind of depends on the, on the deal. and we're also trying to find, we've got programmatic JV partners, we've got our syndications. sometimes we'll find deals that. We like a lot, but they don't have an obvious partner. You know, the big institutional shop, it's too small or we don't like that market. So it's as much about sourcing deals, which is challenging, but also sourcing deals that will meet this shop's requirements, the shop's requirements. Yeah, yeah. It's all subjective too, right? It depends on the day of the week. Craig Fuhr (46:12) Makes sense for the money. Jack BeVier (46:19) How do you, who did, I mean, how many investors do you have and who does like, who keeps in touch with them? You know, when they want to, you know, they, they met you on the initial zoom, right? So like they read some wall street journal article that's got them nervous or has got them excited, whatever. And they, they, they call you and they expect you to pick up, right? Or at least expect you to get back to them within a very commercially reasonable timeframe. Like that's, that's how much work. Jacob Vanderslice (46:41) Yep. Craig Fuhr (46:41) You know, I have to say, so to that question, because I was thinking the same one, I have a very good friend who is a large student rental, you know, investor. So he, you know, has, I think several thousand units at this point, started off as a single family guy. And one of the things that we had a very long discussion one night, and he was talking about investor relations, and how that is absolutely... become a full -time job, not just making sure that the checks hit the mailbox at the right time and, you know, they're happy about what they're seeing in terms of their investment, but like really making sure that they understand that like, no, we're taking care of you and we're taking care of your money and let us show you that it's not just about the check in the mailbox, it's about, you know, we're gonna reach out to you on a semi -annual basis just to see how you're doing. send you a couple gifts along the way. Like you've got to have someone on staff at this point who's doing just that right, Jake. Jacob Vanderslice (47:41) Yeah, we do. So we've got, we hired a gentleman about a year and a half ago who's kind of helping spearhead this larger family office institutional efforts. So he handles a lot of those relationships. We've got an associate here that's underneath me that handles subscription documents and kind of basic questions from investors. But a lot of it's me. I, I, have a heavy inbox and email management's always challenging. But tax season, right? We're on a lot of Zoom calls with people walking through their K1 and they've given you, we might have 300 people that have given us a lot of money, but each one of them deserves equal amount of attention, whether they put in 50 or 5 million. And it's a lot of effort. We do have, this has helped quite a bit, but... We've got, I'm sure you guys have seen these and you probably use them, but call scheduling links, you know, schedule a call. I was worried, I started using this like three years ago and I was worried that I would be perceived as, this, this guy thinks he's such a big deal that he sends me a link to schedule a call. And, and it was the opposite. People love it. It does the time zone conversion. You know, how many times have you traded voicemails with somebody? You know, they call you, you're in a meeting, you call them back there in a meeting and you end up never talking. So that's been really helpful. But our main kind of help on the investor relations side, at least post -funding, is Aaron Westfall, one of my partners. He's a software engineer by training. And he built some software that's essentially, it's real -time investor reporting. It's an API into our property management software. And they can log in and see real -time visibility into any one of 25 different key performance indicators, like revenue, net rental activity, insurance penetration. They can graph it out historically, like what happened the last six months on this facility. And they could see kind of the peaks and troughs of that revenue happening. And they can see where we're missing, where we're, where we're exceeding expectations. And then to augment that, we have a very detailed reporting package that gives our budget to actuals. and the fund level, but also the facility level. And coupled with that, we have a lot of commentary on kind of, you know, if we're missing somewhere, why, what are we doing about it? We don't speak to much to if we're exceeding somewhere, because who cares, right? If it's going well, it's, you know, you care about the bad and not so much the good. But transparency is a really important core value to us. And we show them everything that we do that we see. and all the metrics that we use to operate and measure the performance of our business, they can also see real time. Craig Fuhr (50:22) Are you using, are using off the shelf property management software with your hooks into the API's or did you guys develop your own? Jacob Vanderslice (50:29) Yeah, we exactly what we're doing. So yeah, we're, we haven't gotten around to building our own management software. I'm not sure if we ever will, but we use a software program called store edge. That's one of the larger kind of self storage management softwares and our software that we built internally pulls reports from storage. The problem with storage is it's not, it's good at pulling reports and it's snapshots in time. It's not good at pulling reports to trend out of store data. So the software that Aaron built. talks to storage, it updates like four or five times a day and kind of trends all this out. So it's kind of a way to augment storage. But yeah, we are using a third party property management software. Jack BeVier (51:10) Do you use the software to manage investor relations? Like keep everyone's subscription agreements? Jacob Vanderslice (51:17) We do. We use Juniper Square. They're our investor portal. And these fund admins and investor portals, all of them have problems. And Juniper has been good, but we think they're kind of the... I want to say they're the least bad because they're good, but they're the best option we found. We've experimented with a couple of others over the years. Their software is more robust. The user experience makes a lot more sense. They can do a certain kind of brass tax type of things like generate unallocated net income on investor statements, some other platforms, some of that capability. So we use Juniper and then we also use our CRM is called HubSpot. And that's kind of our email marketing. investor follow -up software, we can track kind of the evolution of somebody filling out a web form to actually getting a portal invitation, to funding, and kind of track what deals they're in and how much money they have with us at the relationship level. So those are kind of our software systems. Juniper, HubSpot, our storage management software, and then our reporting software, which is called Clear Insight. Craig Fuhr (52:28) Jake, are you having fun, man? Or is it really just draining? How are you today? And tell us in general, are you excited about the space? Are you still having a good time with it? Where are you with it right now? And no one's listening, so you can be perfectly transparent and honest. Jacob Vanderslice (52:46) Yeah, you know, it's, it's a, I hate to use this, this word, but it's such a roller coaster, right? I mean, there, there's so many. We, so for example, in fun three, we're targeting, initiating our first distribution, hopefully in Q3 of this year, we've got great performance. We've got a couple of refis that we're working on. And that's been a big source of stress because we want to start them sooner. we want to start them in Q4, but we're still raising the. Craig Fuhr (52:51) Yeah. Jacob Vanderslice (53:16) balance of our equity. So that's been a source of stress, but it's so relative. When I talk to either a new investor or one of our existing investors to catch up, one of the questions I often ask is, how are your other deals going? And the responses I'm getting are astounding. We've got one lady who invested, I think, 100 grand times five across five different multifamily syndications probably about two years ago or 20 months ago. And this is a common story that I'm sure you're hearing as much as we are. two of them upstop distributions. They may not be necessarily a bad thing. It could be we're hoarding cash for a refi, whatever the case might be. But two others are probably going to be equity wipes. And one of the deals sold and she put a hundred grand in and she got back a $900. 900 bucks at 100. Craig Fuhr (54:14) Ugh. Jacob Vanderslice (54:16) And I talked to another one of our investors. He's a pretty big hitter, very intelligent. He went in big in the private space and he thinks he's going to lose 15 million in the different deals that he's in. Just a bunch of. Jack BeVier (54:28) What percentage of that, do you have a sense of what percentage of his equity investment that was? Jacob Vanderslice (54:34) I'm not sure. It was a brief phone call and he obviously didn't want to go into too much detail, but he still volunteered the information. So anyway, what I'm trying to say here is... Jack BeVier (54:44) like, I wonder how much of that's that's because no one wants to know what once no one likes talking about that, right? Like when you lose money, there's like, there's a certain like, there's a certain shame to it, right? So people don't talk about that, right? But in an honest moment, you know, it's interesting to have it happen. We've got to maybe two years ago, we did, we must have looked at like 40 multifamily syndications, we had some money at the end of the year, we wanted to get some bonus depreciation. So we were like, hey, we want to get some money out. And We were like kind of appalled, frankly, we talked about it at RAR at the time, like appalled by like the kind of lack of quality of like the average multifamily syndicator at the time. And we whittled it down and we found two deals that we actually liked and they had fixed rate debt. And we believed the lease up story, the value add story. Both of those deals are not doing distributions. Like we whittled it down from like 40 to two that we thought we really liked. And neither of them are anywhere close to pro forma, right? Like, and, and, and neither is doing distributions right now. We don't think we're going to lose money, but if we could just have our money back right now, we would absolutely take it. Like, you know, just give me my money back. I'm good. And we can't obviously that's not in the cards. that's not practical thing, but, and that's, that's our experience. And we thought we did a pretty good job of screening and we are not happy with our multifamily. in investments right now. I wonder how much of a trend that is that no one's talking about, right? Because no one likes to talk about it. Jacob Vanderslice (56:15) Yeah. Yeah, I'm hearing more of it. I'm hearing more of it. And it's all anecdotal. It's just kind of side conversations, how your deal is going. But I'm hearing more of these, and it's more of a consistent theme. Certainly, stop or pause distributions. The problem with, I would rather start distributions later and keep them going than start them and then stop them. That's a totally different problem. Craig Fuhr (56:43) yeah. Jacob Vanderslice (56:43) But to return to your question a minute ago, Craig, you know, you having fun, how are you doing? You know, I've been stressed about when are we going to start PREF on fund three, and then it's all relative. It's not like I'm stressed about we're going to get equity wiped on these 10 different deals, right? We're nowhere close to that. So it's all relative and you know, many days like we closed our Jacksonville Florida deal yesterday. That was exciting. and, and now we're, I'm going to be transitioning to, a difficult call with one of our retail tenants later today who's having a problem with rents and winding down their space and what we're going to do about it. So, you know, you've got these, these, you know, hourly highs and lows and highs and lows again. but generally we're having fun doing deals is fun. Craig Fuhr (57:29) Yeah. Jacob Vanderslice (57:30) We've grown a great asset base. We have an amazing team of people. We've hired some new talent in the last couple of years and they're doing great. But no rest for the weary these days. They've got two little boys that are 16 months apart. They're six and four and a half. So they're a goat rodeo every day. And it's... Yeah, that's right. Yeah. And then it's work and taking grenades in the highs and lows and... Craig Fuhr (57:49) One of my favorite terms by the way, the old goat rope. Yes. Jacob Vanderslice (57:58) Do it again the next day. We're having fun. We're excited. Careful what you wish for, but we do think we're going to see some more distress. Not necessarily macro, but we're going to start seeing pricing expectations loosen up a little bit. This debt maturity wall that we thought was going to hit three quarters ago is not here. Maybe it'll never show up, but there are operators out there who need a liquidity event. And I think we're going to see some, some improved pricing in the coming quarters, but I probably said that on some podcast a year ago and never showed up. Yeah. Craig Fuhr (58:35) You know, the reason why I ask you mentioned, be careful what you wish for in the first episode. And Jack and I have had the pleasure of speaking with so many guys on the podcast now. And of course, you know, Jack knows so many investors across the country. And I think it's easy for folks who are listening, who are, you know, trying to break up to that next level. We like to think of ourselves as an advanced podcast for advanced investors. And so for those who are listening, you know, who look at a guy like Jake Vanderslice or folks that we've had on like we had on a Jack, you'll have to help me out here. I think it was Sean Mulhall, he talked about, you know, sort of, by all accounts, any any average investor will look at this guy and go, this is a big shot, who's killing it and really told a story of like the first 150 200 houses where they're just bleeding cash, doing transactions, everyone's thinking like, you know, this guy's the biggest swing and D on the on the on the found on the plantation. However, you know, he was still figuring it out. And in many ways, I love your story, man, because, you know, like, I think you guys have figured it out, and you're just becoming better and better operators at what you do. Jacob Vanderslice (59:42) No, we have not figured it out. We'll never figure it out, so to speak. I mean, we're... Yeah, yeah, well, thank you, thank you. There is so much still to learn. We learn something new every day. And most of what we learn is not necessarily what to do, but what not to do, right? yeah, don't do that. I'm not sure what to do, but I'll remember, don't do that again. And if you... Craig Fuhr (59:48) I was being kind. I mean, if you just listen to the two episodes, Jack, that we just had, and we'll wrap here. But if you listen just between the lines, Jake, you guys have learned, you know, you learn the single family space, and by all accounts, you did well in it. Then you learn a whole new asset, then you learn development, then you learn, you know, partnerships, then you learn how to do PPMs and raising capital. I mean, you've learned how to take care of your investors with software reporting. I mean, Just the operation alone has been tremendous. And I would encourage everyone as you listen to these high level conversations, Jack, we always said we were never going to do a how to, you know, how to invest in self storage. But if you listen to these episodes in depth and you really sort of read between the lines, I think, look man, The cool thing I think that you've come off as is like, I may not be the smartest guy in the room, but I'm going to learn my shit. And I think that's where a lot of people miss. They sit back and they go, I'm going to get into self storage. But they never think of, well, how am I going to scale that? And what are the things that I'll have to get better at before I do that? And it's just really impressive that you guys have put together a platform where you've conquered all of those massive variables that you had to learn. Jacob Vanderslice (1:01:26) Yeah, and learning. Craig Fuhr (1:01:26) And I would say the same thing to Jack Baviera, frankly, you know, what they've done at Dominion to grow the platform and both properties management and financial. Jacob Vanderslice (1:01:35) But the learning curve is not, you might learn something, but you're not gonna learn what you need to learn by reading a book or going to a seminar or listening to a podcast. You'll get some ideas and some pointers, but the way you learn is by going out and doing a deal. Whatever form that deal might take, that is how you learn. And you'll never learn, have a better learning experience than a deal that fails. Craig Fuhr (1:01:42) Yeah. So true. green. Jack, any last thoughts? Jack BeVier (1:02:01) No, man, hey, Jacob, really appreciate it, man. Looking forward to seeing you at the next RAR and talking about how fun 3 is going. So appreciate your time on it today. It was a lot of fun. Jacob Vanderslice (1:02:12) Good to see you both. Thanks for having us on. Craig Fuhr (1:02:13) Jake, thank you so much. Honestly, I really appreciate the time. I can't imagine how busy you are. So the fact that you would take a couple hours with us and it's just, you know, we're honored. So thank you. All right, man. Well, it was great speaking. This is Real Investor Radio, Jack BeViere and Craig Fuhr. We'll see you on the next one. Jacob Vanderslice (1:02:24) Best part of my day, fellas.