Latest / Real Investor Radio Podcast / Ep 60 - Navigating Property Management, SBA Loans, and Tech-Driven Investing with David Moses

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Ep 60 - Navigating Property Management, SBA Loans, and Tech-Driven Investing with David Moses · Real Investor Radio Podcast

• Craig Fuhr 00:00:00 You're listening to Real Investor Radio with Craig Fuhr and Jack BeVier, where we cover advanced real estate investing topics to help you stay ahead of the curve in your real estate investing business. Hey, welcome back to Real Investor Radio. As the bumper says, we are a podcast for advanced investors, talking about advanced topics. We're gonna go deep today, Jack, welcome. Welcome, welcome. Welcome, my friend. Jack BeVier 00:00:26 Great to see you. Good morning, sir. Craig Fuhr 00:00:28 Well, we have a great guest today. So why don't we just go ahead and jump in with David Moses. David. Good to have you on the show, man. Thanks for taking the time today. David Moses 00:00:36 Great to be here. Great to be here. Craig Fuhr 00:00:39 So why don't you give us your it's better than me giving it. So give us like your your your paragraph bio, your 15 2nd elevator pitch bio. You, you've been in the real estate business a long time, so I'm sure you could go on for a bit. So, yeah, tell us all about what you're working on. David Moses 00:00:56 So I started investing in 1999 bought my first property from my dad. he had, he had about 100 and 20 or so rental properties in Pontiac, Michigan, which is about, you know, 30 miles, outside of Detroit. I, I like the business. I decided to start a property management company. He was nice enough to be my first client. we built the business. I bought a bunch of real estate, great recession hit, you know, fell flat on my face, had to give properties back to banks. had to, you know, basically just went to zero. had no, you know, no one to support by myself. So it was, you know, I guess in retrospect, a good time for that to happen. If there is ever a good time for that to happen, and then kind of picked up, started buying again, got some you know, private investors to help me get going. kind of mentor me through getting back on my feet. I got my builder's license. We actually, I got a real estate brokerage license. We basically did anything and everything we could to, to, to survive through that. And and then started buying at a big clip starting about 2010 to 20 you know, 14 portfolio stands about 200 today. We kind of keep it there, buy and sell. We, we have a community management company that we bought five years ago. We manage about 3000 doors. Of condo property management were at about five, right around 500 doors. We have direct to seller, you know, marketing, we buy houses company. We've got a construction and maintenance company and that keeps me busy enough. Craig Fuhr 00:02:57 Yeah, so, yeah, so Jack, why don't you jump in and tell us how you met Mr Moses and let's take the conversation rolling. Jack BeVier 00:03:08 Yeah, I've had the great pleasure of getting to hang out with David for a number of years now. He's in the, the real investor round table mastermind that we actually had hosted just a week ago here in Baltimore. So we were hanging out at the Os game and got some good dinners and it was good catching up with him. And David is as, as you can already tell, right, he's, he's doing a lot of different things from a business perspective in terms of you know, different sources of income, both buying real estate, but also being an operator and being an operator for, for fees as well. Like, so David, what, what's the, what's the thinking behind like that, that approach to it? Like ho how do you, are they complementary businesses? Just because you're like, hey, if I'm already in the property management business, it helps me afford more people. Is it a diversification diversification of revenue thing? you know, a counter recession thing or, you know, countercyclical str strategy. How, how, how did you think about which businesses you're in? David Moses 00:04:08 Yeah, it's kind of all of it, all of those things for a lot of different reasons. They are, we're, you know, relatively vertically integrated. Most of the businesses do feed off each other, help each other. You know, there are, you know, the community management business is fairly recession proof. Jack BeVier 00:04:27 Oh, tell, tell, tell me about that story. Like, so how you got into that? I, because I remember talking with you about that in Rir as you were, as you were buying that business, right? Because that's something that you didn't start from scratch. You bought into that business and then grew it. Right. David Moses 00:04:42 Correct. Yeah, we bought, we bought it from an operator. She, she doesn't want to be a business owner. You know, she, she bought the business from her mom. She really loved the business and what she was doing, but she didn't want to be an owner, dealing with payroll, dealing with employees, dealing with all that stuff. She just wanted to help continue to grow the business and manage the business. And for us, it was really a way to at the time increase our footprint. you know, because having communities all around kind of the region where we had to get people to, to do services. It, it helped us get to our maintenance faster, our turnovers faster, grow our our employee base and that was kind of the, that was the theory behind it. What it's really become is a way to beat the crap out of banks for cheap money. Jack BeVier 00:05:36 So, ok, so let's, let's, let's dig in there because that's super interesting. And yeah, I remember, I remember this now and like, when you bought that business, I remember you bought, you got, I, I was like, you because you, you were, you were, you know saying like, hey, I got, I got an SB a loan that I think I'm gonna close on this business with and like the financing terms are great and it's gonna help me do the strategic thing. So it's to be clear, it's a, it's an ho a management business, right? You, you were, you were the ho a manager providing grass cutting services and like sending people letters when the, when the neighbors complain that that someone's got a car parked in the front yard or paints their door pink or something like you're the, you're the guy who they're hearing from, right? David Moses 00:06:20 We're the one everybody hates and loves to throw things at Jack. Craig Fuhr 00:06:24 My mother, my mother was in a condo. She was telling me the other day how they found a woman who was burying chickens in the backyard and I was OK. That would be a good job for David to go handle. How do you handle something like that? Jack BeVier 00:06:35 Is that your standard guideline? Do? No Chicken Graveyard Clause. David Moses 00:06:40 I, I've not seen a Chicken Graveyard Clause in, in bylaws yet. David Moses, Craig Fuhr 00:06:44 I, I'm sure it's coming, coming today. Jack BeVier 00:06:49 So you talk, talk about using the SB a loan to buy that existing business because I thought that was super interesting. You're like, it's a creative from day one. very low money down. David Moses 00:06:57 I was like, yeah, we, we put about, well, we end up actually putting more than we thought we would put down. We end up putting 75 grand. We bought the business for $450,000 or 400 sorry, 425,000. but at the time, SB A had like, I don't know if it's still this way, but they have 22 different types of loans. There's like the quick loan which can go up to 350 K or at the time could. and then there's a more drawn out loan, and the quick loan takes several months. So going with the long drawn out one was just not something we were, had the appetite for. So we just, you know, we, we would have been able to probably get away with financing almost 100% of it. you know, had the price been in that, you know, in the, in the right striking range or if we'd want, wanted to go through the 6 to 9 month process, using SB A is, you know, it's quirky. There's really not a lot of logic to the underwriting. You know, they basically, you know, the, the valuation for the business came in $100,000 less, which is shocking to us because we thought we're buying it a good deal. but then they said, oh, no, don't worry about that. We're just going to give you a working capital loan for the difference. So it, it was, and they rolled it all into one loan. So the whole thing, you know, I've been around a lot of underwriting and a lot of different, types of loans and I think like that's its own, that's its own beast. Craig Fuhr 00:08:24 you know, so I, so, so give it, what, what year was this and what were the terms of the SB a loan? David Moses 00:08:32 2019? it was a 10 year term. it was, it was the rate actually floated, which for a long time was phenomenal and then it was not, but we owe very little on it at this point. So the high interest rate is just like, you know, it's, it's not really that big of a deal. but we were paying at the time in the fives now we're paying in the, I think high sevens. so it's still, it's still pretty reasonable. it, it's, you know, unlimited personal guarantee. it's, you know, but there, it's a good way to buy a business. I would say it's, it's a very good way to, continue to buy an existing business to start a business or to grow a business. You know, I can't speak too much to that. you know, but, but there are some, you know, if you have a business that's trying to grow. I know SB A has like a quick $25,000 or $50,000 loan. that, that doesn't take a lot of underwriting to get done. I, I would encourage people to, you know, look at that as an option. and I think it's a great way to grow an operations business. I think if you're, I know people who are using SB A loans to buy trade businesses, like they've, you know, they own a plumbing company, they want to buy an electrical company, they want to buy a, a cleaning services company, you know, things that, that complement each other in that space. you know, so, and, and they're using SB A loans to do it. And there are guys that, that's kind of specialized in just, financing the acquisition of one business to another. And I mean, you can actually, there, there are ways you can acquire a business, actually take cash out of the acquisition, instead of, you know, where, where you're actually getting 100% financing to buy it and getting capital to grow it. you know, we're looking at another acquisition right now. So SB A is definitely one of the ways we're looking to fund it. But, ultimately, I think, the type of business community management is, we control where a lot of cash goes to bank. so being able to say, look, you know, here's $10 million of cash, we're gonna commit, you know, a million dollars because the escrow account because of the escrow account and it's not, it's not our, it's not our money, right? It's, it's just money that we, you know, we control because we have to do all the reconciliations, we have to, you know, manage all the transactions. So we, we tell the, you know, communities where, where they bank, especially with the operating funds, you know, where the dues go in every month. So we can, you know what we're in the middle of doing is basically going to a few different banks and saying, look, we're gonna buy this business and be under a million bucks to buy the business. but we're gonna, we're gonna commit to bringing a million dollars of cash to your bank. So the bank is just do they trust me because they don't need the cash to lend it to us. And they wouldn't be able to lend it to anybody else unless they brought it to them. So it, it, it becomes a pretty simple equation. For them. David Moses, Jack BeVier 00:11:42 It's just do they trust me that we're gonna, you know, not fall flat on our face, but that's like a huge deal from the bank's perspective, right? Jack BeVier 00:11:50 That you're able to show up like you're just a from, you know, the the the community association doesn't need is not a very big borrower from the bank's balance sheet point of view, but it becomes a humongous depositor, right? So they're like loan to deposit ratio ratio on the relationship with David Moses is like a tremendous one, right? Like you're an awesome customer, you're bringing tons of deposits and borrowing some money too. David Moses, Jack BeVier 00:12:14 Like that's just best case scenario and we're not encumbering the money that we bring to them. David Moses 00:12:20 but that's ok because, you know, it's, it's available for them to, to lend. So, so we wind up getting around a lot of, you know, hey, you know, our real estate, you know, single family bucket is full like I don't care, Jack BeVier 00:12:36 my are going down the street with single family bucket isn't full anymore. It full maybe, you know, top it up a little bit just to pop up. David Moses 00:12:46 So, you know, and, and they, and, and I, you know, I don't know from the regulatory side, I have a shout out to, to to Fred Lewis for, you know, kind of coming up with the idea of exactly how we leverage that cash when we go to the banks and, and, you know, he's the one who taught me about credit spreads. You know, we, we bank basically, if they've got cash, they've got to earn money on their money right now, credit spreads, are in the low twos and I'm bringing them, bringing them the cash and saying I want to borrow it at a 3.5 or a four spread. that's very enticing for them. and so, you know, 80% financing, I'm, I'm paying in the, you know, I'm, I'm typically paying in the low in the low to mid sixes. You know, so they do have so some of the cash they don't pay, the bank doesn't have to pay the deposit or anything because it's DD A accounts and then some of the cash they have to pay, you know, interest on. So it blends out and then we pay a credit spread on top of that and borrow money and buy real estate. Jack BeVier 00:13:59 Yeah. Until you told me about you buying this community association idea. It never really occurred to me, you know, I was just like, I was like, why, you know, like I have absolutely no understand that whatsoever. Like that sounds like crazy. And I'm like, and you're like, well, I'm essentially, I'm 100% financing it with, you know, with cheap government money. It's a creative to my overall operation because I've out of the gates, got a reason to be in those locations. And so it's making my property management operations more efficient and by the way, I'm all this, all of a sudden, the big swinging dick at my bank relationships because I'm, you know, coming with millions of dollars of escrow accounts and I'm like, oh, yeah, I guess there is some value there, like, yeah, that sounds like a pretty good idea. Wait a minute, a strategic point of view. David Moses 00:14:43 Yeah. it, it, it, it definitely makes sense. And I think it's I think the growth is there. So, so from one standpoint, you have, you know, every all the storms happening in Florida, you've got issues happening all around the country with, with weather and whatnot. And condo associations are being targeted now from a regulatory standpoint to actually take their reserves and increase them requiring to, to do reserve studies. So I think the business only gets sexier over time. So we're looking for other community management companies to buy, we're looking to, you know, aggressively grow that business because at some point, it'll be big enough to just, you know, where will be a target, you know, for private equity, you know, to come in and make an acquisition. Jack BeVier 00:15:33 Is that like a what? So what are the day to day operations that business look like? Is this, is there a particular community association software that specializes in those kinds of issues or are you using regular property management software adapted for this. So this case. David Moses 00:15:47 So there are, there are quite a few software packages that are specific to the space. We are actually switching from an older one called Village Management software which is really like still like VPN dial in to a server and switching to a company called Sync. The advantage for us is that sync has their own lockbox. So what becomes very interesting is they all mail all these, all these co-owner at these associations, mail will now mail the payment to a lockbox in Lansing Michigan and they have lock boxes all over the country. and from a software perspective, they'll process the payment. But then on the back end, we can like with a flick of a switch, decide where we want that cash to go in terms of a bank. So we can say, ok, association, you know, a, you're gonna, you're gonna have bank accounts at these three banks, right? And depending on what's most advantageous for us, they don't care because these are DD A accounts are making any deposit, you know, any, return on them and, and they're, you know, they're, they're protected from, FDIC standpoint. So they don't care and we'll just basically, you know, use that tool on the back end to decide, ok, we're going to put a million dollars here. We're gonna put, you know, half a million dollars in this bank and, and so the software on top of being kind of the way you hook new communities in, you know, like that's really, that's really your interface with them. You're not, it's not like a tenant where you have to deal with the interior of the unit, you're really just dealing with, you know, are they paying their dues and are they violating, you know, various, various bylaws? Yeah. So, so it's not a, you know, they really interact with us through the software. you know, most of the vast majority of our, co-owner that's, that's really their only impression of us. and with the board members who are actually, who are, you know, running their board meetings each week, each month, you know, how snazzy their reports look and how, how they're able to navigate through that becomes super important. But at Folios got into the space too. and at Folios, you know, like a folio does, they're, they're going full bore into it and, and, the, the management company we're looking to acquire right now uses a Folio, as their, as their backbone. Jack BeVier 00:18:29 so, well, so what are the synergies that you've found from the, from the operations perspective of being in the community association business as well as being in the property management, right? You know, traditional property management business. And then I guess corollary to that, have you found any, has the being in the community association business helped you find any deals or is it just about the property management synergies as well as the banking? David Moses 00:18:56 so, so far it's just, I mean, we have had, you know, we're a rental, we have a, you know, kind of a bad rental in a community where we come in and we say, look, you know, we can, we can manage this for you, but it, that's kind of few and far between really, maintenance is a, is a big, we fell flat on our faces right out of the gate. We, we basically jumped in and said, ok, you know, we can take this work order, we can take that work order. But the mentality of a repair person going to a rental and making a repair is different, you know, that the process is different, the quality is different. e even, you know, even how you are gonna go about fixing something is different. you know, so, so we, we really, we really, poop the bed on that right out of the gate. but you know, going and basically saying, ok, well, you got a railing here on this side, this railing is falling over on the other side of the porch. property management, we go out there, we replace the one railing that's broken. We, you know, paint it to match and we're good, you know, community management. The whole thing gets replaced, probably the overhang above gets replaced. Everything needs to look, you know, new and perfect or you're gonna have people screaming and yelling. So, so it is a different approach and that was difficult to wrap our, you know, kind of wrap our minds around. So, instead we started hiring what we've gone to now is more of like a things like a fractional maintenance technician. So it's like you're a community of 50 doors or 75 doors or 100 doors. And you don't need a full time maintenance person on staff. But it might make sense for you to have someone come one day a week, you know, so we would basically have one maintenance guy who he goes here on this day there on that day, so on and so forth. But they're only at communities. So they have, you know, they understand what the kind of what the goal is. And, and, and what to solve. So we've seen some synergies on that side. You know, other than that, it's really, it's really banking. We'll probably jump in on brokerage a little bit more once the market kind of loosens up a little bit. You know, try to maybe brand our own, you know, you know, community condo expert, you know, listing service. We're, we'll list your condo. There, there are some nuances to listing and, and selling condos that are a little different than single family homes. So, you know, having 3000, you know, hopefully soon 6000 captive, you know, eyeballs, looking at us to say, hey, you know, we've kind of figured this out just a minor adaptation to our existing brokerage business and we can kind of customize it for that space. Craig Fuhr 00:21:54 What's the Buy Box? I mean, there's a lot of communities out there, right? And so what's the Buy Box for a typical community is there? You know, are you looking at 55 and older? Are you looking at certain age groups of, of communities? You know, what won't you buy? What will you buy? David Moses 00:22:10 So we, we what we want our newer, newer communities. So you, you're looking for things that were built, you know, things that were built in, in our market after eighties and later, would be good targets for us. So if a community management company manages 2000 doors and it's all, you know, kind of high rise buildings from the thirties and forties, you know, that's, that's, that's tough for us, you know, that's elevators going out all the time. That's, you know, neighbors on top of each other, listening to each other, you know, cook and yell at their spouses and beat their Children like it. It's just that it's just not fun. David Moses, Craig Fuhr 00:22:54 but the bathroom above you leaking, you know, you know, and then you have, you know, four people to deal with. David Moses 00:23:00 So those aren't, you know, we're looking for, you know, management companies that manage, in, you know, in areas where either the builder who built it, you know, you know, really, really knew what they were doing, you know, or it's just new enough where, you know, the, the cities were on top of it, making sure that it was built correctly. you know, because you, you wind up getting blamed for everything as the manager as you, you know, just like in property management. But in community management, you know, the fewer the problems you have in that end, the better. So that's what we're looking at the age of the building. The it's actually better to have younger residents because they are just more apt to use your technology to, you know, call and work orders to pay their dues to, you know, all the things that the interaction becomes easier with text and, and, and so forth. The other folks are, you know, they're calling you and staying on the phone with you for a half hour to talk about this and that it eats up the time. especially like and Jack, I know you use culture index. So it's like, you know, that would say the best community manager is really like a socializer, right? Somebody who can just connect with, with the person of when you have older folks calling in that can that can take time. We have a little timer on, on, on the desk or, you know, under the desks of these people just like, hey, two minutes. That's it. You do. Craig Fuhr 00:24:26 You do not want to call from my 82 year old mother. David Moses 00:24:30 And they, they also wanna come in like, like they have bank bill pay, they have a checking account but they, they wanna come in and they want to deliver their, their payment. So, I, we love our, you know, older folks and, you know, respect them and thank them for everything that they've done for us. Craig Fuhr 00:24:50 So you mentioned the deal that you got on the first purchase. you know, do you, do you find that it's that easy these days or has the market for buying these companies become way more competitive? David Moses 00:25:04 I, I think it is very competitive. We're probably, you know, we were paying, you know, one time revenue now, we're making offers at a 1.5 times revenue maybe. you know, even approaching 11.7 it really depends, are they profitable or not? If they're not profitable, then, you know, you can get it more on the cheaper side of things. But, you know, we've only struck once and we're looking very close to striking a second time, but we have been out there talking to a bunch of people, but it's really that the avatar is someone who built this business. They are looking for an exit at some point. they, they still, they can't be like ready to pull the rip cord because they're gonna sell the big guys. because they don't, they don't need them and the big guys are gonna pay a little bit less because they have their systems together. You know what percentage of the business they're gonna keep over what period of time for us. we really want to keep that person for at least 3 to 5 years. Let them continue to grow the business, let them stay there so that the existing clients know, you know, all the faces aren't changing. really all we're going to change things on the back end. That's the other part of the business is that you're really, you're really buying the community managers, you know, you, you're really, that's the relationship, you know, the, you can create some efficiencies on the back end and you can give support to community managers to increase the number of units that they manage. But really, it's they're the backbone of the business. and, and, you know, they're, you have the variables that change our community manager and board, right? And, and as long as you have some continuity on the boards, you know, to maintain the relations with the community manager, you know, they, they can navigate those politics and, and keep the business. Craig Fuhr 00:26:59 So are you out there doing the due diligence on, you know, boots on the ground type thing with the, with these purchases or is this something that you can generally do? Remote? I mean, do you want to go out and see the properties meet the managers? David Moses 00:27:13 No, we can, we don't need to, we, we definitely want to meet the managers, but that's very tricky with these things. It's almost like you gotta be really far down the road. You, you kind of have to rely on, you know, Google reviews and, you know, to try to, you know, piece out, ok, which managers really aren't loved which ones are, that's kind of tricky. They don't, they don't want to let any of their people know that this is happening until it's basically a done deal. And so, so that becomes, that becomes tricky to navigate. Jack BeVier 00:27:48 So you, you mentioned that you're in the the property management business, not only for your portfolio but also for, for third parties. why? And how do you make that work? Craig Fuhr 00:28:02 There was a slight bias to Jack's question there. Just, it was almost undiscernible. But David Moses 00:28:11 II I can't give you a really good answer as to why we've always done it. We started that way, we kind of built that way. But if you ask me five years from now, is it our goal to continue to have a robust third party management program? I would say no. it, it's, it's something that with clients who view us as a convenience or a way to, a way to kind of take care of their very passive investments. We are, we're very happy with those relationships. the people who used to live in the house, you know, that it's like that they have an emotional attachment to it. People who rely on this income to make their own, you know, expenses each month, you know, those are, those are just difficult scenarios that make it very it, it, it's a frustrating business. It's also just a very inefficient business because, you know, half our job is doing our job and the other half, half of the job is justifying why we did what we did. David Moses, Jack BeVier 00:29:29 It becomes, yeah, so, so what, what's your culture there with them, with respect to prospective new owners and even existing owners? Jack BeVier 00:29:38 Like, are you guys like, hey, I'm the expert, leave me, leave me alone kind of thing or, and like, how do you do feed? How do you, there's a lot of different ways to skin that cat, right? Like in terms of making it work and, and, and I think everyone's gonna agree that like the, the one owner who owns or the, the owner who owns a single rental property who doesn't know anything about the business who is also like, needs the money. That's like kind of worst case scenario. From a client perspective. So like where do you guys draw the line in terms of your fees, how you, how you charge those fees? And then, yeah, you, you're kind of like attitude towards the customer relationship with the customer. How does that, the property management, you know, owner? David Moses 00:30:20 Yeah, I mean, the first thing is just, you know, patience, you know, the ideal situation is even if you have a newbie investor, if they own it free and clear, it's, it's gonna be ok. In, in the vast majority of cases, it's gonna be fine. People borrowing 7075 80% I would guess that in most markets that just doesn't cash flow for five years. And I think that anybody who thinks it does like, is just either kidding themselves or they are, you know, hoping for lightning to strike. I just don't, you know, the idea that, you know, kind of the way we've been kind of encouraging people to go about investing where they're finding their own deals and we're just managing them is to kind of look at it like you're going to acquire, you're going to renovate, you're going to rent it out, get to long term capital gains. Right. And then after that first tenant, if that first tenant lasts five years. Wonderful. Right. You're gonna be making money, you know, earlier than five years. If that first tenant lasts, you know, 18 months, sell that property, you've just turned it over, you've just renovated it, it's in, it's in good shape. As long as the market is, you know, like it is now sell it, move into something else. If, if you don't want to pay that long term capital gains tax, fine, move, move yourself into a 1031 and just, you know, kind of keep it rolling. because those are the things, you know, those large turnovers, if you're trying to build a portfolio turnover is gonna kill you until you get to a, you know, 100 doors plus, you know, it's just you're gonna give away all of your income. If, if you have five doors, you gonna, you have one big turnover, you're gonna give away your income for 18 months on your whole portfolio. You know, because it's just these things, these things don't, you know, they don't cash flow, not if you're borrowing money. So, so we discourage we, we're not out there looking for business. I, I also tell my people, you know, when people come to me and say, hey, I want you to manage my property, the first thing I ask them is, you know, do you know a handyman? Right? Because if you know a handyman and you can pay that handyman to fix that thing, he's going to charge you less than I'm gonna charge you. And not just because I've got a lot of demand for my services. It's also because I've got payroll taxes to pay, I've got insurance to keep, I've got trucks. I've got, all the overhead that I've got. and there's, you know, at cost I can't do it cheaper than you could do it if you, if you know a guy in a truck. So that, and, and you know what we do try to do really well. the battle I think we win is marketing new properties, screening tenants, you know, I think those things are going to be, you know, doing collections. I think those things, a professional property manager is always going to you know, just far outperform and outlast anybody who thinks they can do it on their own. Craig Fuhr 00:33:44 Jack, it's been a long time since you and I talked about third party management at Dominion properties. The management company are, are you guys still managing third party? Jack BeVier 00:33:54 Yeah. we are. So we just like David, got our butts kicked in the downturn and we're just looking for ways to make revenue in 2008, 9, 10. And so we started selling turnkey rentals as because at the time, the, the cap, what was awesome was the cap rates, right? Because the prices are super low and the rents hadn't really moved down much. And so we started selling turnkey rentals. We probably sold, I don't know, 100 and 50 or so in a couple year period. And we as part of that sale because we were kind of definition looking for folks who were, you know, doctor lawyer dentist type. They weren't in the business. And so they wanted third party property management. So we managed those and we had done the renovations. So, you know, we knew that there was a certain level of, of quality, quality in the renovation. And so we kept that, we've kept that third party property management portfolio, but we really haven't taken anybody on that. We didn't, do the renovations and sell the turnkey rental ourselves. We haven't sold Turnkeys in, in many, many years. So we don't have any new clients to speak of and some of our owners have over the years just decided to sell, some are still just, you know, collecting the check and they're thrilled because everything's, you know, going up into the right. Craig Fuhr, Jack BeVier 00:35:20 So, we haven't talked about that since probably 2016, Jack. Craig Fuhr 00:35:24 And that was your sort of the story you gave me back then of why and how you would bring on, a third party, owner. And I, I thought the brilliance of, of the whole story back then was, hey, look, we know how to renovate these things. So they're bulletproof. We know that they're probably going to be, you know, we'll, we'll place a decent tenant and, you know, Jack, we've met property managers all over town here that'll take on pretty much anyone and the ones become, you know, I'm just handing this thing over, let them, he let them handle the tenants and toilets and I don't want to get any phone calls and that's never the case as both of, you know. So, yeah, I love the idea of, like, give me a bulletproof house, you know, we'll put a great tenant in for you and hopefully that'll perform much better than the guy who's doing the mom and pop himself and patching paint on a place. Jack BeVier 00:36:17 Yeah, I mean, the turn the turnkey rental business, right? Has necessarily one of the services that the turnkey rental sellers are selling is property management. Sometimes they often they're doing it themselves, I think frankly, as a necessity, right? They build a property management company because they need to, in order to sell more turnkey rentals. On rare occasion, I've seen where there's a third party property manager that the turnkey rental guy is like teeing up. but I've, I mean, just from our own experience, I've had such a hard time making any money in that business. Like I know what it called. Like, I know that that company doesn't make money for myself, right? When I, when I manage it for our own rental properties, and I was charging, I was charging myself 8% plus one month leasing fee, plus a renewal fee after two years. No mark up on maintenance though. And that didn't make any money that made no money. I lost a little bit of money doing that. So like o on the to like a total percentage of revenue basis. Like, I, I think the third and I'm talking about like, I'm talking about like 14 $1500 rents here, not $3000 rents but like 14 $1500 rents. I think it costs at least in Baltimore or at least in Maryland. I think it costs 12 to 14% of revenue, maybe probably like 12 13% of revenue to run the property manage to run property management. Well, so like when I see third party managers who are charging that or less, I'm like, either you're doing either you're aware of something that I'm just completely unaware of and or, or you started it with Filipino Va S from day one and you figured that you've cracked that code or you're just a shitty property manager. Craig Fuhr, Jack BeVier 00:38:01 And I think that most often it's the, it's the latter or number three. Jack BeVier 00:38:06 And so, you know, but, but, but also like it doesn't and I also think it's like a, it's, it's a penny wise pound foolish thing to like, be cheap with your property manager, right? To try to like when they tell you it's 10% of rent plus one month leasing fee. Plus we charge a 10% handling fee on maintenance. I'm like, yeah, like, yes, like that's the, that's, that's gotta be it. Like the other, like, and, and trying to negotiate with them is just such a cutting your nose off to spite your face, like, approach to business. Then I'm like, you know, they're just gonna, you're just, they're just gonna, you're making, you're forcing them to just be like, open up the yellow pages point at plumber and like call plumber and plumber charges you $350 for a trip fee, right? David Moses, Jack BeVier 00:38:48 Like you're forcing them to, to, to not try right to spend no energy in, in saving your, no, I so, and this is, and this is as good as it gets the last 10 years of market. David Moses 00:39:02 That's as good as it gets it, it's, it's not gonna get better than that. So now, now, now add in, ok, rents are plateauing, you know, costs are going up, revenue is not going up. You know, people have bought people are, you know, upside down or, you know, basically treading water, you know, that business doesn't give better from here. It's like all the things you mentioned and then add a market that isn't, you know, isn't getting any better running like a freight train. Jack BeVier 00:39:36 I mean, I if you, if you, if you bought your house prior to 2020 you've benefited from significant rent increases. And that's great. That's awesome. Right. And those rents haven't really come down, they're starting to come down in certain spots, but they haven't, you know, nationwide, they haven't come down much. And so those folks may be ok. But I don't know, you know, if you bought into, if you, you know, the stuff that you bought in the past couple of years though and then levered up, I'm like, I don't know, man, I think that's tough. Right. That stuff's not gonna cash flow. I just don't, it's just not gonna cash flow. I can't see how it's how, how that's the case. I if you put any kind of debt on it, sorry, like, you know, unless you bought it free and clear obviously or put very low levels of debt like 50% LTV levels of debt on it. David Moses 00:40:16 It's a great, it's a great you know, if, if you're full time in the business from a tax perspective and if you have an operating business that earns, you know, ordinary income, it's, I think it's a great, it's a great strategy to, you know, I think it's a great strategy to avoid paying a lot of taxes. You know, we, we, we're doing we're doing deals where basically we, we bought them, we cost seg them, we took the bonus depreciation and then sold them 1031 into something else and did the cost e again. So you're basically taking an already low basis and now you're costing again and getting it, you know, taking advantage of another, you know, big hit. and I, you know, that's a, I think that's a good way to good reason to, to own houses and, and continue to buy. but you're right, there's the cash flow if you're buying something now and you're using leverage unless it's very, very, very low leverage. It, it's, it's probably, it's probably a loser from a cash flow perspective. Jack BeVier 00:41:26 David, I have a question for you. Have you like, how much is the property? The third party property management business been a source of deals. I'm always focused on source of deals, right? Like has it and because I have this thesis, I want to get your take on it. And Craig, I, I don't know if I've mentioned this in the podcast before. Interrupt me if, if we have. But so the, the idea that like, I, I think that folks who bought post 2022 and then put leverage, you put and maxed out leverage, whatever they could do, whatever was available at the time. I don't think that those deals are gonna cash flow in the long term. I think that they might be cash flowing, like they might be covering the mortgage. Craig Fuhr 00:42:13 Yeah, a couple of 100 bucks a month. Jack BeVier 00:42:15 Yeah, on a monthly basis. But as David alluded to 15 minutes ago, 20 minutes ago, when you get to that first turnover, there wasn't, you know, unless you're cash flowing for $500 a month. There's not, and not spending it. Right. And then not spending it. like there's no, there's no money left in the reserve account to pay for the 5 $10,000 turnover that you have in a single family house. And, and that's the point where if these folks don't have other sources of income or other savings, that's when they'll have a problem. Right. The property will turn over, the property manager will go do her an estimate and say, hey, this is, it's gonna be $8000 please, you know, send this over $8000 and we'll get the property turned over for you and they'll be like, yo, I don't got it. And you know, the owner will be like, I don't, I don't got it. And the property manager would, it'll just sit there vacant, right? Like, so the property managers will be the first one if I'm right. Yep, the property managers will be the first ones to see this because it'll, they'll start to stack vacants, right? Like owners of 10 properties will have one vacant at any given time because that's a typical vacancy rate or whatever in that market. And then they'll get to a turnover and they'll be like, ah, I don't have the cash flow for it. Just leave that one vacant for a month and with, and take it out of next month's net income payment. And then they'll do that right. And that'll work and then another one will go vacant and then, but then the next month after that, you know, there, there won't be, there won't be enough to pay for that turnover. And so they'll just leave that one to the side, you know, just like, just, just keep paying the, keep paying the utility bills and the property taxes. But we're gonna leave that vacant until the cash flow from the rest can pay for that turnover. And, but you're then eroding the top line, right? As you, as you take more and more units offline, you're just eroding the top line until there's not enough money to, to there's until there's not enough money to make the mortgage payment. Right? Because you've now got 30% structural vacancy, which, which is only three houses, you know, if you want, you know, but, but if 30% structural vacancy, the, the Excel spreadsheet is, it is definitely not covering the mortgage and that's when they'll panic and be like I'm done. Like, I don't know what to do. Like I'm done. II I, I've got, you know, I've got three vacants out of my 10, you know, I've got 30% structural vacancy in my portfolio and I, and I can't take money out of my savings to keep making these mortgage payments. And so they'll, they'll build up like that. Right. And the property manager will see it coming right because they're the ones who will, like, be told. Hey, yeah, just set that one to the side, you know, and if you're self managing well then you'll know it. But you really, you know, you, you'll have a story, right? You'll be telling yourself a story for a while as to how a couple more months it was just a bad run of luck there and a couple more months of cash flow, I'll get these back online and get the, get my vacancy. You know, my, my, my my occupancy rate back up, but it'll never happen. Right. And it'll, that'll take a year, 18 months to play out. Right. Craig Fuhr, Jack BeVier 00:45:15 That'll take, that'll take, maybe take a couple of years for that to play out Jack's whole thesis. Craig Fuhr 00:45:20 By the way, David is my memoir from 2010. Like he's like, this is, this is the Craig Few story of 2010 right here. Yeah. Yeah, man. He, he must have read my, my, my computer notes at some point. Yeah, man. So what's your David? What's your take on that? Is, is the property manager the first to know, is that the 1st 1st buying opportunity that you see? David Moses 00:45:43 So from a property management perspective, we, we would generally not allow like a small investor with a few houses to kind of have to go through that if you know, and it, it's not be benevolence, we're making money doing it. We, we're we're marking up the turnover significantly and we're saying, look, we're gonna do this turnover for you and we're going to take it out of future rents. and that has been, you know, where we run into issues with stacked vacancy is really more people who are doing it themselves and just don't have time to actually, you know, do the turnover. but people who, who lack the funds were, were stepping in and we're doing it and, you know, because, you know, ultimately it's money out of our pocket too and it's just as difficult, it's just as difficult to manage a vacant property, if not more than it is to manage an occupied property and in many cases not making any money doing it. Jack BeVier 00:46:40 So, I wonder, yeah, I just wonder at what point the owner will you tell them that, hey, this is how, this is what we're doing here. Like we're getting this thing back on the rent roll and they call you and they're like, no, no, no, no, no, no, I need that. I need that check to make the mortgage payment, right? Like when you get that call, right, when you start getting, when that, when that, when you get two of those calls in the same month, let me know. David Moses 00:47:04 Well, those are, those are, those are interesting situations. The other, the other, the other thing right now, it's like, why is there no, you know, why is there no foreclosure inventory coming, you know, and, and, and, and I would say that the primary reason that there is very little foreclosure inventories because the market is basically telling them, hey, you get a reward, you know, for being forced to sell, you know, you're forced to sell and, oh, by the way, you know, the market's gonna give you great money. And so, so I think that's, that's gonna be the exit, that's gonna be the decision. It's like, ok, you know, we, we design all of our leases to end in the, in the warm months in, in, in, in Michigan. That's just, you know, it makes sense. So vacancy is always occurring either from an eviction which is rare or from a situation where, you know, somebody moved out in accordance with their lease and if they moved out in accordance with their lease, ok, you don't want to do the turnover. You don't want us to, to turn this over, you're not gonna be able to, to carry it, you know, while the rent pays us back fine, let's put it on the market, get you some cash, we take a commission and, and, and, and they're happy we, we have bought from our, you know, from our owners before, but that was really, you know, investors who felt like, ok, I think the markets hit a relative peak, I'll take, you know, a few cents off to, to sell, you know, five or 10 at a time and, and we've done very, very well on those, but at the time it was like, you know, like it didn't, it wasn't an exciting purchase. I didn't feel like we were getting a great deal. But, but those, you know, wound up being great deals. Jack BeVier 00:48:52 Hey, let's talk of a conversation that we had at Rar I wanted to bring that here in terms of so on the property management. You, you, you led a conversation, we have tried to have a very like informal environment where we've got members who are leading topics on on subjects that they're the experts on or, you know, and we've also got new member presentations during the during the mastermind. And that's super helpful for everyone because we get to know the, the folks that are, that are coming to the business and ee everyone's always got like, you know, if you're doing enough volume, everyone's got some genius zone where the rest of the room really learns off of that. So that's a, a big part of what I, what I get out of, of Rar. And David led a discussion on the property management side about your property management tech stack and what like what Softwares you're using, how those should work together. And this is a pain point for me because we got a lot of legacy systems and I just, and I'm in the category of like it's good enough. And I know it's not elegant. Like I know ours isn't elegant and that offends my sensibilities. But it's also like I make a business decision at the end of the day and it's OK. But David, I thought you had some really interesting insights on what you, how you guys have thought about this and where you think, what you think that the, the tech stack needs to be on a going forward basis to run a profitable third party property management company, right? Because we, as we've mentioned, it's already a low margin business. So having a, a crappy old legacy tech stack is not, you know, it's probably not the secret sauce to, to run the pro pro profitable property management business. Craig Fuhr, Jack BeVier 00:50:29 So talking about that idea, Jack, do you wanna continue to roll or should we roll into a new episode here? Jack BeVier 00:50:36 Let's finish. Let's finish this conversation and then we'll roll into new an episode because I, I definitely wanna spend some time talking to David about his acquisitions right now. And also there's some info new construction that he's done. That's really interesting. On the modular side, he's got more experience than anyone else that I've talked to. David Moses 00:50:50 So, so, so on the in, in the world of property management tech, III I want to use the same disclaimer. I use our rar this hasn't worked yet. I, I kind of my approach to, you know, kind of how I want to go forward. I haven't, I haven't proved this out to be able to say yes, it works this way. But we're, we're taking a, a Frankenstein approach we're basically doing is we're picking AC RM, we picked Zoho. You can pick sales force, you can pick, I mean, I think many of them are very, very good, unlimited customizability is really what you're looking for in a good CRM. And that becomes our like our central hub and then we basically have thrown our hands up and said, we're never gonna be the best at maintenance coordinations. We're never gonna be the best at showing coordinations. We're never gonna be the best at whatever it is that you fill in that some software company that's out there at IMN conferences and you know, various other conferences, you know, saying, hey, look what we figured out for inspections or whatever. We're just gonna say like we want a system that can be a central hub that we can plug in those external. We do this best programs to save our time to save us money. Software is generally cheap. definitely cheaper than people even cheaper than people in the Philippines in South America. So it's figure out a way where we're using best in class, whatever and plug it into our hub so that our hub can then translate it and communicate it to our property management software and to other Softwares in the tech stack that, that need that data. So you're not, you know, forced into duplicate entry and, you know, and you know, error, basically human error. So that's kind of our, that's kind of our approach. That's, that's what we have been you know, executing. Jack BeVier 00:53:03 I'm a big fan of I'm a big fan of that idea. It's the approach that we took in building out the lending company software side of things. We four years ago just said, screw it. And we're like, we're gonna invest in sales force. And so salesforce is our backbone. That's the word that I use for it. And exactly what you said, the same thesis that you said like, hey, there's gonna be apps that do the individual components of our business much better than anything that I'm gonna create custom for myself. So, you know, the point is not to build salesforce from scratch internally, it's to use it as a backbone that we can tap into the best in class app soft or, or software providers. And we chose Salesforce because from a scalability point of view that we, we thought that they made that made sense and the app, their you know, their app environment, the developer environment is probably the most robust right now. It's also one of them, it's, it's very expensive, right? So that's the offset unless you're gonna do like 6000 units like JWB in Jacksonville, built theirs on, built their property management backbone on sales force, but they're managing 6000 units. So, you know, they had good reason to, to need that level of scale. But I, I think that that makes a ton of sense to me. and also I mentioned this at Rar, I think like I, I envisioned this world in the future. I think with Chat Chat GP T 40, that was like a, a really kind of tide shift in terms of the new capabilities that you can get out of 40 Right now is really kind of eye opening for me. I think that that's the first version that's actual, it's gonna lead to noticeable productivity gains for kind of white collar labor. And I don't think we're gonna read documents anymore. I don't think humans are gonna read documents anymore. I think we're gonna drag and drop it into to chat GP T 40 or whatever the, you know, the next version is and say, you know, abstract this lease for me and label these certain label, these certain definitions, you know, the the base rent, incremental rent, utility reimbursement who pays for, you know, who pays for water, all that stuff. Names of, you know, names of folks and then Chat G BT will just label that data based off of, you know, because it extracts it from your standard lease and then api s it into your into your CRM and that automatic and, and since it's connected to all the apps, you know, the lease automatic or whatever, you know, the the the the move in package automatically gets gets created and you know, the welcome package automatically gets created and you the the tenants are set up in the system and all that jazz, right? That just happens because you've connected the backbone to these best in class apps. And so there's no data, there's no data entry, it's just drag source document into chat GP TJ GP T API S to your backbone, which sends it out to the apps that your customers are gonna use. And it should be very, it should be very minimal from like a labor point of view, from a a property management, labor point of view. And I think that may that, that idea though, I've never seen what I just described just like you just said, right? I I haven't seen that happen, right? Like I'm working on a version of that idea in different parts of our business right now, but I'm just working on it because the J GP D 40, just came out, right? And I think that's an interesting but, but I, but I think that your, your vision of that backbone talking to apps is like the right one because it enables it's because it's necessary to add the A I aspect to the to the workflow. David Moses 00:56:52 The data component you're talking about is it not only enables you to quickly get data from whatever your data sources, whether it's a document or you know, whatever. It also gives you the advantage of being able to mine that data and analyze that data later. So, so having a bunch of different data points allows you to ask questions and get real answers. Where if, if you aren't even collecting the data to begin with because you're using manual labor to do it, then you don't have, you know, you're immediately at a disadvantage, you know, as a, as an example, it's like what we are, the, the question we try to answer with property management from a leasing standpoint is what who is going to stay the longest, right? I want to predict the tenant that's going to last five plus years, right? And we don't have, we don't collect enough data, we haven't collected enough data over the past 10 years to really accurately, you know, we're, we're kind of guessing based on how long they stayed on their, at their last place and why they, why they're leaving, you know, but, but there's really, I think that will get worlds better. And we'll be able to use other people's data and our own data to try to answer that question. And focus in on those tenants that that are gonna be winners like you, vacancy is, that's it, I mean, vacancy and turnover, vacancy is not expensive, turnover is expensive. But, you know, you don't have to do one if you don't have the other. So, so being able to predict who is going to, you know, who's gonna stay there is just, you know, that's, that's gold. Craig Fuhr 00:58:54 Do you have a, do you have a sense of the data that you're not collecting right now that you wish you would be like the, you know, to, to avatar that perfect tenant out. David Moses 00:59:06 So I, I think what it is is just digging into like there are thousands and thousands of data points out there. We use it when we buy houses when we buy a list, you know, a predictive list from authentic or from. And, and I think that, you know, the idea is to when someone, you know, when someone moves right, then it's doing a postmortem and saying, OK, what, what is that person's life look like, you know, over the past, how, you know, and then using all those data points engaging with those types of companies to use the data, they probably already have that. It's pretty much free. I mean, the data doesn't cost anything. It's really just the, you know, manipulating of it in the, the mining, you know, they, you know, basically the processing of it. and you know, engage with those companies and say, you know, you guys figure this out, you guys have already figured out how to predict for me with a remarkable amount of, you know, better accuracy than me. Who it makes sense for me to send a mail piece to to ask them to sell their house because you've kind of figured out this is what the avatar of a seller who's willing to sell at a discount to an investor looks like. So you're more likely to, to get good hits if you aim for these people and it's not credit scores, right? It's not income. Those things are, I, I, to be honest, those things, I think they fade into the background in terms of really being good predictors. Obviously, if somebody can't pay the rent, then it's gonna be very costly and they're not gonna stay, you know, but, but that's just such a small subset of people to begin with that are gonna go through an eviction. I, I think it's just kind of a waste of time to focus on them. You really have to focus on, you know, regardless of reason they're gonna be here 10 years from now. They, they're still gonna be in this unit renting. And, and so it's really, I, I think that's what it, I don't think it's really data that we're I, I think it's basically data that is out there combined with the data that we're collecting so that we can change our practices. Like we, we can feed it. This is when these places went vacant. Like this is when we leased it out. Right. Show me, you know, people who leased in March, you know, are they, you know, what's the average tendency of a person who leases a property in March versus somebody who leases the property? And, you know, I, I would guess I would wager that the people who are moving in, you know, right before school, you know, a couple of months before school starts. So basically like that end of summer, you know, beginning of fall, you know, those people are more likely to move when, when the weather gets nice than somebody. Like once you've gone through a winter move like, and, and you've felt that pain, I feel like that's, you know, maybe a better predictor of what, but, but I don't know or perhaps not. Craig Fuhr 01:02:26 I mean, if, look, if I move into a place in March because I have a kid who's going to the better school down the street, maybe I'm now a four or six year tenant because I want my kid to stay in that school. Right? David Moses 01:02:37 And you can predict that because, you know, I know how old your kids are, right? So I can predict how long your tenancy is gonna be just by looking at their ages. Craig Fuhr 01:02:47 Jack Dominion. you know, you guys boast a pretty, high, occupancy rate and a fairly long tenancy rate as I recall, you know, how does this hit you? What are you thinking about, you know, love the whole idea of trying to predict the better tenant. I mean, if, if someone cracks that nut, that's a sellable nut. Right. You know. Jack BeVier 01:03:10 Yeah. Yeah. I mean, one of the reasons we work, we work a lot with the housing choice voucher program regardless of location. And the the the main reason we made that business decision to, you know, we of course, you know, for fair housing, we review all applications equally, but we advertise on places like go section eight dot advertise our houses on places like go section eight.com because we like voucher tenants. The reason we like voucher tenants that we think the stigma is overdone and the we get very long tenancy duration and very low credit loss. Like, you know, we have, we, we file a lot of rent court but we vic very little. and and yeah, so like cracking the nut of tenancy duration. I agree. It's, it's a a laudable goal. We, we use, we've used the voucher holders is like, that's just like kind of a hack for tenancy duration, right? Like those folks don't move that often, they don't want to, they don't have the money to move that often. So like you, you give them a great, you give them a great product. and they, we, we end up getting above, above average tenancy duration. David Moses 01:04:17 That's a, you know, it's an interesting book because we just started kind of, you know, expanding, you know, housing choice vouchers tend to in our market, you know, they trail, you know, rent trends. So they're always, you know, always paying last year's rent or whatever. So what we have, what, what, what we're looking at is, hey, it's a big pain in the butt to get somebody in there, right? I can get a market rate tenant in there very quickly. It's a big pain in the butt to get, you know, but the flip side of that coin is, isn't that also a disincentive for the tenant we have? Jack BeVier 01:04:58 Yeah, we have a list of there. There are, I think there are currently 40 people who have told us that they're thinking about moving because we, we survey that a lot. But we get 10 turnovers every month. Like that's it. That's all we get. And, and it's, yeah, because there's friction on both sides of it, right? Like go find, go oh yeah. Oh, you want, you know, you're interested in moving? Cool. You're in good standing rents. Current love. You, do you want to stay at one? You know, do you want to come to another one of our, our houses? You know, that's our first, that's our first base. But then if they I it is a theme in the leasing office that folks will go out into the market. Look to see what's available. Even, even if they find a place that the, the house doesn't pass the pre the, the, the prett inspection, and, you know, fails the prett inspection twice and 90 days later, there's the, that landlord gives up and says, like, I can't, I can't navigate this process. Like, I'm sorry, I, I, you know, I have to go in another direction and they come back and they're like, I guess I'm staying, you know, like I can, you can, you paint my, you know, can you paint my rep, repaint my bedroom and we're like, of course. Absolutely. yes, that's a thing. There's friction on both sides of it. David Moses 01:06:08 Yeah. And I, I, we, you know, it's, it's, it's really, I, I don't know what if there is an easier button in terms of expanding your, average tenancy length than accepting, you know, section eight housing choice vouchers. but what, what else is there? Like? you know, II, I think, you know, one thing we stay away from are, you know, just predictable one and dones. You know, people were overqualified, people just moving to the area. you know, things like that though, you know, they, they, they're least if they don't know the area, they're least likely to, to, to pick where they actually ultimately want to be. so, you know, things like that. Jack BeVier 01:06:54 we have, like, if you, we have a joke, like, if someone's moving from out of town and they're moving to a tougher part of town, like a tougher location. We're like, no, it's not gonna work out. They're gonna, like, if you're, you know, if you're, if you grew up in that neighborhood and model across the street, all right. Cool. You know, you're actually, there's actually a high likelihood you're gonna stay there for a long time. But if you're from, if you're from New York and you're moving to a tougher part of town, I'm like, maybe we're gonna get four months before we're like before they're calling the office just freaking out, you know, that this is what they expected. Yeah, it's funny. It's a thing. Craig Fuhr 01:07:27 Hey, David, can you give an example of, some product that you've bolted on to Zoho that has made your property management more efficient. David Moses 01:07:39 so from a, I would say the one of the exciting ones we're working on right now, it's gonna sound super boring. but you love boring. We're using a software called Doc Parser, which is probably irrelevant already, but it won't be, it, it, it's just, it's not yet. the, the like chat GP T 40 is not quite there to read. and, and, and write the databases super reliably. So, doc parts are basically just you put in a PDF of essentially a form document like a water bill for us. It's water bills because water bills are a big pain in the butt. They get attached to the taxes in Michigan. If, if the tenant doesn't pay them, it's almost impossible to get it into the tenant's responsibility. So we're running hundreds of water bills through, you know, where we, we get them emailed, we, we pop them in a folder. Doc parser reads them and sends data into into zoho. And then Zoho right now, all it's doing is saying, hey, this tenant is past due on their water, right? But very shortly it will, it will say, hey, this tenant is past due on their water. Hey, tenant, you're past due on your water. We're adding this fee to your ledger, we're adding the water bill to your ledger. going into our property management software, cutting the check and putting the fee on their ledger and putting the water bill on their ledger. So it's all an automated process that you know, if it, if it saves two hours a month or three hours a month, I mean, it, it probably isn't gonna cost us more than, you know, 3, 400 bucks to to implement. So, it's little things like that and then we can kind of copy, paste that same functionality because we get a document and something has to happen, right? So once you've kind of figured out who has to be notified, what has to, what, what has to happen then it's just kind of, plug and play. Ok. We're gonna take this template for water bills. Now we're gonna apply it to, you know, we got a violation from the city for grass cutting, right. So tho those types of things, that's one I think we're using that simple but useful. property meld is one that we've used for property maintenance. We're kind of digging into how we can make that whole process automated in terms of paying our people. because they, if they use meld to interact with the tenant to schedule the schedule the work order, they go out, they perform the work, they upload their bill. You know, that bill goes into our system. If they get paid, it gets, yeah, it just, it, there's so there's so many touches when it comes to maintenance. So by kind of eliminating a lot of that, putting it a lot on the tenant and a lot on the on the technician to interact with the software to tell us what we need to know, then it can, you know, the accounting part of it can be automated and taken care of notification to the owner can be taken care of. you know, yeah, I really want my accounting people to focus on budgets like, like that's manage expectations, like this is what, this is, what is probably going to happen with your portfolio in the next year. So when somebody calls and says, da, da, da, da, da, da, da, da, da, I am bitching about an expense. It's like, ok, you're at, you know, you know, 60 it's, it's July, you're at 60% of your budget for maintenance. I think we're still going to be ok. But I'll keep an eye on it and, you know, next time a maintenance thing comes up, I'll see if I can get a better deal for you, if it's, if it's gonna, you know, breach that limit and they're like, oh, ok. I, I guess I'm still ok. Craig Fuhr 01:11:26 Yeah, I, I, Jack and I, well, Jack does a call with, most of the L Os and some other folks at Dominion Financial once a week. Jack. Yeah. And, we were having a discussion the other day about, you know, A I and sort of how it's how it's sort of the fourth turning of technology and how it should make us all more productive. And, you know, we talk, we don't talk about it much, but I'm a loan officer here with the company. And one of the things that we have to do that is just mind boggling is, you know, we have all these note buyers, never one of those note buyers has guidelines and those guidelines change and they're usually documents that no one really wants to read or memorize. And so what we've done is what one of our managers has done here is really loaded up all of those documents in the chat PT. And so now I can query any note buyer on, hey, what's the max LTV? I can go here or if I've got a five unit property with a person with a 680 credit score, what can we do? And it's instantaneous across all the note buyers. And it's brilliant. one of the things that we do often here is underwrite condos and part of that is we have to find out whether or not the condo is warrant or unwarrantable right there. Jack BeVier 01:12:34 Different definitions of non warrant between different note buyers. It's mind numbing. Oh, it is. David Moses 01:12:40 But I think between different agencies, I think even Fannie and Freddie have slightly different. Craig Fuhr 01:12:45 So, so if you standardize on the Fannie form for the, for the condo questionnaire, now that that questionnaire can be loaded into chat and you can get out an instantaneous result on whether or not the condo is warrant or not for that particular no p and that's the time that, that saves Jack. Craig Fuhr, Jack BeVier 01:13:03 I mean, it's got to be at least an hour and a half and we can get 10 calls in an hour and a half here, you know, so we can, we can turn it into a chat bot that like, so now a customer can just be like, hey, you know, ask, ask whatever questions you want at one in the morning, right? Jack BeVier 01:13:17 And like whatever answer you. Yeah, and you'll get, you'll get access to 12 different sets of DS CR guidelines and figure out which program is the best one for your particular situation. So it's like, it's, you know, it's phenomenal, you know, it's really cool. David Moses, Jack BeVier 01:13:31 Yeah, that's, I mean, it's exciting where the stuff is going, you know, like the GP TS are like, I know that the the the criticism is that they hallucinate in like general general queries like and that's like that. Jack BeVier 01:13:43 Well, they're not good enough like, you know, because look at this silly thing and you point to this like silly answer that he gave. But when you, but I think that when you are training it on a specific set of data, the hallucination percentage goes down materially because it doesn't have the wrong answers out in the world to get confused. You know what I mean? Like to, to, to add to the, to add to the waiting, right? Like if I'm just like read these 400 pages and that this is all you're gonna work off of is these 400 pages correct? Then like it should get it wrong a lot less. And I think that there like specific guidelines, scenarios or like training manuals, David, you were talking about your like the training manuals and turning how you, you've used to you, you went from this perspective of or this approach rather of having a one page training manual and now you're really building them out to be much more robust. I think that's the stuff man, the people who have like tight detailed sops that they can then give to their GP T and then now the GP T knows how you want it done. And the, if then statements to like route the, the data different directions based off of what happens, that's gonna be the source material of the GP TS are gonna like really add fuel from an efficiency point of view to operating platforms. Craig Fuhr 01:14:59 So I'm always fascinated by guys who have ridden through a couple of cycles. You know, we talk to investors every day here, at least I do that, you know, they, they've got 56 houses, they've, they've really just been riding the wave up and, or, you know, we all know syndicators who are just really betting on appreciation for their, for their model. But when you, you talk briefly at the very beginning about how, you know, you, you got hit pretty hard in the downturn. And I just love a good story and, and I love the comeback story, you know, and so, it was, I was just saying to Jack, when, when we took a quick break that, you know, if you'd held a gun to my head right now and said, hey, I've got this flip for you. I would still have PTSD over what I went through, in that 2000 sort of 1011, 12. And frankly, you know, I, I was, I was reluctant to get back on the horse and so I went off in coaching directions and things like that. And so the fact that you've been able to, to really pick it back up and really do better than ever, it sounds like, I think it's fascinating. So maybe you could share that with the listeners on what you went through and, and what it was like to sort of make the comeback. David Moses 01:16:15 Yeah. So, you know, when someone gets back up, you know, after, you know, like there's a certain degree of stubbornness that is required, you know, the, the they're really, but, but what it boils down to is just, you know, just not allowing that part of your brain, you know, you know, they've the back part of your brain to, you know, to, to, to operate you, you know, you, you really have to look at it logically learn from the mistakes that you made. And, you know, for me, I guess I was a little lucky in that it was much easier in my situation. Like I was in a market, most of my properties were in markets that lost like 90% of their value, 85 90% of their value. So I was looking at it going ok, that's stupid. I mean, the, the first property I bought, you know, post downturn or, you know, on the way out of the downturn was a house I bought from Bank of America for 1500 bucks that they gave me a $3000 commission as the buyer's agent for buying. I literally got a house and some cash. so, so there are some, ok, that's stupid. Like it's, you know, I should, I should stay in this like there's, there's opportunity here like there's, it doesn't matter that I screwed up. But I also had a lot of good, strong mentors who are sitting here going, you know, look, Dave, I lost, I lost money with you, but I know you came out a lot worse than I did. you know, not better and, and you learned, you'll, you'll figure it out and you know what, for the last what, 15 years we've been fishing with dynamite, you know, it's, it's super, super easy. Every, every mistake we thought we made turned out to be, it turned out to, turned out to be a winner. I, there were a few that I thought were winners that wound up being, you know, wound up being losers. But everything that I was teetering on, you know, every, every, every little rental that was like in my, in my strike zone. Yep, it was, it was fairly, it, it turned out, ok? But I would say, like, advice to people who are falling flat on their face. It's like, you know, just be luckier, you know, just, just be luckier. Craig Fuhr 01:18:52 Keep putting the uniform on every day. Shit works out. I mean, Jack in 2012, could you ever have predicted the run up that we would see between 2012 to say like 2019? Are you and Fred talking about that? Jack BeVier 01:19:10 I mean, no, no, we didn't, we didn't, right? Because we sold stuff, right? And that was everything we sold was a huge mistake. And we sold every year, we sold stuff. So like that was all a mistake. And we bought in, we didn't see, we bought in lower end locations than we should have, right? We should have been operating in higher end locations because they saw materially there was materially more money, there's been much more money made over the past 15 years in home price appreciation than cash flow wherever you were right. Home price appreciation has been the the vast majority of the return in every in every you know, look back. Irr. and so yeah, like we sold we had we went to Atlanta in 2011 and bought like 700 houses over the course of 3.5 years and we're selling turnkey rentals the whole way through because we just didn't have enough cash to keep everything. So that was out of necessity. But we ended up tucking away 200 houses, with like basically hard money, and ended up selling them in, in 2015 at, at, at what the time was a great cap rate. Like we sold them at like a six cap at the time, which was like, we thought a great deal. It was like you could borrow money at 675 or we could sell the houses at six. And we were like, well, I guess we're selling the houses at six and we thought we were, you know, we patted on the back, pat ourselves in the back for selling high, you know, and then rents doubled and, you know, like, like I didn't, you know, I didn't see that coming, had no idea. And we would have, we left so much money on the table. Oh, I got a funny story for you. So there's one property, there was one property that we kept in Atlanta in Atlanta because when we went to sell it, it was, I had bought it stupidly at the courthouse steps. I had bought it and there was a rental restriction and you couldn't rent properties in that, in that condo. It was technically a condo, but it's all townhouses. and there was a rental restriction against it. and we leased it back to the existing homeowner who was there and that was a great result. Right. He didn't have to leave his house. He had a one time set of medical expenses that caused him to lose his house and he just, he wanted to stay there. And so we collected $900 a month rent for s for the past 15 years. Craig Fuhr 01:21:22 Shout out to Danny Kan. Sell a rent. Jack BeVier 01:21:27 That's exactly right. Yeah, exactly. Right. So that works. Yeah. So I got a, you know, tremendous tenancy duration out of it. And we sold that portfolio nine years ago. We sold that portfolio and it's the one that we kept because it was the old owner. There was never any maintenance calls and we didn't want to disturb the situation. And, you know, and the, the, the, the condo association was probably just looking the other way because it was the old owner. Right. No one wants to kick that guy out even if he's technically renting. So, anyway, I, I think he passed away recently and so we turned over the property and we're like, well, we have to sell it because there's, there's a rental restriction. So we can't put a for rent sign up and we went back and looked at the numbers. I bought that house for $27,000 in 2000 13, 2012 doesn't matter. And we're selling it for $250,000. Craig Fuhr 01:22:19 Just be luckier us be luck. Jack BeVier 01:22:22 That's all I had it been. And, and probably the allocated purchase price in the 2015 portfolio sale was probably like 100 and 15 like, and that was amazing, right? Like, oh my God, you, you know, we probably put like 10 grand into it or whatever, but like you triple your money on, on these houses. And we were like, this is amazing. But then we could have, you know, more than doubled it again. Had we just not sold and like, you know, no one. So to David's point, like everyone's been very fortunate the past 15 years. And maybe the, maybe the market continues to go up into the right. But I think operationally it's gonna be harder on a going forward basis than it has been. Craig Fuhr 01:23:05 So, yeah, I think everybody will like a brain surgeon when appreciation is rising rapidly. David Moses 01:23:11 But we, we talked, so we talked about open door and we've gone kind of back and forth on, on what we think is gonna happen in the long term, ultimately with that company. But I, I like to, I like to, to keep things very basic when, when I buy. because I think it's, but housing is primarily a function of how many people need the housing and how many housing units are there available. I mean, it is a supply demand before you get into interest rates before you get into employment before you get into any other factors. You know, it's you know, so, so I look at, I look at a company like open door who can buy and, you know, obviously in multiples of what I can buy. And, and I look at it like if they're not stupid, which no idea if they're stupid or not, but if they're not stupid, they should win when market times increase. Right. That, that's really i, if, if supply and demand are even, just even like if, if you know, assuming you have enough supply and enough demand, assuming they're an equilibrium, you know, if, if market times increase, then you are, you are the fast buck and you will be able to acquire, right? You'll be able to buy, right? And, and I don't think it's a function of interest rates for me like I'm buying right now. Not because I think the market is going to appreciate like it has over the last 10 or 15 years, but because I think I can buy it a bigger discount right now because people who are in distress can't just put their house on the market and get four offers in two hours. Like there, the market is moving slower, market times are increasing even if prices aren't going even if prices aren't going down. So, so that's, that's why I'm buying and I think that the like the, the luck factor and I say, I say be luckier and I, I mean, like if you're doing everything right and, and things aren't, you know, and you're failing like no one's doing everything right. But you learn from your mistakes and you stay humble and you'd be willing to accept that you're not always right and you have to, that allow you to look back and see where you screwed up. But then it's just, you know, you do things as, as, as, as precisely as well as you can. and then there is an element of chance to it that's really gonna ultimately overshadow, any of your great decisions or bad decisions because you just can't predict the future. Jack BeVier 01:25:54 I, I do, we, we will have that conversation sometimes in both the real estate and the lending side of things like, well, what if you know such and such happens and you know, like, you know, like, like what's the, what's the doomsday scenario that has to happen in order for like us to get wiped out, for example? Right? And, and I always have this, you know, retort that I'm like, if that happens, 95% of the market is worse off than we are and then we'll be fine because the tail will be wagging the dog, right? Like no one's foreclosing on the top 5% of operators, they're dealing with the bottom 95 who are an absolute shit show and represent far greater losses than us. Everything, you know, everything is relative in capitalism, right? Like money is relative and operations are, are relative and so no one will be like dropping the hammer on us because we'll be the best perf, as long as we're the best performing in the lot, you just need to be better than everybody else. Right. Just need to be faster than your friend when the bear is chasing you. and, and I, I just, I think that's the practical reality of it. You know, like you don't need to worry about absolute results. You have to worry about your results, relative to how, how the rest of the market, you know, relative to the, your peers at any given time. David Moses 01:27:18 And more importantly, you have to gear yourself up because when that happens, there's that, that's an opportunity that's gonna favor the bold and the experienced, you know, like, it's a funny story from the downturn is Chrysler. Chrysler's headquarters in Auburn Hills. They, the debt on the building in like, I don't remember, it must have been 2009. Right around there, the debt on the building was going for two cents on the dollar and I had my property management company couldn't afford to pay me. So I literally had a job with my uncle's brother, like uncle through marriage, his brother and he was putting together a group to buy the debt. He, he, they had renegotiated, you know, they, they had a relationship with this with this bank already, with the, with the, you know, the debt order already and they negotiated a deal by it at two cents on the dollar and then like, you know, several, it must have been several months later and they were paid off 100 cents of the dollar. So, and it was like on obviously the Chrysler headquarters, like a big dollar amount, they made, they made a ton of money. So it's like when those opportunities happen, you, you, you have to be bold but, but you're gonna get those opportunities because you're experienced, those opportunities will come to your doorstep because you know, so you're not just the 5% operator who your lenders aren't gonna come knock on your door for their money back. It's that your lender is gonna knock on your door and say, you know, I'll, I'll give you favorable terms on your dad. You help me out with this. Jack BeVier 01:29:06 It's, it's a very not sexy approach to the business, but it's definitely the one that we take is like just focus on operations. Everything else will probably, you know, don't, don't do, don't do anything like too crazy focus operations and like it, it'll take care of itself like, you know, we, we won't get hurt when it's bad and coming out of the bad, we'll get a bunch of opportunities because we're good operators and like it's, it's not sexy, right? It's a not sexy approach that you know, we missed out on the past 15 years. Do, did I ma did I maximize the past 15 years of up into the? Right. Absolutely not. Like in no businesses. Did, were we the best performing business? Right. We were always a little more. We, we, we were never the most aggressive when it was, when you got paid to be aggressive. Right. When you got paid to be aggressive. The past 15 years, we were never the most aggressive ones. So lots of folks have been like brighter shining stars, but we just, you know, we, we do really solid returns on equity and just keep building the machine and it's nothing sexy about it. But like, I don't know, that's that, but that's our mo that's, that's our, that's our style, I guess, you know. David Moses 01:30:11 Yeah, and that's, that's why when the shit hits the fan, so to speak, you know, you're OK because your approach is not balls to the wall every, you know, mortgage the you know, mortgage the blue oval. I always say that because that's what kind of Ford did. They came out like way ahead. They didn't have to take money from the government because they literally like before the downturn, they had like literally, they had literally borrowed against the, the goodwill of the, the, the brand. Like literally the brand like if they, if they had lost for the Ford like oval with the, it would, wouldn't have been theirs anymore. So, yeah, and, and I mean, look, they came out ahead but, you know, that, that turned out to be a, you know, a smart thing to do at the time. Right. It was, you know, but, but like, like you said, Jack, it's, it's just, just at last, right? Just, just be in a strong position, relative to your competitors, relative to your peers and opportunities will come your way. Jack BeVier 01:31:20 So, switching gears, what are you doing on the acquisition side? Right now? You, we talked about this a little bit last week and I was super intrigued you, you, you, it sounded like a, a redesign. David Moses 01:31:30 Yeah, we're, we're so we essentially inherited a, we buy houses company, not, not like the franchise we have, but, you know, it was basically a company built on a system, Tiff and Josh High in, you know, Columbus. I don't know if you've heard of them. this company was kind of operating the system. The owner of the company had a sickness in the family and he had to step away. And so he basically just said, you guys take care of my people. So we kind of inherited it and we, we've been tinkering with it, you know, from a tech standpoint. the these kids know how to, they know how to sell, they know how to buy, they know how to, they don't know how to make deals happen. So just feeding them leads, tracking everything that we possibly can track, getting the best data, you know, implementing automations. and we're buying, we're buying, you know, we're contracting. We contracted seven last week. It was a really good week before that. Yeah, the week before that was, I think it was like six, but we're generally three, you know, right around three a week that we're putting under contract and we're taking down one and wholesaling the rest of them. We'd like to take all the deals that we, you know, we have the capital to take the deals we want to take. We don't have like we have the debt, we have the equity, we don't have the trades, the base. Yeah, to, to manage all those especially the ones that are heavy, heavy turns. So that's a lot of what we're wholesaling out. But yeah, but our feeling is, look, look, look for distress. and and, and just get deals done. Craig Fuhr 01:33:15 So we were talking before the we pressed record on, on your legion and what you're using for that and sounds like you're making a bit of a shift. So what were you doing for legion? And what are you doing now? David Moses 01:33:26 So we have been, we are to some degree still doing cold calls and texts from Adan and another predictive list and other public record data like, you know, pre foreclosure. probate things like that. David Moses, Craig Fuhr 01:33:47 in house or va the for the cold, the cold calls all VA s, and the texting is all VA S as well. David Moses 01:33:54 They just kick a lead and our, our, you know, kind of our buyers jump on it. We want to get out of that. mostly from a defensive standpoint. We don't want our name, you know, smeared on the internet for being, you know, you know, being a call or whatever. Yeah. So we eventually wanted to get out of that. There's some exposure in terms of fines and things like that. You know, we want inbound leads. They're also just better leads and a better use of our people's time. So we're, we got P PC running at about running about 2025 K a month, spend on P PC. and then we're also, now looking to PPL providers, so PPLS pay per lead and so we've identified five of them and I think we'll, our strategy is going to be buy leads from all of the PPL providers. Like if you provide leads in our system and we can verify that you are not reselling those leads to other people, which is pretty easy to reverse engineer. We buy from all of them and that way you can tinker with what we're paying in a particular county at a particular time, to just take advantage of, ok, who's willing to give us these leads at the least price and be able to kind of develop over time what our close rate is from each provider and use that to, kind of turn the knobs and pull the levers to get, you know, to get the, the cheapest lead cost. And then we're also, we're looking to start a heavier direct mail campaign. you know, right now it's just strategic direct mail to particular people and pretty soon it's gonna be direct mailing the predictive lists. Jack BeVier 01:35:36 How do you get comfortable? I mean, I've always struggled a little bit just from a trust point of view with the paper lead providers. Like you, you mentioned that you can confirm that there, you can verify somehow that they're, they're not reselling selling that lead to multiple people. How, how do you like, how do you do that? David Moses 01:35:53 So we, we do ask like it's, it's, we, we do, we do post mortem whenever we don't get a deal. we also look reverse, look into our market to see who did they sell to. and we can, you know, use that to kind of say, ok. This PPL provider is, we're, we're closing at a one out of seven rate. This other one is one out of 20. you know, and then you start to see deals that you were fed by them, you know, selling at a higher rate to your competitors in the market and you can start to kind of recognize that's, that's likely what's happening. But we also know and interact with a lot of the wholesalers in our area. We, we host a meet up, we bring them all to our office, we talk about deals, we try to make it so that we, you know, JVN deals where possible we can plug in some of our resources in the property management space or in the inspection space or in the financing space. you know, to, to just make it worth their while to, to keep an open line of communication with us and then, you know, we can see, ok, they post a deal that they get, you know, where they talk to us about a deal that they get where we got that lead and we just ask them where you get the lead from. And if the same provider that's a problem, where, I don't know that, you know, you have like multiple PPL providers are really the same one. You know, there might be some issues there. But, you know, so far we've been, you know, we've only been doing it the PPL part for a few weeks. We were really, you know, retentive about what happened when the lead came in. Like lead comes in. We wanted to make sure, you know, every field was, you know, input a certain way we want to make sure that we're, notifying everybody who needs to know that that lead came in, making sure that it's, tracked all the way to close. but once we got that, we started doing it a few weeks ago and, a lot of leads were getting, you know, 3 to 4 leads a day. that's really, now kind of dominating. the deals were locking up. I think that those PPL providers that do a really good job there, you're actually going to get a higher hit rate with them than you will your own P PC. because they're really freaking good at it, you know, they, they not only are out there with P PC, they're not only out there with, you know, Facebook ads and youtube ads, but they're retargeting, right? They're, they're doing a very good job of retargeting. And the thing I, the reason why I like retargeting leads who are P PC or, you know, whatever is that you've taken a situation where somebody goes and Googles, you know, I want to sell my house quickly and they see you and your four biggest competitors, five biggest competitors, whatever it is. And when so, you know, they, they're clicking on you but they're clicking on a bunch of other people and they're just shopping for the best price at some point. If they, a deal didn't get made, they forgot about it. Their situation improved and then it got bad again, you know, they're retargeting when they see that youtube ad. When they see that banner ad, when they see that whatever it is, now they're clicking and you, their captive audience, they're not going out there looking for people. It popped up now. Yeah. Now, now your hit rate goes up. Craig Fuhr 01:39:28 I don't want to ask you, your proprietary provider there, Jack. Have you looked in the PPL here in Baltimore? Jack BeVier 01:39:35 Yeah, I, I have a trust issue with the reselling thing, you know. So I'm gonna talk to David more about it. Craig Fuhr, Jack BeVier 01:39:41 But, I haven't, who would be, would, are these, like, nationwide providers? Craig Fuhr 01:39:45 Jack, or is this like more local regional? I don't know, you haven't looked at any information. Jack BeVier 01:39:50 There are, well, I don't know if anyone's truly nationwide, right? Because you probably can't do it well, nationwide. They're probably like major metros. David Moses 01:39:57 Yeah. I think it's, it's really where their advantage where the PPL really make money, where the writers make money is that they're, they're advertising nationally, right? So, it's much cheaper for them to generate a lead, than it is for us targeting in a specific market. but I, I Jack, I wouldn't really worry so much about the reselling thing anyway. If they're out there reselling it to wholesalers, you know, you're a buyer, you have cash, you have good, better knowledge of the market practices. But what I would look at it just like this is a PPL provider. I'm able to close one out of X with them. It's profitable. It's not profitable. I don't care. I don't care why. I mean, like, I want to know because the defensive part of me, like, wants to know and I, like, you know, it just irks me to know that I'm, you know, buying something that they're selling to another person for the same, but at the end of the day it's just all about closed rate. Craig Fuhr 01:40:56 What's your cost per lead on, on that type of lead? David Moses 01:40:59 So I, I can't, you know, with only doing the PPLS for a few weeks, I can't give you accurate data on that. you know, but because I think it's, you know, I can tell you the cycle is fairly short, just like P PC, a 30 day cycle. So we'll probably know in a couple of months, with reasonable accuracy. what our, what our cost per acquisition, our, our average cost per lead is about 100 and 50 100 and 75. But that's just probably more my market than it is. You know, people, people from like Arizona are probably paying like 550 or, you know, you know, from the same provider. It's all county based. and, you know, I, I offline of habit, you know, share all of our providers and then, you know, kind of what, what we do. but yeah, I like I it just, it's anything and everything to get acquisitions. talking to other wholesalers, we use privy to mark, you know, to mine stuff that's on the market. We use investor lift to find deals and, and go dig in and say, ok, this wholesaler has it, a lot of investor lift has a lot of inexperienced people posting deals. And I think there's a way to when you have experience and they, you, you can get, you can gain a rapport and a level of trust with, with that wholesaler. You can call them about deals you want and you can make it work because either they have it at the wrong price and they have to re trade it and they can get that done or they have it at the right price. You just gotta, they're just asking for too much and you just get to the number that makes sense. David Moses, Craig Fuhr 01:42:41 And if you're the easy button and they trust you, you know, they're wholesalers by and large just taking an order at that point. Craig Fuhr 01:42:48 Yeah. Jack BeVier 01:42:49 Yeah, it's super interesting. I thought that was a great, a great point. Yeah, cool. Well, hey, David, really appreciate your time today, man. We've taken up a lot of it. Thanks for for hanging out and chatting and we just, you know, love, love digging in and you know, you're a great operator. It's been my pleasure to to hang out with you at Rar and really appreciate you taking the time to join us on the, the, the podcast today. David Moses 01:43:12 Thank if you guys ever wanna come out to Detroit. Jack BeVier 01:43:15 And, you know, dude, it is one of my great regrets in, in my career that in 2008, 9, 1011, I never came up to De Detroit and to see the $1500 house that was being sold where you could get, you know, you can get a commission on it and walk away from the table with money. Like that must have been just, I'm sure it was treacherous, but I bet it was so fun for a couple, like for a number of years there. David Moses 01:43:41 Like it, it was, it was, it was a lot of fun. We, we would go to tax sales and we'd bring, you know, we, we at one tax that we bought 23 properties. I think we spent, I, I think we spent 400 grand, something like that. 33 or 400 grand. and that we still have most of that portfolio. It's probably worth, you know, probably 3.5 4 million now and nice stuff too. Jack BeVier 01:44:09 Like it's like, you know, like they're really nice, they're really nice areas. Craig Fuhr 01:44:13 I looked at some of your properties, man, the, the, the Detroit metro area, you know, is no different than the Baltimore Metro area. They're just great single family venerable. Old neighborhoods that people still want to live in. It's fantastic. Yeah. David Moses 01:44:26 Yeah. And they, yeah. But, yeah, if you ever want to come out, I mean, we'll, there's still, it's so funny because you can still see, like, you still drive to areas where, you know, you'll see a, like two blocks were just, there's like two houses, the rest of the houses were torn, you know, were just torn down. and you can see they're still there, they're still kind of remnants of the I think they call it ruin porn back in the day. People would literally come out and they would, you know, look at this abandoned building like and it was there's a great episode on the, on the Silver Dome which used to be. You can find it on the internet just looking at people walking through how that building had dilapidated over whatever it was when they built Ford fields over 15 years, 10 years, whatever it was. So there's still some of that there, but then you can see areas that are just, you know, that's what real estate moves slowly like, it's, you can see where it's going very easily. And but yeah, so it's thanks for having me on, I appreciate it. Craig Fuhr 01:45:36 Yeah, man, I hope everybody enjoyed super deep dive today with you. As always, you can reach Jack or I am at Craig at the Dominion group.com. Jack is can be reached at Jack at the Dominion group.com. We love your comments. We thank everybody for taking a listen. We got so many more great episodes coming up over the next few months. We got some great guests just like David and Moore. So keep tuning in. This is Real Investor Radio. We'll see you the next time.