Latest / Real Investor Radio Podcast / Ep. 106 | DSCR Pricing, Treasury Rates & Multifamily Outlook
Transcript
- Craig (00:13) Hey, welcome everybody to Real Investor Radio. It's Craig Fure and Jack Bevere coming to you on a sleep deprived Monday. Jack, I was out late last night to watch the disaster that was the Baltimore Ravens. Jack, I just don't get it. They're just they're just horrible. I don't want to be labored to point Jack, but it still hurts. It stings a little bit. I got a little little pang here and it's just horrible. Went to the stadium, endured the 75,000 people. Jack BeVier (00:30) been a tough year. Craig (00:44) and only to be let down once again, Jack. Jack BeVier (00:49) It's been a disappointing, disappointing year, you know, like a little bit of ups and downs, glimmers of hope. feel like the fan base has been like sticking with the team, you know, super strong, but yeah, they just not keeping it together. It's a shame. Craig (00:57) They're not a good team. They are not a good team. So we're going around the horn today, buddy. And we got we got some several stories that you and I have wanted to touch on for a while. But, man, I hate to beat a dead horse, Jack. And I hate to belabor a point. But I listen to a lot of podcasts where they have to repeat themselves. So let's talk about the five year Treasury and where we are right now and how that affects. DSCR pricing. So checked before we came on the air today. And you know, frankly, the five year charger yield has been hovering around 3.6 to 3.8 % for the past 60 days ish, you know, like it just kind of right around there. They're really going above it or below it. But still, last week, December 10, or about a week and a half ago, depending upon when we post this. Fed rate cut second of the year 25 bips. So the overnight rate is now kind of around 3.53.75 and inevitably Jack as hard as you and I try to educate the public. We still get phone calls the very next day from borrowers early. Hey 25 bips. What's what's your DSCR pricing look like today man? It's gotta be awesome. And I'm like that's not that's not how it works Joe. It's not how it works buddy. Like the DSCR guys don't care what pal does. You know, it's all based on the five year treasury. And I think Jack, I need you to educate here. need you to tell people why it is that we don't really care too much in terms of DSCR on the fed overnight rate. Jack BeVier (02:43) Yeah, sure. So the, all the pricing, all the pricing charts that we get, all the pricing matrices, right? Excel spreadsheets, basically that we get from all, from wall street that buys DSCR loans, all of them are indexed to the five year treasury rate. Why it's a 30 year loan. What the hell does the five year have to do with anything? I thought the 10 year had something to do with mortgages, right? ⁓ Craig (03:06) Right. Jack BeVier (03:08) So the, reason the five year, the reason everyone thinks that it's the five year is that the, prepayment rate. how quickly borrowers investors, right? How quickly they are repaying these loans on average, the math on that is it's been weighted average five years that the, that these loans pay off. And as a result, and, wall street calls that the, the CPR, the constant prepayment rate. And a constant prepayment rate of 20 is the inverse of that is one fifth, you know, 20 divided by a hundred is one fifth. So if you had a CPR of 20, that infers that 20 % of the loans pay off every year at weighted average duration, five years. So when you're pricing that loan, what's the, you know, what's the re the benchmark reference point that you should use the five year treasury, cause that's your alternative. You think that when you go, you know, make DSCR loans to investors, even though you're writing a 30 year loan, it's prepayable with some prepayment penalties, right? But when you do, especially when you do the five, four, three, two, one prepayment penalty, which is the majority of the originations, not all, but you know, majority of originations they pay. Yeah. Cause people want the best rate. Yeah. It's where you're to get the best rate. Yeah. So, um, and the reason you're going to get the best rate is because it's the, it's the, well, it's the most predictable that they're going to Craig (04:19) sort of the default, you know, like that's where you're going to get the best rate. Jack BeVier (04:31) Well, they have been paying off within in a weighted average five year term. And so if you're an investor who's knows that you're going to keep that thing for 30 years, one, no one's got a 30 year crystal ball and you're probably wrong. But I have that view when I borrow money that we're going to keep this thing for a very long time. And, and I'm getting priced off of the five year when I should be getting priced off the 30 year, right? so I think I'm actually getting a little bit of a deal there. so anyway, that's why the five year is because on, on average weighted average, all of us investors are actually either selling or refinancing these selling these properties or refinancing these loans on a weighted average five year basis. So the five year, so what matters is the five year treasury. and the five year treasury moves with every single day with every single piece of news and when even speculation about what Powell is going to do at the next meeting happens, the five year moves and DSCR pricing moves that day. They don't wait for the, for Powell to actually be just to do what he, they thought he was going to do or not. They're adjusting that pricing every single day. So, you know, even if you knew, even if, if, even if somehow you had the inside baseball and you knew that Powell was going to, drop rates at the next meeting, it wouldn't make a difference. Like the play would be to, the play would be on treasuries, like that day. So that's why, that's why that index is the right one to be paying attention to. If you're a real estate investor, that's the one that's going to affect DSCR pricing. And so far that weighted average, that counts the prepayment rate of 20, it's held up. it hasn't really changed much. So if all of sudden there was a bunch of re you know, more, you know, quicker repayments or the opposite, if people weren't paying off, then the index would change. But so far, for the past five, six years now, that five year treasury has been the correct prepayment rate. So Craig (06:23) So let's talk about sort of there. I've been reading about the Fed infusing. Help me out here. Like what is a Fed repo Jack where the Fed infuses capital in this case in sort of the short end of the of the curve like two year and five year to help me out. So. What I read, what I read, and I don't have it in front of me, unfortunately, right now. But what I read was about a week and a half ago, the Fed infused one of the largest, you know, amounts of money into the market ever. And I guess that was sort of to help short end liquidity. Jack BeVier (07:04) Yeah, so the Craig (07:05) and maybe why we might be why why we should be alerted to that and maybe even slightly concerned. Jack BeVier (07:11) Yeah, so like bank borrowing, so like overnight bank borrowing spiked, because a number of banks needed additional liquidity. And so they came to the window came to the Fed funds window. For the first time in a long time in the banks, and sorry, in the Fed lent against bank assets, to a significant extent that they hadn't they hadn't been doing that previously. it and why that matters is that less that there was, it's not like there was like some like scare or anything like that. It wasn't like that. It was more of just kind of like sign of the times thing where that the, that the fed needed to infuse capital or give a liquidity to banks means that banks aren't sitting on a ton of cash, right? They're, they're being tighter about their lending. ⁓ they're being tight about their lending. We've kind of reached the end of the rate. Craig (07:38) Yeah. Jack BeVier (08:01) ⁓ tightening cycle and the Fed for the first time in a long time is now actually like, it's, you know, a little bit of quantitative easing, right? Like they're actually infusing capital into the market. Whereas they've been sucking money off of the team, pulling money off of the table via these, this like higher fed funds rate for the past, since 2020, late 2022, you know, it's been three and a half years of a rate tightening cycle. And now, so this is more of a sign of the times thing that now Craig (08:10) Yes. Jack BeVier (08:28) Fed is actually putting liquidity back into the market. And there's, you know, we've seen successive quarter point rate cuts. And if you watch the dot plot, you know, the Fed dot plot, is the, the, the, the fed's own projection of where they think rates are going to go. There are several more cuts coming over the course of the next 12 months. So it's more of a sign of the times thing that, the fed thinks that we need to get some liquidity into the market, that the rates tightening cycle is over, that they're a little bit, and as a result, the posture is that they're a little bit more concerned about recession than inflation. And so it's more of a signal along those lines that the Fed's now a little bit more concerned about recession than there are inflation. Craig (09:07) as I read it, the bank, not to get too far in the weeds here, but it is intriguing for one particular reason that I'll get to. a bank goes to do this and they pledge bonds that they may already have to almost sort of hypothecate those bonds, correct? But when they do that, I... Jack BeVier (09:26) Mm-hmm. Craig (09:30) I thought I read that like they have to report the loss because because let's face it like these banks are are taking bonds that they may have purchased back when the they were getting a better return. Correct. And now Jack BeVier (09:45) Yeah, the bonds aren't worth par because they're below today's interest rates. Yeah. Craig (09:51) correct. And normally, banks could have millions of dollars of losses that they don't have to report until they tried until they hypothecate that bond. And I think that's an interesting thing, Jack, because if that's happening, then there's some banks that are going to be reporting significant losses on their bonds. Jack BeVier (10:14) Yeah, that's interesting. I hadn't thought about it from that perspective, but yeah, I get it. It makes sense. The, there's a stupid or weird accounting, you know, an accounting thing in banking that if you, if you place, if you buy bonds and then the interest rates go up and now that your bonds are worth less than par, but if you just designate as the CFO just says, you know what? No, no. I never intended to sell these. These are held to maturity. That's the held to maturity, capital H capital T capital And if these bonds are held in the held maturity status, you don't have the bank doesn't have to recognize the loss. Now that this issue, this concept was like, was part of the trigger that took down Silicon Valley bank, ⁓ that started that panic, was there, there, they had all they're, they're held to maturity account, mark to market. Craig (10:38) Fresh. Fresh. That is right. Jack BeVier (11:03) was like wiping out a huge chunk of the equity and that freaked out Silicon Valley and everyone, there was a run on the bank. So the same concept is what you're referring to here is that they're sitting on the bank's balance sheet at par, even though there are 3 % mortgages in an environment where you could make mortgages at 6%. But since they're held to maturity, they're sitting there at a hundred cents. But then if they go use them as collateral, the feds like not going to let them, know, the fed, what you're saying is that the fed makes them mark to market based off of that, the amount of leverage that they get on those. Cause Hey, I mean, that makes sense, right? You're pledging, you know, a hundred million dollars of 3 % bonds, but then borrowing whatever rate it is at in borrowing it at four and a half, you know, the, fed funds rates higher than the mortgages on those. Like they don't even cover. So yeah, sure. The fed's going to have to force you to mark to market when they do that. So yeah, you think that there's gonna be like a bank earnings implication to that? Craig (11:55) I do. I don't see how there couldn't be. mean, it's no secret that there's a lot of small to mid-sized banks are sort of on the bubble, even some large ones that are, you probably going to report losses. Another thing that I would touch on on this subject would be just the amount of cash that, you know, some of these institutional investors are holding right now. And what that what sort of implies about the future. know, Warren Buffett sitting on more cash than he ever has JP Morgan Chase sitting on more cash than they ever have. And so are they sensing a buying season? Some would say yes. Jack BeVier (12:28) Yeah, I, I have a, just, I have a personal opinion on this, the, so having unfortunately gone through a couple of cycles, right. And like, a couple of liquidity cycles, there's this like pattern of behavior or pattern that I'm noticing. And this one's the first time that I'm actually cognizant of it, kind of going into it. We'll see if I'm right or wrong, but the, when prices start to soften, right. Which is I think fair to say in real estate right now, we're seeing, especially as is pricing is definitely coming down right. Craig (12:31) Yes. Mm-hmm. Yeah. Yeah. Jack BeVier (12:57) Um, when that happens, all of a sudden, a lot of stuff, if you have cash, a lot of stuff starts to look good, you know, like starts to look better than it did six months ago, but then it did a year ago and you're like, Hey, this is great. Like I have cash and the opportunity, prices are getting better. And so you, and it's, and it's really difficult to, uh, it's really difficult to pick which opportunities to take advantage of when the opportunities start. becoming more, prevalent than your cash. And, it's really challenging to, to, to say no, because a bunch of stuff starts to look like shiny objects and exciting and, Hey, we should do this and we should do that. And, and, and, you know, it's fun, you know, you get the dopamine out of that. ⁓ but the thing is that you're wrong in that it's, it's, it's very often the case that we have been wrong, you know, that I'm, I've been wrong. Craig (13:40) yeah. Jack BeVier (13:50) And we pull the trigger a little bit too quickly or, and then frankly end up in the same kind of like liquidity crunch, which is putting all of these other folks in, you know, you know, which is creating the, the distressed pricing or like the, better pricing and the assumptions that we made with respect to our ability to raise capital, our ability to raise debt. They move on you, right? Like Craig (14:09) Mm. Jack BeVier (14:13) You go into that being like, you know what? I'll buy this project and I'll get a bank loan from over here is the exit strategy. And this is going to be great. And the thing is that that's not true anymore. Right? Like what you're wrong about that assumption and you buy this investment and then you get to six months later to refinance it. And that bank's not there anymore. And you're stuck on this asset where that bank's not there at They're only there at 60%. And you stick a chunk of your liquidity into that. And it like, and so you then start to become the cash constrained person also, and prices are still coming down. And because there's fewer and it's just less and less capital to jump in there. And I've heard lots of folks talk about, you have, there's all this dry powder on the sidelines. And I do believe that there is a lot of dry powder on the sidelines or that would jump in for opportunistic pricing, but like, The difference between where we are today and opportunistic pricing, where those folks are going to jump in is a pretty significant price drop. think. Yeah, we're not there yet. We're not, we're not there yet. Like there's, there's a bottom and it's higher than it was in 2008, 2009, but we're not there yet. And so I'm sure we're trying to be my point of all that is we're trying to be really disciplined about where we put our cash out right now. And. Craig (15:12) Yeah, we're not there yet. Jack BeVier (15:34) Like the RTL business is going gangbusters right now. Like we're, we're doing, we're doing, we're seeing lots of great looks on projects. And I have to think that's because there are other lenders that are, you know, have less, liquidity than they used to. And these, and these, and the deals are also getting better. like the RTL business is really fun right now. ⁓ but it's running us out of cash, you know, like, cause we, we like for the first time in Craig (15:37) insane. Jack BeVier (16:01) for the first time in, you know, six, seven years, we're like cashflow planning and everything's fine. And we have, fortunately have good access to liquidity, but like, I thought we were going to have to go do a securitization in like April. And we're like, no, we need to go to market like now. and, ⁓ anyway, it's, it's all in the vein. I'm rambling here, but it's all in the vein of that cat that, less capital in the market is leading to. Craig (16:16) Wow. Jack BeVier (16:29) like less bids in the market is leading to for those who have to sell right now to a weaker environment to sell into, which is great for margins if you're the investor. But if you are cash constrained that everybody is the it leads you to having to pick and choose your your opportunities more carefully than you could in the past and be careful about the assumptions that you're using. when, know, when you get excited about taking advantage of this opportunity, you know, what that refi looks on the back end, you may just be wrong about that. And, and it's harder, you know, it's a little bit harder. Like there's, there's some, there's some, danger. There's some pitfalls to in, you know, catching the falling knife, right. To investing as prices as in, into a softening market. And at the same time, if you try and call bottom and miss it, you'll just have, you know, made fewer investments. So like, Craig (17:11) Yeah. Jack BeVier (17:22) It's hard, right? Like you're catching a falling knife or you're trying to time the market and both of them are really hard. Craig (17:23) Yeah. As a lender, we don't play in the office space, but let's go around the horn on asset classes right now and get your get quick takes from Jack. So funny story. I'll start with multifamily, even though I really should. Now let's start with office. Give me your take on on office, Jack. Are people going to come back to work? I feel like I hear more and more CEOs than that. We're bringing them back. you know, at least three days a week we're going to and everybody's excited that that our office buildings around the country will start to be full again. I don't know if I feel that or not. What's your what's your hot take on asset prices from an office standpoint? Have we hit the bottom or is now the time if you're an office investor Jack is now the time to go out there and scoop up everything for pennies on the dollar. Jack BeVier (18:15) Yeah. So a huge caveat. I'm not an office investor. so I'm sure there's much more intelligent opinions on this. I think class a office is probably you're good. and those companies are also the one like the tenants in class a office are the ones that have the leverage to bring people back to the office, to back to the office. You're in class B minus or C like, you know, the, work environment there, you know, it's a, it's a cubicle farm, right? Like that's not really the same. Craig (18:19) Yeah, but you know enough. Yeah, yeah. Jack BeVier (18:43) I don't think, I don't think they behave the same way. So I think the B and C is still in the long tail of, of, obsolescence. ⁓ whereas the A and B plus is probably a safer place to be right now. Craig (18:51) Mm. All right, let's go multifamily. Last week I get a call from a broker. my God, the best story for you. Don't let me forget. You're going to love this. You were so right. You were so incredibly... All right, I'm just going to go through. We've got time. So beginning of the year, I'm working with this broker. He's got a borrower who over in the 90s, this guy was a Halliburton executive, made a lot of money. Smart guy, engineer, really, really sharp. Older man. assembles like 350 acres in Texas. And he had this master plan community. And Jack, I know you'll remember this. I was working on this thing for like three months because I thought it was the greatest deal ever. And the guy wanted to basically get some financing on one of the parcels. And it was like 7 million bucks. And you took a look at the loan and you were like, God, no. What you said was even funnier. I can't say it on the air about what you would rather do than give the guy the money. So speaking with the same broker just last week, I haven't talked to him in a while. And I said, how's our boy out there in Texas doing? And he goes, not so well. Really bad news there. I thought the guy died because he was in his 70s. And he goes, no, it's much worse than that. The guy they just foreclosed 175 acres. It's like $200 million worth of land. And he's probably going to lose it all, all of it, because he's he was too jack. He was too greedy. They this broker set up a relationship with an institutional lender. And I mean, a household name. Jack BeVier (20:15) ⁓ Craig (20:28) was speaking to the very top of the top and they were going to give this guy all the money he needed to finish this project this massive project. And but they wanted a piece of the action as well. And he was like, Nope, no, thank you. And now he's now he's already lost 175 acres and he's moving on. But getting back to my point, so you were so right about you were so right, Jack, about that loan. Anyway, I get a call. I know you do. Jack BeVier (20:54) That sucks, I hate to hear it. Craig (20:57) Because this guy spent the last 25 years of his life working on this thing, right? So I get a call from this broker. He's got a office building in DC, fully leased. They only owe like three million bucks on this building and it's worth much more. He needs like a million bucks. And I was like, office DC, not really feeling it. I'm sorry. This was multifamily. Let's get back to multifamily. Jack BeVier (21:00) Yeah. Craig (21:21) The multifamily space Jack, which I know you look at a lot. Where do you feel like that is right now? Where do you has that knife dropped all the way? Or are prices stabilizing? Are we starting to see better asking more realistic asking prices from the sellers? Where Where are you with multifamily right now? Jack BeVier (21:41) Yeah, I think you're, think we're like thick in it right now of, of like workouts, like coming, starting to really come out and people who do have to sell just, you know, capitulating and selling where the market is right now. which is a hundred basis points higher than where it was a year ago. the, so I think that that's, I think that that's an interesting opportunity for 2026. Like we bought, we bought one building and I was the underbid, it was an auction. I was the underbid on two of the other assets and that really surprised me. I'm not used to, you know, usually that tight. and then, you know, and it seems like there's just a higher volume of opportunities that are coming out and they've all got some hair to them. It's some kind of workout or, know, the cleanest ones are just that someone passed away and the kids are selling right. But, or that, you know, the, the, you know, older landlord is just tired and wants to get out and just happens to want to get out now. and it is what it is. You know, market is what it is, but the, there's also some debt restructuring deals that are, that we're seeing hit the market that have some hair to them. Like, Hey, do you want to assume the debt? you know, just, just literally step into the shoes here and like, go operate the thing. Like you want the, yeah, you want the equity for a dollar. They don't want to default on their Freddie Mac loan, you know, cause they've got other projects, but they're. You know, but you know, it's questionable as to whether the equity, whether the project's even worth a dollar of the equity, even worth the debt. so we're seeing some stuff like that. That's, that's coming out. And I think that we're going to see more of that stuff. I don't perceive that we're on the upswing there. think the same liquidity issues that I was just talking about are affecting that market right now. So for the same reason we're seeing decreases in as is single family pricing, we're seeing decreases in multifamily cap rates. Like those two markets will kind of go together ⁓ because they're liquidity driven. Craig (23:31) Is a scenario there that you were just speaking of sort of like the guys that purchased three years ago, four years ago, five years ago, syndicators, maybe they are, their performer was rosier than the results, you know, took sort of short term debt on it that has to be refied out. Rates are much higher rates are higher now than their performer was, you know, suggesting when they spreadsheeted the thing out. Is that sort of the likely scenario? Jack BeVier (23:56) Yeah. Yes, that and just under performance from an operational perspective, just like they're having a hard, they can't even operate and cover the debt. And they're like, Hey, someone should just come in here and just, just to operate it and pay the debt, like work for upside. So both of those just, I mean, both driven from the operational under performance, but some, you know, one could have been like, you know, you're, didn't, you didn't hit your pro forma. The second one is you're just not a very good operator. Craig (24:24) Yeah, we saw a lot of that. Jack BeVier (24:26) I think they're both, they're both, they're they're both, I'm seeing those stories right now. Craig (24:30) Yeah. Well, listen, that's kind of anything. single family. What's your what's your take on single family prices? Obviously, some softness in several markets around the country. Yet in some markets, it's still robust. And so what's your take there? Jack BeVier (24:46) Yeah, I think like, I just use the paint with a broad brush the entire country. The I think just softening, softening top line prices to homeowners because affordability is still not great. know, mortgage rates are still somewhat high. Maybe they come down a little bit if maybe they come down a little bit if there's if you know, no one's if you're not concerned about inflation, you're more concerned about recession. But I think that the threat to that is a consumer recession that weakens demand even further. So I'm not optimistic. I'm not underwriting any price increases for 2026 anywhere. depending on the sub market, underwriting prices coming down some. ⁓ Craig (25:24) Yeah, speak to that real quick, Jack, sort of the cautionary tale for average and better than average investors out there. If you're looking at comps for a project that you're getting ready to start, and maybe one of those comps was like six months ago comp, and you kind of got one across the street that just sold like you can't be looking at six months ago. Jack BeVier (25:44) You're like trying to find a number. Yeah. Like, you know, yeah. Looking six months ago to, you know, six months ago says 300, but, uh, you know, I think, so here's like a dangerous thing, right? Like, Hey, there's a great comp within the subdivision or like, you know, a street over from six months ago that, uh, that supports 300, but there's this sale from the subdivision over. And that's the last comp from the subdivision, but you go a subdivision over and it's pretty very, very similar. And that one's, you know, when you adjust for things that's leading you to 285 or 280 and you're like, yeah, yeah. But within the subdivision, it's 300, right? Like it's 300 because this is the best comp. And you, you know, you, kind of, you know, ignore that the market is giving you signal here that things are a little bit softer and you're just wrong. Right. And then you go put that house in the market and it sells for two 75 and you're like, what the hell? thought it was 300. The market's down more than I thought. And I got, you know, that was unlucky. Like, no, that was a little ignorance there. Little lack of skill, little lack of, you know, um, you know, heating caution there. So I think that there's a thing. There's a fair amount of that going on, like the, the amount of back and forth with borrowers that we have, cause we underwrite our deals internally. I don't get an appraisal. Like, you know, we have our underwriters, our appraisers. Craig (26:55) I do too. Jack BeVier (27:03) come up with their opinion of value. And their job is not to be conservative and not be aggressive. Their job is to be right. And we have honest conversations about like, hey, here's what we see when we read the tea leaves, when we read the comps, this is the number that we come up with. And we give that flat, you know, feedback to borrowers. And like, you know, I want them to make money, right? So like, if we think that they're not going to make money, I don't, know, you know, I'll give you the loan quote, if you're like, if you're just convinced that I'm wrong, sure. But like, honestly, we'd Craig (27:22) course. Jack BeVier (27:30) We actually just think that this may not be worth your time. Like go find a better project. You're, you're overpaying the seller, for the as is property. And anyway, so that pattern that I just described where we're seeing comps that are better or that they're giving us signal that, things aren't as rosy as they were six months ago or a year ago. That's happening with, with increased frequency. And so, you know, Sometimes borrowers will interpret that as conservatism and we're like, no, no, no, we just think we're right. And think you're wrong. Like, and, and everyone's, you know, it's still hard to find a deal, right? There's not like, there's a ton of supply of as his house is. So like when you get one under contract, you get excited about it. You get emotionally attached to it. Sometimes, you know, she's just not that pretty and you know, you should just let her go. Um, so anyway, we're seeing that with some increased frequency right now. Craig (28:13) Yeah. Yeah, I think the time for irrational exuberance as a buyer is just not the time. It's not time to say, I can put this thing out there, you know, 300 grand and multiple, you know, offers and escalation clauses. Those days have long been over. just think, but you're absolutely right. In a time of sort of low transactions, and you find that what you think is the needle in a haystack, when you start shoehorning the numbers, you know, when you start making yourself believe that this is my ARV, probably a recipe for disaster in this market. Jack BeVier (28:56) Yeah, and I just don't think people need to I think that if you if you do still have access to capital, you do still have liquidity, you should be getting paid right now. Like you can you can find deals that are better. And that have enough you know, you can find super solid singles and doubles again, you know, it's not every deal is this is a skinny single and we're just going to keep the money moving like 2021 2022. And we end the market got we got lucky when market bailed us out. Now I think that you, you know, there's, there's enough liquidity has dried up enough that investors should be knowing that they're going to make money going into this flip, not thinking about it or telling themselves a story or ignoring a comp, to, to have that belief. and, so yeah, I just, think investors should be picky right now. And I think 2026 is going to be more of that same story. And, and the folks who make the mistake of getting into the deals, they're going to be really frustrated because they're going to be looking around and seeing money being made and have this fricking albatross around their neck because they got excited and you know, went in early, you know, and loaded up their plate early. and they'll be, you'll be frustrated, because you, your plate's full of, you know, break even deals when you're seeing, you know, when you're standing at the courthouse steps with no money in your pocket and you're seeing stuff go for even cheaper. So I think that's the time for temperance. Craig (30:20) Well, tied all up with the bow here, everyone keep an eye on the five year treasury rather than exactly what the Fed is doing. When you're pricing out your DSCR or looking for DSCR pricing. Obviously we're always available to have that conversation with you and be choosy, you know, be patient. I think the patient money wins in this case, Jack, don't you? Well, that's our quick episode. Real Investor Radio. Hope you enjoyed it. Jack BeVier (30:40) Yeah, exactly. Craig (30:46) We got several more coming. We'll see you soon.