Latest / Real Investor Radio Podcast / Ep 81 | The Future of DSCR Lending, Multifamily Market Insights, Market Challenges & AI Disruption

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Ep 81 | The Future of DSCR Lending, Multifamily Market Insights, Market Challenges & AI Disruption · Real Investor Radio Podcast

• Craig Fuhr (00:12) Well, hey, welcome back to the real investor radio podcast. I'm Craig Fuhr joined, joined again by Jack BeVier We've got a whole lot of things to talk about today. And if you're just joining us for the first time, we are a podcast that's focused towards advanced investors, and encourage everybody to go back and take a look, take a listen to or look at all of the 70 plus episodes that we have up so far, Jack, we got a lot of guests coming up in the coming weeks. But today, We're just going to go sort of round robin through a whole bunch of topics that that have tickled our fancy yesterday. By the way, how are you doing today? Jack BeVier (00:51) I'm good, buddy, I'm good. Good to see you. Craig Fuhr (00:53) Yesterday, you spoke at the Maryland investor network, as many people know, where Dominion is located here in Baltimore, Maryland. We've been here since 2003. And so obviously, we know a lot of local investors in the DMV area. And so yesterday, Jack, you spoke at the Maryland investor network hosted by our friend, Brenton Hess. What was the topic? I heard it was very well attended. So I heard it was like standing room only. So good for Brenton. Sounds like a hell of a crowd. Jack BeVier (01:25) Yeah, Yeah, Brenton's put together a great, group. There's lots of Facebook, real estate investor Facebook groups and the Maryland investor network, which was originally started by Mark Owens, kind of passed the torch to Brenton Hess, who's doing really a phenomenal job of building it up and building that community and bringing content to all the members of that group. I think it's one of the best run real estate investor Facebook groups in the country. Craig Fuhr (01:35) Yes. I like how he's straddling the line, Jack, between sort of like online Facebook group and in person sort of meet up real estate investment club. And there's over 25,000 members in the Facebook group. I don't know if they're all local. But yesterday, I think he had over 200 people in the room for, you know, the monthly or sort of, you know, I guess it's maybe a quarterly meeting that's open to everyone with vendors. and a whole bunch of real estate investors in the room. So yeah, go ahead. Jack BeVier (02:18) Yeah, yeah, exactly. I think he's got about 100 vendors that help support the group. So they've been able to really invest. They have a full-time person, Kelsey Balak, who does a phenomenal job of keeping everyone organized and making sure the content's moderated appropriately and that there's high value content on that page. So I think they're really kind of an example of how to do it right. Like you said, they put together this in-person event, and it was a three different panelists that Brenton interviewed, Aaron Alberti, is just the best contractor in Maryland for real estate investors. does like Craig Fuhr (02:49) Yeah, we've often said if Aaron dies, like half the investors in Maryland won't have anybody to do their projects for them. So yeah, Aaron's definitely got his shit together. Jack BeVier (02:55) Yeah. He does like 400 rehabs a year, 50 to a hundred for himself. he's got literally like hundreds of guys that he has on staff. and they do, they do a great product and they've been, you know, really instrumental in a lot of, a lot of, wholesalers turning into flippers, right? Craig Fuhr (03:14) So you and Fred do a lot of projects. mean, you guys are still buying 100 houses a year. How many projects do you think you'll put into rental or flip this year? Yeah. Or let's say, how many did you do in 24? Jack BeVier (03:23) We will. Yeah, sure. think we did 80 and 24 added maybe 35 rentals, probably flipped 40 and wholesale the rest. Craig Fuhr (03:34) Can you imagine managing the staff that Alberti has? Jack BeVier (03:39) Yeah, it's extremely impressive. Yeah, it's incredibly impressive. Craig Fuhr (03:41) It's unheard of. mean, it's just, it's like, it's like the greatest babysitting exercise of all time. Jack BeVier (03:47) Yeah, he does. He does a great job. was Brenton interviewed him. That was the he was first and then Neil Roseman who owns Block Investments, which is a hard money lender in Baltimore. He also owns Lead Probe, which is a lead paint and a lead paint inspection company because we have compliance here in Maryland around that issue. And, and then load star is his home inspection company. Super smart guy. I've known Neil for like 15 years, so we're good. So His content was excellent as well. And then Brent interviewed me about, know, just, you know, state of the market, what we think is going to go on, talk about the businesses a little bit, you know, building, building the companies, how we got there. So it was, you know, kind of a 20 minute interview. But we got lots of positive feedback from the room that the content was, good. So that's what, that's what was going for. Craig Fuhr (04:31) Well, let's dive into the state of the market. You know, we talk to investors every day here at Dominion Financial. you know, I think I think the sentiment that I hear, Jack, sort of the underlying tone is a tone of optimism. You know, hey, we're just plowing forward. And, you know, we've talked about this many times on the podcast where it's a time for guys who have been in the market for a while to really tighten operations. you know, really understand their KPIs. talked to Frank Cava last week on the podcast about like sort of all of his marketing and the KPIs that he monitors just to make sure that his marketing dollars are well spent. I think it's that time, Jack. It's that time where if you're an investor who's doing five projects a year and you want to get to 10, you better tighten your operations and you better figure out where your equity and your debt is because I think those two factors are going to be a major factor. You know, where are you borrowing your money? to scale the business in 25. If you're a guy who's doing 20 and you want to get to 40, those data points that you have to monitor constantly, I think only become even more apparent. So what were your feelings on that and everything else you talked about yesterday, state of the market wise? Jack BeVier (05:46) Yeah, yeah. So as we sit here right now in mid February, think that this was Aaron kind of kicked off with this sentiment and I agreed with it. But I think the past 90 days have been some of the most difficult in a very long time. Like we've had 15 years of up market, right? And after the interest rates increased in October, that was kind of the bottom and then interest rates started to go up again. And now here we sit with, you know, seven again, 7 % mortgage rates to homeowners, showing activity really decreased. we're starting to see price drops on a regular basis, but the market's just thin. So it's like, I feel like the consumer sentiment right now is like, it's a bad time to sell and it's also a bad time to buy. And like the markets just kind of frozen up. Craig Fuhr (06:30) So Brian Liebowitz on a call that we had company-wide mentioned that I think you guys sold four houses around in the December, January timeframe, didn't you? Jack BeVier (06:40) We got a little pop right at the beginning of the new year. but then, but it was like, you know, it was, it was almost like, you know, it was a new year's pop, right? Like there was, Hey, like, Hey, we got to get, get out there and let's go buy a house this year. Cause we need to. And then after that week was over things, you know, quieted back out. and I think it's largely driven by rates, and also a bit, a little bit of uncertainty because there's a lot of things changing in the world right now. Craig Fuhr (06:46) Lip on the radar. Jack BeVier (07:04) So just consumer sentiment right now is not not aggressive. We're also you know pre spring, of course but it's been a tough 90 days from a from a showings perspective and and then you know, and then rates are higher right now. So it's not like there's a you know, super economical bailout on the on the refi side of things. Banks have continued to stay really out of the picture. They're just further withdrawing and Craig Fuhr (07:27) Her investors, you mean. Jack BeVier (07:29) Yeah. Yeah. And so I think it's made it tough for, from a liquidity perspective for real estate investors. The past, the past quarter has been a tough, a tough cashflow quarter. and I'm nervous that, I'm nervous that there's no reason that it's going to improve. Like I can't put quite put my finger on like that. This is going to get better in the short term. I think that, you know, I'm kind of hunkered down for the medium term right now. and I'm still super bullish. Craig Fuhr (07:51) What does that mean? Jack BeVier (07:53) I'm still super bullish on you know, American real estate long term. So like I'm adding as many rentals as we can afford to from a cash flow perspective. But wholesaling and flipping has gotten harder. And so that, you know, as you know, as many as we can afford to just got a lot harder. And we haven't seen a you know, we haven't seen a big increase in inventory we haven't seen so I feel like, you know, cash flow is the thing that breaks you. Right? Like, you when you, when you just run out of cash, it's not like, you know, that that's when your behavior changes because you just literally can't, you know, show up to the steps or can't, you know, put that next house under contract because you got to get these two albatrosses out from off your neck. And I feel like we're coming into that time right now where we may actually see some tide shifts in terms of distress, kind of, kind of come through the market. So Craig Fuhr (08:42) distress from a homeowner standpoint or distress from maybe some real estate investors who are stretched thin standpoint. Jack BeVier (08:49) Yeah, real estate right now I'm talking about real estate investors that are stretched thin, but on the back. Yeah. Craig Fuhr (08:55) too many projects on the plate, can't get rid of the ones you got, not really getting much cashflow off of some new rentals that you put into the portfolio. Jack BeVier (09:02) Exactly. Yeah, exactly. And all those things, right? Like there's like kind of nowhere to hide, you know? And then kind of on the back of that, I'm concerned we happen to be in Maryland. And I'm concerned about, you know, if Trump is successful, and they are just, you know, their guns blazing right now, right? Craig Fuhr (09:08) Yeah. It's Christmas Day every day if you're a fan. Jack BeVier (09:24) Yeah, yeah, yeah. From a from a from a philosophical perspective, huge fan, as a somebody who, you know, as somebody who lives in the DC metro area, however, and, you know, and wants to put out a product that that those federal employees have been a have been big buyers of for the forever, right? Especially over the past 30 years. Craig Fuhr (09:33) backyard. Right. Jack BeVier (09:48) I'm nervous about that, right? Like if all of sudden we ax the department of education, transportation and cut and cut HUD in half, those people live in PG County and Montgomery County and Northern Virginia and you know, yeah, in Baltimore. So I'm concerned about a regional recession in the wake of cost cutting, right? In the wake of, of austerity. Craig Fuhr (09:59) Baltimore. So there's currently 2 million people who work directly for the federal government, in the Baltimore Metro, DC, Northern Virginia area, and obviously elsewhere in the country. And then another 2 to 3 million or more who are contractors in the area that work as contractors. And so I don't think it's an insignificant worry. I think that if he gets the downsizing of government that he's seeking, you know. I think there's going to be a lot of people that are left with a pretty decent severance. However, you know, what do you do when that runs out? And so I think, you know, do you see, and I believe that that has to happen within two years. I don't know that he's got a four year runway on that. Right. And so a lot of disruption. talked about this earlier in the year, you know, a lot of broken glass, to get to that, to get to that point, which I think is better for the country, frankly, if there's just less government spending. less overhead. But it is definitely not an insignificant... It's not an insignificant thing if you're an investor in the area. I think you have a very legitimate concern there. Jack BeVier (11:17) Yeah. And I think that, and what won't happen is the fed decreasing rates as a result, right? Like that's a regional recession. The overall, you know, country's economy can be booming. And one would expect that with a Trump tax cut, you know, package coming up in the spring, that the stock market's going to look very favorably upon that. And so the stock market could be doing great. The national, you know, unemployment rate could be, could be very low. And yet we're stuck here in a regional recession and so and rates stay where they're at even though Everyone's sucking wind here locally and that would be a recipe for price, you know for price decreases I mean we've Craig Fuhr (11:56) Absolutely. And maybe a lot more inventory coming on the market with people losing their homes and things like that. Jack BeVier (12:02) Yeah, well, yeah, losing their homes or and but also like for landlords, you know, their tenants lose their jobs. You know, that's that'll that'll exacerbate the headwinds that they are they that they already have. So that's kind of like my that's kind of like my my I think that's a real possibility like Craig Fuhr (12:20) Let me ask you this. I know that you and Fred with Dominion Properties, most of the rentals that you have are subsidized Section 8, correct? And I know that you keep very close ties with the local housing authority. What's your take on how the new administration might affect that and either increase the budget for subsidized housing or decrease it? Jack BeVier (12:29) We do a lot of that, yeah. Yeah, sure. So Scott Turner's gonna be the new HUD secretary and he's gotten headlines for his desire to privatize Fannie and the agencies, Fannie and Freddie. I haven't, I don't have a clear line of sight on what his perspective is in terms of terms of the HUD budget. Past Republican administrations have looked favorably upon the housing choice voucher program. Because section eight's an umbrella right there's lots of stuff inside a section eight. There's public housing There's project-based vouchers. There's lie tech and there's housing choice vouchers housing choice vouchers are kind of the most Republican of the housing subsidy programs because Craig Fuhr (13:16) Mm-hmm. So it gives people kind of the freedom to choose where they wanna go. Jack BeVier (13:26) Yeah, exactly. And, and works with private landlords as opposed to giving money to another government agency to administer stuff. Right. So past Republican administrations have been good for the housing choice voucher program. They've, they've sometimes have gotten a relatively increasing percentage of the, that budget, as we've, they've moved away from public housing, but I'm not sure that, I'm not, I don't have a direct line of sight on like, you know, what budget Craig Fuhr (13:33) Sure. Jack BeVier (13:51) modifications or reallocations we might expect under a Scott Turner HUD. I mean, that's TBD for me. Craig Fuhr (13:59) So I was taking a look at some headlines prior to coming in today and the National Association of Realtors is expecting the mortgage rate in 2025 for homeowners to be around six, you know, maybe in the, maybe come mid year into the, into the sixes and maybe get to 6%. You're smiling because I don't know that you feel that same sentiment. Jack BeVier (14:22) yet I don't and the National Association of realtors always is projecting that the mortgage rates are going to come down right because because it's because they're trying you know because that's because it's good for business you know they're talking their book right like they I think they they always project a decrease or at least they're like on the low end of all of the conservative or low end of the estimates whenever you know when you put it would to get put together the mortgage bankers Association National Association of realtors all the other trade groups and what they think that the Craig Fuhr (14:28) Yeah, right. Right. Jack BeVier (14:50) where mortgage rates are going to be, NAR is always at the bottom. Craig Fuhr (14:52) Any other insights from yesterday from the Maryland Investor Network? Jack BeVier (14:52) The greater. yeah. So like, well, and so I mentioned this, like, you know, I think like we're having like current headwinds from a cashflow perspective as an industry. the, I'm concerned about a regional recession that won't get any help from a monetary policy perspective. So we'll just be eating it. And then I'm concerned from a 2026, 2027 perspective about, about an actual consumer recession because of AI's impact on $50,000 $80,000 white collar labor, frankly. I think it's coming faster than we're going to be able to adjust for from a political perspective. you know, the fear of losing your job, the fear of having your job being replaced by new technology and having to repurpose is gonna... is going to, I think it's going to disturb the labor market. And this one's going to be a white collar recession. It's not going to be a blue collar recession like we had last time. And so that I could see that as a real possibility next year, 2026, 2027, that stuff really flowing through the economy. So I'm man, I'm hunkered down right now. Like mentally, I'm hunkered down. I'm like, only do the things that we're great at. No new shiny objects right now. Like, you know, Craig Fuhr (15:56) I agree. Jack BeVier (16:05) focus on cash flow and not planning on setting any records in the next couple years because I think that it would be imprudent to go out on a limb right now with so much risk that I perceive in the world. Craig Fuhr (16:17) Yeah. How do you feel about, we've mentioned it a couple of times on the show. Dominion Properties is currently building some multifamily here in the Baltimore metro area. How do you feel about multifamily in the area as well as sort of elsewhere in the country? You know, we saw it kind of drop, you know, you know, some significant price decreases around the country. the multifamily over the last year. How do you feel about this year, especially with all the units that you guys have coming online? Jack BeVier (16:46) Yes. Yeah, I mean, Maryland has the we don't give out permits in Maryland, you know, like they do in other states. So there's a very little new construction on a relative basis to other parts of the country. So we don't have like the new supply issues that other parts of the country have had to deal with, particularly in. Craig Fuhr (17:05) We do have a fairly significant amount of like top end supply though, don't we Jack? Like stuff that's kind of maybe sitting a little vacant right now that not necessarily affordable multifamily, but sort of top end multifamily. I'm thinking Baltimore peninsula, you know? Jack BeVier (17:18) There was a chunk of deliveries in that segment, but it's not like there's cranes been up for the past year or two. There's not new stuff that's coming on, especially not when you compare it to other parts of the country like West Coast of Florida, like coastal Florida, big chunks of Texas. They actually give out permits and people actually are building there. Craig Fuhr (17:35) Sure. Jack BeVier (17:43) And as a result, you really see cyclicality within the rental market as well. Whereas because we have on a relative basis, not that much new inventory as a percentage of like total housing supply, new housing supply doesn't tend to move rents that much. You could, you know, oversaturate a particular spot, but in like, you know, mess up that market there, but as an MSA, like it doesn't really move the needle. the multifamily brokers that I've been talking to, I keep, keep telling me that like, we're just seeing banks and the insurance companies that own the debt on, these multifamily projects, just blending and extending, right? Just, kicking it to the back, kicking it to the back, taking whatever cashflow is there, but not wanting to foreclose. but you know, and then the question is, can they just do that indefinitely or not? Right? Like who can do that indefinitely? because you know, I don't think anything we just described. Craig Fuhr (18:21) Kicking the can down the road. Sure. Jack BeVier (18:37) leads to a lot of strength in rent increases on a going forward basis. So I think that like, it'll be tough to continue to increase rents from the landlord's perspective, if we're walking into a weaker consumer environment. And so we're not going to be able to just pass it through. And if that's the case, then can the you know, do the banks and the insurance companies and other debt holders of the multifamily debt. Um, eventually just say, you know, at some point say, Hey, you know what we've been, you know, we, we, we did this for three years, but we can't keep doing it. You know, it's, know, we think we're above water enough. Let's pull the rip cord here. Um, and so, yeah, cause we really just haven't seen this in the multifamily supply, even though there was like some, you know, poor lending practices happening back in 21, 22. Um, and that hasn't come, you know, that this hasn't come home to roost yet. So I think that's another like thing that we're keeping an eye on. It may be a source of opportunity. but you're going to have to have cash to do that. Right. and that's like, that ends up being the tough part, right? Like everyone thinks about the cash they have now when they're talking about the opportunity that's going to come a year from now, but they, there's this cognitive dissonance that we do as people, as humans that we like, don't project that, Hey, if everything else is getting worse, why would I be an exception to that? Right? So like, you're like, Hey, I've got cash now. I feel good. I could take care of opera. I could take advantage of opportunities if they happened right now. the opportunities don't come out in the healthy environment where you've got cash, they believe it whole the whole economy squeezes you until you start to break. And then they present opportunities. So, you know, the people who were like talking to you know, you know, people were talking a year ago about gearing up for multifamily acquisitions won't have won't be in the cash position when the opportunities come out. That's why they operate. That's why the opportunities came out at those better prices. and so it's, it's really hard. It's really hard to survive, to be in a position to take advantage of those opportunities. Like everyone knows that's what you're supposed to do, but like, like, but being in that position is much easier said than done. Craig Fuhr (20:42) I had never, I have such a hard time, Jack, remembering what I had for breakfast yesterday, much less the names of the folks that we've had on the show. Who was the gentleman from Zelman that we had on? Yeah, so Tony McGill, and I think we had a couple other guests that were saying that there's probably not a lack of equity right now sitting on the sidelines. Jack BeVier (20:52) Tony, Tony Miguel. Craig Fuhr (21:05) And, and I don't think that lenders like Dominion are going to, you know, nobody's folding up shop. mean, we're, we've still got, you know, capital at our backs to fund deals. So I've made, I've said this on my LinkedIn page several times, and we've said it on the show that like getting back to the whole idea of better operators, when those opportunities come along, I think those are the guys. that should be developing the relationships right now, proving what their experience and sort of their operation to the equity side of the equation. I think, do you feel me there? Let's say, we'll just take you for instance, 20 years in the business, just an unbelievable operation, very tight from Jack BeVier (21:46) Mm-hmm. I'm with you. Craig Fuhr (21:58) from management to to tenant operations to, you know, construction, all of that, I can't imagine that if you needed some equity, it would be difficult for you to go out and find those relations to establish those relationships. So that when the real opportunities came along the blood in the streets, as they say, you would be well positioned to take advantage of those opportunities. Yes or no. Jack BeVier (22:24) Yeah, think, yeah, track record matters then absolutely. Craig Fuhr (22:27) And do you believe that there's a tremendous amount of equity on the sidelines for those types of bigger opportunities that might be coming along? Jack BeVier (22:37) If yeah, if and when pricing came down, right? Like if pricing comes down to the point where the return profile of getting in is become sexy, like it's not sexy right now, right? Like it's you're buying multifamily at a seven and a half cap, like seven, seven and a half cap. Like you can publish a levered 10, you know, like it's not, it's not sexy yet when you can publish a levered 18, then yeah, then equity will be interested, but we're just, we're not there from a pricing perspective yet. Craig Fuhr (22:48) Right. Yeah. So over the weekend, I think you were in Houston meeting with the real investor roundtable, which we've mentioned several times on the show. Maybe you can discuss like sort of the caliber of individuals who are in the room, maybe talk about some of the guys are in the room. And these are all, you know, top investors from around the country. And then tell us what some of the takeaways were there. Jack BeVier (23:27) Yeah, I am. I freaking love this group, man. Every time I go, like, God, like, gotta, you know, figure out how to like work this into the schedule. And then Craig Fuhr (23:34) It's always that way. Then when you, it's like going to the gym and you get there and you're like, I'm glad I'm kind of glad I'm here. Right. Jack BeVier (23:37) Yeah. Yeah, exactly. And then afterwards, I feel really good about myself and always have actionable stuff to come back and implement into my company, right? So yeah, like you said, it's about 25 operators from around the country. We get together. There's probably like 40 guys and 40 people, guys and girls, some excellent women as well, of course. And I get together in person for two days. Every four months. Craig Fuhr (23:41) Right. Yeah, yeah. Jack BeVier (24:01) And just, you know, talk about what's going on, what's working, what's not work, most importantly, what's not working and get perspective from everybody on like, you know, those, cause they, cause other people in the room have experienced the same challenges. So, it's, and, everyone's got different talents, right. And works on slightly different things. And so, you know, just cause it worked for them, doesn't mean it's going to work for you, but the perspective is definitely relevant. Craig Fuhr (24:25) It's a wide swath of guys that are operating in different asset classes, not just single family. Jack BeVier (24:31) Yeah, yeah, and have different sized operations and are in different platforms. So, and, for all, all for good reasons, right? Like that there, you know, there's lots of ways to, to approach this business. and so giving those different perspectives and different geographies and, from different, you know, talent levels or not levels, but different personality styles, is, is really, really informative. And we always bring a ton back to our business. I would say like from a general sentiment perspective, there was like some similarity to what I was just talking about in terms of like concern, like 2024, 2024 wasn't a, wasn't anyone's best year. you know, guys made money guys, you know, finished their, know, finish their pivots from an, from a, you know, executing a lot of guys were pivoting, you know, in the wake of 2022, you had to like change up. couldn't just keep doing things the way you were before. Um, and so a lot of guys finished that operational pivot in 2024. was a lot of investing in infrastructure that happened and investing in people that happened in 2024. Um, and deals are still hard to find. And then we capped off the year with like, you know, a slow quarter as interest rates climbed back up. So no one was like, Hey, I'm, you know, we're 10 X and, know, you know, we're 10 X in our real estate business this year. Craig Fuhr (25:29) Yeah. Right. Right. Jack BeVier (25:46) But there's a lot of folks who are who have built diversified businesses. It's really funny, actually, like, pretty much everyone in the someone, Joey, she is from Alabama pointed out that like, dude, everyone in this room, like five years ago, there was a lot of just wholesalers, just flippers, just rental guys, just lenders. And now like the entire room is doing three things, because you need those three pillars to like, even even yourselves out and like, from a cash flow and a profitability perspective. Craig Fuhr (26:02) Right. Right. Yeah, yeah. Jack BeVier (26:14) And it's like that idea has become really like, I feel like pretty much a best practice at this point where you need like, you need some active services income where you're the best at something that where you make money doing that and you invest in real estate and you so you have to have the skill sets associate your skill sets necessary to find deals and renovate properties and property management if you have to or if you want to. but, but, know, but balancing out, but, committing to being just doing one thing is a good place to start, but it doesn't give you this doesn't give you long term stability. And, and so pretty much everyone in the room has got has done that a version of that. And it just kind of emerged organically. Like it was never a conversation. It just, but you see everybody just doing that. Yeah, yeah, yeah, exactly. So yeah, it was a really, really invaluable conference. Craig Fuhr (27:03) Yeah, it was purely out of necessity. Right. I don't know that it's something, I don't know that, that pivot into, you know, other facets of the business would be well advised for someone who's just starting out to intermediate. mean, you're as a starting out investor, you're already wearing every hat in the business, marketing, contracting, you know, deal, deal flow acquisition and disposition. So it's a lot I was, I was speaking to, an investor the other day. you know, as a loan as a loan officer with the company and the guy quit a great job, made a lot of money, quit a job. And I think he's generally a smart guy. But they're trying to build a rental portfolio. And I said to him, you know, I'll do respect. How are you paying the bills? How are you? How are you paying your mortgage? How are you sending your kids to school? How are you paying for groceries? And he was like, you know, we're really trying not to take any of the cashflow out of the business. And so, and I was like, are you, are you guys going to flip any houses? He says, ah, no, we're, keeping everything. And I was like, where did the paydays come from? Like, where are the chunky paydays you need to pay your bills? And he was like, ah, I've been doing some snow plowing and you know, do a little landscaping business. I'm like, I like the hustle. I really do. But like that just takes away from what I think you're trying to do from a real estate investor aspect, right? Like, I don't know how you, you know what I mean? Jack BeVier (28:11) Mm-hmm. Yeah. Yeah. And I get, I get nervous about that storyline, because they're getting cashflow paydays, right? Like they, have to, right. But then the answer is that, you're getting it from debt. Like you're getting it from the refi. And so you're levering every property to the, you know, to the hilt to make cashflow work. Cause you're not making it out anywhere else. And, and so that those, that, that perspective or that approach can find you. Craig Fuhr (28:33) Yeah. Sure. Jack BeVier (28:58) like just totally levered. And if you're, if you don't understand your expense ratio well enough, don't know just cause you're new to it, right. Even, like you could find yourself with an over levered portfolio that doesn't cashflow and then you're chasing the next deal. And that's literally, you know, it's your own version of a pyramid scheme where you're just like feeding, feeding the, the, exodus of cash with new deals that eventually that does blow up. But we haven't seen, you know, we haven't seen that happen though. Haven't, haven't seen that really play out. There has not been like DS, you know, a guy's got 50 properties that he built with a DSCR, you know, 50 property portfolio that he built with DSCR. And that comes to foreclosure that hasn't happened yet. I'm looking for it, but I'm not seeing it parentheses yet. Craig Fuhr (29:42) Foreclosure rate in the DSCR is still historically low, is it not? Jack BeVier (29:47) Yeah, delinquencies started to pick up in the fourth quarter last year. But, but all non QM products did and DSCR did less than everything else and still like kind of well within underwriting well within acceptable guidelines. So it's definitely a there's a company called DV01 DV01 that does phenomenal research on remittance reports of securitization, which is basically like what this securitization trustees have to publish. Like they have to publish the data of how things are going. And, and so they aggregate all that data across all the different securitization shelves and show, know, so can get a sense of like a broad swath of performance data across an entire like loan product. And so they do that for all non QM and including, so DSCR is a specific thing that you can pull out of their data. And I've been watching that. so there's been a little bit of an uptick, but it hasn't been crazy. And it's been less than everything else. So there's still tremendous demand from loan purchasers to buy DSCR loans. Craig Fuhr (30:48) Let's get back to this. I want to come back to the state of DSCR, but going back to the your RIR meeting in Houston, you said, you know, it's, it's always a labor of love to get there. And then you always come back with something actionable and some excitement about something. What are you excited about? Well, like, like from that room, you know, what did you come back, you know, kind of wind at your back? Like I'm excited. Jack BeVier (31:11) Yeah, yeah. I mean, we're working on some AI projects that I'm excited about, just automations and getting rid of people scrolling through PDFs and getting rid of people clicking around in a software. Just stuff that where they have to do it. Yeah, all that stuff should be, is totally doable right now with existing technology. Your data has to be set up or your database has to be set up. Craig Fuhr (31:26) the crazy repetitive, right? Mm-hmm. Jack BeVier (31:37) in a structured way such that you can, you know, program that stuff into the system. And that's a lot easier said than done for a lot of folks. But I think we're gonna start to see, we're starting to see efficiencies in production now, like literally now. And that's not common. Like that, there are a couple, in that room, there were maybe four companies that were, actually trying to do anything with AI in their businesses. and, by the way, this is like, in my opinion, one of the most sophisticated rooms in the country, right? So like, you know, there's 25 companies in the room and F and F four of them are actively working on this. Only two of those four actually had anything in production, myself not included. We actually now we do now as of this week, but, um, so like, you know, I, I feel like I, Craig Fuhr (32:10) I agree. I agree. Jack BeVier (32:28) We're trying to balance the idea of like, is it important to be an early adopter here? Can you wait and just let the private market produce the product and then, and then bolt it onto your existing system. it doesn't make sense to spend the money to be an early adopter. That's like an active debate in that room. and there was no consensus. It was an active debate. It was an active debate. Some people think I'm an idiot. other people think like, no, dude, I see the vision, like do it. Like, I can't wait to hear about the next one. Craig Fuhr (32:45) What was the consensus? Jack BeVier (32:55) So we'll see you then. Craig Fuhr (32:56) Don't you think Jack, as an early, I think what I hear you saying is, do we wait for the private market to come up with the solutions that more than likely they probably will? Or do we start to develop those solutions now? knowing that there might be a better solution coming, but at least we're familiar with the process sort of like how to bring how to bring something from an idea to fruition. So that when advanced AI, agentic AI comes out, we're that much further ahead of the game. Jack BeVier (33:27) Yes, exactly. That's kind of the debate right there. Yes, you framed it perfectly. Craig Fuhr (33:31) I have to honestly, like I don't know how much capital you're spending on that right now, but I'm on the Jack BeVier side on that. I think if you don't have people within the platform who are well versed in how to take an idea and turn that into something that is workable through AI, you'll never be the early adopter of the private product that might come out six months from now. Jack BeVier (33:59) Yeah. so like, yeah, I'll, I'll steal me on both sides real quick. Right. So the wait and see perspective is I don't know shit about engineering. I don't know shit about data science. like you, but you're going to tell me I should, but I should go hire some, some nerds that are going to come into my system, which is in like four different pieces right now and like link it all together so that I can create a chat bot like I'm cool. You know, like that's not going to help me buy more houses, dude. Like that's just not going to help me buy more houses. Like, and like, my, my issues are buying more houses and getting construction work done cheaply and making sure that my tenants are paying the rent on time. And I think there's like probably some easier arguments. Everyone's like, Hey, there's probably some easy applications for this and property management, but property where or app folio or yardie are going to come out with their own version. Craig Fuhr (34:26) Right. Jack BeVier (34:50) that bolts right on top of the software that I'm already using and allow me to be more efficient and not have people clicking around because they'll have some agent built into their system that clicks around. They're going to productize that for me. Why the hell would I go build what they're definitely building? And they're the nerds already. I like, why would I build it on my balance sheet? I'll like just rent it from them after they build it on theirs. And I get that perspective. I totally understand. Like I think that's very logical. I can absolutely see the, know, that they're like, you know, very you know, intelligent, reasonable points in that my, or the, think the other side of that, coin is that this is like the internet, but probably much faster. and we're all going to have to learn anyway. So you might as well roll your sleeves up and get comfortable with the concepts and the ideas before, lest you just get overrun by a workforce that or, know, that learns around you and, and, and frankly, just like eats your lunch. Right. So like, I think that I'm concerned that, or rather my perspective is that it's something that we, that everyone is going to know how to do in five years. just decide when you want to go up that learning curve. And I'd rather like, I'd rather start to implement things into my system early so that I can, so that I can migrate my team. skills, their job descriptions up to the things that are fundamentally human that AI cannot do. Because if I wait for other companies to do it themselves and lower their cost structures, I will be losing ground from a competitive perspective as these other companies around me who are making these investments become more efficient machines and deliver a better service level to their customers. Craig Fuhr (36:20) Mm-hmm. Jack BeVier (36:37) And then all of a sudden, and then the private market will come in and say, Hey, I've got that solution for you so that you can keep up. And then I'll have to bolt it on and lay off 20 % of my people. And I think that frankly, that would be a very unethical thing to do for just to sit back and wait for technology to force me to axe a bunch of people, right? Who then are not, who were then completely unprepared. Craig Fuhr (36:37) guess. pass you by. Sure. Jack BeVier (37:01) to do whatever else because they haven't been familiarizing themselves with these concepts are not comfortable with these ideas. So I think that there's like a little bit of an ethical perspective to leaning into this, but I'm also doing it purely from a self interest perspective in that I think that we can get productivity wins along the way that have a very, that have a self evident return on the investment that we need to make. It's not like you're like, this is not coding jobs. You don't need, you don't need, like, this is all like, this is all low code, no code stuff. So it like anyone can do it. You just have to lean in and just, and, like open up the, you know, the learning channels in your brain and like, and figure it out. So, you know, it's just work, right? It's just work. Um, but I think that that's a, actually let me make one last point. Um, so, and I think that the downside scenario, Craig Fuhr (37:36) That's right. Do you? No, go ahead. Jack BeVier (37:56) If I, I, or I think that there is a real possibility that, whoever does it first is all of sudden able to decrease their cost structure materially and offer lower pricing or better, you know, better quality product, better service product at a, at a better rate. And that the private sector is not going to create an application of this technology because your business systems and processes are so unique. that they can't, they could, they can bolt an AI onto an existing software. But if you're using four different softwares, they're not going to bolt on something that talks to this and this and this and this and does the data mapping for you because you designed the data mapping. Like you designed your own systems and processes. There's uniqueness to your business. So there's not going to be an obvious bolt on that, that actually truly makes your business as efficient as it should be. And so you like, so bolting it on is not actually a real thing that's going to happen. And like there's, there's not going to be a private market solution that you can just bolt on. You're going to have to do the heavy lifting of getting your data in a structured format such that you can apply this technology. And then you have to apply the technology, the way that you built your machine. And if you're waiting for the, the, the, you know, the the silver bullet to come. We're just going to run past you. I'm just going to take your market share while you're waiting for the private sector to do that. It'll happen too fast. I'll just eat your lunch while you're sitting there waiting. And I think that that's a real possibility too. Craig Fuhr (39:21) private solution? Sure. So where are you more excited about AI right now? You know, from the property side, you know, or from the lending side? Yeah. Jack BeVier (39:45) Both we have more people in the lending side right now. So that's my priority because just, just purely from a math perspective that that makes, it makes more sense for us to start there. But all this stuff that I'm learning, I'm absolutely mentally being like, I can apply this to property management here. I can apply this to construction there. So I'm building out a roadmap in my head for those other companies as we learn about the tools on the app and applying them to the lending company. Craig Fuhr (40:08) How much do you think the implementation, the early adoption, like I always think that like Amazon is Amazon, not because they deliver, you know, low cost products. It's because of the customer experience, right? Like I can open up my phone and in three hours I can have it sitting on my doorstep and Bezos makes no. bones about like, that's the whole mission, right? Like, let's make it as easy as we can, the most elegant customer experience. How much do you feel like the implementation of AI is going to change the customer experience from a lending standpoint? Jack BeVier (40:35) Mm-hmm. Yeah, tremendously. I think that there are obvious gains there. And it doesn't physically take a month to close alone, right? Like it's not as if there's 160 hours of work that need to be done. Like it's nowhere close to that, right? And that was even if you had one person doing it and you actually have like five, right? So like all of the work that's being done is being done. It's just, the handoffs and it's the... Craig Fuhr (41:01) Right. Right. Right. Jack BeVier (41:12) what two steps forward, one step back pivot over here, two steps forward, one step back, pivot back over there that like end up resulting in those longer timeframes. But the whole thing's a big decision tree. Like it's all a mappable process. And so it's a, mean, there's a lot it's big, it's very, very big. dude, I saw this morning. Optimal blue, which is a an ice Black Knight owned company. It's their resi consumer software. for it's a Resi consumer software. They've built a lot of AI tools into Optimal Blue. so large mortgage originations, large Resi consumer mortgage origination companies now have access to a lot of cool tools. So that's that idea of, the software guys are gonna just build a bot into, build automations and build natural language reporting into my software. And so I don't need to do it. And I, and that's true. think absolutely that's going to happen. Optimal blue just came out with it. They're humongous. Like they're like one of the biggest software companies in the country. and, and so, yeah, like we're already seeing it there, right? But if you're not on optimal blue, so, Hey, if you're on optimal blue, cool, get in there and start learning the, you know, playing with the cool new tools. If you're not on optimal blue though, everybody else is now like, just, you know, they made themselves much more competitive by having this feature set, in there. but everybody who's not on Optimal Blue does not have that. And Optimal Blue doesn't do everything, right? So those are cool tools within the context of that software, but still you have to have set up your business around the structure of the software, which inherently has some limitations, just has definitional limitations to whatever the software's capabilities and processes are. But everyone who's not in Optimal Blue, not in Resi consumer mortgage, like there's no business purpose lending version of Optimal Blue, like mortgage office and liquid logics. And, you know, there's, half a dozen like companies that are trying to compete for that space, but nobody has emerged as like the best best in class product. So like, you know, so that doesn't exist in the private lending space right now. Craig Fuhr (43:16) So we've talked to several investors here on the show about Salesforce as a CRM. We use Salesforce here and I think the company has made a tremendous investment into it. What do you know about what Salesforce is doing from an AI standpoint and how that might help some of our listeners as well as our company over the next six months to a year? Jack BeVier (43:39) Yeah, just to be clear from like most listeners, Salesforce is total overkill for your business. I mean, if you're doing less than, you know, if you're doing less than 15 million a month of hard money, don't just don't, bother. Like it's not worth it. Just stay on Excel. Excel's fine. Like Craig Fuhr (43:43) Yeah, yeah, we get that. It is. I always say that sales. I always say that Salesforce is like the Photoshop of CRMs. You know, it's got a million features, but you only use like five and it costs, but you're still paying the same amount for it. So, but I think what they're doing from an AI standpoint, it's exciting. And, and even if people aren't using it, other companies like it will adopt some of these features. So maybe you can speak to that, what you're seeing. Jack BeVier (43:59) Yeah. Yeah. Yeah. What's cool about Salesforce is that it's a structured database where you can do pretty much, you can do lots and lots and lots of stuff. The problem is you can, and you can customize it any way that you want to customize it. The problem is you have to customize it using their, it helps to know their coding language and being a sales and because it's so complicated, there's literally like full certification, you know, certification programs to be a Salesforce administrator. so there is a steep steep learning curve associated with it. There are other options like Zoho that are much more user friendly and allow you to link stuff together in very cool ways that are, if you don't need big scale, then they're frankly just better solutions. Craig Fuhr (44:48) ZOHO. Jack BeVier (45:00) We went, made the investment because we wanted to scale the lending business. And so it's been an annual investment. it's a significant annual investment and steep learning curve. And because, because there's a learning curve, you know, you've got some power users, but not every manager is a power user. so every manager can't go in and make the revisions that they want, you know, in five seconds, like you can do in Google sheets and Zoho and you know, lots of other options, Zapier. So there's like big downsides to it, but the upsides to it are that they is that you can build a billion dollar company on it and it doesn't break between a hundred million and a billion. It's like nothing will, nothing will break. Nothing will change. Whereas the other ones will, they will break when you get to that scale. And so anyway, that's the reason we made a long term, very long term investment in that software, in that platform. I think that Salesforce has come out with with agent force, which you've seen the Matthew McConaughey commercials on the Superbowl. Yep. Eight million a pop. heard eight million. Yeah. And for 30 seconds, 30 seconds is eight million dollars. Craig Fuhr (45:55) spent a lot of money on it. Sorry. I didn't see any Dominion commercials during the Super Bowl. Jack BeVier (46:04) Night no, not yet, not yet. Maybe we buy houses, you know, slighted. We buy houses in there. Anyway, so. They've come out with Agent Force and they think you know it's their answer to Microsoft's copilot, which is kind of gets the crap kicked out of it, because it's it's not that cool. But but even the Agent Force stuff is like pretty early innings still like they. They're advocating, if you listen to Mark Benioff talk, he's advocating this idea of digital labor. That's the new buzzword, digital labor. Yeah, exactly, which is like that, which I kind of buy into, but it's not an unlimited labor force because there are still things that are fundamentally human. Craig Fuhr (46:36) Right. You can have an unlimited labor force. worse. Jack BeVier (46:51) I really don't see the sales process being automated like this. The human to human interaction is, there will be certain people who just want to go on a portal and upload their information and never want to talk to a human. Sure. And that stuff, it's important that we build that functionality, right? That we have that functionality. But I don't think that it's going to displace all things in business. The human to human interaction is like, I think something fundamental to... people wanting to do people doing business together. So anyway, but the idea of digital labor is really interesting because you can because you can train at one time and it doesn't get sick and it doesn't forget and it's really smart. Yeah, yeah, exactly. And what's really exciting about it is that and if you've got capital or if you got ops and you've got ops and capital, Craig Fuhr (47:31) Only gets better over time in terms of its intellect. Yeah. Jack BeVier (47:42) to be able to put behind those resources, you can instantly have 10 of them or 100 or 1000 or 10,000. So like, there's no like, hey, we're starting up our hiring process and we're gonna hire a bunch of people this year for this role. Like we need 30 of this role, you just create 30 of them or have the one doing the work of 30. And so they're paying their... Salesforce is trying to make up for the loss of seat licenses, which is how they currently charge. And this is a thing across all software, all SaaS companies, all software as a service companies, that they're losing seat revenue or they had, they'd lost seat revenue. Salesforce is trying to replace it with charging by the drink for... what the agentic AI, what agent force is doing. like how many conversations charging you by the conversation, for example, for the chat bot. and they've priced it a place where it's like, yeah, that's definitely cheaper than me having a human have that conversation. So if the, if the, if the, if the, if the chat bot can using chat bots, like the most basic example, right? Like the chat bot can access my entire library of data and I can tune its personality and So it does just as good of a job as the human or the Filipino VA that I would otherwise have behind that chat bot interacting with my customers. And I can pay less for that conversation than I would with either of those alternatives. You know, why wouldn't I? It's a better customer experience and it's cheaper for the owner, duh. So, and it's infinitely scalable. like that, the idea of, of, of digital labor is, Salesforce big push right now and the fundamental idea behind agentic AI. And I think we'll be seeing it in production, you know, deployed in our economy. We will be interacting with these things or they will be doing work. you know, this year and definitely next year in the year for that. Craig Fuhr (49:43) And the reason I brought it up was full well knowing that most of our listeners probably don't use Salesforce is because I think that that type of functionality will be coming to most platforms pretty quickly. So that if you have some member of your staff who's doing highly redundant work, repetitive, I think that functionality is going to be happening very quickly amongst most platforms. Jack BeVier (50:07) Mm-hmm. Craig Fuhr (50:07) a agentic AI will be the, you know, will be something that everyone I think will be using within the next six months to a year and a half. Yeah. A hundred percent. No, I don't either. a couple other things I wanted to talk about Jack and we'll wrap it up here. Um, state of DSCR. Um, I know that, uh, we're heading out. You're we're heading out to Vegas. Um, I'll be at the, what's the conference I'm going to Jack, the national home builder conference. Jack BeVier (50:14) I think so, yeah, I think so. I don't think we're gonna have a choice in the matter. Yeah, the National Association of Home Builders, their international business show, IBS conference for National Association of Home Builders, yeah. Craig Fuhr (50:44) I think that starts on February 25th. You mentioned that there'll probably be about 10,000 attendees, maybe five to 10,000. It's a huge show. Jack BeVier (50:52) Dude, it's some crazy number. I should look that up actually. But like they take over the entire Las Vegas Convention Center, which is a statement. Like that thing is humongous. There it is. Four, four different show halls that are each the biggest show hall I've ever been in. Like you walk into one show hall and it takes you six or seven actual minutes to get to the other side. Like it is over a quarter mile long. Like they're really huge. And, they're all full of Craig Fuhr (51:01) It's massive. Jack BeVier (51:19) full of vendors. So there's lots of builders there. Lots of of trade. It's a ton of trade companies. But as a result, there's lots of builders. Craig Fuhr (51:24) I think what I'm most excited about is just talk with guys that are out there building and see what their sentiment is. And are they full steam ahead? Do they feel like it's going to be kind of a sideways slog this year? That's the discussions I'm really excited about when I go out there and meet a whole bunch of new builders and investors. But you're actually attending another show. and so, yeah, can you speak about that and sort of lump in the sort of state of DSCR? Jack BeVier (51:53) Yeah, sure. So yeah, it's back to back for us. The Builder Show is the middle of the week. And the beginning of the week is the Structured Finance Association Conference, which is basically thousands of guys in blue suits from New York descend upon Las Vegas and talk about the securitization market. I mean, they're doing mortgage securitizations, but they're also doing car loan securitizations and student debt securitizations. Craig Fuhr (52:06) Right. Jack BeVier (52:17) you know, any, any, you know, esoteric asset class that you can turn it, turn into a cashflow, Wall Street securitizes it. And so all the, the investment bankers and bond buyers and lawyers all, come out to this, the structured finance association conference and get together. And there's a melee of, of, of meetings, you know, you'll go in and you'll go into the meeting areas and it's like, Wells Fargo has got a huge room and they've just got like these curtains, like these like, you know, curtains struck on structured with tables in them. And there's like 40 meeting rooms in the Wells Fargo. Craig Fuhr (52:50) Yeah. like the like the emergency room at at your local hospital is just like two curtains and a bed like this is two curtains at a table and two chairs for you to sit down and talk with some investment banker. Nice. Jack BeVier (52:56) Yeah, yeah, yeah, it's like a... Yeah, it's an army hospital. And so and there's just a bunch of blue suits running around having meetings and like waiting for the next person to come in and desks where the people check in and then send you back to curtain room number 17 and you have your 30 minute meeting and go to the next one. So it's quite a quite an experience. And all the big banks are there and have have you know, have those those meeting areas and so we're going there. Craig Fuhr (53:27) What do you hope to get out of it? Jack BeVier (53:28) Yeah, we're going there to, because we're gonna do another RTL securitization to do fix and flip loans, to try to get our cost of capital down as low as possible to do more fix and flip loans. And then we like the idea of doing a DSCR securitization as well and actually keeping the DSCR loans that were originating. So that's on the roadmap for us. But we're gonna be doing an RTL securitization like in the next month. So. That's like the primary motivation is to go out and meet with a bunch of bond buyers, do a little road show basically and sell ourselves as a safe place to buy bonds from. Craig Fuhr (54:03) I'm sure that I can't think of anything that doesn't sound less fun, frankly. But I'm sure you and Fred will get a lot out of it. So give it give it give me your hot take on on the appetite for Wall Street and the large insurance companies for DSCR in 2025. Are we are we going to have the same bucket of capital that we had in 2024? Jack BeVier (54:07) Yep. Yeah, no, it's fun. It's fun. Craig Fuhr (54:32) Or do you think it's growing or do you think it's diminishing? Jack BeVier (54:36) It's definitely growing. Yeah, it's definitely growing. But no one has but but you don't have the front runner that you had in years past where like one program is clearly better than everybody else. Now everyone's more tightly grouped together. But there's more companies that are more tightly grouped together that want to buy these these DSCR loans. And so I think that it really favors we're you know, we never expected that one Craig Fuhr (54:38) Really? Huh? Jack BeVier (55:04) bond by or one loan buyer would like why would that be the natural progression of things like competition. Craig Fuhr (55:08) like one one buyer would buy like up 95 % of the loans right like yeah sure. Jack BeVier (55:12) Yeah, yeah, which has been like the case, like, you know, 80 % of production has gone to like, Blackstone, basically, in the past, like, for the past several years, they've kind of stepped back a bit and the pricing is more in line with everybody else. But that's kind of like where you would expect it to be right is the natural is competition. And so having we're really happy. I'm really happy about the decision, the strategic decision that we made to not affiliate with a particular loan purchaser or marry ourself to a particular program. Because with that competition, depending on your particular situation as a borrower, one of 15 programs is going to be the best one for you. And if you're not working with an originator that is working with all of the loan purchasers, Well, you'll just get shoved into, you know, like the corner of the box that you're in, you'll get shoved into somebody's other, some, some other programs, subpar sub optimal pricing. And so like being, you know, having the, having access to all the programs I think is, is really important is more important now than it was before, frankly, because of this more competitive environment. Craig Fuhr (55:59) Right. So do you feel like that we'll see guidelines tightening? Or do you feel like we're, it'll just stay the same? Or do you think guidelines will broaden over the next year? So I guess like break that down to sort of the listener level, the investor level, are we going to have to check more boxes to get these loans done the same amount of boxes or less boxes to get them to fit into the note buyers guidelines? which is for the listeners, Jack, if you know, for those who, you know, I mean, most of our listeners, I would think have done DSCR loans. So you should know that it's not always a walk in the park to check all the boxes for a loan. Right. if I've got a six unit in South Dakota, it's not, not always going to be an easy loan to do, versus the single family in Baltimore. Right. So what's your take on that? Especially with it, especially with the newer note buyers that are coming into the market. Jack BeVier (57:02) Yeah, I think that... Yeah, I think that we're seeing specialists kind of emerge there. So it'll be a function of, do you want to jump through these hoops? It's worth a quarter point to you if you jump through these hoops. you will be very, we'll be able to very easily tell you what the hoops cost, right? And like, and you can make a decision as to whether you want to jump through that bullshit or not. And, you know, we'll go either way, right? Like we're, basically, we're a conduit, right? To like, we're like a low cost conduit. You know, that's our, that's our approach here is to be a low cost conduit. We're not going to change the loan purchasers' decisions on what their credit guys think the box should look like. And there's 15 different opinions of what the box should look like. There's not even conformity within the market with respect to what a good DSCR loan exactly looks like. And frankly, if we have this more stressed environment on a going forward basis, we'll see upticks in delinquency in certain places that will lead to changes in guidelines. There is an active feedback loop there between the loan purchaser who also acts as asset manager and who's getting delinquency reports and then seeing like, I'm seeing a spike of delinquency in Southwest Florida, like for DSCR is below 1.1, like we need to change our matrix to like stop that shit. So like. I think that as we, as more time goes on and we get more, and frankly, the loan purchasers get more data on the nature of the stuff that they bought. They'll their opinions on like how this stuff performs is going to change and will, I think we're going to see a constant evolution of guidelines and matrices again. So it's really important to be, to have a full field perspective of all the available options. Cause one person's opinion may change based off of delinquency data. But another portfolio may not have had that stuff in there. And so you won't see a guideline change with that other program. And all of sudden they become the front runner for, you know, for, because somebody else backed away. So I think it's going to be a constant, like guys, you know, stepping forward and stepping back and stepping forward and stepping back in different parts of the, in different parts of the box, so to speak. Craig Fuhr (59:12) But you do feel that over the next 12 months, we'll see a new crop of note buyers for DSCR. Jack BeVier (59:20) They're already in. They're already in. Yeah, yeah. I think we've onboarded four in the past month, four new ones that are very competitive, that are gonna win business. So yeah, it's a more liquid market in 2025. Craig Fuhr (59:30) Wow. That's great. That's that's great news for anybody who's out there, you know, refining rentals or purchasing rentals. Jack BeVier (59:41) Yeah, if we could just get the five year to cooperate, it would be really great. Craig Fuhr (59:46) Five years been on a bit of a roller coaster, bit of a roller coaster. Jack BeVier (59:48) And then we had the inflation data come out yesterday and the five year jumped up 20 basis points, yesterday being February 12th. So like that sucks. So if we could just get that five year to cooperate, that would be awesome. So we will see. Craig Fuhr (1:00:01) Yeah. But still doing those loans every single day of the week, Jack. And so, you know, obviously people are out there finding deals that are, you know, providing enough cash flow, even with the rates where they are today. Anything else you want to touch on? Jack BeVier (1:00:16) Nah, man, man, we covered a lot of topics today. Craig Fuhr (1:00:18) We did. I didn't think we were going to speak for an hour. Well, I appreciate your time as always. Folks, that was our take on sort of where all things on Jack's mind today. Really appreciate everyone listening. Always love your comments. You can feel free to reach out to me on LinkedIn, Craig fewer. Jack is also on LinkedIn. You can leave comments and on YouTube or wherever else you see us Instagram. Jack BeVier (1:00:21) It was good. Thank Craig Fuhr (1:00:43) But we appreciate everyone listening. That's Real Investor Radio for today. We'll see you on the next one.