Sponsor Vetting 101: A Crash Course for Investors

Tim Lyons  00:03

The value of the property will be going down because the denominator divided by the cap rate is your price. And as the denominator gets bigger, the value goes down. So just know that cap rate when it goes up, the value goes down. Welcome to the passive income brothers podcast. Here we take the fear out of real estate investing using real life stories of everyday successful investors. Let’s go Welcome to another episode of the passive income brothers podcast. My name is Tim Lyons and today I’m joined by my brother Greg Lyons. How you doing today, buddy?

 

Greg Lyons  00:33

I’m doing fantastic. Another great day to be a lions. And in cityside capital, that’s for sure.

 

Tim Lyons  00:39

It is. So we’re coming to you today. In the end of April, there’s a lot going on, right? There’s a lot going on in the markets, there’s a lot going on in the economy, there’s a lot going on with the stock market, there’s a lot going on with the Fed. And a lot of this is causing uncertainty and fear. And when there’s uncertainty and fear and confusion, then it’s hard to kind of see through the clouds that have kind of formed. So today’s episode is really meant to really kind of answer some questions that we’ve been hearing from investors lately about how things work mechanics deals, the current state of some of the things that are going on. So Greg, what are some of the things that you’ve been hearing from investors when you’ve been speaking to them?

 

Greg Lyons  01:21

I think it’s always good to have a cleanup session, right. And because we do talk to people, we hear what their concerns are. And I think a lot of passive investors, investors in general are kind of sticking their head in the sand a little bit and saying, there’s too much going on right now. I’m hoarding cash, I’m waiting, things have to get better. But when I think when you take a step back, and you understand market cycles, when everyone is rushing in, to put money into a deal, it’s high time on the town, money’s easy credit, CZ, that may not be the best time to make your greatest returns, making your greatest return sometimes is deviating from what the crowds doing. And that’s kind of what we have right now. It was a lot of push into maybe some treasuries, short term treasuries and stuff like that, but and to make four and 5%, which is good, but it’s not quite getting past what inflation is doing to your money right now. So when people are kind of being safe, sticking their head in the sand and not doing anything, now may be the time to say, oh, yeah, I’m gonna get into a deal. I’m going to really study something, even if you don’t put money into it, instead of just looking at it and say, No, it’s, Hey, let me ask questions. So I can understand this better. Now’s the time to be doing that. And I think when you do that, you educate yourself and just become a better investor.

 

Tim Lyons  02:43

I couldn’t agree more. And it’s hard, right? And it is scary. And nobody wants to lose any money. And nobody has that silver bullet or crystal ball. If we did, we’d all be in great shape. But that’s where the education comes in. That’s where the trust in the process comes in. And in a period of economic dislocation, like we’re in experiencing right now, that’s really when you need to really kind of read the tea leaves and surround yourself with folks that are doing the thing and data. That’s good. And that’s how you make better decisions.

 

Greg Lyons  03:13

I think right now, what we are getting is we are getting questions from some of our investors. And I think now’s a good time just kind of compiled the list here to say, let’s address some of these things, because a lot of our investors, our listeners, and let’s just kind of go through some of the concerns and some of the questions that they have about multifamily right now. And I think a lot of times we like to talk about the jockey and the horse when we talk about investing, and the horse is the multifamily deal. It’s a self storage deal. And those are the horses that kind of make the returns. But what’s really driving the horse is the jockey. And in this analogy, the jockey is the sponsor, the person that’s putting the deal together, getting the financing, running the property, and all those sorts of things. And it’s really important to do your vetting of a sponsor or the jockey before putting your money behind that horse.

 

Tim Lyons  04:06

Oh, absolutely. I mean, that’s basically the premise behind cityside capital, right? When we joined our broker dealer, we were good at raising capital. We were good at looking at deals, but we wanted to have a process in place that we could actually vet a sponsor their track record criminal background checks, right? Do they own the properties? They say they own? Are they paying investors? Like they said, they’re gonna pay investors, how did their underwriting compared to actuals? How do they underwrite? What are their assumptions? And that’s all the things all the heavy lifting upfront what you want to do as an as an LP or a limited partner or a passive investor because once you invest in the deal, as a limited partner, you don’t have a lot of say in how things are run. When do we sell when do we refinance? What company should we go with? Do we do gray or dark rain or sleet on the walls as far as pink cars go? So that’s really why we’re vetting the jockeys are ahead of time, because especially in a period right now, Greg and I are learning that we feel really good that we spent a lot of time and money and effort deciding who to work with. And we’re seeing who’s strong out there. And we’re getting on anecdotes about maybe people that are suffering out there. So betting the operator on the front end is huge. Yeah, and

 

Greg Lyons  05:18

I think comes down to four things. And I think the first one is with the jockey, the company background, their experience and their investing strategy. And when you talk about investing strategy, sometimes when you get an investment deck or an investment summary, and it has sexy pictures of a Class A property, that may not be the best strategies in times of economic slowdown, because people that are homeowners, if they unfortunately have to move out of their house, they’re gonna go into maybe Class A properties, but the people that are in class A properties during times of economic uncertainty, may have to move down to a class B property because they can’t afford a three or $4,000 rent. So that’s where when you’re invested in the B, and C class properties in great markets, those are the investment strategies we really like to work with at cityside. Capital. I obviously

 

Tim Lyons  06:08

want to stack on top of that, Greg, because a lot of the mainstream headlines right now are that rents are falling like crazy. And when you dive into the data, like I read an article on The Wall Street Journal this week about rents coming down precipitously, and oh my god, commercial real estate when you actually read the article, and almost by the time I start to lose interest in an article after like, 10 seconds, but I actually stayed with this one, Greg all the way through. And towards the bottom, they’re talking about markets like Miami. And if you don’t know Miami is a super, super high end, hot market, a lot of classes, right boom or bust. And they’re talking about the $4,400 a month rent coming down to 3750. And I’m saying to myself, yeah, that’s a I hate to in public math. That’s like a 12 15%. Decrease in rents, right. Greg’s has a cringe on his face.

 

Greg Lyons  06:59

Let’s have a calculator handy. Math. Yeah, this public math stuff is not good. Public

 

Tim Lyons  07:04

math is terrible. But that’s not what we’re investing in. Right? Because the class a brand new sexy product gym, beautiful pools concierge, there is a market for that. A lot of pension funds and sovereign wealth funds and big institutional players kind of play in that space, right? Because it’s a low cash flow, but it’s stability of capital. But what happens time like this is that the A, you can go to the B, right? The eighth class renter can go to the B class, right? Something that I would want to live in, Greg would want to live in our families, and the B class friends are can drop down to the C, right so that B and C Class space is really kind of resilient. I think we’re about to find out heading into a recession, if we’re not already in one.

 

Greg Lyons  07:43

Yeah, no doubt about that. And when you think about the A class versus B class, our investment strategy is value add. So you can’t really add value to a class a property that was built two or three years ago, there’s no renovation of units, there’s no clean up the outside kind of things like that, that add value to the property. So that’s why we like to play more in the BNC class space. Anyway, when you’re also vetting a sponsor. Number two is due diligence. And we spend a lot of time through our broker dealer on due diligence. And not only is that the underwriting the pro forma, but the market, there’s a physical site visit in every single deal that we do, which is fantastic. And it’s third party doing it’s not the operator, we’re not just taking their word. So due diligence is really, really important. And it’s something that an investor can really dive into to really learn about a market and a sponsor.

 

Tim Lyons  08:37

Yeah. So just to clarify, like if somebody from our broker dealer actually physically steps foot on the property, right, they go, they take pictures, do a side report, because I don’t know about you guys, but I don’t fly over the country to get see every deal that I do as a GP, or even as an LP, right? I mean, there’s plenty of properties that Gregory our passive investors that we’ve never gotten to see or touch or feel or walk by, or anything like that. So that’s part of the value, right? It’s part of the value that we can provide. And to that end, a lot of times if you’re a successful business owner or a W two worker, and you’re looking to invest, a lot of times you don’t have the time, the knowledge to know how you don’t know the questions asked where to find the answers who to trust, right, and that’s kind of where we saw there was an opportunity for cityside capitals to step in and kind of fill some of those voids. But number three, Greg, yeah.

 

Greg Lyons  09:23

Number three is the fee structure understanding who’s making money, how they’re making money, when you get your returns, what are your projected returns, understanding those sorts of things are really important and a lot of deals that we do there are different classes, investments class a Class B Class A, there are splits and waterfalls on the back end and understanding those things are really important.

 

Tim Lyons  09:46

I can see people driving off the road right now Greg, when you say he splits and waterfalls are just like what the heck is he talking about? It’s akin to public math. Oh, yeah, absolutely. So yeah, I mean, so fees right. So like there’s industry standards for fees acquisition. fees, disposition fees, refinance fees, asset management, management fees, property management fees, it takes a lot to get one of these deals to up off the ground and then drown third base and bring it home in a couple of years, right. And I think those fees incentivize people to work hard. So I really don’t have a problem paying fees. And neither do our investors. By and large, Greg, we’ve never really heard anybody push back on fees or anything. As far as the share classes go, I really highly recommend whether you’re on our email list or somebody else’s that does these types of investments. And if you’re not on my email list, just shoot me an email Tim at cityside cap.com. And I’ll get you on or you can go to our website, cityside cap.com. And just fill out the form and we can get your edit on but you really, you know, even if you’re not ready yet to invest, going through the investor summaries the deal deck their cold or a slide deck or a pitch deck, however you want to define it, it’s usually I don’t know, Greg, what 30 To 40 pages color. And we could really gained a lot of knowledge and information about markets about the operator about their track record about the business plan, what does it mean to be evaluated much as a cost? And what are the associated returns kind of looking like as well as the webinar, right, there’s always a webinar that we do, it’s pre recorded, it really goes through the decks are really following along while the person is kind of going through the opera is going through the deck and telling you the behind the scenes story and adding some color where you think colors do and then having the q&a section is really powerful, right? And if you do that five, 610 times, even if you’re not ready to invest, you really start to learn how these things are looking what to look for what you like, what you don’t like, and it’s just another tool in your toolbox as a passive investor to get comfortable with investing outside of mainstream Wall Street.

 

Greg Lyons  11:40

Yeah, there’s no question about that. And it’s really tough for us to kind of get on a podcast to go over fee structures. I do like that recommendation, Tam, hop on our list, see our deals, and ask questions. Even if you’re not ready to invest, we are happy to help educate to help people understand the way that these things work. Because it’s outside of the norm, it’s outside of the 401k. It’s outside of the stock market where people have a little more familiarity, so happy to always kind of go over the deals and how they’re structured. And I think that’s great. And Tim, just to round out the vetting of a sponsor, number four investor relations. And this is a really important one, because not only do you have to do the study of the sponsor, and the market and the deal, the fee structure all that but the investor relations after you’ve made your investment, and it’s everything like what is the reporting structure? Is it on a monthly or quarterly basis? Or financial shared? Is there an investor relations liaison? Those are things and of course, when the distributions come out? Are they monthly or quarterly? Are they on the sixth of every month? Are they kind of all over the place? All those things, once you understand that, and have clarity about that investor relations is a really important and key part of any investment.

 

Tim Lyons  12:56

Yeah, I love that. And especially starting out my career as an active investor, but also as an LP Right, I’m an LP in deals that I’m not a part of, right, I do other people’s deals, and it becomes comforting to know that every month you’re gonna get a report in your inbox, and you’re going to be able to see what’s going on what’s the good, the bad, the ugly, in this current environment, I’m always sending out emails to what Greg and I are sending out emails to our investors with the monthly updates. And at the end, I’m always putting, hey, listen, if this doesn’t make sense, or you got questions or concerns, let’s hop on a call, shoot me a call, call me on my cell phone, text me or schedule a call on the link below. Because we want to have people have that clarity, especially when things are not going well. Or if there’s a pause and distributions, or it wasn’t distribution wasn’t as high as last month, or whatever the case may be. There’s always a couple of people that take me up on that I always feel better after we hang up the phone, right? They’re always like, man, thank you so much for that, because it’s one thing to read the report and to video attached to it or you know, or anything like that. But sometimes it’s just better hearing it from the horse’s mouth. And that’s what I love to do. And I know Greg, but you do the same thing every week. So investor relations is huge, especially in this uncertain time. I did want to circle back right to one thing, the share classes in a deal, Greg said A, B and C classes. And I really want you to pay attention to the A, B and C classes. A lot of times there’s only one share class in a deal. This is an example obviously, say an 8% preferred return and a 7030 split. And there’s maybe a hurdle a waterfall, it’s called that after a 2x equity multiple meaning we double your capital and the lifecycle of the term, it might go from a 7030 split 70 to the passive investor 30 to the general partners, it might then turn into a 5050 split, right. So just understanding that’s called a wonderful or hurdle now that you know that you can start looking at these deal decks a little bit closer, but that 8% preferred return people get hung up on this all the time, Greg and that’s even from the brand new novice investor to the experienced investor that we have the preferred return works like this. So say we have an 8% preferred Return on a deal we pay out monthly 7030 split, right? That means that the investor, the LPs, the passive investor, they get all the cash flow, right after expenses. And after the mortgage payment, they get all the cash flow up until an 8% preferred return, right? So say in year one, we only returned 6%. Right? Well, that’s certainly not eight. So we’re now they’re in a deficit of 2%. Hope everybody’s with me here. I know, the public math is tough. But we OG eight, we only pay just six in year one. So now you’re owed two. Now say in year two, we paid the 8%. Right. At the end of year two, we sell the project. Well, here’s how it works. Here’s how it all unwinds, we sell the project, right, and now we’re sitting on a pile of cash, we have to catch up your preferred return first, right? Everybody who didn’t get their 2%. In year one, they get caught up 2%. Now you have gotten a percent in year one a percent in year two. Next is the return of capital. Meaning if you invested $50,000 into the deal, we have caught you up on your preferred return. Now you get your $50,000 back now the profits gets split 7030. Now say between your cash flow in years one and two, we were able to then double the capital with the remaining equity from the sale of the property. Well, that gets up until the 2x. Multiple it gets split 7030. After that, if there’s still cash available to be split, then it goes 5050. Right. So now you can see how things kind of get unwound if there’s a preferred return structure, and there’s a sale, Greg, any any comments on that? Yeah,

 

Greg Lyons  16:35

and I think you’re right investors do get hung up on say, like a seven or a preferred return. But especially in times like this, where we have a will uncertainty in the market. A lot of our operators are hoarding cash, right? They’re not paying out the full seven or 8% preferred return, they may be paying out four or 5% or 6%. And people like, whoa, hold on, I thought I was getting 8%. Now that’s your preferred return. Meaning even though you’re not getting you’re only getting four or 5%. Right now, it is accruing, so you’re not losing it. You’re just not realizing it right now. And that’s a question we get a lot from people, not all of our deals right now are paying their full preferred returns, some are paying more than the preferred returns, because they’re performing just a little bit better. So that’s kind of all over the place. And we do hear that from investors a lot preferred returns versus actual returns and how they accrue. So that

 

Tim Lyons  17:32

value add deals value add deals usually have lower cash flow in the years, say, one, two, and three, because they’re capital intensive, because they’re cabourg. we’re renovating units, we’re getting higher premiums upon the renovations, that all takes time and capital, right. So we want to be mindful of reserves. So a lot of value. If you see the term value, add, just know that that’s not going to be probably not going to be pumping out the preferred return. And that goes during times like this, and it goes during the boom time. So it’s just a capital intensive process. Great. That’s a Class A share.

 

Greg Lyons  18:01

Well, it’s gonna say, as you go through, and you’re in these value add deals, the goal is to raise the net operating income. And that is the most income that you bring in minus the expenses is your net operating income and all the multifamily deals already. That’s how the properties are valued, right. But then there’s something called a cap rate, and the cap rate is applied to the net operating income to get the value. And this is where Cap rates for the novice investor for the seasoned investor, throw everyone off. Tim, if you can, in the most concise way possible. Give us a couple of minutes on cap rates and their effect on the net operating income creating the value for multifamily apartments. Dude,

 

Tim Lyons  18:49

I like how you frame that. That was like don’t talk about everything that you want to talk about. Just make it a nice, clear, concise statement, right? Yeah. Are you telling me that I’m too wordy? No, I

 

Greg Lyons  18:58

would never.

 

Tim Lyons  19:00

So cap rates, right. Cap rates is one of those things that the misunderstood metric that sometimes can make people’s eyes glaze over or the confused mind says no, right? I don’t understand is too complicated. Look, if you were to pay cash for a $1 million property that had a 6% cap rate, right, wherever that might be in the US right now, that would really mean that if you paid cash for that property, you could get a 6% yield on cost, right? That would be your return for paying all cash. Obviously in real estate we will have a lot of times use leverage and debt to enhance returns to lower our initial cash outlays. But the net operating income divided by the cap rate will give you the value of the property right so for example, well to also stack on top of that, say we’re talking about a 6% cap rate and in one year it goes down to a 5% cap rate right interest rates are dropping the markets hot people are coming in from the north. With East and the Pacific Northwest, right and they’re flowing into the Southeast, and the cap rates are compressing well as cap rates come down, the value goes up. It’s an inverse relationship. Now right now what’s happening is say we bought that at a six cap the property, we bought a six cap, I don’t know two years ago, but right now might be a seven cap, right might have gone the other way it increased, well guess what that means the value of the property will be going down because the denominator, right, we talked about the net operating income divided by the cap rate is your price. And as the denominator gets bigger, the value goes down, right. So just know that cap rate, when it goes up to value goes down, when you don’t break down, the value goes up.

 

Greg Lyons  20:40

And that’s really important right now, when it comes to lending the lending environment right now, because there are certain ratios that you have to keep with your bank to keep the project in good standing and to be able to refi when rates get better and stuff like that. Tim, if you can just say real quick about the ratios that have to do with the lending environment that we’re in right now. Yeah. So

 

Tim Lyons  21:03

when the good times are booming and credit is abundant, you’re very likely to see a loan, whether it’s bridge or agency permanent financing, say maybe 70 to 75%. In commercial real estate, you’re very rarely see somebody going at 85%, LTV loan to value because that’s just a lot of risk, right? You’re using a lot of the bank’s money with very few dollars in equity going into a deal, right. So when credit is abundant, right, say 70 75% LTV and a good interest rate. That’s great. But right now, right, we’re going into maybe a little bit of a credit crunch and interest rates have gone way up. Right. So what do banks do not to get too into the weeds, but you’ve all seen the headlines, we have banks that are losing billions 10s of hundreds of billions of dollars are leaving the banking system, and they’re going into short term treasuries, T bills T notes, they’re going into money market funds, well guess what doubt doing a whole lesson on commercial banking. When that happens and money leaves the commercial banks and goes into bills, bonds and money market funds, it comes out of the commercial banking system, and then the banking system has less dollars to lend out. Right. So right now, if you need to refinance, and you got a 70 75% loan three or four years ago, well guess what they might be only giving you 50 or 55%. LTV. I know by the way, since our interest rates have skyrocketed, right, cap rates have come down. So now the ratio is not in your favor in two different ways. Right, the LTV that the bank is willing to give you the dollars out is lower, and also the cap rates have now gone up, which means that the value of the property like a mark to market value of the property is lower. So now you’re gonna give me lower proceeds. And that’s what you’re seeing right now a big time in office, right? Because office is struggling, right? We’re seeing anywhere different markets, anywhere from like 30 to 60% occupancy in office towers across the country, obviously, depending on market specific. But when those leases come up, renewal companies are saying, Look, I had 10,000 square feet during the good times. But now I only need 3500 square feet. And there’s no way I’m paying you $6 A foot I’m paying you $3 A foot so these office towers, their net operating income is getting destroyed at the same time that cap rates are going up. Right, so you can see how there’s gonna be a lot of distress in office. Now on the multifamily side, it’s a little bit different. Because yes, there’s going to be people that are in trouble, right, they’re not gonna be able to roll over their debt as easily as they thought they could, providing that they didn’t keep their net operating income up, because the value of multifamily is just a multiple of the net operating income. So yeah, we might be getting into the weeds on this,

 

Greg Lyons  23:39

Greg. Yeah, a little bit. But that’s okay. The kind of debt that you put on a project is really important. And you kind of liked in the office space that you were just going over, you said the vacancy is very high right now in office, and office buildings. So the net operating income is just struggling in the office environment. So to go and refinance. I mean, the net operating income just isn’t there. The value isn’t there for the banks to lend on. We’re also seeing this a little bit. We’re also seeing this in multifamily, because when credit was abundant two and three years ago, a lot of operators were putting bridge debt on their properties, a bridge loan versus permanent financing, meaning you have a fixed rate interest rate for four and a half percent for 10 years, right, that’s permanent fixed rate mortgage versus a lot of lenders a lot of people did bridge that which may be only like a three year note at a lower interest rate. But you’d have to refinance out of that loan at some point and right now, two years down the road. Interest rates for commercial properties are six and 7%. And with lower net operating income, I think a lot of operators may be in trouble when it comes time to refinance that bridge that

 

Tim Lyons  25:02

that dislocation, Greg is precisely where we want to be positioned to not steal the property from them, right. But there’s going to be some pain and hurt out there with that dislocation. And people aren’t run out of time on a project where you run out of money, and a lot of times running out on people, and they’re not able to roll that debt over. So that’s where people like us can buy something at a discount. But to stack on top of that the bridge debt is a great product, right for value add, it’s lower interest rate, shorter term, right. So Greg said, like maybe so products we’ve used in the past are, say, a three year bridge debt product with two one year extensions, and it’ll be a floating rate over Sofer. Right, so say, when we bought the properties a couple years ago, it was maybe 200 basis points over silver, right. And then what you would do is that you’d buy a something called a rate cap, which were at the time probably cost 25, or $50,000, to just say, our all in going in interest rate was a 4%. And we bought a 2% rate cap. Well, that means that our rate couldn’t exceed four plus two, which is six, right, another public math, that one I nailed Greg. Yeah. So even though it’s a floating debt product, you’re really in trouble if you didn’t buy a rate cap, right? Because now you’re paying 678 9% You I guarantee you you’re bleeding cash like crazy, every deal that we did had a rate cap on it, so that you can now forecast and your underwriting and your pro forma, you know, alright, so it might interest rates gonna max out at six at this X amount of months. And then we can grow the NOI through renovations and blah, blah, blah. And now you can really know where you’re going to come out on the other end, right. And we always underwrite for 50 to 100 basis points of a cap rate expansion, saying that our property’s gonna be worth less at the refinance time. So if it’s not, then great, but if it is, then we already accounted for that. Right. So anyway, Well, without getting too deep into the woods on that one. That’s a huge point.

 

Greg Lyons  26:52

I think it’s important to note that as you’re listening to this, people may say, why would anyone ever do bridge debt versus permanent debt? And I think the answer to that is there’s typically not a prepayment penalty on bridge debt, versus there could be a pretty hefty penalty. If you have a 10 year note on permanent debt, you could be paying a pretty hefty prepayment penalty. So after maybe four or five years, you want to sell the property, the prepayment penalty is awfully high on those permanent loans. So you don’t have as much flexibility to either refinance or sell the property. And that was kind of the argument for getting away from permanent debt. So with all that being said, Yep,

 

Tim Lyons  27:31

real quick, that’s called defeasance or yield maintenance on the permanent debt, right. So you might be if you’re looking at deals, and they don’t fix right debt, you know, like, oh, man, great, right? It’s a seven year fixed rate or a 10 year fixed rate. Well, guess what? Like, you might be losing several million dollars on the back end, if you sell in year four, right? Yeah, it could be catastrophic to the returns. So yes, fixed rate is awesome, right. But it has to be the right project and the right market at the right time. So yield maintenance or defeasance, right, because the bank is going to make their money one way or the other. Right? Either they’re gonna get the 10 year term when you hold it for 10 years, or they’re gonna get a year for when you sell and they’re gonna hit you with a pretty hefty prepayment penalty versus the maybe 12 or 18 months of interest on the bridge debt. And now you can really account for that much easier product to extricate yourself from

 

Greg Lyons  28:15

Yeah, no doubt, as you take all of this. I think looking forward, I think there’s going to be some opportunities in multifamily right now transactions are down. And with higher lending costs on a lot of these projects, the values are down a little bit, right. But the best thing about multifamily self storage, these sorts of things, projects aren’t valued mark to market, like there’s not a value placed on an apartment building or apartment complex every single day, right? So there’s always time to keep renovating, keep raising rents keep your occupancy going. There’s time within these projects to keep the business plan going, no matter what’s going on in the market and the lending environment, recession or recession, people need a place to live. And with the shortage of housing in the United States, anywhere between 3 million and 5 million units, depending on who you read, food, clothing and a place to live is really the most important thing. And it’s really the thesis that we have as cityside capital, but there are going to be opportunities in the coming years. Tim, what do you think about that? Well,

 

Tim Lyons  29:25

Greg, as hard as it is, sometime, because you and I understand the plumbing of these deals, and we’re still buying right we’re still offering deals to our investors. We’re still doing due diligence, our broker dealer just got back from a trip to Ohio to do some due diligence out there on a new operator that we’re going to be working with in the Midwest. And you know, it wasn’t like these deals happen when there’s good times when there’s bad times right? And there’s different deals at different times. And it’s really just like you said is the asset is the horse and the jockey and the operator and right now we are hyper focused on operations. We are hyper focused on growing and why and maintaining occupancy and doing all the things that We need to do. So Greg, we’re still buying, we’re still looking for opportunities. And in dislocation of economic uncertainty, there will certainly be deals,

 

Greg Lyons  30:08

no doubt about it, Sam and a couple of notes for our listeners, the people watching on YouTube, you know who you are about one minute into the podcast, my microphone holder. Okay, that just stopped working. So I’ve had to hold my microphone the whole time. Okay, so we’re 35 minutes into this podcast. And you can imagine the anguish that I’m going through having to hold my microphone. So okay, that’s number one. hope people are enjoying this on YouTube. Again, it’s not easy being a podcast. So people just think you turn the microphones on. That’s just not the case. Yeah,

 

Tim Lyons  30:41

if it was easy, everybody would do it. Right.

 

Greg Lyons  30:42

I appreciate that. Sam, the other thing is from one of my favorite podcasts is the gentleman’s agreement that we have with people. Because the time we put into this is not free. While you’re not paying anything, we do have to get paid with your ratings and reviews. And we ask that if you enjoy this podcast, give us a rating and review. We would love that maybe send an episode to a friend, maybe not the YouTube video of this podcast, because of me holding my microphone. But maybe from a past podcast, I think that’d be great.

 

Tim Lyons  31:16

I agree. We work hard to get some good content out there and to put the show on and we love doing it. And Greg, I just got two emails this week, one of them was talking about the value that they got from the John Bowens self directed IRA, and then how that was life changing, right. And we’ve already had three of our listeners actually have connected them with John directly to do that. And like when you actually have a chance to make a difference in somebody’s life, and financial future, whatever, it really feels awesome. But to attract great guests to keep on bringing some good content, really those ratings and reviews, you know, the algorithms stuff that I don’t understand, it really helps us out. So with that being said, we’d be forever grateful if you could just take a minute and do that on your favorite podcast or YouTube application there. And that’s gonna do it for this week with the passive income brothers podcast and we look forward to serving you again next week. Thank you for listening to another episode of the passive income brothers podcast. We would be grateful for your support of our podcast by giving our show a five star rating and review and subscribing to our show on your favorite podcast platform. Don’t forget to take inspired action after listening to this show, so that you can start building out your passive income streams. Finally, head on over to cityside cap.com to connect with us and find out more information about how to get started passively investing in real estate