Multi-Family Deal Lab Episode 009

COVID, Leaks and Disappearing Investor Money! OH MY!!!

In this Episode of the Multifamily Deal Lab Podcast:

The Lender Drops financing because of COVID-19!

Rescuing $90,000 of investors Money!

Leaking Water Pipes randomly bursting in various apartments due to faulty plumbing! and STILL MAKING MONEY?!?!?

This episode has it all!

Multi Family Deal Lab dissects deals of everyday people who are building a business and realizing financial freedom by creating a Multi Family business. We’ll cover how each investor got their deal, how they raised the money to fund it, what surprises happened during the due diligence process and how they handled them, the unexpected challenges they faced how they chose their market how they chose their markets and more. The show is designed to share experiences that you can use for your own deals.

Speaker 1: Welcome to the multi-family deal lab podcast, where we dissect a deal before your eyes and ears. So you can discover the strategies and tactics that got each deal to the finish line strategies and tactics that you can put in your own toolbox to get you to the closing table from sourcing the deal, raising due diligence to the property takeover. Multi-family deal lab shows how you too can get the deal done. And now here’s your host. David Lindahl, everybody welcome to multi-family deal lab. I’m your host Dave Lindahl.

Speaker 2: And we got a couple of special guests with us today. But before we do, before we go to our deal dissector today, I want to, share some information that my, one of my partners sent over. And it was an article that CoStar had written. And it basically says that over the next two years, the market could expect to see 13,000 loans, totaling 148 billion held in commercial backed securities. CMBS is default that represents 14% of the loan count and 11% of the dollar amount that currently make up CMBS universe. Historical CoStar data shows that when a massive amount of distress sales flooded the market in a short period of time, properties are liquidated at prices, not much lower than their outstanding loan balance, but also much lower than the market value of similar properties. In the same location I should have said price was not only much lower than their outstanding loan balance.

Speaker 2: So the ratio of distress property sales to total transactions reached a peak of 32% in 2010, about a year and a half after the last, big downslide, the great recession in slid down to 2% before the coronavirus outbreaks. So it goes on to say once the fault that loans are liquidated, the properties backing them could sell at an average of one third, the pre Corona virus value based on CoStar risk analytics, which is similar to the severity and the great depression. So, you know, I’ve had a couple of different guests on, Mike Flaherty being one. I forget the name of the other individual who talked about how they started investing after the last downturn and how the, how well they did going into now, you know, how they pretty much set themselves up. So right there, the opportunity is being defined by CoStar as she has a risk analysis of all the loans that they see, the commercial loans that they saw out there outstanding.

Speaker 2: Another part of this was graphs, and, it shows that the values they expect to see for these particular loans, not, not, not in the market overall, but for these particular loans, apartment values decreased by 65%. A lot of people ask about office and retail office 68% retail, 76%. So there is a huge amount of opportunity. That’s why we talk about, about getting prepared now, sharpen your axes now, and you’ll be prepared to do deals like these two were, tell everybody who you are and where you’re from. I am Rebecc , we’re from I’m from Phoenix, Arizona, I’m Brian, her partner

Speaker 3: Business partner. And we’re, I’m here in Phoenix, Arizona as well.

Speaker 2: Right. So, you guys are from Phoenix, you guys formed a partnership. Tell everybody how did you form your partnership, first of all, to meet each other How did you decide that, you know, this is the other person I want to do deals.

Speaker 3: Well, I can, I can take this one because my story is a little bit, my picture’s a little bit brighter. So, we actually met in a business group. I was a home inspector. She was, on appraiser. and so we started doing work together, in a totally separate business yes. At BNI group. Yeah. And so we started doing that and then her as an appraiser and me as a contractor, a home inspector, we started flipping houses together. And after, I would say probably about 20, 25, we decided we wanted to get into multifamily. and that’s really where we really turned up, our partnership, to the, to the multi-family industry, and really wanted to learn as much as we could, in this industry. How long ago was that Two years ago. So it was two years ago in February. I think we joined a, your group that we originally joined. think it was February, March, two years ago.

Speaker 2: What have you been doing I know the deal that I want to dissect, but what else have you done Have you done other deals

Speaker 4: yeah, so we’ve done seven deals in the past two years.

Speaker 2: Nice. From a, from what ranges, what, what size deals

Speaker 4: our smallest dealer was like 1.7, 5,000,049 units. And our biggest one was 12.25.

Speaker 2: What was the acquisition fee on that 12.25

Speaker 4: Is $550,000 to go forward. And so, yeah, that must’ve been a nice check to get. Yes, always.

Speaker 2: I wanted to just mention BNI, BNI, business networking international. I remember when I first started in business many years ago and I, and, you know, my story is I went from landscaper to, to real estate investor, to construction and landscaping construction, and then investing. And they said, you know, if you want to join business groups to, in order to get ahead in this world and they’ll help, you know, you’ll help each other. And they said, one of the best ones to join is a BNI business, networking international. And the great thing about it is they only allow one particular person for one particular industry to join. So you’d be, you know, you’d have it by yourself and then they help each other get, get business. So I checked in my area of, Brockton. Firstly, there was none in Brockton. and then, so I went to the next nearest city, which was Quinsy and they already had, they had, I also own a real estate brokerage company.

Speaker 2: So they already had, they already had real estate brokerage there and they all had already had a contractor there. So then at the next fall I was Needham, which was another, like 10, 50 miles away, nothing over there, it was available. I checked all the different areas, fall river, everything was booked. So I, so somebody said, well, why don’t you start your own Brockton needs ones you might as well start one. So I thought, well, I never even thought of that. You know, hearing I’m starting out in business, you know, I get a bunch of things going on and to actually start run a group. So I thought probably just like starting another business and then they’d help me do it. So I started the Brockton chapter of BNI many, many moons ago, way back in, I think, 1994, 1995, ran it for a couple of years, you know, as a, you could be the president for one year and then it’s got a turnover, but they actually kept me on for the second year. And then I either attended or had somebody from one of my businesses. Cause I’ve had multiple businesses through the years, attend that right. For like almost 20 years, 20 plus years. so it’s a great organization, BNI.

Speaker 3: They learn really well, who you work well with you know, it said it’s such a good group, but it is like you said, starting to be an eye chapter or being in the office is another business in itself. So you’ve got to make sure you include that on your, on your resume there on the businesses that you created because doing, running a B and I are starting to be an nine group is a lot of work.

Speaker 2: Yeah. They do give you good support, which is good. Yeah.

Speaker 3: Oh yeah. Yeah. Great support, great group, great organization. I’m very happy to be proud to be a part of that to have been a part of that. unfortunately with the multi-family is really our focus. It hasn’t been a need for us to be in the BNI group, but I can, I can tell you because I partnered with Rebecca, my close of business. And so that’s how they track their success and being a high for anybody’s listening. It’s not a part of BNI. you know, my thank you close a businesses is doing really well because of, because of the, and I, and the partnerships that I made within that group. So they’re excited. And with that part of my story,

Speaker 2: So most BNI groups have, it has a realtor, but they don’t think about having an investor. So you could propose that, you know, like to take the spot as an investor and there’s usually an open spot, so that’s something for people. All right. So let’s talk. So you did seven deals, a Judy happened to have any idea of how much equity you’ve created in the last two years during those seven years deals.

Speaker 3: I mean, I could tell you, not, not total equity. I would probably, I would probably say no, because we do, we really do focus on the value adds, my background being a contractor, I’m looking for that value add. So I w I would say we’re probably total equity gain in, in, you know, obviously with the COVID thing, it kind of puts a wrench in it a little bit, especially with your report that you just told me everything’s going to be worth a third of what I,

Speaker 2: No, just those loans that are in default.

Speaker 3: Yeah, yeah, yeah. I, I w I would say, you know, an excess of $10 million, in the last two years in equity, total equity across our investors, because we really do kind of focus on, you know, when we do a project, how much of that equity is our investors getting from day one for example, we did a, a property, here in the Phoenix Metro, and just at, at closing, you know, I think we had almost $2 million because we had it on, we had it in an escrow for almost a year in a very hot Phoenix market. And we had almost $2 million in equity at closing that we got to share, obviously with our investors, just at the day of closing. I mean, we actually had offers, the day after closing, we got a random call. Somebody wanted to buy it the day after we bought it, they would say,

Speaker 2: Well, how much more than what you paid for It,

Speaker 3: It wasn’t enough to pay the taxes, but it was more, I mean, it was more than, you know, obviously if they called us a week prior, it might’ve changed the story a little bit, but, because we had just closed and then obviously the, the tax, and we haven’t had a chance to, you know, it was a rehab, it was a definitely a value add property. And so, you know, we didn’t have a chance to do anything with it after one day. but I can say, you know, we’ve owned the property for 11 months now, and we really turned that property around. and we are planning on exit that property, relatively quickly, in, the returns being better managed and up and repaired. And it was in a great market. it just was something that was an absentee owner that just had money coming in and elsewhere. And wasn’t really too concerned with the prosperity of that property.

Speaker 2: All right. So I want to turn to the deal that you, you guys did with a master lease option, master lease option a was one of my favorite subjects. It’s probably, it’s a good tool to have in your toolbox. You’re not going to use it a lot, but when you get the opportunity to use it, it works out really, really well. So I’m going to have you guys, one of you, one of you to explain what a master lease option is, I could go across my office and just grab something and I’ll be right back, but I’ll be able to hear everything. So why don’t you explain to everybody what a master lease option act is in how the, how you got into the situation

Speaker 4: The master lease is basically when you can get a property under contract, we were close to closing on our deal, but with the master lease, we ended up, taking ownership of the property and taking over the property from that point. So we put a down payment to execute the master lease, and then we’re able to take over operations and we’re able to go ahead and do everything on the property, you know, that we need to. And so all the profits then become ours in our situation. You know, we ended up needing it because of what’s happening right now in the current market with POBID. And because of everything that kind of changed, you know, with everything, we were able to execute the master liens and be able to take over on the property and, you know, give a return to our investors. So basically our lease payments are exactly the amount that the seller is paying in mortgage payments. so they’re not making any sort of profit on the property, but we’re able to go ahead and serve everyone in the property going forward.

Speaker 2: So are you making the movie payment director, are you paying it to the owner directly Excellent, good. Cause that’s a, you know, that’s, that’s a mistake that people have made in the past by paying the owner of the mortgage and then they don’t pay the mortgage, you know, and the property starts getting into arrears. So for everybody, a master lease option is typically you use this strategy when the properties is some sort of distress, and you’re not quite sure sometimes if you can actually turn it around. So it actually, so it gives you a certain period of time, which is your, which is your option period, to exercise on the purchase of the property. And you can really take a good look at the property. You can start executing your plan on the property, always knowing that you’ve gotta be careful, that if you’re going to start putting a lot of money into the property, you just have to protect that deed.

Speaker 2: That deed has to be somewhere in an escrow account to be delivered upon your request. Everything has to be in writing because you don’t want to improve the property to the point where the owner, all of a sudden looks out and says, Oh my gosh, this is a great property. Now I don’t think I want to sell it. So you just recently closed on this then, is that right So were you, were you buying a conventionally at first And then you realize that there’s some problems here that you may not be able to analyze. So therefore you need to go a different direction

Speaker 3: For us. It actually kind of, kind of fell into our lap. So we were originally supposed to do a conventional close. we were scheduled to close on March 31st and then on March 27th, the lending, dried up, you know, we’ve been going through the lending process. I know pre-approved, everything was going great. And we were told on Monday that we were going to close early, we were planning on coed closing, Thursday or Friday of March into March. And then, you know, we didn’t have to close until the 31st. So I think it was like the 27th or 28th that they, they told us that they’re pulling, they’re walking away. The lender is closing shop because of the COVID uncertainties and whatnot. So, for us that gave us four days before our, and we’d already gotten an extension. and so we needed to come up with something, that fit the seller’s needs, and secured, obviously our earnest deposits.

Speaker 3: And we knew with the property going in, again, this is one of those other properties. That’s a value add. it was a 2011 bill, that has some severe plumbing issues. so from a standpoint of the issues, that the sellers didn’t have the cash to do anything to improve the property. So it just kept being a snowball of a problem for them. and so we knew that if, once we had a property secured that we could then finance it. So we just did the master lease as an example, to secure our position, to hold it some way we can do financing over the next 18 months, and then, you know, to manage the property and I get the rents up, get the occupancy up. They headed down to 73%. we had it up to 90. we have 99% of the tenants are paying

Speaker 2: Before we go there. I want to go to back to the master lease decision. So when the bank pulled away, did you have any money that was hard non-refundable how much and 90,000, 90,000 was it your money or was it your investor’s money combination So when the banks had they’re walking away, so how long did it last for

Speaker 4: it wasn’t that long, you know, we were able to call and talk to Jeannie and, you know, run through our options, you know, which is always amazing. You guys are always there for us. And, you know, the master lease was one of our, you know, options kind of moving forward because we had already gone through all of our extensions, on the property.

Speaker 2: So you presented it to the owner. And what was the owner thinking now Did you say the property was 73% when you took it over

Speaker 4: it was 70% when we originally went under contract. we’ve since gotten it up to 90% within the last couple of months. the tellers did part of it, you know, along the way. And then, we increased it as well, but originally the, the sellers aren’t professional property managers, you know, the, one of the sellers is a former football player from Texas a and M and they’re just not equipped to handle everything. They’ve been kind of putting a bandaid on a larger problem for a long time,

Speaker 2: If you’re not trained properly, like we said, this is the perfect example of what we’d be talking about with the, you know, the opportunity that’s going to exist in this marketplace. It’s the marginal managers, you know, their problems are going to rise to the top. The properties are gonna rise up there. They’re the ones that are going to lose during this period because they just would never train properly to manage their assets. And they don’t have to, you don’t have to be a good property manager. You have to have be a good asset manager and know what numbers to look for. And then when the numbers aren’t right, you know, that you need to be looking at that Monday morning report. I mean, that has all the key information on there. and then if one of those numbers aren’t right on that report, you need to know how to dive into it and figure out what the core root of the problem is and fix it and move forward from there. So you presented the master lease to owners. How did that go and how did you present it What was your strategy

Speaker 4: Presented it as an option for them Because they were terrified, you know, going into, you know, COVID and the uncertainties. They also had a residential team that was doing their collections. So they had a Berkshire Hathaway team, not a professional property management team in there as well. And they weren’t doing a lot of the notices that they needed to. as far as, you know, what was going on in the market where you can get help with all of the Texas, TA you know, notices, they weren’t, you know, doing any of those. So when we presented it to them, we kind of offered them out. you know, we can give you because there was not a lot of equity in the property to begin with, from their standpoint. And so they were only going to get, you know, letting up a lot at closing on the closing table, for taking over this property. When we originally got it under contract, you know, they built it for $7 million in 2011, and we had it under contract for 5.2. So there was not a lot of that. They were getting at the closing table. So we were able to present it more as an option for them to get out of managing the property and, you know, allowing us to take over, and that kind of a time of, for all their tenants.

Speaker 2: So that goes back to my, when I was talking about master lease option works best with distressed sellers. So the sellers were definitely distressed.

Speaker 3: You know, obviously, as this pandemic is, is growing, the, you know, in distressful times is when the master lease is going to be an absolutely awesome tool, to, to, to secure an option on a property, like you said, from a owner who, who isn’t doing it professionally or doing it properly, and, you know, the, the lending market might’ve dried up. and so, you know, it’s going to be valued the property, but this gives you an option, another option to secure an asset that is, has a potential for a definite, growth. And like you had mentioned earlier in the call about, during the downtimes, when you’re going to make the majority of your money. And so this just gives you an option to put less down, secure the property, turn it around, and then refinance out of it or finance out of it. That’s a secure your position and do actually even better than at any other time.

Speaker 2: You’re absolutely right there. And you made another good point and that is that it’s a good tool to have in your toolbox for the up and coming market, because there’s going to be a lot of distressed sellers. I remember about four or five years ago when the market was really hot. two 16, I think about five years out to the last, downturn in somebody came out, where the program for master lease option as the way to, you know, build a huge portfolio, taking no money out of your pocket. And I thought to myself, well, you know, naturally, so options are great, but they’re not great at this particular time in the market, because it was weird. It was only two days before that I had read something in one of the financial journals that 1% of all apartment deals the previous year had been done through a master lease option.

Speaker 2: So if someone knew somebody at that time was going to try to get rich by doing master lease options and taking them on no money out of their pocket. It just wasn’t going to happen because it wasn’t the right time in the market for that particular tool. But going forward is going to be the right time in the market. And we’re going to see a lot of different opportunities there. So that’s good. So let’s dissect the rest of this deal. The total number of units was how much, how many 60 units or 132 student housing beds. So what university is it near the station Oh, all right. I thought for some reason, I thought you were, you were in Phoenix. okay. So,

Speaker 3: We are in Phoenix, but we do most of our buying in Texas. for, for whatever reason, Texas has been very nice to us. We found a really good management company, and we find a lot of secondary markets that we really do well in Texas. So we really do like Texas.

Speaker 2: Yeah. And they get a, they’ve got a great government for business there, so it’s a good place to do business. So at 60 units, it was, how much did you pay for it By $0.2 million, 5.2. And it was at the time of takeover, 73% occupancy, but now you’ve gotten it to where. So what was the problem Why was it at 73 I mean, when you did your diagnosis, because whenever you do a repositioning, anything below 85% occupancy is below equilibrium and that automatically makes it a repositioning deal. So anytime you’re looking at a deal like that, the first thing you have to do is say to yourself, can I diagnose this problem Can I, can I clearly see the problem here And then number two is, can I fix this problem So what was your diagnosis of the problem

Speaker 3: We do as we kind of look at the property, and then we look at all the neighboring properties, everybody else was at 95, 97% occupancy. And we were at 73. So we knew that there had to be either a management issue right off the bat and or there’s, you know, conditions, issue of property shows very well, obviously with the plumbing issues that causes people to leave when the stuff gets all wet and then it’s not repaired. So that was an ongoing issue. So we look at it from either management or aesthetics, if you’re basing it on comparison market, I mean, there’s property, right next door. That’s 97% occupied. There’s no, there was no onsite manager. There’s a beautiful office onsite, it’s empty. And they had a sign, you know, one of those for sale sign, you know, 12 by 16 sign and had a phone number to call to rent.

Speaker 3: And then if you were to call that number, you had to drive two and a half miles away, the management company would give you keys. Then you would come look at the property by yourself and then you’d return the keys. And then you decide if you wanted the property, if you wanted to rent it or not. So they did not have any services in play. The, the management, the owners, they basically had gotten themselves into a position where they didn’t have an option because they have four partners who were running out of money. They were trying to put band-aids on it, and it just kept snowballing enough control. and this is of course, you know, after dissecting and doing a really big overview on it. and these are a lot of my own assumptions on, on, you know, people’s philosophy on how they, how they look into things.

Speaker 3: But, this is, this was part of the game for me, I guess. So really what happens is they were not properly managing the place at all. Every time that I went there for an inspection, we would be there and two or three people would show up to rent a place. And there was no one there to greet them. And so the reason why it was, you know, and once we pointed this out, again, I think we did one of our inspections in January. And once we pointed this out to them, the owners realized that the management company that they had in place, wasn’t doing what they were supposed to. And so then they turned it up a little bit and then started running it out a little bit before we even took over.

Speaker 2: Did they live close by Well, there

Speaker 3: They were all scattered. We had some in Hawaii. We love our Hawaii owners for whatever reason why the owners do a stew. Well, because they’re absentee, I guess it’s called Island time. so we bought a couple of our properties from Hawaii owners. what’s that Oh, yeah, but it seems like there are two of our owners had neglected properties that really, they so much money on the table because they just neglected the management. You know, we obviously view this as a business, not just a hobby and, you know, it’s not going to just fall in our lap. this is a business for us. And so we really kind of look at, like you said, we kind of dive down on what’s the issue, whether it be aesthetics, like property or management.

Speaker 2: So let’s go to the plumbing problem. What was that plumbing problem How did you diagnose diagnosis What was it And then how did you fix it

Speaker 3: Yes. So locally in the area, they did a, a PEX plumbing, which was a very common plumbing. but the company that they used is no longer in business. It basically the chem, it’s a PAX, which is a chemical compound that they put together to make a PEX plumbing, which is just a, a universal name. But the company that put this PEX plumbing together, for guests forgot, or D got the compound wrong. And so there’s a lot of leaks and sold it back in 2015 or 16 there, they lost in a big lawsuit. They went out of business, but obviously that money disappeared in a blink of an eye with attorneys and, you know, other people who were in line first. And so the PEX just needs all the plumbing throughout all four buildings needs to be replaced. And so obviously that’s, you know, a big significance. So, you know, we might have $2 million in equity, but we know that we have a $500,000 repair bill ahead of us to replace all of this PEX plumbing.

Speaker 2: So have you started that, what’s your plan How are you going to phase that in and move where, or what’s happening or are they coming up

Speaker 3: It’s just, it’s totally random. It’s up in the ceiling, up on the walls. It’s just the pecs. basically it can’t take the pressure and it just pops. And then it’ll just start leaking all over the place. It’s in the floor, where we’ll have wash outs underneath. It’s a pure built. So there’s not an issue of a foundation security foundation issues, but definitely, water just starts leaking and gushing, and then they go out there and they fix it, put a bandaid on it and then, you know, go about their day. so what we did from a contracting standpoint, we knew this going in and they were very upfront about that, about the issue. And so we had, several plumbers, contractors, founding, foundation people. We did, we ran this thing through, for, you know, nine year old building.

Speaker 3: We ran this thing through, you know, all of them. We had multiple contractors out there to do, give us assessment, give us bids, how much it’s going to cost to replace the plumbing drywall. can they access it without damaging the cabinets If they have to damage a cabinet or remove a cabinet as a salvageable you know, we went through the whole thing, to get our true costs, took all three beds across the board. And then we went, went to the worst case scenario, and then we added to it, to protect us and our investors, you know, honestly that me being a contractor and having a plumbing background, I was a plumber for eight years. so I have a background in this. So it really suited us well where most people were probably, I was like, Oh, this is, you know, very worse than moving to cows today. We’ll be working for a while, but obviously that’s not the goal of this business, but, you know, worst case scenario, we knew we had this under control.

Speaker 2: So how are we going to phase in, and you doing one building at a time when you knew the time, you know, what’s the plan,

Speaker 3: We’re doing this, going to do the vacant units. so we’re going to do all of the home runs. So from the meter to every one of them comes up into the laundry room. So we’re going to go section by section,

Speaker 2: Explain that term home run, because that probably just,

Speaker 3: Yeah. So from the meter to the shutoff in the laundry room, there’s a main shot off for every apartment, each individual unit in the, in the laundry room and they’re all stacked. So they’re all vertical of each other. All the laundry rooms are stacked on top of each other. So what we’re going to do is go from the meter to each laundry room first, and then on every vacant unit we’re going to go through. so right now we have, six vacant we’re going to go through and do all the plumbing and the vacants. And then we’re going to move between either change of leases in, or offering to move people to these vacant units. And then those six will be vacant. And then we’ll go to those six, or we’re going to try to do them in a vertical top to bottom. But again, it just kind of depends on where the vacant are, but we’re going to put it in a system.

Speaker 3: And we’ve worked with talk to several of the plumbers that we had on that out there. And they all had different ideas on how they wanted to do it. and we collectively with our management team, class and management, we put together something with them. and then the other, that was the other issue too. The other thing I want to bring up is, is our management team. she’s actually done this once before, on another one of her properties that they purchased, a couple of years back. So she was familiar with this whole thing when we brought her in. So that was, you know, that’s a fantastic, you know, just bringing in the right people is the best thing in this business is making sure that, and that’s the one thing I do want to say it’s kind of off topic, but, with, within the, our mentor program is you get to meet so many different people who have done different things.

Speaker 3: And so you just have to ask and, and, and not let not let the, I know it all, I’ve done it all and been, you know, find somebody who’s done what you need to do and ask them and just take the best of it or the worst of it and ask a couple of other people as well, and, and, and make a decision on there on what you can do. But that, that to me is the comfort of, you know, like, you know, when we hit the master lease issue, why don’t we, we know we’ve got three days to close, or we’re going to lose $90,000 between me and my investors. I mean, that’s like you said, that’s the panic attack. And so to be able to pick up the phone call and call people and come up with ideas fast to get the situation under control is, was amazing. And so it’s a credit to, again, I know this is off topic, not on the plumbing issue, but it is a credit to the team of people and the people that surround, the RN mentor program, that I’m glad to be a part of. So, sorry, a little off tangent,

Speaker 2: Sorry. That’s what we pride ourselves on is support. Oh, how are you keeping your tenants in there You know, they know this is a property that has plumbing problems. What type of communication did you give them You know, in order for them to feel comfortable with the fact that, okay, you know, this place is there’s at least coming out of all the walls, but yet I still want to stay. How did you handle that

Speaker 4: Mostly it’s just staying in communication with them. You know, we had, prior to us taking over, there were a lot of tenants that were uneasy about, you know, going into the current environment. but they had really good rates, you know, on their apartments, based on everyone else that was in the industry, because right now they’re below market rents. And so, because they were below market, they were willing to put up with, you know, the, the minor pinhole leaks, the, minoring conveniences, but they, again, they were putting a band-aid on a bigger problem. When we took over the office, there was a calendar in the office. They hadn’t been in the office since 2017 and just having a presence onsite, you know, because our onsite leasing person lives in the property right now. And just having that person on site that you can go to, you know, with an issue and get, you know, immediate maintenance, available to them. And it’s been, you know, very helpful, you know, bond between the tenants and owner. So we’ve been very fortunate, you know, to be able to take over and give them the support that they need.

Speaker 2: All right. Great. Well, I want to thank you guys for being on and sharing your wisdom and allowing me to dissect your deal and, congratulations. Good luck out there. And, I wanna thank everybody else for being on this deal lab call, and we will talk again,

Speaker 1: Take care. You’ve been listening to the multifamily deal lab podcast, where the deals get done. If you’d like to learn more visit Dave’s free book.com and don’t forget to leave a five-star rating and review and hit that subscribe button. So you don’t miss an episode. Thanks for listening.