Deal flow management for HR

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and before we dive in actually I'll take a step back for those that are not as familiar with us at Lone Star Capital my name is Rob Beardsley I'm one of the founders of Lone Star Capital uh with me here is Charles Waldron our director of Acquisitions who oversees uh the entire Acquisitions process as well as the putting together of this data with the help of Grant Oliver who's also on the webinar today so thank you very much Brad for putting in that work uh Charles do you want to just enter yourself and then kind of share the setup that goes into this spreadsheet um sure yeah so hi I'm Charles Waldron I head up Acquisitions here at Lone Star Capital um so you know interfacing with the Brokers and then bringing in the deals or viewing them figuring out which ones they want to bid on and what level and kind of guiding them through the process eventually to close uh you know focus on dollars in Houston metros as you can see here on the left in our Market column um yeah so that's just the bread and butter here and this is kind of a review of all the stuff we've worked on in the past quarter yep so to provide more context before we go into the insights this spreadsheet is every single row represents a deal that we sourced and underwrote and likely put some sort of bid on because there's no sense in going through the process of evaluating a potential deal and not providing that feedback as far as where we like the deal right it's good to provide the market that feedback so that sellers pricing can adjust if if it's warranted and right now we're seeing a lot of that where people are going to Market or going off Market to solicit bids and it's really important now more than ever to provide that feedback to let sellers know hey if your pricing expectation is here there's actually a handful of buyers down here so if you are a market seller then likely you need to bring your pricing in line with the market is so it's good for us to be putting out that feedback letting sellers know hey here's a reasonable uh transaction price so as I mentioned every single row is a deal we have redacted or taken away some information just to retain some anonymity but if you're familiar with these markets I'm sure there's going to be some deals here that you can kind of pick up on and recognize but with that being said just to go through the various columns we have market so as Charles mentioned we really focus on two markets DFW and Houston and it's interesting to compare the data from those two markets because while those markets are both Texas power markets they do have their differences another interesting Nuance that we cover is whether a deal is marketed or off market so here you can see Market versus off market and we'll talk about those trends when we get to that point as well unit size I don't know if we'll really have that much data to talk about as far as a unit uh unit unit size but as you can imagine there's definitely some insights that could be gleaned from a larger unit properties versus smaller unit properties and how the cap rates and projected returns vary between those deal sizes similarly we have vintage so as you can imagine return profiles May differ from older properties versus newer properties and also business plans can be somewhat dictated by the Vintage of a property as well some other important uh things to point out is of course pricing so pricing right now is very uh I would say opaque because we have such a wide bid ask spread in the market today just to Simply cover what that means we have sellers who are looking at the past and they're placing the value of the property here based on the past and then buyers are forward-looking and because interest rates are higher and performance future performance is less certain buyers are being more conservative and so their prices are down here and that's creating that bid ask gap which has been a recurring thing that we've been talking a lot about here in the office as well as with investors and partners around the country so when we have pricing here we have the guidance pricing which is the pricing quoted to us essentially or the strike price as as given to us by the broker or the seller and then we have our our value as far as what we think would be our price that we would pay for the asset and then we get into valuation as it relates to these pricings we have the underwritten cap which is the cap rate at which we underwrite the deal at based on their strike price and then we have yield on cost which is the stable stabilized yield on cost metric which is where we are projecting noi can end up through the business plan divided by the purchase price and the capex and so yield on cost is a very important valuation metric which doesn't take into account leverage so it's less manipulative manipulatable and it gives you a clear sense of the return potential for a deal and then you have our pricing which is LSC here and it's our underwritten cap as far as our price so just to give you an example with this first deal here we have a 4.2 cap is what the seller essentially wants to sell the property for in a 5.1 cap is essentially what we want to buy it for and that's the disconnect and that's a very wide disconnect normally the market is a little bit tighter than that but you know if going from a four to a five is a huge disconnect right it's about a 20 pricing difference and I'd say a normal healthy bid ask spread it's more like 10 so we have a double twice as big of a bid ask spread so and you know of course we have more things here such as the projected returns based on our pricing and uh the noi that we're projecting as well as the capex which will tie into some of the insights that we have to share so hopefully that makes sense and sets the stage for what all these numbers mean um so and again feel free to put questions in the chat but without further Ado I'll let Charles jump into maybe the first Insight yeah I mean I guess we'll if we look at some summary stuff yeah yep no yeah I mean so we've looked at you know a lot of units uh I think this is about 100 deals uh give or take um you know and you can see actually just you know the in terms of the Vintage on the size um this quarter we've looked at the average vintage is 1986 last quarter it was 1986. um the unit count this quarter average is 247 lost quarters 265 so square footage both in the 800s so kind of really similar honestly you know in terms of the deal criteria that we've been looking at we've been pretty consistent in maintaining our box um and yeah just a very very similar slice of products uh although the market you know in terms of where we're looking we've kind of looked at a few more deals in Dallas uh this quarter so last quarter we were two-thirds Houston um one-third Dallas and then this quarter um given that you know we're kind of focusing on dollars a little more and there's a little more activity I would say just a little bit um you know that we're uh we're looking at more dollars deals as a percentage as well so but in terms of the product it's really similar to last quarter um and then yeah you can see that um you know kind of going where I was saying about the the bit of spread and the market in this tricky place I mean the Market's been in a Kind of a Funny place for a while right um even last quarter uh it was basically uh half and half between marketed and off-market Deals and now at this point I think we're 75 uh yeah we're at 70 off Market deals for for this quarter that we looked at um which I mean also just as if they are really a serious seller they they might not be off Market they might be in the market well why don't we jump into that as being our first real insight as far as the way that marketed deals versus off-market deals and how that has shifted from one being more attractive than the other essentially right so yeah it's obviously if if you're marketing right everyone knows your deal is for sale uh if you mess it up it's going to be embarrassing um you know you're kind of putting yourself out there um and you're kind of committing to sell pretty much uh we used to go to I mean last quarter there were more kind of hung processes where you know they call for offers they didn't get the number they wanted but at this point people mostly know I think uh more what's going on and so uh if they're going to be in the marketers day they're they're likely um seller sorry I'm gonna find the file are we comfortable sharing this file or no uh I mean we haven't been sharing it interesting I think okay all right yeah we're not we're gonna hold off on sharing for now but thank you for asking um so yeah yeah so just to build on the off-market concept when the market was going up and up and up if you took your deal to Market it was more than likely to get a bidding process to ensue and that would actually bid your property up above your strike price you would actually sell for more than you're asking now that the market is not going up and up and up now when you go to market you really only would do so unless you are more than likely a market seller so whereas before the off Market deal could have been the more attractive deal because it would potentially be sheltered from an aggressive bidding process now it's the opposite now the off Mark eels are the less attractive deals because people who are off Market are just people who are kind of Dipping their toes in the market just to see if they can get their price whereas markets Market sellers not all of them but some of them are going to Market and saying hey I just need to sell I'll take whatever the Market's willing to give me and that's what we're focusing on so what you're seeing here is only 29 of the deals that we looked at this quarter were marketed and that's because far fewer sellers are willing to go to market because if they don't have to sell why would they sell into a weaker environment but these are the ones that are more attractive to focus on which is again I mentioned is the opposite of how it was before we were always striving to have more and more of our deal flow come from off-market sources because we felt that those could be the better opportunities and now I'd say it's inverse now I'd rather have this be 70 of our deal flow the more marketed deals we could look at uh the more I'd argue we have a chance to strike and and similarly you know it used to be that no one want to preempt the process because the price would always go up the further along you went but today a lot of the processes are flexible or you know if they're going to they need to see the bid sheet that um you know maybe that's because they need to see a number of bids in order to take one less than really what they would would like in an Ideal World um so you might have seen um in in the past where uh there would be sorry yeah um let's do uh well we haven't yeah so I mean so the next thought on this topic about bit of spread is is just we actually calculated where is the average you know liability for us um you know between our two markets and between market and off market so um you know for Market of deals uh we're probably seven percent six percent closer on average than for off-market deals um so you can see in the off Market both Houston and Dallas were like you know in the 70s uh which is pretty far off um and for marketer deals we're you know we're closer um 8084 and I think part of that also is um you can see actually we're closer on Dallas at the moment which is surprising because of course Dallas was always has been a hot market and very competitive to bid in so it's kind of interesting to see that um that difference there uh but so that sort of goes to actually our next Insight which is this about this cop rates which is that the cop rates on average actually seem to have uh compressed uh but you can see that they compressed for us um in our underwriting uh more in Houston from uh Q4 uh to q1 then in Dallas so um you know Dallas we made uh the Austin copyrights lost quarter 3.8 and then this quarter 3.6 you know on kind of adjusted expenses and everything um whereas in Houston 3.7 and 3.3 so Houston's uh for 40 bips um Tighter and why is that um so because in Houston expenses are going up um so insurance is going up uh that's one of the that's probably the main driver there and so um that's kind of so you've seen the copyrights Titan and Houston because the pricing hasn't really kind of fully uh adjusted to account for the increased expenses um so that's also affecting transact ability in that market this was a surprising insight for me because I'm under the impression like many others I'm sure that cap rates have expanded and are due to continue to expand as the market adjusts and digests higher interest rates so to see cap rates in both markets become more compressed that is interesting and I and also the interest rates that were in the market during Q4 versus q1 were roughly the same we started Q4 with lower interest rates and then interest rates went up and up and then the opposite happened with q1 where we started with high interest rates and then they kind of went down so I think the average is somewhere around the same but just to recap where we we had pretty much the most aggressive Market here ending in Q2 of last year and so you see you have we had low three cap rates and then we started expanding we continued to expand and I figured that we would see even further expansion here to the fours but we didn't we didn't have that so as Charles explained it's at least in Houston it's arguably mostly due to Rising expenses and This Is Us adjusting to the market and you could say well we could have inputted these higher Insurance costs back here but so it's not necessarily tracking chronologically perfectly but at some point buyers in the market are recognizing future higher costs and that's Weighing on their cap rates and it's going to take time even longer time for sellers to accept that fact and go okay fine and go out with lower asking caps right it doesn't sellers don't overnight change their pricing expectations so that's why it's a long slow moving process that we have here yeah you know it takes you know so we might have started adjusting our insurance number before the market at large and it takes some time for the market a large to cycle through that expense that insurance renewals for example and it really kind of hits the reality there so yeah and then let's also look at asking cap rates versus our cap rates right and talk about so and what is the difference just to recap so the asking cap rate is the strike price that the broker is when the seller are offering the property for that's what they'd like to sell the property for and LSC cap rates are the cap rates that we would like to buy for all right so here you can see peaked in do three or no I'm sorry uh peaked in Q2 just like asking uh cap rates and then we started to expand and expand because we were moving with interest rates that affects our underwriting immediately right underwriting is obviously very sensitive to interest rates and then here we are in uh Q3 versus q1 our our our cap rates actually went down so can you explain that uh well I think you know we're also working on you know in Houston I think those part of it is that these are average numbers and so there might have been a number of sort of troubled properties that bring on average down specifically in Houston um but I think it's also interesting you can see the kind of that bid off spread has it's widened since you know Q2 of last year when basically you know it was very hot there were lots of marketed processes lots of action all the time and then you can see that you know we and many other people as well immediately have widened our top rates back in uh Q3 of last year but then you can see that um the Austin cooperates in both markets are kind of trickled along much slower in terms of you know they haven't reached anywhere near that bridging that Gap where we went from 3.6 to 4.2 today uh you know which is um 60 bits they've gone from 3.2 to 3.6 which is 40 bips you know and they're starting from 11 points so it's just you know the the movement of the the market copper has been slower and so there's just been less activity for the last three quarters yeah do you want to cover these next sure I mean yeah so this is kind of an extension um of the bid ask discussion really this just shows kind of how the deals are pricing in terms of our price uh versus the ask price um and then at different you know what percentile of of our pricing are we out versus we ask so you know how transactable is the average deal well the median deal um in the most recent quarter we're at 80 percent um of the Austin Price uh which is you know this the bid ask spread is widened for us so um the table below uh the Q4 metrics you can see we were 85 for the medium Depot last quarter so um you know the pricing's kind of continue to get a little tougher in terms of transact ability always for us um on algorithm the deals to look at and you can see the same thing about the median deal because the average numbers for copyright and such can be a little um you know difficult to make sense of but you know you can see if you want um four cap and the median deal that we're looking at and which has actually stayed the same they were just interesting uh meanwhile the irr has gone down and I think that's probably just due to uh financing I'm sorry right can't wait the same actually I think we're slowing it's more aggressive yeah okay uh let's take a question here so Elijah's asking about off-market deals what does our process finding these deals look like what have you said to unreasonable price sellers so I mean that's what I want to just talk about sourcing yeah I mean you know we just try and keep in touch with the brokerage we're always in touch with them whether for marketed or off Market we try and participate in everything um you know want to be as far as call or you know we want to get the shops um is I mean we tend to just feedback our pricing and a lot of the time these days nothing really happens yeah I mean it sounds like you're asking for some sort of uh secret sauce I would say we have no sort of Secret Sauce as far as dealing with unreasonably priced sellers I mean the market is the market we can't convince a seller so it's just this is the reason why we look at so many opportunities to find the right ones and provide feedback to the market and as far as when we talk about off Market we're very rarely talking about direct to seller opportunities uh almost none of them are directs I mean maybe out of this quarter of 100 deals maybe two of them are direct to seller and you know two two to four minutes two to four yeah so yeah when you're talking about institutionally sized properties 20 million plus very very rarely are you going to get a direct to seller opportunity so that's not even something that we're really chasing uh most of the time it's a waste of time we've never bought directly from a seller let's go and talk about Patrick's question about how we uh approach the Valiant component and how that's estimated so that's actually a really good point because we can now flip from talking about asking cap rates and our cap rates and actually focus on yield on costs so where should we go in the table for that uh well yes is going to be the these this column and then there's one for the um out there pricing because the yields and cost has been based on our project to stabilizing and why so that's the column is just off the screen to the right hand side um and then over uh the uh purchase price plus capex so that's what we have capex in the table at the far right so that gives you um that that's used to calculate the yield on cost you know in addition to the purchase price and then it also gives you some indication of what kind of a deal it is right if there's a high number there it's going to be more involved and if there's a lower number it's it's probably a bit more straightforward now let's explain that a little bit more so there's a few ways to get obviously the higher yield on cost the better and there's a few ways to get to a higher yield on cost one of which would be just to buy a higher cap rate right a higher cap rate could get you closer to the higher yield on cost that you want the other way to go would be to buy a low in place cap rate for example you could buy a property that's half vacant and there's a big turnaround play but there's usually a big reward there by way of a higher yield on cost and that relationship is actually something that you should demand from a deal so you wouldn't just want to buy a distrust asset and achieve the same yield on cost as they stabilized asset you would want a premium there and so we can find examples of that for example I would like like this one this one we've got a deal here that has basically a negative going in cap rate and a yield on cost of 6.8 so that is not necessarily a good deal because what this seller is basically asking for is for you to pay stabilize pricing for a distressed deal that has no income and it's going to lose money and it's losing money right and it's your job to turn it around but you're not even getting paid for your effort of turning it around because all you're ending up with is a 6.8 percent yield on cost so it's a big spread with not much of a reward for an 80 spread between my cap rate and my yield on cost we want to get paid more and that's why you can see that in our underwriting you can see uh we would actually want to end up at a 9.1 percent I'm sorry no no we want to end up at a 7.7 yield on cost to make it worth our while to pursue the uh the distressed opportunity so that's what yield on cost is all about and so you can see the average yield on cost asking is 5.6 percent and we are demanding 6.9 yeah big spread that's a very big spread so just going back to make sure uh Patrick's question is answered right you're asking how how we uh estimate the valid component so that gets more into our underwriting process right and less about the the deal flow data but you know obviously Brad and Charles are doing rent comps and estimating renovation budgets you want to talk a little bit about that uh well I mean there are a few different ways right I mean you could either a lot of them they just have a pre-package they've already done off the units and you kind of it you can do the rest um typically you're not going to get tremendous returns for doing that because everyone knows how to do that and it's you know whatever but it's it is money that you can make for doing something that's relatively straightforward and you do get paid to do it uh generally um or at least will demand be paid to do that um you know but there's also obviously the comps have to support it you know you're going to put the money in to renovate the units you have to figure that you can get rent premiums if every deal in your stock market looks the same and they say that you should renovate you know every Deal's got just the plain old regular countertops and they say you should put grounded and nobody else has that and nobody else has higher rent then you might use people um so you wouldn't do that plan uh but I think in this chart um you know you can kind of see that somewhat in the you know our irr metrics um on the capex budget basically so um you know deals that have more value-ad component are going to have lower going top rates they're probably going to have higher project irr and on levered irr um and they're going to have a higher capex budget in terms of the deals in this chart and likewise yield on cost level higher yield on cost so let's address Matt's question which is a very popular topic these days which is positive leverage so Matt asks have you been seeing any opportunities these days with the ability to employ positive Leverage so let's actually do a filter here on the under and cap rate and let's go by uh descending order right so if we look at the absolute highest cap rate that we saw in the market was a 5.8 cap so there if you bought that deal you would be able to actually acquire it with positive leverage because you could use agency financing in today's market where Treasures are today you could you could do a five and a half percent rate all day long and that would be positive Leverage so but as we start low and going down the list you can see the vast majority of deals are below mid low fives right so we've got a lot of negative Leverage but then you have to ask yourself the question when talking about positive leverage are you limiting yourself to only being positively leveraged day one or are you comfortable being positively levered on a stabilized basis right meaning yield on cost because what if you buy today at a negatively leveraged position but then in a year from now through your business plan you're able to push noi such that you become positively levered right is that that's that's a risk question is something that are you willing to take the risk on the business plan to get to positive Leverage so everyone's talking about positive leverage these days go ahead well it's getting to undo to get the charter packed was um yeah yeah well I think yeah um I mean I think in terms of positive leverage historically never really been available um yeah because I mean that would basically be free money um I mean that generally you're going to buy with the expectation that I mean those generally Market rent growth so that would be a reason why you wouldn't be able to get positive leverage ever going in you know in general you're going to expect to be able to do things a little better than the next guy or whatever um so and also in terms of our product you know we're looking for high Returns value odd this kind of thing right if he wanted to be able to buy with positive leverage you'd probably be looking at that's a deal that makes sense going in it's probably going to be a casual type deal or something and not going to achieve the kinds of irr targets that you know certainly our investors are looking for yeah because there's an inverse relationship between underwritten Capri and yield on costs generally speaking The Higher by the lower the yield on cost is going to be and hold on a second so that's that like Charles explaining if you want if you absolutely have to have positive leverage well that might force you to buy it will force you to buy a higher cap rate well where are higher cap rates higher cap rates exist on deals that are in worse condition in worse locations and worse markets uh worst asset classes right maybe non-multi-family you could get a higher cap rate as as well as having less upside the more upside a deal has the lower the going and cap rate so if you want to buy a higher cap rate you would then buy lower upside and also you maybe if it is just a no upside deal you tailor your financing and you do 10-year financing with yield maintenance you'll be able to get the absolute lowest rate and today that rate would be close to five percent so if you buy you know good product with cash flow and you have five percent debt now you're getting close but still buying at a five cap today unfortunately is very very challenging so that's a good question about yield on cost or I'm sorry about uh positive versus negative Leverage you what else do we want to talk about um well I guess I mean on the kind of the business plan aspect uh you know from quarter to quarter our our business planners just got a little bit uh less aggressive um so you know but it's it's you're it's tighter Market we're stretching a little bit less so you can see um yeah capex budgets have dropped just a little bit also um some sort of covid pricing falling out of materials cost maybe but for 9 300 to 9000 um and then similarly uh are underwritten irrs um I've found just a little bit um so we were you know 15 that we'd want um where is this error I'm seeing uh 14 21 to 20. yeah yeah 21 to 20. so or unlever yeah yeah so yeah unlever you know fit into 14. so we found like a point kind of on our underwriting there um you know with with less budget so I think we're slightly backing off sort of the operational risk a little bit in our plans we're favoring deals that are lower risk I think because the market is in a situation where you're if you want to take a lot of risk you can but the projected returns don't really go up much for that so you may as well focus on the deals that are less risky and where the outcome is more certain and that results in targeting slightly lower returns as well as targeting deals with slightly smaller budgets and also as Charles mentioned some of this decline in renovation budgets could be due to relief from increased costs associated come from coming out of covid here you can also see where it's predicting I mean really slightly not really small differences here as far as the projected noi per unit being a little bit lower I mean you also look at the rent growth assumptions probably being a little lower right being less aggressive with rent growth as that's kind of that's starting to slow down a little bit we're still seeing in our Market still positive rent growth and still strong renewals so performance remains strong um yeah also our exit cop underwriting has you know widened from 5.5 to 5.6 even I mean since the beginning of the year so we're continuing to be a little bit you know wider on that obviously a lot of the adjustment would have been last year already yeah I would say average exit caps towards the well I'd say in Q3 Q4 of last year were kind of around five and now we've widened exit cap rates by about 50 basis points so that would probably be the single biggest thing that is affecting our underwriting that and and debt right debt obviously has a especially because Leverage is lower today that's having a lower magnifying impact on Leverage returns and then when you factor in a wider exit cap that uh just really penalizes your numbers and and makes your returns Project Return projections much lower Charles schuyler's asking how do we determine exit cap rates uh I mean kind of what he thinks that you know reasonable would be to buy plus a little bit IBS so I'm going to call it 25 to 50 depending on the deal um you know of course to some extent this answer depends on your view and interest rates but you know yeah I think we definitely want to at least see some expansion over where we are so probably 50 bits of expansion um they were certainly not trying to predict the future we're just we're trying to have good underwriting fundamentals and good underwriting fundamentals means that you have a slightly higher exit cap rate than what is currently observed in the market and so today there is not much of a market to begin with so cap rates it's really what people are talking about at the institutional level and it's precluding a lot of institutional investors from investing because they just don't know where rates and cap rates are going to land so it's hard for them to underwrite terminal value which is an exit cap rate uh so it's funny kind of you know it all comes down to this and right now I'd say we're seeing market cap rates for deals I mean not much is really actually getting sold right so it's really hard to say what is the true market value which then leads you to so I guess for Skyler's question right in the in a normal Market how we've been having things there's tons of Trades and through this very document through this trade tracker that we call it we would see oh very simple the average asking price guidance pricing cap rate is right here it's 3.4 okay so the market cap rate is 3.4 and then we add 50 basis points to that or maybe about 100 because these are value-add deals so these aren't stabilized market cap rates so you take that 3.4 you go to four and then you exit at four and a half and there's your exit cap rate but just because people are asking for 3.4 caps today that doesn't really mean where the market is the market is definitely not that low so we have a more ambiguous market so then you say well is there another way to come up with exit cap rate valuation um and another way to look at it for example a private Equity foremost being with they they their argument was well the historical spread between the 10-year Treasury and cap rates is roughly 200 basis points and if we have a three and a half percent Treasury then cap rates need to be five and a half percent and and then if you want to be conservative from there you could say okay well 50 basis points above that now you're at a sixth cap and then you know now today look at the market 10-year treasury is more like 3.2 so do you adjust it down or do you do you then put your macroeconomic hat on and guess essentially where the 10 years going to be when you sell in five years right so you say well I think that the 10-year is going to be at three percent in five years time and the historical spread is five um is two percent so it'll be a five cap and we want to be 50 basis points why to that so five and a half right I mean there's there's so many ways you can come up with reasonings I think at the end of the day you just have to do something that is defensible rational but if you just slap a six cap on it it might just be too uh pessimistic and you'll never buy the deal so it's just always this balance of being aggressive enough to give yourself a chance to buy while not getting over your skis and being too aggressive obviously and you know Market cooperate it's not just a time with interest rates right I mean there's the spread from the spread can vary so so I mean even if you have an interest rate view that doesn't necessarily mean that your exit cop should just kind of move in condom with interest rates you know there are fundamental drivers of you know supply and demand in the market the Capital Market all this stuff that also influence inflation as well um so you know there's there's a lot that goes into it in the end and it's sort of a you know you know as a kind of have an opinion okay so I think unless you have uh anything else I'm gonna basically throw out there if you thought things were going to get better in this quarter uh they didn't right I think we still have some time to go I guess here would be a good place to point that out from Q3 to Q4 to q1 you know cap rates are still remaining low making it very difficult to transact as I'm sure you all are seeing not a ton of deals are getting done and I think we have a couple more quarters of that but who really knows right it could get back to business quicker uh with a market sign if the market has a sigh of relief and the FED signals the end of raising rates that might really calm things down and allow things to go or it could drag things out on and and investor sentiment could be negative and that could delay things so uh that is kind of what I you know I'm seeing here is that patience it's going to take time for the market to work itself out to get to this point okay so that pretty much wraps it up with uh what we wanted to share today we have some more time if anybody wants to ask a question what in the chat or live feel free to do so and then from there we will sign off and send the recording out thanks guys appreciate it um will you be sending out the blank template with the recording uh thank you for reminding me do you have a blanket yeah we have one somewhere all right let's we'll find the blank template for you right now and we'll post a link in the chat so that way only people who are on the call get this uh blank template awesome thank you guys appreciate it um is this it uh let's double check but but probably yeah no that's but we could share this that's yeah true okay yeah we wouldn't have a date one to share okay cool um one question one question that I do have are there any other um um I've read your book um thanks a lot very informational is there are there any other um forums that you can recommend just to get a little bit more um astute on the spreadsheet and and all the various formulas that would you know make you know our acquisition um template a little bit more sound adventures in cre has really good sound fundamentals and formulas and stuff like that to dig into their spreadsheets I don't know do you have any other ideas free FM I'm not familiar with that one what is that I think it's called refm I haven't been I think that's out there yeah so I mean obviously you you've read uh sounds like you read maybe the the first my first book I'll just I'll just put those links in there as well let's answer this this is a go-to question so when we're way off on price do we submit another y or just give feedback yeah a lot of verbals or emails which is available the uh the Brokers will sometimes ask for I know because they want to have something in handheld to show the seller and say hey this is what the Market's saying and they try to convince the seller with enough offers if we feel like there might be some pressure you could also submit low and just hope that they kind of you know get desperate one day yeah it's always good to have your Loi just sitting there and you know I might pick up the phone and call you back and then what about Mina's asking what about showing our underwriting you know when we're super far off the broker says hey are you you know what's going on in your head well I mean the the underwriting is reflective of of like opinions that you have qualitative opinions you know sort of does it stock up to the rent columns does that make sense is the condition of the property good is our budget therefore going to be higher um so you might provide feedback on where your opinion might differ from for example the opinion of the buyer who probably is going to buy the deal um so like if they're telling everyone that there's a value-add plan then probably a buyer will come a long while hopefully for them a buyer comes along who's going to buy that and if you don't believe it you might say well you know we don't we think the rank constant support this or something but you probably just qualitative feedback mostly you know we're going to like the area or whatever right yeah there's I mean it's all in the eyes of the bubble holder right they're hoping to find a buyer who falls in love with the deal and can Overlook its downsides but that's not obviously everyone and it's not always going to be us all right well I think that pretty much wraps us up here thanks everyone I'm curious yeah I'm curious I know you know with the the state of interest rates you know in the single family Arena you know there's a big opportunity for Creative finance and a lot of people are trying to leverage that I'm just curious how much do you see that being a play in the large multi-family space not at all or it just is a case-by-case basis yeah we've seen a little bit of it I think ryze 48 which is a sponsor in Phoenix they closed the deal in Phoenix with seller financing so that's creative and I'm sure it was a home run for them the other thing that's more prevalent in our space is Mezzanine Financing or preferred Equity so getting more creative with instead of just having a bridge loan or having just one loan on the deal you might have some sub debt or some sort of uh like I said preferred Equity so I I don't think there's a ton of that happening as far as Acquisitions but I know that's definitely happening on Recaps so recapitalizations where people are doing a a refi and then in conjunction with the refi they might be putting on prep Equity as well yeah because they might have higher leverage currently and they're trying to get into lower leverage but they need to supplement that lower leverage obviously with third-party Equity uh and then maybe there's some Equity buyouts happening as well where you can use prep Equity to buy out um some some inequity Partners so I think that's the creative stuff there isn't assumptions I mean blue yeah loan assumptions are another good example they're a big they're a big portion of what's available right now in transactable right now and you can maybe get a supplemental on them and multi-family from the agencies so got it okay cool appreciate you guys very cool all right well thanks so much uh and we will see you on the next one