Michael O'Shea- Origin Investments

Introduction to Origin Exchange tell the audience about how you got started in real [Music] estate welcome to the Masters in real estate podcast with your host Tanner Webster so I got started in this business um raising money for uh Inland who is the largest 1031 exchange sponsor and I spent about a decade with them just traveling around the country raising money from financial advisors and kind of learning how the business works and then what' you do from there well I kind of saw a big gap that was in the marketplace a lot of the uh the people that were raising capital for Real Estate didn't seem to have a firm grasp of how cap rates worked interest rates worked Etc so I went back to school and I got a master's degree with a concentration in in real estate Finance which is actually where I met Michael episcope he and I both went to the same school here in Chicago depal University and uh so I met Michael there finished school and then um when got this CFA designation afterwards is I thought more and more institutional investors that are allocating to real estate typically we'll have chartered financial analyst you know that's doing the due diligence and stuff and so I wanted to be able to speak their language and so that helped quite a bit you know just in terms of kind of overall knowledge of finding this portfolio allocation understanding risk and um you know everything's kind of come together I've been doing this for about 17 years not exclusively on 10 31s but that's been a big part of my career opportunity zones private placements sidecars um you know REITs Evergreen funds Etc then when did you get to origin this was 2022 or when did you start there so origin we just started up this this platform um you know six months ago really so I started with origin pretty recently and and the Genesis of it was working with um Michael to kind of say you know I feel like I feel like origin Understanding Delaware Statutory Trusts (DSTs) is missing something in the product lineup where you've got allocation strategies to equity and debt you've got a tax advantage solution with opportunity zones that's it's really taking off and your investors are loving it and there seems to be a missing piece of 1031 exchanges I think the General thought process was uh you we don't want to be in the DST space because they're transactional their fee laid Inc and so the idea was can we come up with a better mouse trap so in essence there's nothing wrong with Delaware statutory trust as a raer the problem is essentially how they're sold how the capital is raised how there's so many hidden fees and so we thought if we could just cut through all of that uh we can make a better product for investors go directly to investors and and so we've been working hard behind the scenes for probably a little over a year and getting this up and running and we'll launch our first DST in in July so we're we're uh we're ready to launch can you talk about the B loads that you see in other dsts because I've just heard it anecdotally like you know by the time you invest it's it's almost like you buy a new car like by the time you drive it off the lot you have like 30% appreciation yeah and I've kind of heard similar things about the dsts so can you dig into a little bit of that fee load and the hidden fees that come with those yeah yeah and that's you know maybe one of the issues of our industry I mean they're not necessarily hidden they are there it just depends on what due diligence the investor is willing to do in the time and basically sophistication of reading one of these private placement memorandums which could be upwards of 200 uh Pages if you do go through there I read tons of them so I pretty much know exactly where to go in a PPM but you can essentially find the sources and uses and one of those uses is going to be purchase of real estate so you'll see the actual price of the building that's inside the Delaware statutory trust and a lot of times you'll see that of the entire deal um it's 84% of the purchase price or 89% of the purchase price or something like that in our deal I believe it's 97% of the purchase price is allocated to real estate and remember a lot of it is just unavoidable closing cost we have to pay attorneys we have to pay for title we have to pay for Consultants as part of closing a deal of that um size and so we didn't just so to answer your question I think if you're looking at the total fees on equity for a brokered DST deal you could be upwards of 15% and when we say hit it in yes they are disclosed in the private placement memorandum but for the most part if somebody does a million doll investment into a Delaware stat trust their statement is going to show a million their Dividends are based off of a million so in a lot of cases they don't know that $150,000 is God in fees and it's not by real estate so the net asset value essentially what you bought is 850,000 and so just imagine the growth of that property just to get back to the million dollars that you paid you know plus hopefully some sort of profit um so we've cut the fees down from let's call it I don't know 10 on the low side to 20 on the high side maybe an average of 15 down to 1 to 2% front and low yeah I feel like uh when you're hitting a 15 20% felo just off the bat you're you know better off paying taxes and just keeping that money in your checking account basically um I think uh I mentioned it a little earlier I'm working on a a deal with the land owner who's just a farmer and I don't know if I know anyone who hates paying taxes more than a regular farmer and yeah so let let's say I I advised him maybe not advis is the wrong word maybe I told him about uh origin and the origin exchange how would that work for him so he I buy his land from him how does that work yeah so that good question that's a question we get all the time about the the logistics of it all and if if uh if people are familiar with the 1031 exchange there's really not much different in doing a 1031 exchange with a syndicator like origin versus doing your own 1031 exchange of course there's many many rules you have to follow so I don't think it's we have time to kind of The Problem with Traditional DSTs go through all the rules on this particular discussion but you'd follow all those same rules namely you would put the money with a qualified intermediary so before uh that you actually close on the land and that farmer receives his proceeds he would establish a qualified intermediary account act closing the money would go to the qualified intermediary so that would sort of establish his time frame to complete the exchange and so most people are familiar with 45 days to identify replacement property 180 days to complete an exchange it's the exact same thing with a DST so you could think of us is the only difference is the DST is what's the like kind replacement property in fact you know these things are um light speed so so if you're if you're if you're doing a 1031 exchange on your own you need six months because you have to find a property actually just got off the phone before we did this discussion with the guy who said his last day to identify her placement property is tomorrow the deal that they were going to close on fell out and they had planned on buying it and luckily it fell out in their 45 day window so we I just sent him an email half hour ago and I said here's how you can identify our VST so we could save a lot of these things because our deals are sort of prepackaged in turn key and so if it was something he was interested say your closing is I don't know um September 1st you could actually set up the QI in August you could get all of the paperwork to origin in August you could say here's how much I want to invest then we hold that paperwork in good order you're just subscribing to our offering no different than any other syndication September 1st you go to close the money goes to the QI the QI takes a day or two to wire it to us and so you're literally out of the market for like two days that's a really really simple process and as far as the mechanics behind this do you plan on just always having properties available like you guys are just buying every three months or something like that or is it you know you can exchange into the DST and then the DST will buy something six seven months later like how does that work yeah that's right so so the DST will never buy anything else the DST is a standalone vehicle in fact there are certain rules that guide the Delaware statutory trust the seven deadly sins you may have heard of where you can't take Capital contributions you can't improve the property you can't renegotiate the lease you can't refinance the debt and so as you can imagine these have to be very core stabilized assets that we acquire from that regard it makes it pretty simple if we go out and buy a100 million apartment The Benefits of Origin Exchange for Investors complex and we put a first mortgage on it for 50 million we'll go out and raise 50 million of equity from our 1031 exchange investors once that 50 million of equity is raised that deal is completely sold out and there's no other Equity available so we'll be on to the next one and so from our perspective we're keeping a constant pipeline uh in our sales system to kind of know how much Equity we should have out in the marketplace um it's significant I will tell you just for having launched this fairly recently um we've got we've got a lot of demand and so our deal team uh you know like I said we've got the first deal that's coming out in July we expect that to close fairly soon month a month or two maybe and our deal team is right behind it with with other assets that they're looking at so let's just say we do a deal a quarter $30 to $40 million of equity and so we'd like to have 120 160 million of of equity you know per year how are you sourcing those deals you're in a couple different markets mostly across the sunbell right that's right yeah mostly across the sunb um you know when you talk about how we're sourcing deals I think it kind of gets into the overall origin architecture and our our use of multi litics and data and we could kind of go down that direction uh for this question though we're very datadriven company um we've got deal officers in our major markets and we want to buy where the rent is going to grow we only focus on multif family that's all we do in origin and so we're based in Chicago we don't buy any properties here that's where our headquarters is but we've got an office in uh Denver we've got an office in Dallas Nashville and Charlotte and we have deal officers all throughout those markets um and so as we're looking in rally and Nashville and Charlotte and Tampa and Austin and Dallas and Nevada and Phoenix um we see just about every deal that hits the market you know with that's within our box right now I think in our internal deal tracker we have 108 deals um that we're sort of following that we'd be kind of interested in you know working working towards so um it's just using the data to show you where you want to be and then using the ground level you know deal officers to see every deal that comes through the market we know all the developers we know all the Brokers um and and people like and want to work with origin so we see uh quite a few deals and I want to talk about the multilex platform just because so many sponsors will they'll underwrite a deal and they'll say yeah rents going to go up by 3% a year or something like that but I remember it was probably early 2022 where origin I saw it on like Facebook or something where you guys thought uh rents were going to go down by like two two or 3% while everybody else was underwriting five six seven eight% rent growth so let's talk about the multi- ltic platform how it was developed and how you guys utilize it today yeah yeah yeah good question and we could do a whole webinar just on Multi letics you know bring over some of the people from that side of the house so I I give a very introductory level kind of explainer of it but I think you're right you know we saw such robust R rent growth um that pretty much everybody just thought it was going to you know keep going and obviously you know we're not 100% sure of this but we believe we're the only major real estate uh outfit in multif family space that was predicting rats to decline in 2020 uh 2023 and 24 and so um that data has proven to be pretty accurate so right now everybody's talking about Ai and it's kind of the hot new topic but this was developed um many many years ago and and the idea was just to solve a problem so there's information that we take in and all these commercial real estate companies take in and just like anybody else we could back test it and so we get the data from these sources we input it into our models and then we can kind of look back and say how predictive was that in determining whether rent was going to go up or down by 3% in a given Market that we're tracking and the data that we were using could predict accurately whether rents were going to go up 4% of the time it was wrong 96% of the time and so as a business um I think origin looked at it and said we can't really do anything else until we fix this how do we do it so let's sort of get creative and so I built a machine learning model that would take in three billion data points a month um and this would be maybe One Way U-Haul is com to a place population growth um you know new new permits for apartments but you know scraping the web for all of this data and the nice thing is again the data is can be back tested and so now that we've kind of Applied multi litics and said what are the markets that we now think rent is going to go up or down by 3% annually um multiex is 95% accurate in in determining whether rent is going to go up or down it's just a model we continue to invest in it's model we continue to um improve and it when we first started it took in three billion data points now it takes in 9 billion data points every single month and so the there's there's markets that we will add there's markets that we will drop we just added Salt Lake City as a market look at that know s absolutely yeah you're your backyard right and you and you kind of know why I mean so like that's when you talk to people in those markets they say oh I get it that's a place that we would be well that's where the data drove us right and so now Denver deal officer is going to be out in Salt Lake City looking at all those deals and so um the model's proven to be uh pretty accurate it's a it's a pretty big Advantage for us in terms of proprietary data and driving it sort of Data-Driven Approach to Identifying Markets to the right markets um I want to back up a little bit because we uh we were talking about the origin exchange platform but we didn't really I kind of got side sidetracked there so uh we were walking through that example of the farmer the farmer goes and um they enter the DST platform where does their let's walk through the life cycle of their money thereafter yep yeah no problem getting distracted the multiex is pretty cool um people tend to get distracted by that a little bit it's the shiny object over here but so okay so life cycle and talking about how it works Etc so um you know I mentioned Logistics of how you get in the fund you subscribe to the offering money goes to Qi when the cash goes into the the DST and so you are an owner of that you know particular asset we've got a deal that we're not quite under contract yet so I don't want to kind of share all the details but a property down in Dallas that'll be our first DST launch um it's just in the northern suburbs where we see a lot of growth it's about a $60 million asset we're about 45% loan to value on it so we're going to raise 33 34 million of equity in that deal and so um if your farmer client came in their cash would go to the QI now they would don't piece of that property and so they would receive all of the cash flow from that asset they would be able to offset that cash flow with depreciation they would receive any appreciation in the asset as we continue to manage it over time and I think one of the things that's unique about origin is sort of our exit strategy so when you do a normal 1031 exchange the idea is currently it's kind of like a swap until you drop and that is to say we'll take this property and we'll sell it to a third party buyer maybe five six seven years from now and then your clock starts again and then your clock starts again and your clock starts again well sometimes that does actually work out pretty well where you put in a million bucks it turns into a million two and you roll it into a new deal more principal more cash flow Etc a lot of times it works out fairly poorly um 2023 was actually one of those examples where a lot of people were exiting out of older deals that were maybe 60% LTV with a 7% cash flow because they bought them a while ago and then you come into 2023 with the interest rate Spike and so nobody could Finance deals and so you're coming into a market where it's like all I have is 35 40% LTV deals the cash flows are in the threes I don't want to swap but you have to the deal sells and so you're forced to kind of sell and so you know we wanted a structure where people would sort of be off that roller coaster and just not have to deal with real estate anymore so one of the potential exit strategies for our platform is for the DST that you're that you're currently in to be acquired by our income plus fund income plus is our Flagship real estate fun and anytime two years after you've been in the Delaware statutory trust with origin the income plus fund has the right to acquire that asset and so if they choose to exercise that option income plus fund chooses to exercise that option they will buy out your interest in the DST now instead of giving you cash for your interest they'll give you partnership interest and so that exchange of partnership interest is taxfree or tax deferred under Section 721 of the tax code so you hear people talk a lot about a dual A two stage um or U and U is kind of synonymous with a 721 exchange so you do you sell your property you do a 1031 exchange into the Delaware statutory trust you know that for you know at least 2 years after 2 years if the income plus fund decides to exercise its wrer first refusal then you'll be upgraded into the income plus fund and there will be no more swapping there will be no more idiosyncratic risk of a single asset so the reason people like that if you kind of think about your portfolio and your investment life cycle and going along your time frame you know one of the things that we talk to clients about is like diversifying out of your single stock right you might have worked at Microsoft forever your spouse worked at Microsoft your options are in Microsoft you have 80% of your stock portfolios in Microsoft how we diversify it into a tech mutual fund so rely on a single asset in finance is called idiosyncratic risk and you want to eliminate that in your portfolios whenever you can and so what this does it takes you from a single asset to a broadly Diversified portfolio across all the target markets that origin likes it's also Diversified across the capital stack so that we can invest in core core Plus lending development Prof equity and then of course it's you know Diversified geographically plus the number properties that's in there so a nice kind of set it and forget it exit strategy where you off offload all of your active management to US exchange up into high quality real estate and never have to deal with attended phone call uh for the rest of your life I mean that sounds pretty nice so what is the exit strategy they after is it just living a fund for indefinitely Or there liquidity options like how does that part work yeah that's a good question so anytime you're talking about real estate ownership if you ever want to take possession the proceeds you're going to pay taxes so whether you do a swap T drop DST whether you do a 721 UPR with origin whether you do your own t 31 exchange if you go War the principal you're going to pay taxes and so with the 721 what I like about it is that we take a completely IL what asset and and make it semi so once you roll into the operating partnership units the income plus fund has a Redemption schedule which you would now be a part of and so of course it's gated we own buildings and so we can't be 100% liquid all the time but we can redeem up to 5% of the outstanding units per quarter and up to 20% of the outstanding units in a given year so that doesn't mean 5 and 20% of your Holdings what it means is if we've got a billion dollar fund we could redeem 50 million quarter for a maximum of $200 million per year so should you need to dip into your liquidity down the road it's nice to have that reduction schedule where you can send us in a form Exit Strategy: Up-Reading into the Income Plus Fund and we can buy back your shares of course that would be taxable to you um but it's nice to have that liquidity option down the road should you need it depending on your portfolio a lot of people look at their you know what what they're doing now the other assets they have cash that's built up in I don't I don't ever want to take principle out of this I just want to let it grow forever I want the cash flow off of it forever and one of the tenants that we hold most strongly to at origin is that one of the best paths to wealth is to keep your cash invested for the very long term without the transactional costs of fees and taxes and just let it grow so if you just kind of keep it in there for the rest of your life it's it really clean cleans up your estate because now you're passing on an operating partnership unit to your beneficiaries it's easily divisible nobody has to do any work nobody has to manage the properties um and then of course you get the same stepped up cost basis that you do um with real estate so from a planning perspective it's nice to say I just want to hold this for the rest of my life but should you need liquidity it's got a Redemption schedule that would be better than a swap to you drop or better than owning the real estate yourself and how is that value like every quarter is it just based on a net asset value schedule like we think you know this deal is gone up and this SK deals gone down like how how does that work at a high level yeah so we value the portfolio on a monthly basis completely transparent we put it out in every kind of update we list all of our assets what their value was last month what it is this month how we came up with the valuation um and then we have it audited by a thirdparty uh appraisal company on an annual basis and so um you know the debt uh instruments we can value pretty easily they're basically just based off of the interest rate Market um Equity is a little bit more you know complex you know depends on comps cap rates occupancy how it's doing um and there's sort of a range and we usually kind of pick the mid level of Real Estate Ownership and Taxes that of that range but yeah we just declare net asset value on a monthly basis yeah um you mention there's a couple different instruments that you use there's PR Equity there's regular equity and there's mezzan um how do you look at like the allocation of each of those like I think you guys were really smart in 2020 to 2022 or three about not doing any direct deals and it was all through the income plus fund is prep Equity or mezine um how do you guys decide on how much you allocate to a given space yeah I think it's about um risk versus return and you know opportunity costs and you know liquidity and cash flow so I think it all comes into it from a um portfolio management perspective one of the things about origin that I love is how transparent we are so we do probably a quarterly update on the income plus fund and by the way the income plus fund is not just for our 1031 exchange platform the income plus fund is an ongoing Perpetual fund where investors can just invest on a monthly basis it's opening new investors and we take in cash investors every single uh month and so frequently on our updates you know Mark Turner who's the head of portfolio management will get on and talk about those type of things why did we switch from this asset class to that but I think in general if you think about um real estate is sort of a fixed income asset well what happens to the value of fixed income bonds if interest rates go the nebs go down and so with so much you know you with inflation being so high I mean everything was pointing to interest rates not only going up but going up significant and so there was a lot of funds that are sort of tied to a core investment thesis where in 22 23 they just had to keep buying and buy buying and then when interest rates went up their nabs got hit really really hard and so origin I think to its credit um sort of saw that and said okay if interest rates are going to go up well then we should be lenders and so we switched you know more to the debt side we switched more to the pref equity side we did some development deals and bought some land that we thought was at a good price so it's all about you know what is what is going on the current economic environment how should we deploy new capital and so if you look at sort of returns if you take maybe non-traded reads or private core funds in the last 12 months um I would say they're down on average I don't know between five and 12% the income plus fund is up 4 and a half% and so it's a 14 Point Delta in some cases um because we're able to Pivot and move and I think that's a really good um talking point for the 1031 exchange strategy because if you do a 1031 with origin exchange you sort of date the DST you're in it for two years and if the ex if the option is exercised then you're going to marry the income plus line you're going to be that for a very long time and so there's two things that we like about you know that strategy compared to some other 721s that are in the market number one we don't have to just stay we can be uh flexible depending on what's going out of the different economic environments as we move forward and then number two we're focused exclusively on multif family which we think is the most resilient asset class that has a long sort of Bull Run in front of it um in a place where you know you'd want to be for the for the long term and you covered you covered a lot there um on the going back to the pref versus uh Equity versus uh mezanine do you personally like a favorite strategy um like would you like to see more of one thing versus another or do you think it's pretty well balanced inside of the income plus fund well of course you have to sort of limit it right otherwise otherwise a certain strategy can just take over for example we're limited to 20% groundup development groundup development is nice it is riskier you know cost can go up um and it doesn't provide any cash flow while you're building the property so you know we look at we want to have a blended sort of rate of return and I think favorite Investments are better for sidecars right it's like oh I really love that I love this particular Market I love this particular strategy let me find the side car that's there when you invest in the income plus fund I think we're not trying to hit home runs I think we're trying to hit singles and doubles and as you know it's like if you hit singles and doubles every once a while you hit home run and so we're we're going to do that but if our core if the core assets that we put in income Plus plus one can be earning High single digits um if the core plus stuff can be earning 10 11% if the development deals Transparency and Valuation that are sort of the jet fuel can be earning 18 19% um on the lending side we're seeing things in the 10 to 12% um income straight so you you kind of blend that together and we want to get our investors back to a 9 to 11% annualized rate of return is kind of our Target for that fund right now we're paying 6.3% distribution so if you look at maybe a 6% distribution and 4% growth that would be kind of what we're looking for what what our investors are more interested in the income plus fund is um tail risk and they're just looking at something where I don't want to lose my money I spent my entire life creating this wealth I want a safe place to put it that's going to provide me tax efficient income and growth and something that I can just forget about and know that it's going to be um in good hands with origin so not particular asset class that or or strategy that I think is is better than the other it just depends on what is in the portfolio currently what complement it's in the portfolio and how we protect the downside for the investors okay and uh I guess stepping back a little bit more you guys have grown such a large platform of like 3800 investors or something like that and you're doing deals that are I'm going to say pretty complex with all the um like open-ended Equity vehicles are pretty complex from a tax and accounting standpoint uh if you were going to advise me on how to grow such a large uh platform how do you think about that like you do the content marketing which I watch like all the uh YouTube webinars um so I've obviously learned a lot from that but how do you manage such a large platform yeah my my uh my advice would be like anything is to um crawl before you can walk and origin didn't start out with this many invest ERS it it it's a really good you know founder story and I'll tell you what attracted me to Focus on Multifamily Properties origin was uh Michael episcope and David Shear who founded this company they made their wealth as derivatives Traders and so um you know kind of let's call it by their mid-30s they had enough wealth to just you know kind of not work any and they got together and they said well how do we protect and grow our weals like let's look out in the marketplace and find deals and they really didn't like what they were seeing they thought fees were too high they didn't like the alignment of interest and so they started this as sort of a family office to invest their money together um to find deals so friends and family started you know seeking them out and you know trying to you invest in more and more of their stuff and growing and I think it was the way they think about the markets is just different I think building multi litics is part of it they didn't just go to Brokers and buy the next deal on the street the underwriting was thorough um the amount of work and time and effort that went out to finding actual deals flying out to see it scraping through the PPM turning deals down that didn't work um I think made a really big difference and that's why you know according to prequin you know our returns are in the top desis for um multif family uh private Real Estate Investors and so we went from you know two employees to five or six employees to 10 and then you you kind of learned along the way you know you mentioned that we have 3,800 investors we just hit 4,000 we have 4,020 investors or something like that individual that insane yeah that is awesome it's something we're really really proud of and in addition to that we have 80 registered investment advisor Partners who allocate their clients Capital to origin funds and that's a Target Rate of Return part of our business that's growing significantly and talking about learning it was the investors coming to us and saying do you mind if I have my financial adviser look at this well of course not well my financial advisor Anar and so you know we got so much kind of like reverse demand where the raas would underwrite it and say man your fees are so much lower than what I'm currently can I can I use you for my other clients and so we sort of grew like that and and realized we needed help on that side so now we have a full we have a full team that just covers registered investment advisors from an investor relations perspective we have a full team that just covers individuals um from an investor relations perspective but I think more than any saying and and this may be sort of anecdotal it's What attracted me to origin but I think the honesty um and just kind of the truthfulness of like Michael and Dave and the other senior leaders of origin coming out and talking about a deal that maybe didn't do as well as they thought not he's perfect and I think people just want to invest with firms that are going to make the right decisions given certain economic situations and I think that's what comes across we're very thoughtful we think about the markets differently we really really care about each and every one of our investors and we put our money in these deals so Michael and David have invested over $80 million of their own Capital across the origin deals exactly yeah yeah so we their wealth is and so we are very comfortable going to other investors and saying this is where our Founders wealth is they're the ones you know underwriting the deals and looking at them on a daily basis so we think you know this is a good place for part of your wealth as well and um and then you try a little of everything you don't know what works um our webinars have been pretty um uh pretty good um you know when we lost our origin exchange webinar we had over a thousand people signed up for it we've got a new webinar coming out that talks about you know what's going on in the multif family market we've got Jay Parson who's going to be a guest host on that we have almost a thousand people registered for that and so I think it's um I think it's you know you know having something to say like this is what we think about the market and this is where we're putting our chips we think you should come with us and then whether you're right or wrong you come out and you talk about it afterwards and say Here's here's where we're right here's where we wrong here's where we're going to go in the future kind of thing so that honesty and that trust has been built up over time and it's been uh it's it's been great our investor base just keeps keeps growing well I think you're very right in terms of thoughtful list uh with each market I mentioned earlier that I think a lot of guys just kind of throw numbers on the wall and hope that they stick but um what What markets are you most excited about over the next three five years oh it's got to be Salt Lake City yeah of course why not so uh well Salt Lake is a is is a really good example um you know we see Paradigm shifts right we you see the the kind of work from home is is a permanent thing um you know back when I was you know when I was growing up Apartments were sort of a punishment it's like oh L this apartment for a couple years cinder block walls Coin Laundry um the landlord never fixes anything and someday hopefully I can buy a Ops that's kind of what it was and Transparency and Investor Care apartments have really increased in uh quality and now you've got you know 9 foot Florida ceiling Windows stainless steel appliances um you know they're bigger better construction materials you've got a golf simulator in the property you got Starbucks and Luder and unit um smartphone to unlock the doors I mean it's just Lightning Fast Wi-Fi co-working space and so the idea is is people are saying I don't want to Mobile on I don't want a 30-year mortgage I don't want to do any Landscaping I'm busy working anyway I go out my friends I just don't want to deal with the hassle and then now I like kind of living in this place you know people are getting married later so you can getting roommates it's more fun place to live and so there's this Paradigm Shift where people aren't in apartments for a short period of time and then looking for a home there's a lot of people that are choosing to live in apartments for 10 20 30 Years or or their entire life and so we are very under um delivered in terms of you know kind of those units and apartments in a place that we just you know are are very very bullish of uh you know kind of going forward and I'm not sure if that answered your question yeah I I guess something along those lines can you mention some of the stuff that uh Beyond multi- Linux like what you got look for in in deals like are you looking for a minimum unit count are you looking for a specific location different amenities school districts like how does that really look and I'm sure it varies between each market um but what what is like an ideal apartment complex look like to you guys yeah that that's a really good question I think I think everything comes together and there's a lot of variables like you mentioned school districts well school districts you know in different states are are different there are some places where it just you have to be in the private schools um so when you talk Content Marketing and Growth about you know jobs are people working from home are they going downtown every day is this going to be the path of growth is there a highway coming through all real estate is local and it's not just local to the state or the city it's local to that particular side of town or that uh you know particular you know one there's two gas stations both across the street from each other one goes out of business one got line out the door and it's just because the Ingress and egress is better on this side of the street and so to us that's why we you know have all of our deal officers in their markets all the time you know I was down at a conference in Las Vegas which is one of our Target markets just speaking to a group of um CPAs and in the last day our our deal officer was was down there um you know looking at a project and and Michael was at the conference so he went and you know looked at the property as well um and it's a deal that we it's a deal that we really like um some of the lp equity on it was uh maybe under and it's I don't know if it's totally distressed but we could come in and sort of um be later Capital to come into that Investments infi it's a beautiful location um the comp speec out um very very high quality materials and so it's it's a matter of is is what you're buying today going to be worth more in the future so much that goes into that um you know it's it's it's the price is what you pay but the value is what you get and so we're looking for deals where there's a story to it where there's a reason that people are going to want to pay more rent to be in that property for the next 10 or 20 years and there's just so much that goes into it and that's why I think it's why our sidecars sell so well you know when we bring out a side car and we talk about this particular property in Colorado Springs or this particular property in Las Vegas or this particular property in the suburbs of Atlanta here's why we bought it here's how we bought it here's how we found it Paradigm Shift in Apartment Living here's the here's the new um employers that are coming into the marketplace here's the population groke over the last couple years um those typically move extremely quickly because people see what we see and that is the you know kind of the story behind that asset but it's it's a tough question to answer like General it just comes down to that specific deal that was a a tough question I I agree um I want to bring it Al on where you guys think the market is headed you know we've obviously had a a difficult two years three years maybe um what do you think on that Horizon well I think I can give you kind of Origins answer we're kind of all over about that um you know if if you're unfamiliar with origin and where we stand we've got a great webinar on our website just called 2024 uh predictions with Dave she and we kind of lay out what we think is going to happen and then next year he'll kind of review those uh answers but we think interest rates are higher for longer it's where we are it's where we've been um as we discussed earlier we were one of the first to predict that rents would sort of start to subside and fall in certain markets and everybody says well there's just cranes everywhere there like people are building all these apartments aren't you worried about the over Supply and worry is one word we track it you know we want to be aware of you know what the supply is um but one of the one of the most important distinguishing features especially in the multif family space and we could talk about some other things if you want the office space and what's happening in retail and you know we track all that and I track all that stuff personally but multifamilies all we do it's what we're focused on and if you look at the Delta between the amount of um deliveries and the amount of starts it's the highest Gap that it's ever been since 1976 and so we feel like what we're seeing is a very short blip in the radar of rent sort of correcting because yeah maybe Austin is down one and a half Factors in Deal Selection percent year over year but remember Austin had a lot of years of five nine 133% rent of growth and so it's sort of abating or subsiding a little bit but what you're going to see is because interest trates went up and because construction costs have gone up so much you're going to see not very many starts in the multif family space and so as that Supply gets absorbed because people are going to keep moving to Austin people are going to keep moving to Phoenix people are going to keep moving to all the markets that we like we're very very bullish for the next 10 years on being able to raise RS in the multif family space and those markets that we like in terms of the overall Market it's it feels like we're in a recession you know sellers aren't really capitulating there's still a pretty big um spread between bid and ask um on all the asset classes there's a paradig shift in office where work from home is is a real thing and we've got an over Supply in a lot of the major markets especially major markets that people are just moving out of um in general so that remains to be seen um sort of what happens there beginning of the year everybody thought there was going to be over 100 basis points of Great Cuts or six Cuts throughout the entire year we haven't seen one remember this yeah you know and and it all happens pretty quickly and it's all sort of baked in and so they say it takes about 24 months for interest rates to be baked in and we probably stopped raising rates um about 24 months ago you know I would think and so it's sort of just now starting to get into the system and then of course we can always extend right so if you've got debt that doesn't work oh give me another six months to work it out and so it takes some time so we're sort of like in this extend and pretend part two which Tom Bry just wrote an article about um and Market monitor um and so we'll see how it falls out but one of the things that we talked about in the income plus fund webinar back in February was it's time to go on offense and so we don't have any this variable rate debt that people worried about we're not overlooked we don't have any distressed assets and so we want to take this cash that we're raising in the eom plus fund and we want to move to our first Equity Investments that we've done in the last two and a half three years and find these opportunistic type I wouldn't call them distress Point yet but opportunistic type of uh of deals Market Outlook and Interest Rates going forward on the equity stuff is that stuff that you guys would be uh owning and operating directly or you talking third party stuff yeah it depends I mean if it's if it's a real opportunistic development we would you know work with a joint venture if it's almost done we could probably take the deal over but if it's core if it's a value ad or definitely it's core just something that we would buy and own and operate ourselves we do all that in house yeah cool awesome uh well I'll link to Origins platform and the webinar um if anybody wants to learn more about it I think it's awesome I'm really excited to be able to refer those Farmers to origin so that'll sell me their land hopefully yeah yeah yeah I think that's I think it's a great strategy and I will tell you that you know as as far as this space where we're talking directly to sellers this is relatively blue ocean for the most part if people hear dsts they'll say oh I've heard of dsts the fees are too high this is different this is where we're taking the dsts and you're getting into institutional priceing so you're exchanging up into that higher quality asset without paying all those fees and if somebody does give you that line oh the dsts are too high this is a new strategy take a look at it for sure yeah cool well thank you so much it was a pleasure awesome thank you Tanner appreciate it