Alex Roudi is a seasoned entrepreneur and investor with a proven track record spanning over two decades and more than $2 billion in real estate transactions. Before founding Interwest, he launched Coverall North America Inc. with just $8,000 and built it into a $250 million global enterprise with thousands of franchises and clients worldwide. A graduate of Harvard Business School’s OPM program, as well as UC Berkeley and Purdue University in engineering, Alex also serves as Managing Partner of Plug & Play San Diego, a leading tech incubator linked to Silicon Valley’s Plug and Play Tech Center. A long-standing member of the Young Presidents’ Organization, he and his wife remain deeply involved in philanthropic efforts throughout the San Diego community.
See more about Alex here – https://interwestcapital.com/our_team/alex-roudi/
Here’s some of the topics we covered:
- From Leaving Iran To Building A Real Estate Empire
- How Investing In Tech Paved The Way To Real Estate Freedom
- The One Thing Alex Loves Most About Real Estate Success
- Secrets To Finding Elite, Best-In-Class Property Managers
- The Brutal Hotel Market Crash Rocking San Francisco
- A Behind-The-Scenes Look Inside Alex’s Powerhouse Team
- Disaster Strikes When Frozen Pipes Turn Into A Nightmare
- Why Speed And Massive Action Separate Winners From The Rest
- The Real Reason Smart Investors Are Steering Clear Of C-Class Assets
To find out more about partnering or investing in a multifamily deal: Text Partner to 72345 or email Partner@RodKhleif.com
Full Transcript Below
01:20:07:29 – 01:20:25:01
Rod
Welcome to another edition of Life Time Cash flow through real estate investing. I’m Rod Khlief, and I’m thrilled you’re here. I have a fascinating guest today that you’re going to get tremendous value from. Just from the brief time I chatted with him before we started recording. His name is Alex Rudi, and he’s the CEO of Inner West Capital Group.
01:20:25:03 – 01:20:38:04
Rod
But he’s done some amazing things in his background. I don’t know, you know, what direction to go with this conversation because he, I think he can add value in all sorts of areas. But I’m very excited about this interview, Alex, and welcome to the show, my friend.
01:20:38:04 – 01:20:38:28
Alex
Thank you very much.
01:20:38:28 – 01:20:56:19
Rod
Yeah. So yeah, I as I said, I don’t usually do interviews this early. I’m a, I’m kind of a night owl and so this really pushed me. But when I saw your bio and even though it wasn’t even complete, we just discovered I’m like, you know, I’ve got to talk to this guy. So I got my butt up early for this.
01:20:56:21 – 01:21:07:27
Rod
But yeah, of course, of course. So why don’t you, you know, give us, you know, your background in your words? You know, because because it’s it’s very impressive.
01:21:07:27 – 01:21:31:27
Alex
Okay, so I maybe I go back to the beginning. I was born in Iran. And I NFT run to go to, high school. I went to high school in England and I finished that, I came to the US to go to university. I went to Purdue for undergrad and I did civil engineering.
01:21:31:27 – 01:21:50:15
Alex
You know, we had the construction business. I was going to go back to NASA in Iran, and I’m from Purdue. I went to UC Berkeley for graduate, studies, in structural engineering. And, right there on those times, you know, basically Iran had,
01:21:50:17 – 01:21:52:27
Rod
Well, had some crazy stuff happening, crazy stuff.
01:21:52:27 – 01:22:20:19
Alex
And so I really couldn’t go back and ended up staying in San Francisco. So, started as an engineering and engineering company designing, nuclear power plants. Oh, wow. Yeah. Which was, was interesting that was there. But, you know, it was not really a, a career that I wanted to continue with. So it was just looking around to think about starting a business.
01:22:20:19 – 01:22:31:16
Alex
My family had, really lost, all their wealth, I see, they had ended up being in, in, you know, outside of Iran.
01:22:31:18 – 01:22:32:27
Rod
They were able to leave.
01:22:32:29 – 01:22:58:06
Alex
They were, you know, my, my father sent my mother and sister out, and we had this small place in, in France. So they went there and he stayed back to start to get his, you know, assets back, but you couldn’t, and ultimately, he was able to get smuggled out. Yeah. He came out, and, really was a lot of stress for him.
01:22:58:06 – 01:23:14:29
Alex
And what happened was, he had a sudden heart attack, and he passed away. Oh. So that’s happened. You know, he was relatively young. He was just 63 years old. Wow. My mom was much younger, and I was the oldest in the family. So, you know, I had to.
01:23:14:29 – 01:23:16:08
Rod
Really get some responsibility.
01:23:16:08 – 01:23:38:11
Alex
My life itself together. So I had to come up with an idea of, creating a company with a recurring revenue model and what I had, targeted was, commercial cleaning. Commercial industrial cleaning. Yeah. And, because that’s something it’s a necessity everyone needs. So I it’s.
01:23:38:11 – 01:23:39:01
Rod
Ongoing.
01:23:39:03 – 01:23:54:08
Alex
Ongoing and and so forth. But I what I was going to do is with the twist and twist was instead of hiring employees to go out and do the cleaning, we would set up people into their own business of,
01:23:54:10 – 01:23:56:02
Rod
Oh, yeah, commercial cleaning.
01:23:56:05 – 01:24:19:10
Alex
And so we created this, you know, small franchise unit concept and giving the opportunity to families to own a business while, they would then need to leave their daytime job because this was done on evenings, side hustle. And we would exactly. And we would do them as part of their franchise. We would give them a starting customer package.
01:24:19:13 – 01:24:25:20
Alex
And depending on how much volume that was, anywhere from $500 a month to $25,000.
01:24:25:20 – 01:24:38:17
Rod
So you would actually, source and locate the clients for this. Oh, wow. So it’s a done for you business? Almost. That’s right. Wow. Very appealing. I can see why you were so successful. I saw the success on your bio. Please elaborate. Elaborate.
01:24:38:17 – 01:24:46:20
Alex
So? So. Yeah. So what? What this did essentially would allow people to own their business. You wouldn’t take care of all the administrative work.
01:24:46:23 – 01:24:48:08
Rod
Be you did that as well.
01:24:48:08 – 01:25:19:26
Alex
All of all of the I would build the customers collect. And at the end of the month the franchise, you would get a statement with the revenue and all the deductions. Then that we got apply and then net check. And so as long as the franchisee would keep the customer happy, that’s account and that income would continue. So with this system, we had the customer that all of a sudden had an owner operator backed by a bigger operation.
01:25:19:26 – 01:25:24:07
Rod
And then ownership mindset as well. So you got a much better quality of care.
01:25:24:09 – 01:25:31:21
Alex
Exactly. Yeah. So in that industry. Right. The turnover of customers is huge. Is it because, you know, people.
01:25:31:21 – 01:25:34:00
Rod
Get unhappy you didn’t wipe underneath this table or.
01:25:34:00 – 01:25:54:02
Alex
Whatever, right. And so, typically, you know, it’s around close to around 50% a year. Wow, wow. So with our system, we were able to bring it down to around 18%. So when I was young I was go to different cities, set up offices, regional offices for.
01:25:54:05 – 01:25:57:06
Rod
It, said you had 68 regional offices. Wow.
01:25:57:06 – 01:26:01:06
Alex
And so we went and it was in there, you know, different mine.
01:26:01:06 – 01:26:02:15
Rod
And what year was this or year?
01:26:02:16 – 01:26:32:24
Alex
This was from this was essentially from 1985 oh to 1998. Wow. So during this period I built the company up. I ultimately had about 4500 franchised units. We had about 23,000 customers. Wow. And it became a very interesting platform. And in 98 I was approached by, two private equity firms. And it was exciting because I had started the business with $8,000.
01:26:32:27 – 01:26:36:08
Alex
And now all of a sudden, you know, you had big boys.
01:26:36:08 – 01:26:38:00
Rod
You sold it with a few more zeros.
01:26:38:04 – 01:26:39:00
Alex
Exactly.
01:26:39:00 – 01:26:40:01
Rod
So, okay.
01:26:40:01 – 01:26:59:11
Alex
So, so I sold the company, and I was when I did that, and when I was finished with that, I was relatively young. I was just 40. Didn’t really know what it was going to do. So I started investing in early stage tech companies. And, where.
01:26:59:11 – 01:27:00:03
Rod
Were you living at the.
01:27:00:03 – 01:27:03:28
Alex
Time? Yeah, I was living in, in California, in San Diego, San Diego.
01:27:04:00 – 01:27:04:13
Rod
Okay.
01:27:04:13 – 01:27:20:28
Alex
Judging from San Francisco down to San Diego, as I was opening these offices. Gotcha. And I liked it, so I stayed there. And so, so, just touching on different types of investing and companies too. So you.
01:27:20:28 – 01:27:23:14
Rod
Were trying different things that, that you’re exactly exploring.
01:27:23:18 – 01:27:51:14
Alex
Exploring. And then in 2003 I decided that, you know, I like that, investing in tech companies was very volatile. We had some wins. We had, you know, a lot of losses. Sure. And decided to, you know, do something with real estate is touch and feel. You went along with my education on how I feel to. And so I started I created the company Enterprise Capital.
01:27:51:16 – 01:28:06:14
Rod
And, let me stop you for one second. You said something that really resonated with me and you jumped out by it. You said, touch and feel. It’s a whole lot different than, you know, tech company, which is a digital asset. You can’t, you know, with real estate, you can go kick it, you can go see it. You feel it.
01:28:06:20 – 01:28:12:15
Rod
Yeah. I just wanted to elaborate on that because that was a big deal for me as well. That’s the reason I got in anyway. Please continue. I, I, you.
01:28:12:15 – 01:28:36:21
Alex
Know, so, so it was you know, I wanted to again do a little bit of a different angle, have a little different angle into it, and decided that, the way to do it could be buying non-performing or, or underperforming debt. So through buying those then ultimately to.
01:28:36:23 – 01:28:38:21
Rod
Ultimately end up with the real estate thing.
01:28:38:23 – 01:28:57:23
Alex
Right, right. And really but it was kind of a value oriented. The best short is and so put together a team and I had the relationship with them, Goldman Sachs and, and was able to get a big line of credit. And started buying these underperforming nonperforming debt.
01:28:57:27 – 01:28:59:02
Rod
On what sort of assets.
01:28:59:07 – 01:29:07:18
Alex
And these were essentially at the beginning, it was some multifamily hospitality, office, retail, industrial.
01:29:07:18 – 01:29:14:17
Rod
So you had you had everything you had people analyzing every asset class. And we had some I’m sure you had some smart people working with you. You’ve done a good time.
01:29:14:17 – 01:29:39:28
Alex
So. So that went on from all three to 4 or 8. And in 2008, all the world exploded. We didn’t have that line of credit anymore. Right. And but we had a pretty good track record with made, you know, very, good returns on our investments. And so at that time now we had bundles of opportunity, but, we didn’t have the.
01:29:40:04 – 01:29:42:02
Rod
Didn’t have the capital. Let’s take advantage of the.
01:29:42:02 – 01:29:44:22
Alex
Opportunity and instead of very capital intensive business.
01:29:44:23 – 01:29:53:03
Rod
I remember in 2008, literally, you couldn’t borrow anything. I mean, it was it was gone. It was it was like a light switch went off. That’s right. Right, right.
01:29:53:05 – 01:30:16:05
Alex
So, we stumbled over we became a good to partner for, a handful of private equity firms. And, we started, you don’t be started locating these opportunities and buying that that that would later we would come back to, to real state and have some amazing stories on that. As far as the type of deals that we did.
01:30:16:05 – 01:30:33:13
Rod
Oh, God. Yeah. But they’re staggering because, I mean, crazy. I mean, you know, I, you don’t know my story, but just real quick, I lost I lost about $50 million in that debacle. And, you know, I had I had a portfolio that I couldn’t sell for $0.30 on the dollar, and and somebody ended up buying it for less than that.
01:30:33:15 – 01:30:37:17
Rod
And, and and I’m sure that’s some of the stuff that you. Yeah.
01:30:37:17 – 01:31:01:01
Alex
Wow. Exactly. So so what what happened then? It was because of how what we saw during this period or from that beginning phase of our business, we saw what people could do that could get them into trouble. You know, how you end up with having a debt that is becomes underperforming or non-performing. And so, you know.
01:31:01:03 – 01:31:03:24
Rod
It was all commercial, correct. Everything okay.
01:31:03:26 – 01:31:19:12
Alex
Got everything was that. And so I run the same time 2008 to 12. We really I, you know, stopped doing anything in the office industrial and retail and became more just focused on multifamily and hotels.
01:31:19:13 – 01:31:20:16
Rod
Multifamily and hotels.
01:31:20:16 – 01:31:58:01
Alex
Interesting. And so and then around 20 1112, we just became focused on multifamily pricing. And so because our beginning again period where we would just go where the opportunity was and by the death of this, you know, and that could be in different markets. We became used to really just going into and covering essentially the entire U.S. and so our, our, our target markets really morphed into, a number of different, markets in the Smited states.
01:31:58:01 – 01:31:59:18
Rod
Big MSAs or.
01:31:59:20 – 01:32:02:00
Alex
Big Mr.. Most mostly bigger mistakes.
01:32:02:00 – 01:32:03:15
Rod
You know, like a Phoenix and a Tampa.
01:32:03:21 – 01:32:11:23
Alex
Bay. But, you know. Yes. Okay. From markets in, in, in California, in, in Arizona and all the way to Florida.
01:32:11:23 – 01:32:12:09
Rod
Gotcha.
01:32:12:09 – 01:32:25:07
Alex
So, so that essentially then we also opened up to high net worth, family offices. And our business became really forming the capital on a deal by deal basis.
01:32:25:07 – 01:32:27:28
Rod
Right now, syndicating.
01:32:28:01 – 01:32:41:21
Alex
If you call it syndicate, got syndicate, I mean, the capital together, right? Yeah. Correct. And so, so, what I really like about the battlefield states, I think you probably feel the same way.
01:32:41:21 – 01:32:44:09
Rod
Love real estate, right? Even after losing everything.
01:32:44:09 – 01:32:56:26
Alex
Yes, yes. Every every acquisition has a different story. You know, you you build a different business plan for it. You have a different capital structure around it. And ultimately.
01:32:56:27 – 01:32:58:07
Rod
There’s a lot of creativity.
01:32:58:09 – 01:33:11:23
Alex
Right? A lot of creativity. You base you, it really gets you excited. And I really get too excited about it. And then it becomes them. It comes down to what you do from the point of acquisition to the point of exit.
01:33:11:26 – 01:33:13:10
Rod
Well, that’s when the work is happens.
01:33:13:11 – 01:33:42:28
Alex
That’s correct, that’s right. And what we do is we hire the best in class property management companies in different markets because we are in different markets. And so and we also do combine multifamily, we do student housing, we do age restricted. So it’s that we don’t do affordable, and to be tied to best in class property manage managers and then we asset manage them.
01:33:42:28 – 01:33:58:03
Rod
Right. Same thing we do. Yeah. Okay. Exactly the same. I want to stop you there for a second. Sure. As that’s a very timely statement that you just made. Okay. So how do you find the best in class property management companies? The reason I’m asking. Okay, okay.
01:33:58:10 – 01:34:22:12
Alex
You know, good question. Yeah. Because what happens is that, well, you know, from the beginning, you know, we started different testing our or our, really forming relationships with them and different companies in different markets. But what happens what we have found out and I’m sure this is what you have discovered, is it really comes down to the people, it comes.
01:34:22:12 – 01:34:24:29
Rod
Down to the people at the asset is what I’ve seen.
01:34:25:04 – 01:34:27:19
Alex
Across it, but also who is the.
01:34:27:19 – 01:34:48:01
Rod
Regional and the regional. That’s right. The support network. That’s one. Those are the biggest pieces. And I will tell you, I’m I’ve dealt with some real upset these last very recently with property management companies that literally fired two in the last three months. And, you know, I ended up taking over a portfolio from an ex partner that was just a mess.
01:34:48:01 – 01:35:09:11
Rod
And, we had 23 properties. And I discover and as I hired new management companies because he we were he was vertically integrated. It’s a long story, but to to to nutshell, it he, he, you know, I hired different management companies, large management companies in these different states. And what I discovered was it all boils down to what we just said.
01:35:09:11 – 01:35:26:25
Rod
It all boils down to the person on site and who was supporting them. If they were getting support from a regional and it could be a great management company. But if the onsite staff wasn’t good, that property suffered. It could be a mediocre management company, but the onsite staff was good. They had some regional support. They were. They excelled.
01:35:27:02 – 01:35:29:24
Rod
It was really fascinating.
01:35:29:26 – 01:35:43:14
Alex
But I had you could start with and you could have a great, you know, experience at the property with a particular management company, for a few years. Right. And then all of a sudden people change, right?
01:35:43:14 – 01:36:03:14
Rod
And this that just happened to an asset I have in San Antonio. I was just I’ve been there several times over the last couple of months. And like, we’ve gone through to, to, three management companies on a third management company in a period of four months. It’s a horrible situation, candidly, but but, yeah, I mean, we had staffed and there was just no oversight.
01:36:03:15 – 01:36:05:09
Rod
The regional lived in another city.
01:36:05:09 – 01:36:06:12
Alex
And that’s the problem. Yeah.
01:36:06:12 – 01:36:22:29
Rod
And exactly. And I teach people not to allow that. And this, this this happened in that, you know, over a period of time. But but yeah, that’s why I asked because we’ve had a lot of ups and downs with property management companies. And in fact, I just did you know, I had a student event two weeks ago in Phoenix.
01:36:23:00 – 01:36:41:22
Rod
I’d a couple hundred of my students there, warriors there called in, and we did a whole segment on being careful with third party property management company, as a result of this experience that we’ve had. Anyway, enough about that. So, so so you asset manager, I know you you mentioned before we started recording, you got a size 11,000 units.
01:36:41:23 – 01:36:49:19
Rod
Yeah. And pretty in a national presence, which you can’t vertically integrate when you’re in a national center. That’s right. Not not not not effectively.
01:36:49:26 – 01:37:02:27
Alex
No, no. And, and and, you know, I mean, look, property management as a business itself, it’s not really something. I mean, you have to really like to do that, right? You have to be able to.
01:37:02:27 – 01:37:08:19
Rod
It’s a thankless it’s a thankless position. Nobody calls you when they’re happy. That’s right, that’s right.
01:37:08:22 – 01:37:20:24
Alex
And, And you need to scale. You need to scale to really make it profitable. Right. So we leave that to people that are just focused on property management. Yeah. And there are some good folks around.
01:37:20:27 – 01:37:23:27
Rod
And I’m sure you’ve had some bad experiences as well of city errors.
01:37:23:28 – 01:37:26:18
Alex
Yeah. We actually had bad experience in, in San Antonio’s.
01:37:26:20 – 01:37:28:01
Rod
No kidding. Oh no kidding.
01:37:28:01 – 01:37:40:09
Alex
Funny. Yes. Well, and and, you know, but you go through, you have to you have to pull the trigger, make the change. Yeah. And bite the bullet and condense the whole thing.
01:37:40:09 – 01:37:59:04
Rod
You know, it’s funny you in in my example, you end up doing a lot of the work they should be doing. You know, a lot of you’re making suggestions that they should be making, you’re doing analysis that they should be making and, and making decisions based on for them. And that’s that’s kind of frustrating. But, you know, it is it’s part of the business.
01:37:59:07 – 01:38:01:08
Rod
So it’s just multifamily now for you.
01:38:01:08 – 01:38:20:04
Alex
Yes. Don’t be on your own. One would call oh, one hotel. Yeah. Okay. Right now we had, we had 11 hotels. Okay. Or 12 hotels, but you’re down to one. So we sold them along the way. And the one we’re going to keep, this one is in San Francisco is a beautiful town. Oh, wow.
01:38:20:05 – 01:38:22:20
Alex
Yeah. And that market went was oh, my.
01:38:22:20 – 01:38:36:24
Rod
God, what happened with the hotel market there Danny? I mean, I crashed. I heard that they sold a hotel there for cents on the dollar. Big one. If I recall, I this has been a a year ago. Yeah. You know what? You know what I’m talking about. That fool.
01:38:36:24 – 01:38:38:02
Alex
Somebody a few of them.
01:38:38:03 – 01:38:39:28
Rod
A few of them like that. Yeah. That’s right. Wow.
01:38:40:01 – 01:39:06:23
Alex
Well. And, But but the good news is that’s a beautiful city. Oh, there’s so much going on there now with the, you know, with a guy coming and becoming the right flavor of the day, if you would. There’s so many companies that have sprung up now, and all of a sudden there’s a resurgence in people going back to office and the downtown or.
01:39:06:25 – 01:39:07:16
Rod
It’s coming back.
01:39:07:16 – 01:39:08:01
Alex
Is coming.
01:39:08:01 – 01:39:12:16
Rod
Back. Because I know you had incredible vacancies there. That’s probably like the highest in the country, I think.
01:39:12:16 – 01:39:18:27
Alex
Yeah. Yeah, it’s coming back. And and with that retail business, restaurants, of.
01:39:18:27 – 01:39:21:08
Rod
Course people come back, all of that comes back.
01:39:21:10 – 01:39:22:13
Alex
And the hotels, what.
01:39:22:13 – 01:39:24:17
Rod
About the political environment there?
01:39:24:19 – 01:39:38:10
Alex
You know, it’s it you’re very happy that there was a change in, in the mayor and said that Board of Supervisors there and, so with this new regime, if you would, we feel very optimistic.
01:39:38:10 – 01:39:41:10
Rod
About San Francisco and particularly what about California as a whole.
01:39:41:13 – 01:39:47:27
Alex
California as a whole, you know, you got issues. All right. Right. So that’s them. That’s a problem. And a.
01:39:47:27 – 01:39:51:15
Rod
Lot of controls overregulated, overtaxed.
01:39:51:17 – 01:40:03:07
Alex
And, and not enough, if you would not enough hard line. Movement against them, you know, the homeless situation, right.
01:40:03:10 – 01:40:28:14
Rod
It’s pretty bad. I had I had someone sitting there in that on that couch from LA, and, and she kept saying, it’s so clean here and meaning Florida because she’s used to homeless and, you know, encampments and dirty and and and. Yeah, they do a nice job here in Florida and I think Texas as well. But, yeah, I was just curious what you take with this because you live there and, you know, yes.
01:40:28:14 – 01:40:31:18
Alex
You know, it’s unfortunate. It’s a beautiful state. Yeah.
01:40:31:18 – 01:40:33:12
Rod
Oh, I love I love visiting exact.
01:40:33:12 – 01:40:56:04
Alex
It’s a beautiful state. And, but, you know, obviously I’ve, I’ve seen huge amounts of personal income tax that you pay. But, you know, if you it’s okay if you pay that, but you see the results of it. Yeah. I know it’s unfortunate. That’s in a number of the big cities there. You have this problem. Yeah.
01:40:56:04 – 01:40:59:10
Alex
That is just persisting and it’s driving people out.
01:40:59:10 – 01:41:18:17
Rod
Well, people say that, you know, that the money that goes towards that keeps it. It basically self perpetuates because the people that are facilitating those funds don’t want to lose their jobs. So that so nothing ever improves. So I don’t know what the answer there is, but but and then we won’t talk about that governor of yours.
01:41:18:17 – 01:41:33:19
Rod
But, but anyway, so well, the good thing for you is you’re in real estate, so you’re able to mitigate some of that tax, if not all of it. I don’t know if you can on the state level. I don’t understand the taxation there, but but that’s the beautiful thing about being real estate is the tax.
01:41:33:19 – 01:41:44:17
Alex
The beautiful thing about real estate. Yes. You know, you not only have the current income, right, but you can shield your income right? Creation as you. Well now. Right.
01:41:44:17 – 01:41:47:23
Rod
And cost segregation this depreciation.
01:41:47:23 – 01:41:49:04
Alex
Why is depreciation.
01:41:49:04 – 01:41:54:24
Rod
When was the last asset you purchased. Because you need to purchase to to facilitate. You know that on going.
01:41:54:26 – 01:42:12:13
Alex
Yes. And we just them you’re actually just went nonrefundable on a, you know, good size asset, in, just student housing assets, student housing, Boise State. Okay. Beautiful location. Yeah.
01:42:12:13 – 01:42:12:27
Rod
That’s good.
01:42:13:02 – 01:42:40:19
Alex
About 680, beds. And just walk, walk to campus and so forth. So that’s one we were also under contract on a multifamily in, Milwaukee, that we were in due diligence, and we have one of our assets that we’ve had in, in for the last ten plus years, is in Milwaukee performing extremely well.
01:42:40:22 – 01:43:01:01
Alex
So we like that market. But this one unfortunately felt during our dip, we saw that, there was some essentially, for the lack of better word, bogus revenue recorded. And not they were not recording all of their expenses, just part of their expense.
01:43:01:02 – 01:43:05:22
Rod
Well, that’s nefarious. Yeah. And you can counter that. How did you discover that, by the way?
01:43:05:22 – 01:43:11:20
Alex
It was you know, it was actually if we we discovered that through matching. Matching,
01:43:11:22 – 01:43:12:01
Rod
Bank.
01:43:12:01 – 01:43:22:18
Alex
Stein. Right. Bank statements to their financials and, and, you know, they want to I don’t want to say they had bad intentions. So I think they did. Oh, it’s a.
01:43:22:21 – 01:43:23:13
Rod
Horrible accounting.
01:43:23:13 – 01:43:37:17
Alex
Horrible accounting, just people not paying attention. And, unfortunately, you know, it came to a point where we needed to shave off some, you know, around $3 million off of a $32 million acquisition.
01:43:37:17 – 01:43:38:07
Rod
And that killed it.
01:43:38:11 – 01:43:43:00
Alex
And that killed. Yeah. And so which is look, my experience, you find.
01:43:43:00 – 01:43:45:13
Rod
The best deals are the ones sometimes the ones you walk away from who.
01:43:45:15 – 01:43:50:22
Alex
Walk away. Right. I’m excited about the one that we’re going to do because we one boys them.
01:43:50:22 – 01:44:25:15
Rod
Yeah. So let me ask you this on that note. You know, I, I have listened to a, economist named Harry dent lives in Puerto Rico now for taxation reasons. And and he’s a big, he studies population. So a lot of his, a lot of his, advice is based on population demographics and he talks about, you know, paying attention, especially as it relates to students because the baby boomer students are now going away.
01:44:25:18 – 01:44:37:13
Rod
What sort of research do you do to make sure that a school is going to have the, you know, the enrollment to keep a facility like yours going?
01:44:37:13 – 01:44:38:01
Alex
Oh, okay.
01:44:38:02 – 01:44:39:03
Rod
Sorts of studies. Do you do?
01:44:39:03 – 01:44:54:22
Alex
Good question. Yeah. So, so so first of all, I mean, there’s abundance data available. Is there every, you know, university that you can check into. And also the, you know the the market itself. So.
01:44:54:23 – 01:44:55:23
Rod
This is a great market.
01:44:55:23 – 01:45:00:21
Alex
And this is a great market. You know it was it got overbuilt like most markets that were great.
01:45:00:22 – 01:45:02:19
Rod
Yeah. Austin, San Antonio.
01:45:02:19 – 01:45:27:04
Alex
San Antonio even you know Boise everywhere actually. Right. And so what happened was you know there. Yeah. You, you had people, people migrating to a place, you don’t have enough housing units. Rents start going up. Once the rents start going up, all of a sudden developers get excited. They start now planning, building.
01:45:27:06 – 01:45:31:01
Rod
And so it’s a cycle that’s been repeated. Many, many over and over again.
01:45:31:01 – 01:45:59:03
Alex
Yeah. And then what happens is like now rents go flat or rents go down, people back away from development and then things stabilize and goes back up. Yeah. So it’s good to catch these on the way down obviously. And Boise on the, you know, from the conventional, you know, market rates of units, or multifamily, you know, they’re still absorbing that supply concession market.
01:45:59:06 – 01:46:22:13
Alex
Student they were they were managing through that for a period of time. And all of a sudden now it’s becoming tighter. And so, the university itself, what we look for is, how many, you know, how, how how the university is growing. What is there? Because you can always see what are the plans of the universe.
01:46:22:13 – 01:46:49:27
Alex
Some universities put a stop on admissions. Some, you know, they have goals. That’s still maintaining. And then you look for you look for how many beds are available in the market. And okay, what is very common sense says you know and need university has has in on campus housing. This one in particular has very limited is on campus housing is saying the freshmen are not required to stay on campus.
01:46:49:27 – 01:46:50:26
Alex
Oh okay. Different.
01:46:51:03 – 01:46:52:05
Rod
That’s unusual.
01:46:52:07 – 01:47:14:11
Alex
So there’s a there’s a fair amount of demand in there and supplies in check. And there are different features that we look for in the asset itself that we have versus other assets. This one is abundant parking. Yeah. And parking is same. Making parking is a big, must in that market. Students want to own a car.
01:47:14:11 – 01:47:32:27
Alex
They want to go skiing. They want to go. It’s a very outdoorsy kind of a place. So usually they have a car. And the quite the comps that we have that don’t have enough parking once they finish renting their part, available parking spots, their leasing velocity all of a sudden dips.
01:47:32:27 – 01:47:33:14
Rod
Interesting.
01:47:33:14 – 01:47:34:28
Alex
So you know, we do as well.
01:47:34:28 – 01:47:39:17
Rod
You said you dug deep. You dug deep. So what’s your team look like. Just curious.
01:47:39:23 – 01:47:46:29
Alex
Right. So we have you know we have acquisition team right. That so that’s what.
01:47:47:01 – 01:47:48:11
Rod
Give me the composition of that.
01:47:48:17 – 01:48:01:14
Alex
Okay. So we have five people in acquisitions okay. And these are focused on different markets, different, you know, geographical markets. So one would be for, you know, Florida and.
01:48:01:16 – 01:48:04:17
Rod
And that person in Florida would handle all asset classes. No, no.
01:48:04:17 – 01:48:09:05
Alex
No not all. It’s all. Oh you mean all asset classes like multifamily housing.
01:48:09:11 – 01:48:12:02
Rod
No, no I meant I meant other. That’s right. You’re just multifamily.
01:48:12:02 – 01:48:12:19
Alex
It’s just small too.
01:48:12:20 – 01:48:13:10
Rod
Gotcha, gotcha.
01:48:13:13 – 01:48:20:19
Alex
That’s right. You said that. So we have one person, one acquisition person that only focuses on student housing.
01:48:20:19 – 01:48:21:16
Rod
Got you everywhere.
01:48:21:16 – 01:48:23:04
Alex
Because got you. That’s pretty special.
01:48:23:04 – 01:48:23:21
Rod
Very niche.
01:48:23:21 – 01:48:26:18
Alex
Yeah. And then the rest is only come up.
01:48:26:19 – 01:48:28:18
Rod
More geographically based.
01:48:28:18 – 01:48:40:13
Alex
On my project. Yeah. Got you I then we have asset management team again that is based on you know that’s really based on the type of assets and the number of units that you want to want to.
01:48:40:20 – 01:48:41:01
Rod
So.
01:48:41:01 – 01:48:41:27
Alex
So and.
01:48:41:28 – 01:48:47:21
Rod
Are those those people geographically specific then the asset management people or.
01:48:47:22 – 01:48:49:28
Alex
They are they
01:48:50:01 – 01:48:54:21
Rod
They are do they visit the assets as well? Okay. So they have them, they’re on the road that’s seamless.
01:48:54:21 – 01:49:02:03
Alex
So you go they because you don’t really you can’t really manage this on a on your desktop.
01:49:02:03 – 01:49:03:04
Rod
No way. You have to be.
01:49:03:04 – 01:49:10:17
Alex
There to be there. Yeah. And every time you go there for a visit, there are things that come up that you see that there’s impossible to see when you’re.
01:49:10:19 – 01:49:11:10
Rod
Exactly.
01:49:11:10 – 01:49:18:08
Alex
You’re very, very hands on when it comes down to that. Yeah, yeah. And you want to see issues before they become an issue.
01:49:18:08 – 01:49:22:17
Rod
Yeah. Ideally I would sometimes not always the case but yeah ideally yeah.
01:49:22:21 – 01:49:23:23
Alex
That’s right.
01:49:23:26 – 01:49:28:12
Rod
Okay. And then do you have like an accounting team or have you.
01:49:28:15 – 01:49:40:07
Alex
Yeah. So we have, we have we have essentially accounting slash administrative and that’s Jim, you know, handles all of the reporting and everything that we.
01:49:40:07 – 01:49:41:03
Rod
Get to your investors.
01:49:41:05 – 01:50:08:17
Alex
Regions. And then it goes to the to our investors. So we do quarterly reports, quarterly quarterly reports to all the investors. There’s some of our institutional investors that want to up my nightly. And so we do depending on what. But because of our you know, because of our Genesis being, you know, really institutionally oriented, our reporting is very much, very thorough.
01:50:08:20 – 01:50:32:19
Alex
And, you know, very transparent. Gotcha. So we go through, you know, touch all the to all the, elements of, of the operation in all the reports and give everyone an overview of what to expect next on the CapEx side of things, on the growth side of things, of is there a refinancing coming up? Is there an exit coming up?
01:50:32:22 – 01:50:48:19
Alex
An always give them, really word there investment is standing based on from when they invest it to now as far as you know, their IRR and their return and so forth.
01:50:48:22 – 01:51:10:17
Rod
Talk about talk about a time you had a challenge on a, on an asset or maybe, maybe, maybe a number of assets or, you know, you had a property management company that that ran something, you know, talk about. I talk about I call them seminars. Yeah. Call them seminars because you learn from these from these times. That was a $50 million seminar for me in eight, nine.
01:51:10:23 – 01:51:13:10
Rod
Okay. It’s only a failure if you don’t get up. And you know what? The left.
01:51:13:10 – 01:51:41:25
Alex
Well, actually, I’ll take you, you know, be talking about some problem within that situation. An asset. So we purchased, a pretty large, multifamily project in San Antonio, and, which we, which is now called, Paseo. Okay. So and it’s, it’s right where, what do you call the loop?
01:51:41:28 – 01:51:46:01
Alex
Anyways, on the north west side. Gotcha. Up San Antonio.
01:51:46:01 – 01:51:47:14
Rod
Yeah, that’s where our assets are as well.
01:51:47:14 – 01:51:49:16
Alex
Oh, really? Yeah. Okay, so you’re probably in.
01:51:49:16 – 01:51:52:12
Rod
Thousand Oaks Boulevard. There. Whatever. If you know the streets at all.
01:51:52:12 – 01:52:00:13
Alex
But yeah. So this one beautiful. I said about 600 and oh big would be a big, big one or
01:52:00:15 – 01:52:02:14
Rod
And what for what your would class.
01:52:02:16 – 01:52:03:05
Alex
Class a.
01:52:03:10 – 01:52:03:27
Rod
Class a.
01:52:03:29 – 01:52:09:13
Alex
Yeah. So but but we, we, we always want to do corp class.
01:52:09:18 – 01:52:10:07
Rod
I c.
01:52:10:07 – 01:52:26:17
Alex
Or you know value add but some you know let’s call it B that can become a, a and so forth okay. And so better quality assets because you know, as you know, real asset depreciates over time. Right. And you want to be.
01:52:26:24 – 01:52:43:17
Rod
You know, well especially right now, you know, I think there’s a flight to quality just because, you know, people that live in the C class assets are struggling. Inflation funds are killing people, you know, and, and and we’re, we have an asset that that that’s struggling a little bit. So when I was just talking about there was a management problem.
01:52:43:19 – 01:52:45:14
Rod
Yeah. But yeah. So anyway, yeah.
01:52:45:14 – 01:53:11:23
Alex
So this one so we, we closed the deal was a, it was a good sized deal. We boarded a very good, basis, but it was $125 million transaction. And so we closed that and then a few months later, another year in the month of I was actually during Christmas time, maybe around December, period. And you had this temperature fluctuations that happened in Texas.
01:53:11:23 – 01:53:13:11
Alex
Okay. That I don’t think that.
01:53:13:11 – 01:53:20:17
Rod
Freeze where, where everything froze, the water froze under the ground, everything I remember. Yeah. So that wasn’t that long ago for a couple of three years ago.
01:53:20:18 – 01:53:33:12
Alex
Three years or three years or three years ago. So. So the, the, what you call the, the water lines, they froze and they broke.
01:53:33:12 – 01:53:38:10
Rod
Because they because they were only, like, a foot underground, you know, here they’re 3 or 4ft underground or most.
01:53:38:10 – 01:53:40:10
Alex
Places. But these were these were sprinklers.
01:53:40:11 – 01:53:41:14
Rod
Oh, sprinklers. Yeah. Oh.
01:53:41:21 – 01:53:42:13
Alex
Sprinkler lights.
01:53:42:13 – 01:53:43:08
Rod
Oh, geez. So, you.
01:53:43:10 – 01:54:13:25
Alex
Know, they they, they froze and they broke and, and it was a huge, huge, unexpected mess right where it took, cause, you know, you had to close down on these units. There was a significant damage. I mean, we acted pretty quickly, right? And we went through and rolled up our sleeves and went to it and, displaced the people that were impacted working to other units and so forth.
01:54:13:27 – 01:54:33:21
Alex
It was a it was a huge, huge job. Well, and it continued for, you know, obviously now you have to go redesign everything. Right? And yeah, because we had to, in most cases, just take it to the start in each unit. So you can imagine the cost that, that you incurred that good insurance.
01:54:33:21 – 01:54:34:18
Rod
You had good insurance.
01:54:34:25 – 01:54:38:13
Alex
So you know, but it’s I’m sure you dealt with the insurance.
01:54:38:13 – 01:54:56:04
Rod
Oh, yeah. No, I, I had a place get destroyed by a tornado. Only 101 units had to be completely rebuilt. That just it just brought back memories I had, I had back in the day pre pre 2008, I had 360 houses in Charlotte County when, Yeah, Hurricane Charley hit and every one of them was damaged. It was a logistical nightmare.
01:54:56:07 – 01:55:00:03
Alex
So, you know, I tell you, I mean, climate risk is becoming a real risk.
01:55:00:03 – 01:55:00:19
Rod
Oh, yeah.
01:55:00:19 – 01:55:15:09
Alex
So so then what we learned from that, I mean, we we managed through it and we did. Yeah. We actually built incredible units that now have become your next level, if you will. Sure. So become.
01:55:15:09 – 01:55:15:22
Rod
Fire.
01:55:15:22 – 01:55:39:10
Alex
Rats. There is a there is another level that you can actually get rents for. So it’s helped our business plan. Sure. But, what we, what we, learned from that is, to date, do you do not even though even though these things had never happened in Texas before, it’s becoming more of a more of an event.
01:55:39:16 – 01:56:02:15
Alex
Yeah. And so we immediately looked at other assets we have in Texas. So if there if there is an asset that did not have the linings, special linings on the sprinklers because a lot of them do not. So right before a freeze we drain their lines. Oh we go on fire watch. And then we put the wire. So there’s a there’s a protocol.
01:56:02:15 – 01:56:10:10
Rod
We put a protocol in place as a result of what had you know, that’s really smart. ExAC no, that’s really smart. Well good. Very proactive. That’s
01:56:10:13 – 01:56:12:09
Alex
So those are, you know.
01:56:12:11 – 01:56:26:29
Rod
So, so talk about okay. So sorry to immediately shift gears again. But to you, you alluded to some incredible deals in oh eight 9 or 9 and ten probably, talk about a fantastic deal that you acquired. Let’s just let’s hear some great numbers.
01:56:26:29 – 01:56:27:26
Alex
Some great.
01:56:27:28 – 01:56:32:26
Rod
Yeah. Because I’m sure you stole some of those the wrong word, but, found some incredible deals.
01:56:32:29 – 01:56:41:06
Alex
Well, and I tell you, I mean, I preface this, that I really believe that today we are entering a period, that.
01:56:41:09 – 01:56:41:23
Rod
It’s coming.
01:56:41:23 – 01:56:47:24
Alex
Again. It’s like that. It’s not going to be as intense. Right. But it’s definitely a lot of amazing opportunity.
01:56:47:24 – 01:57:09:05
Rod
We’re seeing a lot of deals trying to be sold for debt plus fees. And they still don’t pencil out. They still don’t make sense. So unless the rates come down, you know, or or they or the lenders start taking haircuts and the, you know, the catch phrase extend and pretend happening with lenders 100%. Yeah. And you know, at some point that that proverbial, you know, what’s going to hit the fan, and these deals are going to have to have to foreclose.
01:57:09:05 – 01:57:17:02
Rod
That’s right. And and yeah, I know I’m getting excited about it. Yeah. It’s not quite here yet, but it’s really close I mean you see.
01:57:17:02 – 01:57:38:26
Alex
Oh yeah. Elements happening. Right. And I tell you after this story I tell you what were you seeing up? Okay. Great. So this one was, you know, interesting one I think was in 2010 or 11. And it was and we only do deals in the US. This came about and it’s a long story how you came to us.
01:57:38:29 – 01:57:46:07
Alex
But you was a big piece of debt that was owned by teachers of New York as like a.
01:57:46:07 – 01:57:46:26
Rod
Pension fund.
01:57:46:26 – 01:58:34:05
Alex
And there as a lender. And it was on a hotel in in Canada. Oh, Chateau Frontenac, which is a very well known hotel in, in Quebec City. Oh, wow. And so, you know, it basically came was 100 and was a hunt, let’s call it $100 million debt. That was that came up and they said, this is essentially and it’s a it’s a compromise that and the reason was compromise was there was the the developer or the borrower had brought in another partner, which was the biggest pension fund in Canada, as as a partner into it and without the approval or didn’t seek the approval of the lender.
01:58:34:08 – 01:58:36:12
Alex
Oh it wasn’t there was nothing wrong with the loan.
01:58:36:15 – 01:58:37:19
Rod
Right. But that but that.
01:58:37:19 – 01:58:54:00
Alex
Was that was the debt that that became a marks loan. And so they, they, they they basically wanted to unload. And it came to us in December and to be they agreed to a price of 92.
01:58:54:03 – 01:58:55:20
Rod
Okay. And it was another 100.
01:58:55:26 – 01:58:57:22
Alex
And there was, let’s call it 100 million.
01:58:57:22 – 01:58:59:27
Rod
Okay. So not a huge not a huge discount.
01:59:00:02 – 01:59:12:10
Alex
It’s a 90 that’s $0.08 on a pretty much an $8 million on a pretty much okay loan. Okay. But the only caveat was they wanted this to close by end of December.
01:59:12:10 – 01:59:13:00
Rod
Sure they did.
01:59:13:00 – 01:59:32:22
Alex
And this was let’s call it no December 12th that we got the deal. So and this is this is in a foreign country. Wow. And so you know, we just said this is too good to be true, but you don’t even know how to put it together. That’s a big deal. And there’s no you can’t borrow against it.
01:59:32:24 – 01:59:55:22
Alex
And so so you’re looking at it you’re trying different you know. See how are we going to pull this. True. Because we knew it was going to be a good deal. And so, all of a sudden we got a call from the pension fund and said, you know, we want to pay off our loan. And, you know, there was a prepay penalty of 5%.
01:59:55:29 – 02:00:10:19
Alex
Wow. And we said, well, you have to pay us 5%. This ain’t nobody gonna pay you a five. What? We’ll. So ultimately, they agreed to pay off the loan. So the time that that would be close the loan.
02:00:10:19 – 02:00:11:02
Rod
And then.
02:00:11:02 – 02:00:16:24
Alex
Paying and then these guys pay all in the same thing without using any money. Wow. So.
02:00:17:00 – 02:00:18:04
Rod
And so you made the 8 million.
02:00:18:06 – 02:00:18:25
Alex
You got that?
02:00:19:03 – 02:00:33:13
Rod
Well, that’s when you said eight. You know, that basically 8%. You know, I, I was I’ve been so used to thinking discounted, distressed debt and those discounts are quite a bit more. Yeah, but this was performing a class paper, right.
02:00:33:19 – 02:00:34:06
Alex
That’s right. Wow.
02:00:34:06 – 02:00:35:05
Rod
What a screaming deal.
02:00:35:06 – 02:00:37:15
Alex
That was pretty. I mean, you can’t do this kind of deal.
02:00:37:17 – 02:00:39:00
Rod
No, no, but you can’t.
02:00:39:01 – 02:00:42:09
Alex
But what we see today, I you which is.
02:00:42:14 – 02:00:45:09
Rod
I want to get your your take on what’s happening today.
02:00:45:11 – 02:00:53:26
Alex
So what we see today obviously two huge, huge numbers of, deals that people did with crazy underwriting.
02:00:53:26 – 02:00:56:17
Rod
I’m sure you and and adjustable rate that.
02:00:56:19 – 02:01:20:15
Alex
That’s, you know looking at in 1970s 1980s acquisition thinking, okay, I’m going to put this much more money into it, get the rents up buying, get up to 4.2 cap right, and then selling it at a four point, you know, five right on rents that are, you know, significantly more than today’s rent. Right. So they would buy this on, on, on floating rate debt.
02:01:20:18 – 02:01:22:28
Alex
And all of a sudden, you know.
02:01:23:00 – 02:01:24:17
Rod
The rug got pulled up. Yeah.
02:01:24:19 – 02:01:29:28
Alex
You’re you’re basically underwater in mediately. And so you see tons and tons.
02:01:29:29 – 02:01:31:09
Rod
Tons of these deals out there right now.
02:01:31:09 – 02:02:12:03
Alex
But you know, we don’t I mean, in our case, we don’t like to touch these kind of old assets, right, in this type of market. So those are one class of same things that you see. And amongst them you find good assets that maybe they’re 1990s or younger and so forth. But it’s not, as you said, it’s not as abundant right before, but the another one that you see is, developers that develop the property, they have construction loans, but they did their underwriting based on rents that did not materialize based on concessions that they didn’t take into account.
02:02:12:05 – 02:02:18:14
Alex
And all of a sudden, the cap rates have changed, interest rates have changed. And no, you have a new product and.
02:02:18:16 – 02:02:20:26
Rod
And they can’t they can’t get rid of the construction debt.
02:02:20:27 – 02:02:34:21
Alex
Right. And so they can and they can’t take that out on this. They put a lot of money in. So those are could be very interesting, you know opportunities to come in and take.
02:02:34:21 – 02:02:36:06
Rod
And there’s a lot of those right now.
02:02:36:06 – 02:03:02:23
Alex
And there’s the exactly I mean are your finishing build me we don’t we only do ground up in San Diego. Oh. And we just finished a project that we, you know, we built it to with today’s rents to over seven cap yield on cost, which is really good. It’s fantastic. Right. And so but because our basis on the land is low, everything that we buy and we do right at stub is story.
02:03:02:25 – 02:03:25:06
Alex
And when we got these hold up the three sides that we got a hold up before a certain measure passed in San Diego, which is called Complete Communities Plan, which gave more density to certain more sales. We bought this on them, you know, pricing that was reflective of a low density side. Nice. And all of a sudden went up.
02:03:25:07 – 02:03:26:21
Alex
Right. That’s why these are good.
02:03:26:22 – 02:03:38:18
Rod
By the way, those of you listening density means how many units per per acre, for example. And and the more density you have, the more valuable the property is, the more units you can put on a piece of property. If you didn’t know what that meant. Okay.
02:03:38:18 – 02:04:16:00
Alex
Gotcha. Good guy. So so so so I know what it goes in building something nice. So when somebody has finished a project and they put so much work into it, which now is an unfortunate situation, that things are underwater based on their underwriting, those could be great or fantastic deals. Yeah, those could be great opportunities. And these are the type of deals that unfortunate thing when you when you have institutional money monies, they don’t, you know, they all kind of travel in a flock.
02:04:16:03 – 02:04:39:05
Alex
Okay. And for, you know, everybody on the institutional side, they have what they call, value at, you know, buckets of money and value add means, you know, you need to do something major right to create value. Right. And to date, to do something major. To create value doesn’t make sense because construction costs are higher. Exactly. Can’t get the rents up.
02:04:39:08 – 02:04:48:09
Alex
So these are these are things that you can buy with much less risk. On the downside and huge potentials on the upside.
02:04:48:10 – 02:04:49:04
Rod
Yeah.
02:04:49:06 – 02:04:59:18
Alex
The institutions are not doing it because they just don’t have the bucket of money for interesting. And so this is a great opportunity for people like us.
02:04:59:21 – 02:05:01:06
Rod
To raise money. You raised money.
02:05:01:06 – 02:05:01:16
Alex
Raised.
02:05:01:16 – 02:05:04:15
Rod
Money from non-institutional organizers, maybe mom and pops.
02:05:04:15 – 02:05:34:07
Alex
Yeah, well not mom, plumbing, sophisticated real estate investors. Okay. Which like to participate in great projects with limited downside. Yeah. So, so one of the things that again, in our case, I put a a fair amount of them equity in each deal. Yeah. So and so similar to you. So I’m very focused on downside protection. Sure. And every deal that we do has to have a story.
02:05:34:07 – 02:06:02:21
Alex
So it can’t just be we were the highest bidder and right blah blah blah. So it has to up this story. And with having a downside protection then the upside we take care of that. As far as what is the business plan that makes sense. Right. And then on the financing again, as you know, if you have the wrong capital structure, yeah, you can have a great project, but the wrong capital structure and all of a sudden you lose.
02:06:02:25 – 02:06:06:28
Rod
You know, there’s thousands of operators right now facing that now. That’s right. Yeah.
02:06:06:28 – 02:06:12:24
Alex
That’s right. To be conservative with the debt side and on the money that you bring. Yeah.
02:06:12:27 – 02:06:33:06
Rod
Well yeah I see that opportunity right on the horizon right now. We’ve got a an asset in San Antonio and the one right next door, it’s the one we have is 200 units. A one right next door is over 300. And it sold for 43,000,000 in 20 1 or 20. No, 22. So 43 million. They’re down to 28 now.
02:06:33:09 – 02:06:37:17
Rod
Right. And and it doesn’t even make sense for us to look at it until they get down to 24.
02:06:37:23 – 02:06:38:19
Alex
There you go. Yeah.
02:06:38:19 – 02:06:43:22
Rod
And and that’s what’s happening. And so it’s it’s kind of exciting times.
02:06:43:22 – 02:06:49:14
Alex
It’s exciting times. Yeah. And and you know, different markets or in different parts of this cycle.
02:06:49:14 – 02:06:53:00
Rod
Yeah. Yeah. Well it’s true geographically specific projects right. Yeah.
02:06:53:00 – 02:07:04:26
Alex
That’s right. And yeah. And we also learned the lesson. You know when you look at see you know classic type of multifamily there’s a lot of problems.
02:07:04:27 – 02:07:22:16
Rod
Oh yeah. No that’s where the problems are because they can’t afford the rent. They can they they living paycheck to paycheck. One little blip and they’re in trouble. They’re in default. That’s right. And and yeah it’s it’s a real problem. And yeah. So I, I won’t even look at a C asset right now. That used to be my bread and butter back in the day, but not anymore.
02:07:22:17 – 02:07:23:21
Alex
No. Not anymore.
02:07:23:21 – 02:07:47:20
Rod
No, no, it’s too dangerous. Well, you know, I I’m very impressed with what you’ve accomplished, Alexis. It’s it’s, it’s very inspiring to, you know, from your from your cover all business with the six you know, 4500 franchise units and 68 regional offices to 11,000 units. And so what’s next? You’re gearing up to take advantage of these opportunities.
02:07:47:27 – 02:08:12:08
Alex
So that’s really the focus that we have. Yeah. Yeah. You know we like to take him the next two years or three years that is in front and take this opportunity to build our portfolio back up, with fantastic assets. Right. Great markets. Right. And and do this with wonderful partners. Yeah. And so that’s that’s really our goal.
02:08:12:09 – 02:08:32:10
Rod
Nice. Nice. Well, listen, I appreciate, you taking the time to meet with me. I’m really glad that we did this. It’s, really been a lot of fun for me. And, you know, I, I, I look forward to seeing what you accomplish over the next couple of years, because, like I say, I think some very incredible opportunity upon us.
02:08:32:13 – 02:08:40:16
Rod
And I keep telling people this, if there was ever a time to, you know, explore this business, it’s right now because it’s, you know, you want to be a contrarian.
02:08:40:16 – 02:08:41:12
Alex
That’s right.
02:08:41:14 – 02:08:49:29
Rod
You know, when that was supposed blood is running in the streets is when you want to be investing, right? Exactly. Is that, famous? By,
02:08:50:01 – 02:08:50:28
Alex
A lot of people have.
02:08:50:28 – 02:09:03:25
Rod
Said, well, yeah. Yeah, they have it. There’s a famous quote by, Warren Buffett from Warren Buffett. Yeah. Be, you know, about being a being afraid when other people are, are excited to being excited when they’re afraid. Yeah.
02:09:04:01 – 02:09:06:11
Alex
That’s right. Yeah, that’s absolutely right.
02:09:06:11 – 02:09:09:22
Rod
But, well, listen, Alex, it was a pleasure to meet you, my friend. Thank you.
02:09:09:22 – 02:09:11:27
Alex
And thank you for getting up and doing this.
02:09:11:27 – 02:09:14:19
Rod
Thank you. Get my lazy ass up early in the morning. Yeah.
02:09:14:20 – 02:09:15:29
Alex
Yeah, I appreciate it.
02:09:16:05 – 02:09:19:16
Rod
Like it was. It was definitely worth it. All right. Thanks.
