Real Estate Investing in 2021 with Mike Cantu #ddre31

Mike Cantu is undoubtedly one of Southern California’s best-known real estate investors. He’s been a full-time real estate investor and real estate entrepreneur for over 35 years. Mike runs a buy/sell business as well as managing a portfolio of rental houses out of Southern California. He’s the author of Don’t Get Voted Off Real Estate Island and Rental Properties and Management From A to Z. Prior to real estate, Mike was a professional skateboarder on the Pepsi Skateboard team from 16 to 21 years old. This week, we talk about Mike's continued love of real estate, his favorite deal sources, managing his rental portfolios, how the market has changed, and strategies he's using in 2021 to buy deals in his back yard.

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00:00​ The Data Driven Real Estate Podcast Welcomes Mike Cantu, California real estate investor
00:06​ Why Mike still loves the game of real estate
03:29​ The important difference between investing in houses vs. homes
06:37​ How to find real estate deals in 2021
12:13​ Real estate flipping, wholesaling, and rentals. What's the mix?
14:27​ Wholesaling and creating a buyers list
19:03​ Understanding the tax ramifications when you flip and hold
21:26​ Why Mike still buys real estate. Appreciation, depreciation, or both?
24:45​ What is the average length of stay for tenants?
27:00​ How has Mike's landlord style impacted his rental portfolio during COVID?
32:06​ How Mike acquired his first rentals?
32:47​ What is subject to investing?
36:16​ Single-family homes or multifamily property investing?
38:43​ How has marketing mix changed over the past decade to get real estate deals? Direct mail still work?
44:29​ Are creative financing deals possible these days?
48:49​ Advice for new real estate investors
51:52​ People problems vs property problems

Transcript

Aaron Norris: 0:06

Welcome back to the Data Driven Real Estate podcast, the podcast for real estate professionals dedicated to driving business using data. I'm Aaron Norris with Sean O'Toole with PropertyRadar and this is episode 31. Today we feature Mike Cantu. He's one of probably the best known real estate investors in Southern California. He runs a wholesale flip business as well as a sizable rental portfolio. And today, we cover a lot of ground from his favorite type of data that he uses to find the deals and the way he goes about doing it. His mix of wholesaling versus what he holds, and after 40 years, why he even still loves the game, and so much more. You won't want to miss this week on the podcast. Mike, welcome to the show. First question starting off, why the game of real estate after all these years, why is real estate still awesome.

Mike Cantu: 0:55

It's kept me from having a real job. It's kept me out of mainstream America. I grew up with military discipline in a small house with nine people. And I just always wanted to do whatever I wanted to do. And that always conflicted with having a job. Never been afraid of work, but I just can't stand to be told what to do. And early on, I was exposed to it. I bought the whole story hook line and sinker didn't question a single bit of it. I knew every word was true. And all I had to do was stay on that escalator and it will take me to the promised land.

Aaron Norris: 1:35

Has it worked out better?

Sean O'Toole: 1:38

So how long ago did you start?

Mike Cantu: 1:42

39 years ago, Sean, I started in April of 1982. This is, I'm embarking on year number 39 being a full-time real estate entrepreneur.

Aaron Norris: 1:54

And so, you've been through a few cycles, and you're still in it. And it's what's fascinates me for some it's a means to an end and for you. You're hooked.

Mike Cantu: 2:06

It's a passion, I, as I mentioned yesterday Aaron and there's no doubt, I'm going to have to go through a 12 step program to get out a deal making. I'd wake up thinking about deals. I woke up really excited this morning, I closed the deal. Yesterday, I got confirmation right at five o'clock. And it's a keeper house. I don't keep much anymore. I've got plenty all the rooms I need. But I thought oh, this is a great house at a great price and great location. I can't sell this. And first thing I thought this morning when I woke up, we closed it. It's mine. So, yes, I still get really excited about doing deals.

Aaron Norris: 2:45

Are you still actively marketing for deals in?

Mike Cantu: 2:49

Absolutely, absolutely. See, Kim has been with me, this is her 30th year of working with me. And as long as I tell her if she ever quits, I quit. And she says 'Well, she's never going to quit'. So, I thought, okay, I'm in business still. So, it keeps, the marketing keeps Kim busy. And she's always got the management side of things. And she's always busy all day every day. And it works out for both of us. But yes, absolutely market. It's several different niche markets. And we can talk more about that if you want to go down that road as far as marketing goes.

Sean O'Toole: 3:25

Let's just do that.

Mike Cantu: 3:29

Okay, I was gonna say I did make a few notes here. On the marketing, of course, everything falls into one of two, one of two categories, owner-occupied or non owner-occupied. There's only those two categories. But in each of those categories, I don't mail to owner occupiers, I buy houses, not homes. And I've always been much more comfortable dealing with anything other than a home, especially if there's kids involved. I would love to see every homeowner get top top dollar and do the right thing. But as far as rentals and vacation properties, stuff like that, all those are houses, that's just inventory. But within the non owner-occupied, we have several sub niches that we mail to. And it's one of two approaches that when you do a big mailer, I consider that like blind archery, just shooting arrows in the sky hoping to hit something. And then the other one is when we're going after a very specific property that's like a rifle with a scope and totally different approach a personalized letter making reference to the specific property and the details of it. So, I absolutely, I love marketing. I love coming up with new trying new lists. And actually the one I just closed on yesterday came from a new lead source, which on our first test drive, oh, but I got a great deal out of what I thought okay, that worked. Keep on going.

Sean O'Toole: 4:57

Nice. Nice. I gotta tell you Don't get voted off real estate Island, which was a, I guess, audio series you did, I don't know if you did it is text as well, I listened to it, I still think is one of the best, like kind of overviews, and you know, and part of it is you're pretty funny guy.

Mike Cantu: 5:23

Thanks Sean. I try and have some humor in there, I just, I don't want to be the monotone drone, you you to sleep. So, no, that's just me coming out in those, in that. But that was my big give back, Sean, I had been the recipient of some great information. But it was because I went searching for it. And I've always said seek and you shall find finding is reserved for the searchers. And for the people out there searching, I thought that's part of the cycle. Gotta give it back. And favorite, one of the favorite things I own is a file in a file cabinet, which was a bunch of unsolicited letters from people that information from that course has changed their lives, created a better future made them some money, solve some problems, and I just love doing that real estate's such a neat vehicle to wealth and retirement. And I love solving the challenges and the creative aspects of it. Most people and agents, no two deals all cash or some money down and get a loan for the rest of it from the bank. And that is just the very tip of the iceberg with what is possible in real estate. And I love the creative stuffs problem solving.

Sean O'Toole: 6:37

Yeah. And I really loved your approach. You know, I think so many people are like trying to, quote unquote, see interesting what you're just talking about with homes versus houses, right, and you like dealing with the landlord. So, it's just a more professional, it's, they're not losing something that's, you know, near and dear to their heart. It's just a business transaction. So, I thought that was a really interesting point. And but even in your, you know, one of the things that really stood out to me in your in your book series was just how you go about the negotiation. And it's not, there's nothing in there about like trying to hide the value of the property or anything else, it's a very kind of methodical approach of just going through of, look, here's the expenses you're going to have in selling. And here's the advantage of selling it quickly. And these things all have value, and it adds up and you end up with a good deal. But without, without trying to trick anybody.

Mike Cantu: 7:31

Oh, no, I like to put it out on the table. See, Sean, I don't want to do a deal if when the dust settles, both sides aren't really happy about it. Unhappy seller prior to close of escrow remains an unhappy seller after close of escrow. And I like everybody to be smiling and just thrilled to be doing business together. And if I can accomplish that, great. If not, we don't do the deal. And back to the owner-occupied stuff, Sean, early on, I did buy several owner-occupied houses. But the problem I have is when I'm sitting at the kitchen table with the seller, and they tell their circumstances to me, I can come up with at least every time at least three if not four, or five solutions. And the problem with that is solution number one, and number two usually are not me that there's a better solution. And I feel obligated to share that with people. Otherwise, I put it into the category of lying by omission by omitting some key facts. And if I can't put everything out on the table, I'm going to have trouble shaving in the mirror, I got to be able to look at myself and like what I see. And if I don't disclose everything, it bugs me. So, I like everybody to know everything my motive where I'm at and what the plan is.

Sean O'Toole: 8:47

There's a lot of people who who believe you can't make money, you know, buying houses, you know, unless you, you know, kind of get them well below market value. And that kind of implies you're cheating the person, there's a lot of infact the press and others out there kind of you know often insinuate that these flippers are out stealing homes from folks. And, you know, I'm sure that there are some bad actors out there that do that. But with 39 years of experience, I mean, you've kind of proved that's not necessary.

Mike Cantu: 9:20

Oh, no, no, I'll knock on wood as I say it, but I don't use litigation as a business tool like some people. And I try and stay out of court. I have very, very few disagreements with my tenants, with sellers. And it can always be resolved. In my experience. If you want to resolve there's a way I've yet to come to the scenario where I couldn't resolve a situation that somebody was unhappy with without going to court over it.

Sean O'Toole: 9:50

Right. If it probably comes down to trust. Do you feel like that's an important part of your business up front and the rest?

Mike Cantu: 9:58

Absolutely Sean, it's back to if I don't feel good about it, I've had people throw out a number. And I've told them, that's the wrong number. But there's more meat than that than that. And I just that's not number I have in mind and I can come up higher. And this is numbers I have and this is the whole scenario here, start at the beginning and work down to the net to you. And it's quite, my numbers are quite a bit more than you threw out there. And I'm comfortable with this. And so, I, it's kind of weird, but at the same time, when I leave, I think I feel better. I feel okay with it.

Sean O'Toole: 10:33

You've actually negotiated them up.

Mike Cantu: 10:35

Yes..

Aaron Norris: 10:37

That's a nice strategy.

Mike Cantu: 10:39

It is weird strategy. But it's usually quite often it's an older person, and they have one of what they're getting rid of. It's not like middle-aged person that's got a dozen or something. In one, it's that scenario, you know, I got to step into my dad shoes, and I think he's got one and he's gonna want to get as much as he can out of it.

Sean O'Toole: 10:59

Yeah, and it's gonna make a meaningful difference in their life, probably that difference as well, so.

Mike Cantu: 11:04

Oh, yes. And I am a firm believer in karma. What goes around comes around. And if I, I tried, try, try to be a good person do the right thing. And that's been a lifelong battle. And that was my intent. When I woke up this morning, have a good day, do the right thing, be a nice person and solve stuff don't do battle. See, that's a lot of people go into the marketplace with the mindset of they're gonna compete and do battle. And I have a complete opposite. I don't like competing. I like creating. And I don't like doing battle. I like playing a game. So, when I, I want to go create, I want to play a game and create. That's my attitude. And I stay away from the competitive arenas. I haven't been in the Multiple Listing and years now my secretary Kim's in there every day getting comps, but I don't look for deals in there. And auctions haven't been around. So, most of the stuff I do once again, is I'm creating an opportunity, rather than going to look for an existing opportunity that multiple people are competing for. So, I want to create and be the only one there.

Sean O'Toole: 12:12

That's good.

Aaron Norris: 12:13

What's, uh, what's your percentage mix of business as far as flip, holding for yourself and then wholesaling to other investors.

Mike Cantu: 12:21

Um, Aaron I in the last few years, I might keep one or two houses a year. And like I said, I've got a big pile and I'm very happy with it. I did have a rule that if I took on something new, I was going to get rid of my least favorite properties. But it's been years since I've had a least favorite property. I like them all. And so, the last few that I've kept, I just expanded the pile a little bit more. But deep down inside, first and foremost, I am a landlord. That's what I strived for. All I ever wanted was enough money coming into where I got out of bed when I wanted, did what I wanted and long ago surpassed that. But that's when I wake up in the morning. That's first hat I put on as my landlord hat, make sure everybody's up and running, solve the problems. And then I go into being a real estate entrepreneur.

Aaron Norris: 13:14

So, you're still actively marketing and the deals that you're able to negotiate you end up, do fix and flip any of those or it's all wholesal

Mike Cantu: 13:22

Occasionally, I pick and choose those battles carefully. Aaron at the beginning of the year, I did a couple of flips full rehabs,$50,000-$60,000 type rehabs, and... but it all depends on the inventory that comes across my table. And I mean, I in the last few years, I changed my job title. And I've downgraded myself to the real estate dumpster diver. I've came up with some real, but there's a buyer for all of that stuff. And once again, it's all a math equation and the math works. There's a taker for it. But I yeah, I dredge up some pretty interesting stuff. So, that stuff absolutely wholesale, I try and avoid entanglements. I don't like dealing with the city any more than I have to pull a permit here and there. But to have structural plans, I try and avoid that. If it involves blueprints, I just assumed pass it on.

Aaron Norris: 14:18

Okay.

Sean O'Toole: 14:19

All right. Let everybody work their niche. There's guys that are that are in this business that have a construction background and so it's better fit for them anyways, right?

Mike Cantu: 14:27

Oh, absolutely. I have my buyers list. I've always said my buyer's list. I'm like the shoe salesman. I know what my buyers financial feet look like and what they're after. And so, when the shoe comes across my desk, I know whose foot I'm going to try and put it on. That's the analogy I've always used that um, yeah, there's a taker for everything out there under the great umbrella of real estate. What I do is just a very, very small percentage of what's available there. I mean, I when people say real estate to me, I know the whole world is real estate. But what comes to mind when I hear that word is entry-level housing in decent to good neighborhoods. And I've always said that I am in the kindergarten of real estate playing in the sandbox. And I've always been comfortable there. And my friend beat me up for years and years asking me when I'm going to step up that penny any game that I played all these years and, and tell him I sleep well, I'm very comfortable with it. I don't want to be out over the end of my skis, wondering what my next move is I, I like what I do.

Sean O'Toole: 15:35

Has how much has the mix between buying rentals doing retail flips that are, you know, fully rehabbed and to end users and flips to wholesalers? How is that mix changed for you over the 39 years? Or is it been pretty consistent, that you've done a mix?

Mike Cantu: 15:54

In the last seven, eight years, Sean, I've expanded my territory. I've gone into Riverside County, which for 30 plus years, my marketplace was 30 miles long, 20 miles wide, just a big egg. And there was plenty of stuff in there, the 15 freeway was about a third of the way East into my marketplace. And my game plan was always to keep west of the 15. And use East of the 15 to earn the money to keep the other stuff see I have a theory, it's called parts and tools. And every time I see a deal, the first thing that clicks is this a part, or is this a tool, and the parts are the pieces that you're assembling your retirement with the good stuff, stuff that you can't sell, because you're not supposed to sell it, that when you see it, you think, Oh, I want to keep this, this is a great asset, the good stuff and the good neighborhoods. And those are the parts. And everything else is a tool, whether it's a wholesale deal, a retail deal, an interim rentals, short term, long term, whether you're growing it up in value amortizing down the debt, but the ultimate goal is to harvest the equity out of the tools and pay off your parts. And that was my theory with the 15 freeway grow a bunch of stuff east of the 15 harvest it pay off stuff west of the 15 freeway. So, I love the parts and tools theory. And I'm actually have another deal in escrow that I'm really excited about, came with a big slab of equity, and a long term tenant. And I'm going to keep that but I knew immediately that that ultimately is going to be a tool. And I'll probably hang on to it for several years until something happens with the tenant if he stays for 20 years, I may own it 20 years from now. But it's not something that is the cornerstone of my retirement, it's a tool to pay off something else.

Sean O'Toole: 17:52

So, you're keeping it because it's got an existing tenant, you don't want to displace that tenant. So, you're basically holding it to allow that tenant to to finish out their term, whatever term they want. At that point, it's not something you want to keep.

Mike Cantu: 18:06

Well, there's, there's a six-figure, nice six-figure slab of equity in it. And it's a good solid house in a decent neighborhood. Or if I were to fix and flip, but I'm uprooting a long term tenant, which I've done before, but I prefer not to. But from the tax standpoint, if I hang on to it for a year, see that falls into a category I call floating inventory. Over the years, I bought lots and lots of houses with other people's tenants in it. And if it's a decent house with a decent tenant, even if you're feeding the small negative, I've got to raise this guy's rent, but I figured if I left everything alone, that it might cost me a couple $1,000 to control 150 plus in equity for a year or two, that it's a nominal amount. So, it's not cash flow, I'm looking for its equity preservation. And if I get a pass a one year mark, and then a different tax bracket, if I flip it.

Sean O'Toole: 18:58

Okay.

Mike Cantu: 18:59

Or I can or I can exchange out of it.

Aaron Norris: 19:03

There's a lot of..

Sean O'Toole: 19:03

There's some complications around that, right, like, because if you're in the business of dealing properties, you, aren't your flips, still considered ordinary income? Or do you just place them in separate entities or something?

Mike Cantu: 19:16

Separate entities, if there's a chance I'm going to keep it goes one place. And if I know what's going to be a flip that goes elsewhere,

Sean O'Toole: 19:23

Got it.

Mike Cantu: 19:24

That, would be corporate versus LLC.

Sean O'Toole: 19:27

So, it's an important thing for listeners just to pick up on right. Like, if you want to keep some and flip some and you're doing more than I think it's five deals a year, you have to be very careful to keep those in two separate places. Otherwise, you're going to end up paying ordinary income even though you've held it for a while.

Mike Cantu: 19:44

Mm hmm.

Aaron Norris: 19:45

Good point.

Sean O'Toole: 19:47

Yeah, that's, that's, that's one that I missed early on.

Mike Cantu: 19:51

Yup. Yup.

Sean O'Toole: 19:52

That's not a, that's not a happy call. What do you mean?

Mike Cantu: 19:55

Right, right. Oh, no, no. And so, I have two distinct entities. Actually, there's three entities there, my long-term stuffs and one entity and the flip stuff gets ran through a C Corporation, and there's an LLC for all of the not sure stuff, that the interim stuff.

Sean O'Toole: 20:15

And then I did a lot of commercial. So, I kept this separate entity for what I call dirty dirt, right? So, things that I bought at trustee sale that could end up having an environmental issue or something that, you know, I didn't want to have contaminate all or everything else I own. So, that's an important thing for listeners thinking about getting into this business, especially if you're going to use a few different strategies, you need to think through the tax and liability sides of that. So, that's a good, a good little side note, we came across there.

Mike Cantu: 20:48

Yes, no, I'm all I'm always looking at the tax standpoint of things too. And one of the things I realized and I'm focusing on now that did help with the decision to keep the property I closed yesterday. I've had some of these rentals 27 and a half years or longer, and I'm losing some of my depreciation and I, is that free ticket is shrinking. That I thought, Oh, no, the goal for this year, next year, I need some new depreciation. And I want it to come with some very well-located quality assets.

Sean O'Toole: 21:21

Interesting, yeah. Many angles there to be playing?

Mike Cantu: 21:26

Yeah, I never thought I would be this age, and out I'm looking for more rentals. But it's not for income, not for the appreciation, it's for the, for the depreciation, not the appreciation.

Aaron Norris: 21:39

In that case, are you looking to 1031 exchange into new great houses? Or what do you think?

Mike Cantu: 21:49

I'm looking at just acquiring them. Aaron, I like I said, I, as I come through my portfolio, there's some, of the best advice I ever got was many years ago from John Schaub. And think he said it like ever year, get rid of your wors house, take it out to pastur and shoot it and replace it wit a better house. And eventuall you will have no junk. And 2 some odd years later, I think i was 2005, 2006 the markets goin crazy. You just have to look a your watch to see what the valu of the house was. And every da I would come through the fil cabinet. Same file cabinets ago nope, nope, nope, nope, nope And I thought John was right eventually you will have n junk. And so, I don't hav anything I want to get rid of So, if I'm getting tha depreciation, it's got to b buying new assets. So, I thin okay, here I am an expansio mode again. And I've gon through expansion an contraction many times. An actually, that's something have a note on that. I only hav two kinds of days. Rarely, might have one or two, mayb three neutral days a year. Bu within seconds of waking up, immediately know, am I my i expansion or contraction mode And what I always fantasiz about is being able to have fiv or six expansion days in a row and then a couple of contractio days to clean it up some kind o method there, but they'r random. But I acknowledge m expansion or contraction. A soon as I opened my eyes thi morning, I realize I'm al excited about my new purchase ready to go slay th marketplace. And I'm definitel in expansion mode today, whic most of the time I am. Bu occasionally I hit th contraction mode. And those ar the days I don't want to talk t people. I want to clean up th mess, get organized and wonde what am I created here? And ho do I control this thing

Sean O'Toole: 23:47

That's awesome. That's it. That's a good you know, because I do think you know, if you never clean up like in the software business, right, we just always create and we never go back and clean up boy, it gets to be a mess after a while. So, it's a very similar, similar thing. That's probably true of of all businesses, right. Sometimes you just need to go get all your ducks in a row. That's a really, I love the expansion and contraction mode.

Mike Cantu: 24:10

Yeah, it's some days I go into my office like yesterday, and I thought, Okay, I need a contraction day in here. I tell people I have a pilot's license. I pile-it here, I pile-it there, I make awesome piles and pretty soon there's no room on my desk. And I thought okay, yesterday I found myself organizing piles thinking I'm going to have to acknowledge each one of these piles. There's a hole for every one of these pages, but they just need to get there.

Sean O'Toole: 24:37

A pile-it license?

Mike Cantu: 24:41

Has been an expert pile-it for as long as in business.

Aaron Norris: 24:45

When it comes to being a landlord, what would you say is the average length of stay for your rentals?

Mike Cantu: 24:52

Knocking on wood but Aaron I'm gonna say I'm gonna be at 10 years plus.

Aaron Norris: 24:57

Yeah. And what do you contribute that to, is it the inventory you hold or how you take care of the tenants?

Mike Cantu: 25:03

Multiple ways. Absolutely. It's the house. Is it somewhere where they want to be? Is it a good house in a good neighborhood? All of my rents are under market. In varying degrees, it depends. I was gonna say I do have a list and if I raised my rents to market, the difference from what I collect is more than most people would be thrilled to retire on. But I have tenants, okay, I have a house in Clermont that came with a couple that have been there 31 years before I bought it as tenants. And I bought that in the year 2000. The husband passed away a few years ago, but Kate is still there. So, my math tells me she's going on year 52, as a tenant in that house, and I'm fixing a house in Montclair that I bought 20 years ago, Sherry had been in that house 15 years before I bought it. And she's a wonderful tenant. So, I have several tenants that had a long history before I came into the picture. And we passed the two decade mark on several of those. And some of my tenants say I bought a house in Claremont. In 1998, I remember I was on the phone and my other phone rang, I told my brother to answer it, he starts taking down information at the time, I had a Pennysaver ad running. And then he hung up the phone and left he came back a half hour later and said want to buy a house in Claremont. It was a burnt house, but um, I ended up making a deal with him, he bought the house on my ad call. And he fixed it up. And the same tenant I rented to in 1998 is still there, and they've done nothing but improve the house. She got married, they've added patio covers and new driveway, stuff like that, or I think carry on.

Aaron Norris: 27:00

And how's that? How has that played out during COVID? You know, you hear a lot of landlords complaining that, you know, people have skipped but you're appraoch to landlording...

Mike Cantu: 27:07

I had one tenant that went AWOL. I had a couple of tenants only two that even mentioned it. And I explained to them that this isn't a free ticket that there will be a day of reckoning and we have a very long history. And it might be difficult to find a better house for less money. After all the dust settles here. And this is a temporary situation to where and I still firmly believe that. See I, I've always always tried to be the best landlord I could possibly be and fix stuff when it breaks. I'm there, every year has a theme to it. And this year is no different, this year actually started in November the year of the water heater. I'll make water heaters deep in about three months and they've gotten expensive, but I thought okay, last year prior to that the previous 12 months was a year of the sewer main line I ended up replacing four sewer main lines, jetted several other ones out a septic Leach lines replaced and I thought okay, before that, previous before that was central air. They were just blowing up right and left. And there's always a theme to the year. And I think that's part of what happens but the right attitude. I don't get mad when something happens even when it's a major I think okay, what's the right attitude? Be grateful I have the assets and the means to keep it going. And that makes everything better smile on my face and send people over we get it fixed. And tenants thank me for it. So no, I try and be the best landlord I can be absolutely.

Sean O'Toole: 28:40

Well, let's talk about for the new guys starting out. Because that's, that is you know, I'm fortunate I'm in that position. I had a couple folks that came down with COVID. I just told them, 'Look, don't pay for rent, I'm gonna forgive it. I'm not gonna ask for it later'. Right? It's, but that's easy to do later, right? When you're first getting started, and you're first taking you down your deals, and you're leveraged, and all the rest, like it's pretty hard to say hey, don't you know, I got this. Don't worry about it right with a tenant. And so how do you do? I mean, it's 39 years ago, so maybe you don't remember at this point. But how do you make that? How does the new guy make that transition? Right? How do they get to the point where they've got enough reserves and can really take care of their tenants and the rest?

Mike Cantu: 29:26

Well, I was thinking as you were explaining the scenario there, Sean, I'm going back to my first nine rental houses, I was still renting a bedroom and a house for $150 a month and I had nine rental houses, none of which I could afford to live in myself. And so, I was but by providing better housing than I had, but of course I was Nick Blackwell telling me how to get this done and it's tough but I used to do a lot of my own repairs. I thought that's, that was the old school. That's the way Nikc did it. So, that's the way I did it is grab the tools and fix stuff and, not that much stuff broke it was my, could have been my downfall was tenant turnover, not picking the right tenants early on, I got sent to school on that one time after another after another. And I just getting, it gets old when you're putting white paint and beige carpet in the same house for the third time in three years the first time it's fun second times aggravating. And the third time can be depressing. So, it's but don't go too fast too far. This is as far as building your empire goes very methodical piece at a time take care of today's cash flow needs before you worry about your future wealth. I see people go way out on a limb and not having reserves and just taking on assets to where I think Nope, there's got to be a balance there. You got to be able to prepare for disaster. And for more than one house, you've always got to have some reserves.

Sean O'Toole: 30:57

Did you always use wholesale and flipping to fund the rentals? Or did you were those first nine rentals where you just somehow talked to bank and loaning you the money and going for it.

Mike Cantu: 31:09

None of none of my first nine rentals had anything to do with the bank. So, Sean, I've never been much of a bank borrower because I've never had a real job. I got some advice early on it was, I was told when you go into the bank, stay off the carpet, because that's where you're going to debt, stay on the tile and make your deposits and everything will work out fine. I have adhered to that I stay off the carpet at the bank, I think in my whole real estate career and might have done a grand total of nine bank loans. I don't think I ever hit double digits. And out of the 1600 plus transactions. 10 of them involved the bank. And the only bank loan that I have right now is I have one and it's on my daughter's house. It's been around for 17 years, and it's good loan and fixed rate and I thought okay, 13 more years or add some principal to it. But that's the only bank loan I have.

Sean O'Toole: 32:06

And so, how did you acquire those first nine rentals? If it wasn't bank loan.

Mike Cantu: 32:11

Most of them were either subject to existing debt. A lot of it was seller financing. Some of it was private money. And some of it was hard money. So, it was all the non conventional sources there.

Sean O'Toole: 32:25

All right, all right.

Mike Cantu: 32:26

And like I said, I did lots of creative stuff, Sean, I just, I didn't have borrowing power, and I didn't have a bunch of money. So, if you have a dream, you got to figure out how do we make this work. And that that became my MO. I took over lots and lots of loans. FHA stuff used to be really easy. Just pay the $45 and sign a one page application thing and you were in.

Sean O'Toole: 32:47

Yeah, yeah, the assumption thing was, was good. So, just I'm going to explain what subject-to is for folks really quick out there. Subject to is buying the property subject to their existing mortgage. So, you'll leave the current mortgage in place. And that has gotten it you know, back in what the 80s, you could you could assume loans not really isn't the case anymore. Most mortgages today have something called the due on sale clause, which means that if the person transfers the house to you, that triggers the loan being payable in full now it doesn't mean you maybe can't make the payments for them for months or years. But there is some risk there. Was that less of an issue? You know, back when you got started the subject to is it more of an issue now or any challenge?

Mike Cantu: 33:41

I'm the only person I know that's ever had three loans called due because of the due on sale clause. They were all unique circumstances, but they were fairly early on. And I did have them called due and I worked around it, I sold one of the properties I rounded up the money to pay off the other two. But in today's climate, I have friends that have taken a couple of 100 loans subject to none of them about anything called due with today's interest rates at two and a half percent if the banks can any anything more than that 3% plus, why on earth would they foreclose go through the hassle only to ultimately end up with money to loan out at a lower interest rate? It makes no sense. Now I could see if rates went through the roof. There might be some incentive to call that stuff. But um, it's a tool and like I said, I nobody, nobody in my circle has ever had one called due.

Sean O'Toole: 34:35

So, you're gonna do it, be ready for that possibility. But it can be a useful, useful tool.

Mike Cantu: 34:43

Yes. And I had, I had a loan I tried to get a bank to call it due because of that a prepayment penalty I didn't want to pay and I did everything I could do to torment them into calling a due and they refused. They said no. You can pay that prepayment penalty one way or the other. So you even if you...

Sean O'Toole: 35:01

Even if you want them to they won't.

Mike Cantu: 35:03

Right, right.

Sean O'Toole: 35:05

That's great.

Aaron Norris: 35:07

Considering the market that you like to market to the landlord's absentee, it has COVID been a moment where we're finding out the tide has come back. And are we finding who's been swimming naked as you're marketing to them? Or do you have a lot of landlords in distress right now?

Mike Cantu: 35:23

Oh, it all depends where their stuff is Aaron. And that's the once again, it comes back to well located real estate. I have a friend that had 20 some odd houses and a not so good area, an outlying area, and I believe in March of 2016, collected for rents in April, he collected one and hasn't seen the dime since then. And it was the location and the type of person that it attracted. So that has a whole lot to do with it. And I know the lower end stuff, people are struggling, they're gonna do what they have to do. And they're not opposed to moving. It's a good house with an older family in it. That's been there a while last thing they want to do is change school districts and unpack a two-car garage. So, it's the product and the location.

Aaron Norris: 36:14

Okay. Yeah.

Sean O'Toole: 36:16

Yeah.

Aaron Norris: 36:16

Nice. Now, early on, I remember interviewing you and you did not like multifamily. You are really an SFR. Guy. How does that changed?

Mike Cantu: 36:25

Nope, I'm stil, I'm still the single-family guy that only multifamily that I have is two duplexes, downtown Huntington Beach and an A plus neighborhood block from Main Street and Coast Highway. It's two duplexes, I occupy one of the duplexes my daughter on the other side, and two very good friends in the other unit will just make for a great environment. If I didn't have the two friends and the other units, they may, they may have sat vacant for forever, because that's my weekend place and it's my lifestyle. But other than the two duplexes, I'm still single family, I want more than two by four and drywall separating unrelated families that I'm responsible for. And I just don't like doing adult daycare. And it's a different mentality in the unit mix than it is a single family. My experience is single family, people want to be left alone, and get on with life and the units that I've had the tendency to want me to do everything right now to changing lightbulbs.

Sean O'Toole: 37:30

Yep.

Aaron Norris: 37:30

Yeah.

Sean O'Toole: 37:31

No, that's a really interesting point. You know, it does seem like you get more turnover, like the apartments like a stopping point for people like something they have to do for a period of time, but not something they want to do for a long time. And I've had a couple of exceptions to that. But largely, that seems to be more of a temporary solution, or is the single-family homes like people, it's becomes their home, right? And they want to stay and they want to stay for a long time. If you treat them fairly, it'll stay forever. 20 years apparently.

Mike Cantu: 38:04

I told the tenant in Montclair the other day, I'm having a bunch of work down there. We had a block wall blow over in November in the high winds. And my insurance didn't pay for it. So, I had to have the wall removed, fence put up and figured, okay, it's been 20 years, it's time to do some work on that house. And Sherry was all concerned that her rent was going to go way up. And I told her that's not the game plan that she's been a great occupant as far as I'm concerned. She spend the rest of her life in that house. Just stay on board with the program, pay the rent on time, and we're good.

Sean O'Toole: 38:37

Wow. That's great. Okay,

Aaron Norris: 38:43

Has your, has your marketing mix changed? You've been doing direct mail for a long time, but I don't remember seeing a YouTube channel by Mike Cantu just yet.

Mike Cantu: 38:52

Nope. And I am still so, electronically challenged there. And you know that I, I did learn how to forward a text message picture. But I've still yet to send an email. I mean, that's every day I go in my office and there's a stack of emails Kim sorts through them things what's what I would deem to be important printed out, I sort that over the trash can. Then I handwrite my reply on on the actual paper and I slide the stack back to Kim and she takes it from there the text messages that I do on my phone. I typically write down what I want on the yellow tablet, put my phone on it slide into Kim tell her to make it happen. She does I've got fat fingers and we're reading glasses so I could never text. Well, I probably could on my own. But I think of me struggling at the kitchen table to send a text message and I think how would you do that driving I'd be in the ditch and 10 seconds. So, Nope. I still operate with a yellow tablet, a pen and a telephone.

Sean O'Toole: 39:56

Let's talk a little bit about and one of the things that I think is most challenging for folks doing direct mail doing any of these ad campaigns, and they get that phone call, right? And the person's interested. And, you know, and this is where you're you're surviving real estate Island series was so good was talking about how to handle that call. And because I think that's really hard for folks, right, you get that call and what do you say? How do you, you know, how do you move from a call of'Okay, I'm maybe interested in selling' to like a close deal.

Mike Cantu: 40:34

Sean, every conversation is different. And I want to get a few things out of the way real quick, one of the first questions. Once we get past the introduction and shallow, meaningless chitchat, I always ask him, is there any interest in the possibility of selling that house? And I'm always surprised when people say no, not really, I just want to see what you're up to and what you thought it might be worth and blah, blah, blah. And let's get to the point. Are you a seller or not? Once we get past that, then I did, I would want to ask some questions, paint a picture, I always ask people, what would they like to see happen in a picture for me, and quite often, it's very unrealistic. And if that's the case, I usually ask them, what's your second choice. And I try and keep the conversation going. I'm on a fact-finding mission. And I rarely, rarely, can somebody pry a number out of me during our first phone call. And I have several friends that operate totally different than that, that they're throwing out numbers within five minutes of being on the phone, because they're computer people. And they've got two screens that are split screens, and they've got all the valuation sites up and driving the Google car past the house, and they see everything going on, I don't operate like that. I don't think that quick, I just want all the info, I assure them that I will do my homework and get back with him either this afternoon or tomorrow morning. And if it's a good phone call, drop what I'm doing, do the homework and construct and present an offer to them. It all depends on how the call goes. But that's the important one, Nothing happens without the phone call. But the phone call...

Sean O'Toole: 42:19

Point of that call, are you talking versus listening?

Mike Cantu: 42:23

It all depends, Sean, sometimes I think I'll start talking and I think wait a minute, I started talking and I can't shut up. I wonder what I just said, and that. But it all depends how the conversation starts out. I add people just go and go and go to war. I'm taking a couple of pages of notes. And I think okay, I don't have any questions after that. They had a whole monologue. And I've got some great notes out of it. So, once again, I realized Sean, we're in the people business. And first and foremost, I mean, I rent to people I sell to people I buy from people. And I'm constantly going back to the people store for new people and whatever needs to be done. That it's a people business, first and foremost. And then, of course, everyone's different. So, it all depends. It depends how it starts out. I've led people by the hand, I felt like I was the student and they were the teacher more than one. I've had some great deals where the sellers did all the talking, if one comes to mind was several years ago, I had made a deal for 80,000 cash on a house. And Ramona was so excited about it. I meet the seller there, he was about 85. And he was almost seven feet tall, put his arm around me and we're walking around the backyard and waist deep grass. And he told me he can't take 80 cash. And I thought, okay, hear him out before I get upset over it. He said, I've got two sons, and they'll just piss the money away. Or he called them his kids. And I said, How old are your kids? He said, 58 and 62. And he said, they'll just pissed the money away. Here's what I want. I'd like 10% down. And I'd like you to make the monthly payments for 10 years and add them to where we ended up with a great terms deal but no change in price.

Sean O'Toole: 44:09

And that was all his idea.

Mike Cantu: 44:11

It was all his idea after we had made a deal. And I thought once again, I love real estate. So, I didn't say much in that whole deal other than my initial offering. He said sounds good. Let's meet and see what you're getting yourself into.

Sean O'Toole: 44:27

That's great.

Aaron Norris: 44:29

Are you finding a lot of landlords these days wanting to do those kinds of creative finance deals?

Mike Cantu: 44:35

It all depends on the circumstances, Aaron I people tell me people don't do seller financing. I bought a property four months ago that I had to clean up lanes and stuff. The seller carried the balance of zero interest for five years and I thought I've got 60 payments and that place is paid for it to break even until then, but I just asked him would you take $550 a month, so I'd paid in full? And he said, Absolutely. How many years is that come to? And I said, right about five. And that once again, that was something I hadn't planned on keeping. But I thought with zero-interest financing that falls into the, the tool category, that it's a tool to get something paid off, I'm gonna hang on to it. It came with a tenant. I thought, No, this isn't such a bad scenario.

Aaron Norris: 45:24

I like the way you phrased that to. You didn't mention an interest rate, it was a payment.

Mike Cantu: 45:29

Right. Absolutely.

Aaron Norris: 45:31

You're one of the most consistent people I know, you're are you still doing the hour a day learning?

Mike Cantu: 45:39

Absolutely. Aaron, see, I tweaked my back good a year ago, in March, and took five weeks of going to the chiropractor, and acupuncture. And I have a great book, it's called the better back book. And I would look at it and swear, if I ever got up, right, I would exercise every day. And today is day number 289. without missing a day, but that I break it up in the morning, it takes about a half an hour, and then the evenings, about an hour, all of the evening stuff is on an exercise mat. It's stretching. But what I do that I either listen to a cassette tape, yes, I have hundreds and hundreds of them in a cassette player for I'm finding golden stuff that I hadn't listened to in years, or YouTube videos. And it's all in two categories. It's either personal development, build a better mic, or adding to my real estate toolbox. So, for 289 days, I've had an hour plus of education every day, and they still read an hour a day. And that's typically 20 to 30 pages. I like to absorb what I read. I don't skim much. So, absolutely. And that keeps me fired up. See, I'm, you know, I'm a huge fan of education I attribute to where I'm at 100% because of the education. And I ask people all the time, do breakfast today, did you eat lunch today? Well, of course I did. Ask them what they ate. And I said, Okay, you got your physical nutrition. Tell me about your mental nutrition. And our mind and our body are two entirely different things. And why would you starve your mind of nutrition and just feed your body? That makes no sense whatsoever? S,o no, you need your mental nutrition every day to keep you fired up. And it's the alternative thought processes that have made for a very interesting life that you're not exposed to in school. And you got to go searching for that.

Sean O'Toole: 47:37

Let's follow that up with, are there any, any favorites? Obviously your own don't get voted off real estate Island. And I want to ask you, if people can still get that and if so where?

Mike Cantu: 47:48

Oh, absolutely. It said go to Mikecantu.com. I claim to have the worst website on the internet. It was made many years ago. And all that's there is my two courses. And yes, I've always been amazed that I still sell several courses a month I've done zero advertising. It's all been word of mouth. And I know Kim's got a couple of boxes of both courses. And when they run low, she orders up some new ones. But they're still there. Now I do want to make a comment

Sean O'Toole: 48:18

You still on cassette tape? Or you, you do offer..

Mike Cantu: 48:21

No, it's on CD but Gary Johnston. He's been a fan of those and he teaches and when he teaches he always sells my stuff. Now I believe they put them on an mp3 or on a stick or something. Whatever the technology people use these days. He has brought it into the 21st century so, it's if your order it, it's coming on CDs, Gary Johnston has the high tech version of it. And I don't even know how to explain it.

Sean O'Toole: 48:49

Okay, so other things what, but you mentioned you've got quite a few any recommendations for top recommendations for real estate investors folks that want to be Mike someday?

Mike Cantu: 49:02

It only. Yes. And I'm going to go off in different categories. See Jack Miller was my hero. I learned more from Jack over 25 years I used to fly all over the United States wherever he was teaching, I would be there. And I would typically get four to six, maybe seven of Jack's classes a year. They were always different topics. I couldn't wait for a schedule but Jack's been gone a dozen years and it's hard to find his stuff. I love John Schaub, out of Florida from th landlording standpoint. I tel people John's stuff is golden That it's, it's a bargain an buy everything that he sell that he's kind of been like real estate dad influencing m in the rental game. I love Bruc Norris' stuff. I've got a bi section of my library of Bruce' stuff. I think I have everythin the Norris group's ever pulle out and gone to just about ever class I've ever done. I lov Pete Fortunato out of Florida I'm a creative problem solver thinking outside the box, I'v learned a ton from Pete over th years. And I'm still a Ro LeGrand fan. He opened my eye to I've known Ron old probabl 30 years now. And they didn' follow him for quite some time he kind of went off in th commercial arena. And but goin back through his old stuff, realized No, this, this was par of the basis of my busines model. I learned it from him and I'm getting a kick out of r listening to cassette tapes. Bu I always wondered, every time did a great deal, I thought i was an anomaly. And this was th last time and that I kep getting lucky. And Legran changed my attitude about that that no, they're like buse showing up at the bus stop. The come every five minutes. I you're searching for it, I mean seldom do we find what we're no looking for. And you've got t define the product that you wan and then go looking for it. An I, I've searched for that fo years and talk back to som marketing. I've always gon after the what not the who, tha had the what and finding ou that there was a pattern wit the who are one of my marketin campaigns is going after the wh not the what, if that makes an sense the person not th product

Sean O'Toole: 51:24

Yeah. No, that's... we think a lot about that right? In terms of the message and stuff, what the message that works for one person won't work for the next person. So, thinking about that, who part, makes it important for sure.

Mike Cantu: 51:37

Yeah, yes. And as soon as you get the who on the phone, the next job is to, is this a property problem or a people problem? It's usually one of the two seldom is it both? And so I try and find that well, what what are we out to solve here? People problem, a property problem?

Aaron Norris: 51:51

Do you have a favorite?

Sean O'Toole: 51:52

That's interesting. Give us a couple examples of people problem in a property problem.

Mike Cantu: 51:56

Property problem, they don't have the money to fix it. Let's use a probate for an example, we got code enforcement. And it's just a matter of time. It's a deteriorating asset. That's a property problem a people problem is when they've got a drug problem, a divorce problem. It can be a whole long list of people problems, that they're not capable of continuing ownership of the property.

Sean O'Toole: 52:20

Yeah. And you see that with landlords too, you get landlords that are in those situations with th,e with the you know, you think about homeowners getting themselves in over the skis or whatever, but you're focusing on landlords. So, landlords are struggling with these, these people and property problems as well.

Mike Cantu: 52:38

Absolutely, absolutely. And, you know, like I said, Sean, 99.9% of what I buy is landlord, landlord material. And they fall into those two categories, people problem or property problem. The deal I closed on yesterday, lady had inherited it 10 years ago, lives nine hours away in Northern California and has never seen the house.

Sean O'Toole: 53:01

Yeah.

Mike Cantu: 53:01

And just collect, she collected $1,000 a month rent, which is about half of what it should be.

Sean O'Toole: 53:08

Yeah. Interesting.

Mike Cantu: 53:10

Yep, she was behind on maintenance behind on taxes just behind on everything. And I thought this is turning into a property problem for her.

Sean O'Toole: 53:20

Yeah. Yeah. And she probably you know, she probably could use the $1,000 a month but maybe didn't have the money to come in and solve this issues or the time.

Mike Cantu: 53:31

She's much much more excited over the slab of money being wired to her account today. That was a, that was life changing money for her. Absolutely.

Sean O'Toole: 53:41

Yeah. Awesome.

Aaron Norris: 53:42

Do you have a favorite people or property problem?

Mike Cantu: 53:48

Yeah, good house in a good neighborhood for cheap. And that doesn't doesn't matter what the problem is. We can work it out. As long as they're happy, and I like it. So, that's all good.

Aaron Norris: 53:59

Just like problems.

Mike Cantu: 54:03

Nobody, nobody's given away a house without some kind of challenge and there have always said nobody will give away equity. They will trade it for peace of mind. They will trade it for a lot of things but they just aren't going to hand it to you and I still have yet to buy a perfect house and in a neighborhood for 70 cents on the dollar minus repairs that that has never happened in my world. There's always something in there that I've got to clean up.

Sean O'Toole: 54:30

Every guru though promises like you shouldn't even consider it unless it's 70 cents on the dollar after repairs. And you know, and you should be able to get those all day long. Right?

Mike Cantu: 54:42

And Sean I still and 39 years haven't had the gift-wrapped, half-price bargain set on my porch that would qualify as a keeper house. It just the A neighborhood stuff I bought it's been problem properties that they've needed. work. And a good deal usually comes with some hair on it. And I learned a long time ago, my real job title is chief problem solver. Whether I'm in landlord mode, entrepreneur mode, whatever mode I'm in, my job is to solve problems and make decisions.

Sean O'Toole: 55:18

We, you know, we've helped 10s of 1000s of investors over the years and we always know are in trouble, like when they've their first call on support is, well, I've looked at 10 properties, you know, or I sent direct mail to 100 properties, and I haven't been able to find one that I can buy for 70 cents on the dollar after repairs, and I don't think your software is any good or I don't think your data. It's like, oh, man!

Mike Cantu: 55:45

Sean, that boils down to belief I, If you think you can, you're right. And if you think you can't, you're right. And I've always been a bumbling optimist. Life continually beats me down into becoming a realist, but it bubbles right back up to where I'm just I'm very optimistic and always have been. So, I'm looking for solutions on the bright side of things. And I hear it all the time. This business is hard, I'm struggling, I can't make a deal. And I think that's a lot to do with attitude. And what have you done to build your real estate toolbox up? And are you actively pursuing your education to overcome this stuff?

Sean O'Toole: 56:23

So, I think we both know that right? 30% after repairs isn't really realistic. That's not the kind of deal that happens out there. Like, for somebody new coming into this business, you know, what, what kind of realistic target should they expect? Like what's, hat's a good but doable dea? Like, what's the deal? The e's so many really works har, they can do four, five, or ten over a year.

Mike Cantu: 56:49

In Okay, now, Sean, when you say a deal, are you looking to flip stuff, or you're looking to keep stuff and those two deals are going to be structured differently? Now, see, I'm in the equity b siness. And I've always said I m an equity purchaser, no e uity, no deal. And there's a w ole world of slim equity b siness out there taking over g od loans. There's a lot of p ople that will pay a premium b cause they can't get a bank l an, but they'll pay over m rket with cash down payment to a existing loan, if it can be s ructured for them that way, b cause they don't have b rrowing ability. I know more p ople can't borrow bank money t an can. So it all depends on w at you're out to accomplish. A d once again, shout I'm still b ying at 70 cents on the d llar. The deal, I closed y sterday at $475,000 plus built in 1977, that I paid $275,000 for it, and it might need $30, 00 if it was empty. So that ce tainly meets the 70 cents o

Sean O'Toole: 57:49

So they do you are finding them.

Mike Cantu: 57:51

Oh yeah. And the other one that I'm keeping I almost embarrassed to say it's slightly below 50 cents on the dollar. And I thought I don't need to flip this that I play a game every month, Sean and I play lots of games with myself. Like, you're not allowed to get in the shower till you've done your first half of exercise. Rule number one and I was struggling this morning, but I pulled it off. But I play lots of games and I as a real estate entrepreneur, I compete against my net rents. So I go to work every month as a human being trying trying to out earn the net rents that the houses produce. Sometimes I do most of the times I don't. But I look at what the inventory that I buy. I mean, I'll everything ends up in one of two checkbooks at my place. So all of the proceeds of the game ended up at home. But more often than not, I don't beat my rents anymore I used to but as the rents increased, it's become harder and harder unless I have a whopper month. That doesn't happen. But still the stuff I'm buying and wholesaling. My buyers have strict criteria, and most of them are in the mid-70s, 75 cent on the dollar minus repairs. S if I'm going to make a wholesal fee, I got to come in less tha that. And some of the junk tha I buy Sean, I buy some of th junk at 30, 40 cents on the d llar. And I pass it on at 50 ce ts on the dollar, but you're go ng to spend some money making it

Sean O'Toole: 59:25

Right. got real problems.

Mike Cantu: 59:28

Yeah. And I somebody people are out there looking for a 20 grand net net net spread after everything. And it doesn't matter if it's $100,000 house or a $300,000 house. I totally disagree with that philosophy. I want the risk and reward to be in line with each other. And if I'm doing a $400,000 house, I certainly want a bigger payday than the 100.

Aaron Norris: 59:52

Green. Well, we are at that time mark, we needed to let you go but is there anything you're really excited about or opportunity you see in 2021

Mike Cantu: 1:00:00

Yeah, I see, it's either going to be really good, or it's going to be really bad. You know where and I have nailed it 100% of the time on predictions for the market, I've never been wrong, not one time. And I'm not going to be wrong this time. Because the market does one of three things, it's either going to go up down or stay the same. And that just nailed it. That's what's going to happen. And you need to govern yourself accordingly. So that all three scenarios work for you. But I don't think the stay the same parts going to be there. I think we're either going to have a great year, or we're going to have a challenging year. I don't think it's going to be middle of the road. I'm optimistic about it. But I'm also prepared for the downside if that happens. But as long as I can keep making deals, life's good.

Sean O'Toole: 1:00:47

That's awesome.

Aaron Norris: 1:00:48

Very good. I will make sure to post the links. I'm going to look at Jerry, Gary Johnson's website to see if the technology advanced version of your book is on one of those sites. I know how to so I really appreciate your time. As always, it's been great.

Mike Cantu: 1:01:03

I can't believe an hour went by we were just getting started here. Today, I thoroughly enjoyed it. It was good talking to you, Aaron, you're looking good these days. And Sean, likewise, we haven't chatted in a while and really enjoyed it you guys.

Sean O'Toole: 1:01:20

Thanks so much.

Aaron Norris: 1:01:21

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