Why Conservative Real Estate Investors Keep Winning Through Every Market Cycle with Nathan Jameson | EP44

Everyone wants higher returns.

Very few investors spend enough time thinking about risk.

In this episode of The Wealth Clock Podcast, Stephen Weinstock sits down with Nathan Jameson, Founder and Managing Partner of Arx Capital, to discuss why disciplined operators continue to outperform through changing market cycles.

Nathan shares lessons from helping scale a national homebuilder from $30 million to more than $160 million in annual revenue, surviving the Great Recession, and building a real estate investment firm focused on affordable housing, manufactured housing communities, self storage, and long term value creation.

The conversation quickly expands into one of the biggest debates in commercial real estate today: debt versus equity investing, preserving investor capital, underwriting risk, and why experienced operators often matter more than the property itself.

Steven also shares his own perspective after more than 25 years in real estate, explaining why he has become increasingly attracted to private lending and how debt investing differs from owning and operating multifamily properties.

Whether you're an active real estate investor, passive investor, syndicator, lender, or someone looking to better understand today's commercial real estate landscape, this episode is packed with practical insights.

In this episode you'll learn:

• Why great operators outperform great deals

• Lessons from surviving the 2008 financial crisis

• Why Nathan focuses on manufactured housing and affordable housing

• How Arx Capital evaluates acquisitions

• The growing shift from equity investing to private credit

• Why experienced investors ask better questions

• The importance of conservative underwriting

• Managing investor expectations during difficult markets

• Why long term thinking continues to outperform chasing trends

• Stephen's perspective on debt investing versus equity investing after 25 years in commercial real estate

About Nathan Jameson

Nathan Jameson is the Founder and Managing Partner of Arx Capital, a real estate investment firm specializing in manufactured housing communities, affordable housing, self storage, and value add real estate investments.

Prior to founding Arx Capital, Nathan helped grow a regional homebuilder from approximately $30 million to more than $160 million in annual revenue, gaining extensive experience in acquisitions, operations, development, and leadership through multiple real estate cycles.

Connect with Nathan Jameson

Website:
https://arxsventures.com

Email:
nathan@arxsventures.com

LinkedIn:
https://www.linkedin.com/in/nathan-jameson/

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The Wealth Clock Podcast brings you conversations with operators, investors, founders, and entrepreneurs who are building lasting wealth through disciplined execution.

🎙 About Steven Weinstock
Steven Weinstock is a real estate investor and founder of WeCapital and the Goethals Capital Fund. Since 2001, he has built a diverse portfolio of residential and multifamily assets while helping investors access passive income through strategic real estate opportunities. On this podcast, he shares real-world insights on investing, capital raising, and what it really takes to build and scale in today’s market.

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Transcript

Speaker: 0:00

Hello and welcome back to another episode of the Wealth Clock Podcast. I'm your host, Steven Weinstock. Today's guest is Nathan Jameson, founder and managing partner of ARX Capital. ARX ARX Capital. Nathan has spent more than 20 years in real estate construction operations before launching ARX Capital. He helped grow a national home builder from approximately 30 million. And annual revenue to more than 160 million, giving him first hand experience scaling systems, managing people, and executing through different market cycles. Today, ARCS Capital focuses on manufactured housing and other resilient real estate investments, with an emphasis on disciplined acquisitions, operational excellence, and protecting investor capital, which is number one. Nathan believes Successful investing is much more about the buying good assets. It's about having great operators behind those assets. Nathan, welcome to the podcast. Steven, thanks for having me. I'm really looking forward to it. Okay, before we start, I do have a sponsor, and that is Cable NOI. Cable NOI helps landlords who own properties that are twenty units plus earn revenue from cable companies. They will pay you money to be the exclusive at your property, which means the tenants still call their local cable company to order internet, phone. TV, the landlord gets a piece of the action, and they will even get an upfront per door fee, somewhere between 100 and 200 bucks. There's no wiring, there's no tenant friction, there's no telling the tenants anything about it. You don't have to bill the tenants. And depending on the property, the cable company will even give a free account for the leasing office. So visit cable no y dot com cable no I net operating income cable no y dot com. Nathan, what's going on? I am back from a recent family vacation and I'm a little jet lagged, which is not something I feel very often. So uh my empathy to those who feel that. Okay, so since you mentioned it, where are you from? Where did you visit? And how'd you get there? Yeah, so I live outside Philadelphia in the western suburbs of of Philadelphia. Go birds. I was in Switzerland for almost two weeks. first time in Switzerland. And we took our our entire family, which was uh our youngest is 10, the four kids, oldest is 19, and um we we traveled throughout this the Swiss Alps area, and um I would say The number of times that we remarked it just feels like you're looking at a green screen. w I mean it had to be fifty times we said that. and it's really true. It's it's unlike any place of beauty that I've visited before. And it was a very active vacation. We did a lot of hiking, we're outdoors a lot, which which we really enjoyed together. Got it. you say Philly suburbs, does that mean New Jersey or Pennsylvania? uh people call it kind of main line area. So we're, you know, on the train line that's west of of the city. Uh as the crow flies, it's you know, a dozen miles or so. Got got a I used to hang out in I think it was called Haverford. Haverford, nice. Yeah. Not far from us at all. Got it, got it. Okay, so tell us about your journey before ARCS Capital. You helped grow a home building company. tell us about that. where was this company? What what what what did you do? Was this your first job in real estate? Tell our audience. Yeah, it was my first job in in real estate. although it's interesting, I I was there thirteen years and I did something new and and different kind of every two years. so I started in land acquisition, which w we were a very small home building company at the time in 2004. And uh I think it's relevant because acquisition and the underwriting of a of a property has really been what has driven a lot of our success is you know if if you don't buy something right, the the work to make it be productive for your investors is all the more challenging. And in some cases you you can't overcome you know a bad buy. And I learned that you know really at the outset of my career. From there then we we had a lot of success acquiring property and we had an institutional partner. And so Yeah, for those of us who are old enough to go back to like 2006, which were pretty heady days in the real estate world, and we raised a $200 million fund to go invest in home builders in 2006. Sounds brilliant, right? Well, we were at the end of the cycle, and I was placed uh in the role of the chief investment officer of that fund, looking for builders who would be good stewards of capital, particularly focused uh in home building, but fifty-five and over home building, so age qualified. You know, clubhouse, swimming pool, first floor living. And uh I'm proud to say that that we invested very little money because we had a front seat to what was going on in the ho home building markets. And most of what we invested, we invested in our own company, which gave us then the staying power through the Great Recession. We shut down the fund and I stepped into an operating role with my partners and really, you know, was managing first a region and then multiple regions of the home building company through the Great Recession. and, you know, as a as a as a younger person, you get, you know, your eyes are really open wide when you spend most of your day meeting with people who've who bought a home from you. We're building these homes custom. You know, these are older people, 60 years old, 65 years old. They've given us, you know, significant part of their savings to build their home. And builders are going bankrupt and belly up. you know, every day. And I'm meeting with them, you know, articulating why they can count on us to build their home, to build it in a quality manner, and to create the kind of lifestyle that they're they're hoping to live in their retirement years. and so proud to say we had a ton of success. We were named multiple times the nation's best fifty five plus builder by the NAHB. And um in 2016 then I had an exit from my partnership. And I started Arx Capital in two thousand sixteen. So let me just simplify, when you were at this previous company, were you there as an employee? Were you there as an owner? how how'd that work? Yeah, initially as an employee and then as an owner. Got it. Was this your first uh real estate job? It was, yes. Did you have a previous career before, or were you uh you know, fresh out of uh elementary school at this time? So I I had about three years prior. The first year was spent in economic development, which is where I really I would say, in a lot of ways, affirmed my love for real estate in the built environment. And that was in the South. That was in North Carolina where I grew up. and then I had a a stint where I I chased my heart and uh I I was an assistant basketball coach at Lehigh University for a couple of years. Is that how you got to Pennsylvania? Wow. I played basketball at UNC Greensboro for a Philly guy, Fran McCaffrey, who's now back in Philadelphia at the a at Penn as the head coach. and kind of sight unseen, my wife and I moved to Bethlehem, Pennsylvania. and I would say then, you know, in two thousand two, I thought I wanted to be a coach forever. You know, I thought you'd say, you know, Mike Shoshewski and Nathan Jameson. But about a a year in I realized that you know, coaching was the the business of coaching, I would say, was not something I really enjoyed. I loved the camaraderie. I loved the competition. I really loved investing in the young people who we were entrusted with. and we had a lot of success. I'm I I mean I'm sure there's a list that's pretty long, but I'm one of you know one of those number who've both played and coached in the NCAA tournament, which is pretty cool. but but after two years and after getting an MBA, I I moved on to real estate. Okay, so let's fast forward to ARC's capital and you're focusing on manufactured housing? We are. and I would say housing generally with a focus on affordability. And then we also do uh RV as as housing, the seasonal kind of RV. We're not really doing transient hotel style RV. self-storage, value add self-storage, and then we do some development. So because of my background, you know what we finance or provide equity for entitlement work and land development, where ultimate usually the the lots are being sold to national builders. And so you're buying existing properties and you're doing development. And where are you focused on on acquiring? Which part which part of the country? geographically, we really we continue to like the Northeast in the Mid Atlantic. so today we own property in New Jersey, Maryland, Delaware, Pennsylvania, and Ohio. we will soon own property in uh Missouri. We like that we also like the Midwest. and and I guess I would just add a caveat or or a a qualifier on why we like the Northeast and Mid Atlantic is Based on my experience in home building, is we really like places it's really hard to produce new housing. I mean, I spent my six hours yesterday sitting in a a hearing in the Pennsylvania Court of Common Pleas where we're trying to get land approved for apartments. And I had to sit into a hearing where the township is suing itself. The township is suing its own zoning hearing board because the zoning hearing board gave us the developer a special exception to reduce the parking. that's required for the development from two per sp unit to one point six. And the township is suing itself. And I had to go there, you know, on behalf of of the developer and the and the current landowner to make the case for why the zoning hearing board should prevail. And I just I I sat there going like, people don't understand how hard it is to produce one of the most important resources we have as a country, which is housing. Yeah. Uh you know, some of the biggest factors in uh the price of real estate has to do with regulation and in your case, the township either being sued or suing the the zoning uh commission is definitely uh an an interesting way to spend the tax dollars of the people in that community. So I'm very glad you got a front row seat and eventually when this uh becomes successful and you're paying property tax into that community. You'll know where that money is being spent in the future. Most investors are chasing apartments, uh, buildings. it seems that you're focusing on manufactured housing. people think manufactured housing means trailers. Is there any luxury aspect to the manufactured housing? Is this Class B workforce housing types of tenants in there? tell us a little about manufactured housing. Sure. Yes, so you mentioned trailers. I think most people think about manufactured housing as a mobile home park. And uh, you know, uh often it's kind of the real estate that goes unnoticed. Yeah, you many people just don't even realize they have a mobile home park in their community. those who do often uh if they don't live there would say they don't want it there. you know, I always say like affordable housing is something everybody, you know, is supportive of. they just don't want it near them. And uh You know, I th the reality is that it it's meeting a significant need for lower income folks who need to be able to have, you know, a a a monthly payment that including utilities, including the s the rent for the site and including, you know, maybe a loan for the house is under, say, fifteen hundred dollars a month. and that's like readily achievable, in many cases way below that, for many mobile home parks. And we're just, you know We've got a we talk about supply-demand, the cost of housing. The number of mobile home parks that exist in the US is decreasing every year because it's too hard to build new ones. And when old ones aren't maintained, there becomes a higher and better use. And so someone, not me, but someone buys that and clears everybody out and builds a strip center or, you know, higher-end products. So we're we like to think that we're in the business of preserving and ensuring that the product that that this affordable housing can remain for the long term. Got it. the areas that you're building manufactured housing, are you managing these pro uh you know, sp specifically the ones that you're acquiring? Are you managing these properties? Do you partner with other operators depending on location? How are you managing these tenants, dealing with all the aspects uh of the ownership? Sure, w we are self managing all of our mobile home parks, the manufactured housing aspect. you know, you you probably know this, Steven, but for your audience, there's really only two or three qualified third party managers for mobile home parks. You know, in the multifamily industry, which is much more mature as an industry, you know, you could pick up the phone and and speed dial, you know, a dozen professional third-party management groups who would handle your, you 50 to 250. unit community. Mobile home parks, I think, you know, they don't lend themselves to that at least at this stage in the industry's maturity, in part because, you know, if we compared it to multifamily, if I have 250 mobile home units and there's 250 apartments, the apartments might have you know, 300 feet of sewer line and you know, 300 feet of water line. Now mobile home park might have three miles of sewer line, three miles of water line. So the maintenance of our properties and the you know, both the capital nature of the the land improvements that are the mobile home park is much more intensive, say than in a typical multifamily scenario. And you're hiring uh people to work at the property directly? Is there some sort of leasing office? How big are these uh parks that you're buying? Are they extremely large where they need uh a dedicated office or a manager at each property? in general, no. I I would say we almost have like a hub and spoke system. So where we have a larger property in a region that would have staff on site that would also support smaller properties in the region would be a typical model. And so we kind of think about it more like a per unit basis at how many people are employed by the property management company, say over each one hundred units. Those one hundred units might be a single property where you have, you know, That times two and you have two hundred units, or we might have, you know, a fifty unit property, you know, thirty minutes away, and a sixty unit property, forty-five minutes away, with the hub being a hundred and fifty unit property. that's kind of how we look at the staffing. guys buying or investing in housing that's manufactured but not necessarily a community, not necessarily some sort of park, just you know, single family homes, two family homes that are manufactured. Um we are not at the moment, and and maybe it's worth just talking about like the difference between manufactured and modular, right? So all modular housing is manufactured, not all manufacturing is modular modular. And it has to do generally with how the the the home that's built in a factory is affixed to the ground. So when you talk about mobile home parks or manufactured housing, they're generally not on a permanent foundation or affixed permanently to a foundation. ironically, that's one of the things that keeps these these homeowners from getting more affordable financing for their home is a lender views it as well. That home could drive away, even though 98% of homes never leave the original site they're put on. Whereas a modular home would be affixed to a foundation or crawl space or basement, much like a site built home. So each category is benefiting ideally from the efficiencies of being built off site and the being moved to the site. And are you investing in modular or or not the fixed to the ground? We are not investing in modular at this time. Why not? for one, the cost to produce it is higher and we're we're a little more focused on that more affordable price point. and I would say in in general we I think you see in modular housing a little less density typically. and I'm not I I I guess I just came from Europe, so I'm thinking about how Europe is advancing maybe beyond us or faster than us in some of the the manuf uh factory produced factory built housing. But I I think the downside of factory built housing, Steven, is that um you've you've got a physical plant. You've got a line. that needs to run every day. And you've got shifts where workers need to show up and those workers need to be paid and you need orders to fill that shift. And the reason from my perspective, it hasn't taken off in a greater way in the US is it's more you can be more responsive as a home builder when you're site building homes, if the economy turns or orders decline. Whereas if you own the physical plant, the infrastructure, you know, if the throughput that's necessary to keep that plant running, If that slows down, you're burning millions of dollars a day and not building any product. so we we like the space that we're occupying in the market with with manufactured housing. We think that's where the demand is likely to remain. Um and we'll continue to watch as it develop develops over the next few years. you've been through two thousand and eight. Uh you mentioned it earlier. what are investors who are investing today not you know, not learning from what happened in eight? I I mean I have I I'll start I'll I'll start. I I have my own theory a little and two thousand and eight was a crisis you know, many reasons, but a lot of it had to do with the real estate sector. So, you know, when we have other bad economies and oh twenty twenty two interest rates went up or or whatever it is, a lot of it is not real estate focused. And back then in eight or pre-2008, you had a lot of investors and homeowners buying property that was Either leverage to the hilt, you know, 100% financing all day long. People were buying with 80 uh loan to values, with a with a second 20% loan to value closing uh on the same day. You had a lot of that. since 20, I think it's 2012, you've had a lot of uh DSCR types of loans. And there's lots of liquidity out there, and it seems that these loans are only focused on investors, not the homeowners, the DSCR. And even though there's tons of liquidity out there and there's a lot of, you know, funds and non-traditional banks that are now lending in this space, the one thing I did notice since then is that they still haven't or they've still stuck with a a decent loan to value. Uh for the most part it's 25% loan to value. Every once in while they have these formulas to do uh loan to cost, etcetera. But for the most part the loan to values have been typically seventy-five, sometimes seventy, on a refinance, sometimes sixty-five or sixty. And I think that keeps a lot of the potential c uh c catastrophic you know, whatever happens not too bad, you know, not not leaving not leaving the lender holding the bag. you know, they lend, you know, the property's worth 100,000, they're lending 75,000, you know, they take it away from an investor, it's a lot easier than taking it away from a homeowner, and you know, they sell it and they just need to recoup you know, their 75 LTV. Is there anything that's happening today that people who've been through 08 should still remember? You I I guess I I'm not sure the people who went through eight are the ones with the problem, right? Like I was thinking about as you were talking, you know, what's changed and I I agree with you. I think home loans, and the the lenders who make them have been significantly more conservative on kind of every measure. And we see, you know, here and there, you know, adjustable rate loans becoming more popular and and so on. But You know, what what do we have new? Well, you know, one of the big things is the ability for um accredited investors to invest broadly in private offerings. and we see that now, and you know, people you know there's a bit a lot of wealth generated over the last decade, and they're looking for for ways to invest that wealth. And you add on that like social media and podcasting and so on. And to me, all of it kind of accentuates this FOMO. People have fear of missing out on an opportunity. And it's human nature. We fall in love with these kind of like the sexy Instagram ad, um, or the marketing on like the you know, the stated IRR for a deal. And you know, my experience, a lot of these people, you number one, they they've never really made any money and they've never really risked their own money. They might be risking their time, but I think people who live through eight have a greater appreciation. For the wisdom that comes through the time when the everything is not up and to the right. And so I I'll be the first to admit I've missed some opportunity because I'm dubious about how long this up and to the right can continue. I I do think like one of the marks for me of 08 that really, you know, I say scarred me was, you know, the level of financial innovation. When that increases, when you get, you know, back then CDOs and, you know. CDOs of CDOs and so on. You know, it's Wall Street trying to figure out how to make money on other people's money. to me, we have a a scenario right now that looks a lot like that. The risk is in different sectors of the economy, but um, I think we've got increasing financial innovation. And the big question mark for me, Steven, is how much leverage is out there? I think it to your point, it's not really in the housing market, but you know, we margin loans are at an all-time high. the amount of capital in margin loans. And you start to think about the the single single stock ETS that do 2X or 3X. and you could lose ninety percent of your money if the stock goes down 30%. all of that is feeding this human nature FOMO kind of thing that to me is a little bit of a recipe for, you know what, I I really like physical assets. I like assets that are out of balance in terms of supply and demand. There's you know, less supply than there is demand, which is why we're in the space that we're in. A lot of our audience a lot of our audience raises capital from investors, sometimes family and friends, sometimes it's sophisticated investors. What questions or what do you think has changed over the past few years, let's say the last three or four years, post-COVID, you know, post 2022, when it comes to investors raising capital? Have have you seen anything change? I I know in my industry, in the multifamily industry, uh there's a lot of hurt uh happening. a lot of the hurt that's happening is properties that were purchased. I would say in twenty two and twenty three. I think people who bought in twenty four and twenty-five sort of have all you know the the the fear or or the the the rate shock you know already built in. the insurance costs, the cost of labor uh already built in. Uh but there's a lot of bad news happening in, you know, properties purchased in twenty two and twenty three. that's some of the properties that we own, you know, that's where we struggle. You know, the stuff bought in twenty nineteen, uh that's doing fine for the most part, you know, based on the basis that it was purchased at. But investors are getting uh burned in the equity side when it comes to multifamily. What questions, you know, what what what are you seeing from investors today differently than you saw just a few years ago? I think to your point, you know, the getting burned has led them to ask more questions, which is appropriate. I mean that that should be the case. I think you're seeing um some shakeout f among syndicators and people who had maybe some initial success riding that wave of a twenty tw you know, late COVID, twenty twenty, twenty two in terms of capital raising, that there was a next step to the capital raise, and that was the operation. And uh You know, there there needs to be some substance behind the raise in order for that to produce, you know, compelling returns. and I guess from my perspective, I I always came to this from an operating perspective. You know, that was my background, it was boots on the ground operations. And then I had kind of this personal dilemma where I had capital I needed to invest and I was looking for a sector that I wanted to invest in. So we've we've grown our kind of investor family, if you will, our investor family more slowly because I was the one who needed to invest. I was making um, you know, anywhere between seventy, you fifty to seventy five percent of the of the equity investment. now as we've kind of proven out our operating model and and had a number of successes for our investors, you know, I guess it's kind of like one of those old truisms, like you the getting rich quick to me. I mean this is in this is in, you know, uh I I I read the Bible daily and You go to the the Proverbs, you know, getting rich quick is is a recipe for disaster. and I've chosen to take the slow and steady road. which, you know, it's hard to post on Instagram about taking the slow and steady road. Definitely, definitely. that's why on Instagram or anything I post are short clips from my podcast interviews. not nothing uh no fast you know nothing too fast unless it's recorded on two X. Yeah, I mean what's your sense? You you you were around, like what do you think has changed um in the last few years among LPs? I'm seeing a lot of LPs who well, there there's different types of LPs. There's what I call professional LPs and non professional LPs. You know, people who have a few bucks, they don't like the stock market, they're hearing about real estate. Let me stick a few bucks into a deal and see how goes. Then you have the professional LPs who've been around multiple cycles. they ask better questions, they understand when the preferred return is not being paid for a few quarters they have a a a long time horizon. I I do see a shift going from investing on the equity side to investing on the debt side. there's a lot of debt investing these days and I think it has to do with investors who didn't do well on the equity side. Maybe some of the projections didn't go through and they're getting opportunities to invest on the debt side. And you know, they lose out some of the benefits of beyond equity side, such as tax you know, depreciation and and you know the tax benefits. But on the debt side, they are really liking their consistent return. Uh for the most part, most debt investors are getting paid every single month. here and there you you know you might have some accruing uh types of structures and the investors are liking that and you know they're seem to be investing in a lot of bridge type of debt where the rates could be anywhere from eight percent to twelve percent and typically the short term you know one year, two years, you know, maybe an extension for the most part. And I'm seeing a lot of debt investing. Uh e even my even myself, you know, over the years I've always invested in debt. But it was more of hey, I have some money sitting around, you know, sitting idly, let me throw it into let me package it with a few other people and then give somebody a first lien loan on some fix and flip, etc. And only the past year or so have more on investing in the debt. Now that's me. Uh I've been in real estate, you know, since two thousand and one. And I've been waiting for this concept of mailbox money to come through for a very long time. And you know, my first property was in Trenton, New Jersey, which some would say maybe is a little suburb of uh Philly or not so much. and even though I did well and the appreciation know, especially during that time, uh skyrocketed. It was hardly mailbox money. And as I started buying nicer properties and close, you know, I'm I'm I'm based out of New York, so first property I bought was Trenton and then I started buying closer New Jersey, uh better properties, easier to manage. I started buying some multifamily about ten years ago, out of state and through all throughout all that time it was Nowhere near mailbox money. It was a job. And you know, I'm compensated for the job and living my best life possible. But it was the furthest thing from mailbox money. And when I had these little investments into some of these debt deals, other than really vetting the opportunity up front after that. I I guess you could say it's on autopilot. Yes, I have to be aware. I have to make sure everything is happening. But on the operational side, it there's really nothing for me to do. there's also a lot less variables that could go wrong on my part. For me, as a debt investor, it's either they're paying or they're not paying. As an owner of the property, and I still own property and I still manage property, and it takes a lot of time, uh, the property management side. There's so many variables that could happen. It's the tenants not paying, it's the the banks being tough with inspections, insurance, code enforcement. There's so many variables that you know that can go wrong. And obviously the buck stops with me. It's it's all my fault or not my fault, but it's it's all it's all me, even if it's not my fault. And when it comes to the debt side of investing, I gotta be honest, after twenty five years you know, I'm I'm enjoying seeing, you know, the ACH or, you know, the mailbox money uh come through and it's it's pretty nice. w your experience um of the investor looking at equity versus debt, do you think that the typical limited partner really understands the collateral on the debt side? So that's a question. And when I speak to some of my investors on the equity side, and I've told them about some of the debt opportunities that I have, some of them get it, but those are the ones that are asking the questions. And some of them they're just asking questions but not listening to the answers. And you know, in theory, you know, these people are bright, they they they make some money. You know, they either have a good W two or they have some sort of a small business, but they're not real estate people. And I I I've tried telling them, Hey, you have a house, you have a mortgage on it, the bank could care less if you lose your job or not. Obviously, you know, they pray every night that you have your job, but at the end of day, they don't care that the toilet is running, they don't care that the roof collapsed. On the first it's due. The thirty days later it's late. They move for for you know, for closure. Whatever it is in in your township. And investing in debt, I tell them it's, you know, something similar. but your bank gets, you know, for your house, all they're getting is the three percent or the five percent. There's no upside. Your house triples in value, bank gets nothing. And I try to explain that to them. And some people understand, some people don't. I I try to walk them through it, you know, when you know, soliciting those types of investments. But uh yeah. To answer your question, a lot of people don't necessarily understand it. Yeah, I I follow kind of a shift toward debt, particularly the private credit markets. And I in my mind, kind of private credit markets broadly fall into kind of two categories. One is asset backed, I'll say real estate backed, and one is not. And you know, where the real problems are, and I think we're seeing are the ones that are not asset backed, not real estate backed. And and yet, and what the genesis of my question it was, is is that I think a lot of people bought into this idea that they were getting this coupon. And they didn't really ask where the money was coming from. You know, at the end of the day, you know, somebody's got somebody has to pay rent, somebody's got to buy a product, somebody's got to, you know, there has to be transaction for that money to make its way back through the the claim on the cash flows and make that debt payment. And I just, you know, it it's kind of to me a little bit like what we saw happen in the syndication market where people just said, look at that return I'm being promised, and they plopped the check down and they didn't you know, care to understand really, you know, what could go wrong. Yeah, yeah. And you know, I'm seeing that on my end, uh, with the people I deal with. You know, I used to say, you know, years ago, you know, the banks, you know, the the JP Morgan Chases, uh the Deutsch Deutsche Banks, all these guys, they have big exposure to real estate. But for the most part they're on the debt side. And, you know, they don't get the big pop when it doubles and triples. But for the most part, you know, the banks or rich people They're more about preserving their capital. And it's the people who aren't rich or the people who need to make money, they have to really go in on the equity side. I I used to say that when you have no money and you wanna be in real estate, you gotta be on the equity side because you gotta find the deal, you gotta find some sort of investor, you gotta get a loan, invest your money, put it together. operate it well, eke out a profit, give most of it or part of it to the investor, and whatever's left, you get to have. When somebody has money, you know, they want to beat inflation for the most part. obviously, you know, some people are more prone to you know risk taking in a good way and uh you know they want to be diversified or for personal reasons they hate the stock market, they love crypto, they love real real estate, you know, whatever it is. But I guess I'm seeing a lot of different types of there's a lot of different types of investors. And I'm going off on a tangent here, but a lot of different types of investors and a lot of different appetites. And the best thing is and I tell this to investors, for the most part you're investing in me or the operator. That's what you're investing in. So the deal could be great. The deal, you know, could could not be great. But if I'm a great operator, I'm showing you this crappy deal and I can make it work. And if you're a great operator, uh sorry, if you're a horrible operator, I can show you this great deal and it's not gonna work. So here and there, you know, with debt investing, we could sort of convince them that it's more secure, a lot less variables to go wrong. I don't have to be a great operator to invest in debt. I just have to know how to underwrite the deal up front. but you know, there's so many different ways to skin the cat and invest in real estate. And I'm seeing it from all different sides and different angles with the people I talk to and and the different investments that I do. but like I said earlier, I I'm really enjoying the mailbox money aspect of the debt investing. And I'm saying that as somebody who's been in the business twenty five years and I still own and manage and I still deal with all the operational challenges. But when it comes to debt investing, I'm sort of having fun. Yeah, well that's I'm intrigued. Um I love the way you've described that. And and we're you know, we've as as Arcs Capital, we've looked at some some options to be able to to have some asset backed, you know, vehicles. I think as you probably experienced, you know, when you when you've had success producing compelling returns for investors that are appropriately risk adjusted, you know, they they say, Hey, what else do you have? And um I th I think, you know, one of my greatest appreciations is of our team. You know, like Arcs Capital isn't just Nathan. We've got a team that is thinking every day about how to drive value for investors. and, you know, I think as we think about different products to add, I may want to pick your brain a little more if you don't mind. It's uh it's I love seeing it. I also love if I can say that you're you're close to the loan, right? Like if we think about some of the stuff that's gone wrong, you know, I mean you read the headline like JK Morgan writes off half a billion dollars, you know, with first brands or something. Because somebody was incentivized to make a loan and it didn't check the collateral. And you had collateral that's double pledged. I mean, I think if if investors can find their way to somebody like you, like there's just to me, some people would have the opinion, well, JP Morgan's not gonna miss it because look at their JP Morgan. I have the opposite opinion. I think Steven's not gonna miss it because it it matters everything to Steven. Half a billion dollar right off, you know, I was I guess it was half a trillion dollar right off of JP Morgan. It You know, at the end of the day, that's on their balance sheet. Like, I mean, they've got the cash to just, you know, take care of it. so I I'm a big fan of finding those, you know, I'll say smaller managers who where it really matters for them. reputation matters in a huge way, and uh and trying to invest with them. Yeah, yeah. Uh I agree. And uh you know, uh it's it's all about investing in the operator. You you're investing in this person. The deal is, you know, it's I guess secondary or maybe not as important. Y you have to know how to yeah, you have to feel comfortable with uh the person that you're giving the money to. That's that's that's really the number one lesson. you know, if somebody's gonna listen to this and take away from Um we went a little long here, but Nathan, tell everybody here uh how they could reach out to you. I'm gonna put everything in the show notes, but just mention any websites, emails, phone numbers, uh LinkedIn profiles, Instagram stories, etcetera. Yeah, so um emails great. Nathan at ARXventures dot com. Again, Arx is ARX. our website is ARXventures.com. you know, we we just we r I raised fifteen million dollars. Hey I I raised our team raised fifteen million dollars last week for our third fund after a successful transaction in our second fund where we sold some properties and we're we're filling out our third fund right now. I it will probably be oversubscribed here uh in the next few months. But I but I just encourage people if if what we're talking about is interesting, like follow follow along. Um I I think as I've been in this now, you know, d doing this iteration for a decade, I've realized, Steven, maybe it's taken some maturity on my part to I'm not looking to make converts. I'm looking for members of my tribe, like people who see the world the way I see it, who think about risk and conservatism in the way I think about it. And if if that makes sense, if kind of what we're talking about here makes sense, then we'd love to to talk to you. If you're looking for me to convince you that you should invest in mobile home parks or or that the depreciation's great, or that we're a great operator, like I I just um it's it's not that I don't have time to to have that. I just think like the reality is, you know, people have a certain lens they look at the world through. And My my lens tends to be a little more conservative than than a lot of people out there. And if that resonates, then we'd love to to spend time together and and maybe they want to follow us and and ultimately invest alongside me. Okay. Nathan, thank you very much for appearing on my podcast. I'm happy we finally got to talk. for all you listening, this has been another episode of the Wealth Clock. I'm your host, Steven Weinstock. Please like, subscribe, share, tell your friends. Like us on Instagram, uh what else are we on? Twitter, I think TikTok also. But either way, just keep listening. Thank you, Nathan. I really appreciate it. Thanks, Steven. Really enjoyed it.