Whitney Sewell: This is your daily real estate syndication show. I'm your host, Whitney Sewell. Today, we've packed a number of shows together to give you some highlights. I know you're going to enjoy the show. Thank you for being with us today. Andy, honored to have you on the show. Welcome.
Andy Sinclair: Thanks for having me. Glad to be here today.
Whitney Sewell: Now, great to dive in on a number of topics today that I know the listeners are wondering about. And you are our expert, especially for today, and maybe a couple of days. And I want the listeners to know we're going to do a series with Andy and talk about a number of things. But I know that you, Andy, you and your group are focused on the Midwest.
Andy Sinclair: Right? That's correct. Actually, the MID and MidLock actually stands for the Midwest. So originally, my co-founders and I, everyone had Midwestern roots, and so we named it MidLock.
Whitney Sewell: Awesome. Awesome. Well, maybe share why there's such a focus on the Midwest, and then maybe we'll talk about, you know, we'll compare the Midwest with some other growth markets or other markets that you all are in as well.
Andy Sinclair: Sure, happy to do that, Whitney. And so MidLock at our core, we're a real estate operator and investor, and we do own coast to coast. But as the name points out, you know, Midwest is our roots, you know, but half what we own is in the Midwest, half is elsewhere. And one thing I think that a lot of investors, you know, maybe haven't seen is that there's been such a focus the last you know, four to seven years on the growth markets. It would be Texas, Phoenix, Florida, you know, to a lesser extent, you know, places like Las Vegas or Reno. And my belief is, well, the Midwest maybe doesn't have the growth trends that you might have in, you know, Tampa, Florida or Orlando, Florida. or Phoenix, that people still want to be there. And it's perpetually undersupplied. And so you need to be a little bit careful. You can't just pay any price, maybe on the Midwest. But there's usually good growth in terms of the revenues, just because no one's ever done a value-add approach or never done things that maybe you see in the coastal markets. So I always like to say, we're always looking to incorporate best practices. So there might be something that's occurring in the coast that we can bring to our Midwestern portfolio. Additionally, on the less sexy side of the ledger though, from the expense side, you have a lot of reasons that service providers want to be in the Midwest, most notably insurance. You know, insurance, a lot of providers right now, they're pulling out of these growth markets because you've got hurricanes, earthquakes, wildfires, right? And they want to be in places like Madison, Wisconsin, where we own or, you know, in Ohio or in Michigan, because they just don't have the same natural disaster risk. And so that means their loss ratios are lower. So both from a supply side, expense side and revenue growth, a lot of good reasons to be there other than, you know, being in the growth markets.
Whitney Sewell: Yeah, no, that makes a ton of sense. People still want to be there, right? Even though it's not a growth market, it's still home to many. And people, future home, no doubt about it. It's interesting, the thought behind the insurance also. And man, that's changed a ton over the last little bit, hasn't it? So many are getting rates that are much higher than they unfortunately expected.
Andy Sinclair: You can never be conservative enough in your insurance estimates. So you always get you need it. And you got to be conservative because it's going to keep going up. I always say you don't know anyone that goes home and says we're going to start an insurance company. And so there's just fewer of them. So we have to learn to work with them.
Whitney Sewell: Yeah. Yeah. I don't know if you've ever heard anybody either that says, Oh, my rates just dropped by 50% or very rarely. Very rarely, yes. Well, you know, speak to, you know, the Midwest versus those growth markets that you all are in and how you all are maybe deciphering, you know, which markets you're going into or focusing on, you know, or why you would still consider some of the growth markets.
Andy Sinclair: Yeah. So I think it comes down to supply, demand and growth, right? You kind of need everything to work in unison, you know, just because, you know, let's, let's kind of look at the growth markets first, just because people are moving to Phoenix or Florida or Texas, you obviously have the wind at your back when it comes to demand drivers of people wanting to be there. But on the flip side, that also attracts a lot of developers and would be just other competitors. So you have a lot of supply. And that's not just for apartments. That's also true for, you know, industrial, retail, self-storage, right? You got a lot of supply risk given that. So if you look at that from the demand side for the Midwest is you might not have the supply risk or in some markets where there might be no supply or just one building. So you still have population growth, but yet if your supply side is not growing, So it's one part supply growth, one part revenue growth, and demand growth. And so certainly you can make a case that over the long run, you'll have great, you know, success in some of those growth markets, but you got to be careful because, you know, with great growth also comes a lot of headaches and challenges. And this has been true, Whitney, over the last month, RealPage, which is a big accounting service for real estate, they released where rents are growing, where they're not. And you know, highlighted a lot of Midwestern markets are having great growth at the expense of a lot of markets like Texas and Florida, which are not.
Whitney Sewell: Yeah, wow. And, you know, reports like that, and I always like to ask because I get questions like this all the time, any other places, kind of a side note for a moment, you know, where you get data like that, that you all trust?
Andy Sinclair: Yeah, I mean, we use a lot of paid services like CoStar, which owns the parent company of Apartments.com or LoopNet, you know, amongst other sources that we do pay for. But there's a great free one that I would encourage anyone to go check out. I actually make sure my whole team is subscribed to it. It's known as CRE Daily News. They've got a great website. They put together a daily newsletter and then also a weekend newsletter. It is the best free source out there. And they always link to other articles. You can't always get the paid articles for free, but they do such a great job of delivering the data. So if you don't have the ability to pay for a CoStar or even something like that, check them out. Great service.
Whitney Sewell: Yeah, no, I appreciate you mentioning them. I've also been reading quite a bit on there as well. So, you know, back to the markets just a little bit. So what about your focus now? How are you all focusing on specific markets now? How are you all, you know, determining which ones are and maybe which ones specifically, you know, are you looking at now and why?
Andy Sinclair: Yeah, so we break it down, you know, every year, and then multiple times within that year. So usually on a quarterly basis, we evaluate is this a market we want to stay in? Is this a market we want to exit? And is there a market that we think has good metrics that we're not in currently? And ultimately, though, Whitney, it comes down to a local basis. So you could say you want to be in any market in the country. But if you don't have the right local operating people from a management perspective, none of that matters. So really key is who's going to run your property. But certain metrics we look at, which is population size. You know, we look at supply. You know, for instance, a lot of people bring up Austin, Texas right now, it's got a lot of supply issues. Obviously, big metro, though. And then we also look at what is, you know, does it have good regulations? Is it not? You know, right now, unfortunately, on the mega side, New York City has been characterized as almost uninvestable, right? Not that we're looking to invest there, but it's got so many regulations and headwinds. You know, as an investor, you're going to take your money elsewhere. You're not going to fight, you know, the good fight where it's really tough. And so, but yeah, looking at growth trends and then major employers, how sticky are those employers, and then what's the cost of living versus the average income. These are all really easy stats that hopefully most people can get. I always like to kind of, you know, show a few markets that we're in. you know, such as Madison, Wisconsin, which has the state capital, also major fortune 500 employees, such as epic and exact sciences, or if I go over to Minneapolis, St. Paul, also state capital as well, right. And, you know, a slew of fortune 500 companies, take your pick. And so if we can find those areas, just like Phoenix or Minneapolis or Columbus or Madison, those are going to be good markets that are going to have good ongoing jobs for people to work at, but also have some stability. And stability matters, by the way, because if you lose a major employer in a certain area, that can be a devastating economic impact.
Whitney Sewell: Has there been any big changes in maybe the focus of markets for you all just recently and why? Or maybe you've seen demographics change. Obviously, we've seen some of that change over the last year or two, right? And no doubt about it, across the country in different states, mass exodus in some places. But has that changed your philosophy at all recently as far as the markets you're focused on?
Andy Sinclair: Yeah, I think overall, I mean, still a focus in the Midwest, Whitney, but I will say a few markets that we're a little less focused on that I think have been in vogue. You know, for instance, we own just a small bit in Florida, and obviously people are moving there and we've done very well with our Florida assets, but not looking to expand. You know, the pricing remains relatively high. expenses also remain ongoing high and growing. And so just, you know, there's a little bit of a imbalance, in my opinion, that, you know, maybe that's not the right market long term. I think to another degree, I think there's certain markets such as Houston, Dallas, and, you know, Austin and the Texas side, that while they've got great growth trends, they've got big supply issues. And then they're also dealing with quite a bit of bad debt, bad debt mean you have delinquent tenants, that they're a renter, but they're not actually paying. And so, you know, I think whenever we see it, we're working on a perspective deal in Texas or Florida, you know, we take a side eye and say, is this the right deal versus other markets of similar attributes, such as, you know, the greater DC in terms of Maryland and Virginia or Phoenix, which have some similar problems, but maybe don't have the same headwinds that maybe Florida and Texas do.
Whitney Sewell: Speak to, you know, let's dive into maybe the just current market situations a little bit around interest rates or inflation. Maybe you can speak to, you know, do you see opportunity? Do you not with the just current where we're at?
Andy Sinclair: Yeah, I think so. So right now, at MidLock, we're out raising for our third fund, which is my seventh fund overall that I've worked on with a thesis of discounts and distress. You know, and I do think if you would have asked me this question, you know, maybe even two months ago, I would have told you that the distress is going to be a lot more than we're already seeing. with the recent pivot of the Fed of maybe easing just a tad on interest rates, I think you'll still have a fair amount of discounts and some distress. And so I do believe that the current market is gonna present opportunities. One thing that's funny about real estate people, and I saw it yesterday in an email, that they don't necessarily look to take leverage that's just right. Like take a loan that just fits. Instead they try to take as big of a loan as possible. Well, that's all good while things are going right. But what happens when that loan comes due or what happens even worse if you trip a covenant? I think this is going to be a buzzword you're going to hear in 2024, which is we did not realize we had a covenant that we had to meet. And so, you know, that's also going to be in terms of we can't meet our leverage thresholds and we have to refinance. And so I think when I look at 2024, you're going to have a lot of people trying to refinance, maybe because interest rates have pulled back, but also some people needing some gap equity. So midlock right now, our belief is that there's going to be needs for pref equity or mezzanine financing to kind of keep that leverage the same, or even a bit down to maybe avoid some capital calls. But I would urge anyone who's in the real estate business that just to be careful not to, on your new deals, take the debt just because it's there to maybe pick the right lender because that's the right fit. And because of that, Midlock, we're very proud to say we don't have any bridge loans. We've been really careful not to do that stuff because it gives you flexibility when things change.
Whitney Sewell: You know, I've interviewed, as you know, you know, over 1800 people now, and I mean, it is a common theme, you know, when we talk about previous cycles, right, or crashes or things like that. Uh, and so many operators now, you know, if they've been in the business long enough, well, they've, they've lived through a few cycles or at least one downturn or 2008 or whatnot. And I always ask, well, you know, what was the cause, right? What would you do to different now? And it's, I mean, almost hands down the top, they'll list numerous, uh, normally, but one of the top things is being over leveraged.
Andy Sinclair: Yeah, I would tend to agree. You got to be really careful. And I think who your lender is. And, you know, one thing, Whitney, I see bad behavior every day is, you know, prior to this run up in interest rates, so many people would take these two year interest rate hedged loans, that they moved to floating with these expensive interest rate caps. And then they would need a lot of revenue growth just to get back to par, you know, just to keep stuff even. That's a recipe for disaster. And that's led to some of the issues you've heard from people, you know, of people in the industry, all of a sudden they need capital just to fund a new interest rate cap. You know, not to say that it's all roses and butterflies with banks and other people, but I think who your partner is matters a lot. And then, you know, right along with that, there's one thing that Trammell Crowe issued after the 1980s crash, is that you cannot de-emphasize the amount of how much your local people matter. Leasing, property management, you need to have the right people making sure stuff matters.
Whitney Sewell: couldn't agree more about the team and local team. And many accredited investors listen to the show, right? Many of our investors listen. You know, I guess speak to them a little bit as far as them investing in a distress fund, right? A lot of us have heard that terminology a lot, or it's becoming more and more common, right? People are getting ready, right, for this potential opportunity, no doubt about it. Speak to how it works for them, maybe some things that they should be considering or questions they should know to ask.
Andy Sinclair: Yeah, I think right now when you whether you invest with Medlock, or maybe another, you know, operator of sorts, have they done it before? What's their strategy? What makes them unique to go access deal flow? So the very first part is how are they going to go find deals? You know, I think it's very easy to say you're going to go find deals and doing it is another thing. You know, at Midlock over the last few years, we've done about 100 million of buying notes. You know, that's buying distress paper where the loan balance is the note, the note price of the loan is worth less than the loan overall. And so I think you're going to see some of that. I think that's a question to know how they're going to find deals, what's their strategy. And then also, how are they going to provide returns in case the property does not turn around? And one thing we talk about here at MidLock all the time, there's plenty of discounted and distressed real estate, but that doesn't mean you want to own it. So, or if you want to own it, is the price that the person who can sell it to you, is it low enough? And so that's the one thing I see right now, I would ask is what's their criteria? How are they going to find it? And then how are they going to operate it? Because if you buy it and it doesn't turn around, then you still have a problem on your hands. And so you go back to operations, I think that matters. And so right now in today's marketplace, we're very acute and looking for either notes we can buy, preferred equity or mezzanine financing we can to maybe get a little bit of a preferred basis. And then we're also doing traditional equity as well, Whitney, which You know, our belief is, is that you can get a fair amount of discounts that, you know, properties might be on sale from where they were in 2020, 2021. But you got to be careful. You can't just pay any price. It's got to fit criteria and you got to stick to them. That's one cardinal sin I see from so many real estate investors is that they're dying to do a deal. And so they start to sacrifice some of the things that they say just to do a deal.
Whitney Sewell: Yeah, no doubt about it. I think that's very wise. I appreciate, even early on, you're talking about, man, operations matter, right? Who is operating the deal? Because there's a reason it may be in the position that it's in now, right, for one, whether it's operations or, you know, obviously, floating rate debt or whatever it may be that's changed. But sticking to your criteria, like you mentioned, I agree. Deal flow has been so slim, right? I can see that happening. to many groups, right? I mean, we just have to do a deal. We got people, we got salaries to pay, right? Yeah. But now all of a sudden, you got a lot more problems than you had before, right? Right. And so I love that sticking to your criteria. And even before that, I wanted to highlight, you know, talking about you can't just throw more money after bad money, right? And so I'm seeing that as well. It seems like You know, it's like, well, if we can buy some time, right. And it may buy some time, but the deal is still going to go down. It may feel better in the moment, but, uh, but sometimes it's obvious, but, but, you know, it seems like, I mean, it's hard to get your mind wrapped around when you're in that position. Right. Well, this deal is just not going to make it so I can, I can try to sympathize with the operator that has deals like that. Right. I wouldn't want to see it go down either. Right. Um, but. Man, you know, when you're trying to negotiate with operators like that, do you see realization like, okay, we've got to have some help here. Maybe the deal is salvageable. And that's where you all could come in with what you called earlier, like gap, you know, equity or whatnot, but just some, uh, you know, sellers, how they're seeing their deals right now or potential sellers. Do you see just more realization than maybe they would have had a year ago?
Andy Sinclair: Yeah, I would say if you go from March of 22 to really the end of Q4 year of 23, there's been a, if the bid-ask spread was here, it has started to narrow, right? And so there was this big capitulation that, you know, if you had to sell, the market was not there. And so Midlock, you know, for instance, we have this on assets we've done really well on, which is we'd like to sell. We've got about five properties we've done very well on. and we're holding them back from listing them for sale because the market is not there. It's a little volatile. So right now, I think the first lesson, Whitney, I would say is if you don't have to sell, I wouldn't. But as I look at the bid-ask spread in terms of people realizing where they're at and moving on, I think that's happening. And the biggest reason for that, a lot of that comes back to the debt stuff that we talked about in their capital structure, right? if they took a five-year loan in 2020, well, that means it's coming due in the next 18 months, right? So you have to do something here. Likewise, if you took a five-year loan or even a two-year loan in 2021, that means your loan's coming due right now. And so people are often much more willing to be realistic about what they have to do. So it kind of goes back to the front end when it is buying time. So at Midlock, our belief is, We take fixed interest rates for almost everything, you know, and it's got to be kind of a five to 10 year cycle of interest rate hedge because you want to be able to have some breathing room because cycles are going to happen. But one thing that's been consistent, though, is if you can hold cycles, you turn. So right now, though, we're in the midst of a cycle.
Whitney Sewell: Yeah, yeah. I appreciate that too. Just, man, if you can hold on, right? Don't sell. Yeah, don't sell right now. What about, you mentioned a minute ago, and we may have to end this segment on this note, but I wanted to at least allow you to elaborate a little bit on your criteria to buy, or maybe there's some like Hard and fast things that are like, we're never going to do this. We're never going to go over this or, you know, uh, even so investors understand, man, these are some things I need to be thinking about as I'm talking to operators, or, uh, I want to make sure that we're not, you know, a higher LTV than this, or, you know, how does Midlock look at some underwriting there?
Andy Sinclair: Yeah, there's a few of them. There's a few basic ones. You know, typically, we're not looking to take leverage in excess of 70%. On average, you know, we try to keep our leverage in our portfolio, just as a FOI, as of this recording, Whitney's about 58%. So we're quite a bit away from even that threshold. We try to stay away from stuff that has a bullet. So stick with the lenders for a second, we try to stay away from these two year bullet loans. or maybe you have to go buy a new interest rate cap and you're right back at it. You know, never say never. It's been about a decade, but we try to stay away from CNBS. That's was a big poster child for the 08 crisis. So we try to stay away a little bit from the CNBS lenders because there's just no flexibility if you have to change something out. So who your lender matters. Additionally, you know, I mean, I think other criteria, you got to look at the demographics, you know, I think for apartments that matters a lot, you know, because if your renters can't afford the rent, um or it's a choice between you know paying bills like electricity or food they're just not going to pay for your apartment so bad debt does matter and your demographic matters and then it sounds very basic but their supply of the market matters right i think so often people overlook that thinking oh you know what more people are moving to the area it'll just get gobbled up but supply is something you cannot reverse. Just ask any office landlord right now. They've been perpetually oversupplied for 30 to 40 years. That doesn't mean every office building is in trouble, but it does mean that, you know, you got to be a little bit careful because once you get oversupplied, it's tough to get out of that unless you get more people in.
Whitney Sewell: I know at Medlock, you know, you all are, uh, you know, you're coming in with what we talked about a little bit, some of that rescue capital, right? Rescue funds and, and you're finding deals that way as well. Sometimes it may be, uh, through what's called, you know, JV equity, preferred equity, maybe even on a, on a high level, tell us what that means a little bit for a newer LP that's listening. Maybe they're, they hear that terminology, JV equity, preferred equity. And as an LP, I'm not really sure what that means for me, you know?
Andy Sinclair: Well, happy to break that down for you, Whitney. And so MidLock at our core is we're a real estate operator and investment company. And while we have operations, meaning property people, construction people, accountants, we also have, well, that can operate the property. We also have our brand in Midlock, which we are quite avid in being real estate, LP, JV equity, preferred equity, or co-GP equity. And what that means in a simplistic form, Whitney, is we partner up with smaller to medium-sized real estate companies. Now, some could be a full-fledged operator, Maybe they syndicate, maybe they do not. But most real estate companies, for the most part, they do two things really well. They find deals, which that's important, and then they do really good operations. But what they're lacking is the full picture, right, which might include, you know, equity, right, which Spinlock provides from our funds and our syndications. They might lack banking relationships. They might lack you know, accounting or some other stuff. And so, MidLock, we act as a strategic investor that is an operator to bring all those pieces together. But what we get in exchange, though, is while we are an operator or a real estate person, we're a real estate person that also happens to be an investor. And we put all those pieces together to bring a good deal. And sometimes, Whitney, that means we're bringing more than just money, we're bringing resources. I know I was sharing kind of in our pre show for instance last week, we have a, you know, we've got national vendor relationships that we will bring to our local partners. For instance, one was trying to appeal taxes and didn't have a good vendor to appeal property taxes and so we refer them a vendor. or we were working with a vendor in Phoenix, or an operator in Phoenix, I should say, that needed a small amount for, like, 100-year flood insurance. Well, in Phoenix, they're not very avid in bidding flood insurance. So, MidLock, as an operator, we brought our insurance people in that operate both in the Midwest and in Florida and Texas to help them bid out that flood insurance. At our core, we're an investor, we're an operator, but we're also bringing resources to smaller and medium-sized real estate companies that are our local operating partners.
Whitney Sewell: I can see that being very advantageous for operators, right, that don't have some of those resources, right? And it could be the difference in the deal working or not, right? Sure. In a lot of scenarios, I think even in one we were talking about before we started recording, right, in the insurance piece, right? You all had a connection that drastically reduced their insurance, right? Or maybe there's that example or another one. Maybe could you share of how you all have come in and made that work like that?
Andy Sinclair: Yeah, it's a good example. So we had a property in Phoenix, and, you know, it's at the very, very edge of like 100 year plus floodplain. And so the lender and that property in particular, would require us to buy emergency insurance, like if it ever happened, right. And so our partner, our local partner, contacted their local insurance agent, and they brought us very expensive quotes to get this, you know, this very sliver, you know, called almost pandemic flood insurance. Now, if you don't actively bid that pricing out, though, on a consistent basis, then there's not really a lot of incentives for insurance companies to give you the best pricing or tell you how to do that. And so we brought our resources, we brought some of our insurance people that operate nationally and regionally, to help better get that pricing down. We were able to get the insurance costs down 70% on that 100-year flood insurance that we needed to meet the lender requirements. So that's just one example, but every property needs something, whether it be on a daily, weekly, or monthly basis. There's always a resource we're providing here at Midlock to our local partners. And I think that's key to having a good, not only a good marriage, but a good partnership, right? You got to communicate and bring resources to each other to make it successful.
Whitney Sewell: How are you all, say, finding the partners that are in distress or that need help from MidLaunch?
Andy Sinclair: Yeah, Whitney, one thing I want to caveat, we work with a lot of partners that are distressed and we also work with partners that are distressed. We do both. You know, it's not just one bucket or another. Ideally, our partners are not distressed and they're a full-fledged company that's operating normally. At our core, though, it's about local relationships. So Midlock, you know, my partners and I and our team, you know, we've been in business here between the group of us. Everyone's been in the business for 15 to 20 years. And so we have both regional and national networks that, you know, across the United States of real estate groups. But then also we have other contacts, whether it be bankers or accountants, that help us kind of further identify people that we think are good candidates to work with. And then once we identify them, though, or they come to us, we have to evaluate them. So it's not just about the real estate. You also need the operator, the local people to work. You know, like I tell every operator, every deal is an encore for a future real estate property investment. And so you need to get the first one right. So that way investors will stick with you for the long term. And so that's why we spend a lot of time up front to make sure we have the right people.
Whitney Sewell: How are you all raising the most capital right now? What's your ways of getting in front of the most investors or types of investors?
Andy Sinclair: Yeah, so MidLock has a dual prong source when it comes to funding. We have our discretionary funds. So MidLock is on its third fund right now. It's my seventh fund that I've worked on personally. Pre-Danny Midlock, I worked on four funds for a different group known as MLG Capital as a multi-billion dollar real estate operator. And then as well as we have our individual property syndications and we use them kind of yin and yang. You know, for smaller properties or for properties that we think have just the right amount of money, we keep those typically in the fund. But then when we think the property is too big or we want to maybe diversify some risk, and share maybe a good deal with investors, we'll also offer a syndication, or we refer to as a sidecar, alongside our fund for investors to come in. And that way, you know, you have the ability to pick individual properties, but also you've got the fund. The way we keep it all fair, Whitney, is we typically give a little bit of a fee discount. We give the best deal to our fund investors. So that way, if you're in both, you get the best deal. But we've got two options to raise money. And we try to keep both groups of investors happy and I'm proud to say most people are doing both for us. We're investing in both.
Whitney Sewell: Yeah, I like that. We've done some sidecars at times as well. And so, but just for the listener that may not understand that ultimately you're, you have a large multi asset fund, right? So I can invest and I'm diversified across maybe a number of assets, right? But then, but then you all will do a sidecar almost like its own little fund on a per deal basis. So maybe if I'm an investor, cause I hear this often from our investors too, it's like, well, wait a minute, you know, I want to know the deal that I'm investing in or, whatever, you know, whatever the reason is, every investor has different things they're trying to accomplish. And so, you know, I want to know that deal so they can invest in the sidecar and accomplish that same thing. Is that accurate?
Andy Sinclair: That is a hundred percent accurate. You got it.
Whitney Sewell: Yeah. Yeah. Love that. Love that, that thought process. And, and, uh, and just the, the opportunity for investors, right. Depending on what their, what their goals are trying to accomplish. Uh, you know, what does a fund typically look like? How many deals are you all putting in a fund and, and how, what's the lifecycle of the fund?
Andy Sinclair: Well, we probably diversified a little too much, but we typically are looking to put anywhere from 15 to 20 properties in a fund, and all shapes and sizes of different property types. You know, so I know apartments is a very popular syndication type, but apartments only make up about 40% of our funds. You know, we're big believers in industrial warehouses and retail. and to a lesser extent, some self-storage or maybe even some distressed office. And so we try to keep it diversified because that way you're hedging your risk of any one property ends up maybe not going the way you think. But, you know, you still want to maybe overweight a few winners in there.
Whitney Sewell: Thank you for being with us again today. I hope that you have learned a lot from the show. Don't forget to like and subscribe. I hope you're telling your friends about the Real Estate Syndication Show and how they can also build wealth in real estate. You can also go to lifebridgecapital.com and start investing today.
