A (2:20)

Right.

C (2:20)

That seems to be where a lot of people turn. But it's been quite a ride over the last, you know, 36, 37 years. And you know, during that time I've, I grew into multifamily real estate development, single family home construction, multifamily apartments, senior housing and commercial real estate, all sorts. I've, I've kind of been there and done that on almost everything. But along the way that was really a learning journey for me. And I feel like everybody has that rookie mistake phase of their career. And I had all the phases because for every different type of real estate I got into, I had the rookie mistake phase of my career and use that time to kind of weed out what I wasn't good at and, you know, focus on what I really was good at so that, you know, when we're out there investing, especially with RLP capital, that we're investing in things that we're highly competent in and it's, you know, essentially our core competency. So we've definitely narrowed that field down a lot into mostly multifamily real estate and senior housing.

A (3:21)

Yeah. So what's your overall state on the multifamily market? And don't hold back.

C (3:25)

Yeah, I think the multifamily market is kind of like a traffic collision in the middle of a four way intersection. You know, like all the lights were green so everybody was going and they all piled up in the middle and you know, there's this massive wreck and carnage and broken glass everywhere. And I mean, that's really what the multifamily real estate market is like. And so now everybody's kind of wondering like, you know, where's the distressed opportunities and you know, and all that stuff. How do you make money in multifamily real estate? And I'll tell you, like, you know, somebody asked me about this the other day and I said it's, it's kind of like in a traffic collision the only people making money is the tow truck drivers and the body shops. And they're the ones that are basically cleaning up the mess after all the carnage has happened. Right. That's where the real money is made. And I think that's the phase we haven't gotten to yet. And people are saying like, oh, now's the time because the market is low. It's like, you just wait. There's plenty of opportunity coming our way and you know, just wait this out, let things kind of settle down a little bit. And then the multifamily market's going to be really investable again. The last four years or so, it's been almost uninvestable. I don't know if you guys knew, but just before the market collapsed, I sold 3/4 of my multifamily portfolio and did not buy any for about three and a half years and in fact actually still haven't bought any. And it's been four years now. So, you know, you got to kind of know when to get in, but most importantly, you gotta know when to get out.

B (4:50)

Yeah, no, I know, I know. Multifamily has definitely had some rocky waters, probably since I forgot the exact year, 2021 or 2022. But where do you, in terms of. And I, I've listened to a lot of podcasts, listen to a lot of people talk about where we are in the multifamily. From my understanding, it's like we peaked, rapid increase in interest rates, cap rates expanded, interest rates went up, people had struggles getting, you know, refinancing out of bridge debt or just refinancing in general. So multifamily housing prices kind of plummeted. And now some people are saying now is a good time to get in and try to ride the market back up. But it seems like you're saying we're not there yet. Is that correct? Am I hearing that correctly?

C (5:28)

Yeah, I don't think we're there yet. I think it really depends upon your capital source and your strategy. And if your capital is your own capital, this is your retirement plan. Maybe you're buying with creative financing even and not putting a ton of money into the deal to acquire it. And you have a 20, 30 or 40 year investment outlook. This is actually a great time to buy. And this, this is really like in that smaller multifamily space, you know, call it duplexes, fourplexes, 10 units, 20 units, you know, maybe anything up to 50 units. Stuff that you can buy on your own, own for a long time, all the way into your retirement. Let your tenants pay off the mortgage and then live off of the, you know, mortgage free income. This is a great time because your basis is going to be lower. Where people get tripped up is they say, well, okay, well then this is also a good time to buy a 200 unit apartment complex by investing in a syndication. And I don't think that's right, you know, because most syndications have a three, five, seven year life cycle. They're looking to buy, make some improvements or, you know, improve the income or Whatever and then ultimately sell. And anything that has a three, five or seven year horizon I just don't think is going to be the greatest investment at this time. I think you can wait until the market has begun to climb and then get in. You don't have to try to time the bottom. Remember, I think it's more important that you recognize when to get out than recognizing when to get in. Because you can be a year late and still do fine on getting in. You just don't want to be a year late getting out.

B (7:06)

That makes a lot of sense. And I know your pencils down sounds like a multifamily at the moment, like what conditions would you need? Because there's a lot of people out there who think it is a good time to buy, you know, And I'm not, I'm not saying it is or is not. I'm just curious, like what conditions would make, would signal to you, hey, this is a good time to jump back in.

C (7:24)

Yeah, I want to see the return of rent growth, like steady rent growth, you know, vacancy reduction in multiple markets. I'd want to see stability in interest rates. I don't even need to see rates go down. You just want to kind of see some stability there and know what they're doing. I think we're approaching that, but what we're not approaching yet is the return of rent growth. Rent growth is still negative and there's some unknowns on when we're going to see that come back. You want to see a reduction of new supply, a little bit less new construction, which would stimulate a little bit more, or it wouldn't stimulate demand, but it would, it would allow the demand that's there to at least absorb the units that are available and not have more units available than can be absorbed. So I really want to see those things happen. And when you think about it, we're in a double digit decline right now from the peak of the market in multifamily. And if you look back over 50 years of history, you'll find only two other points where we had double digit declines. And after each of those two declines, the market went into a bull market for over a decade. One of them was about 13 years and one of them was about 15 years of bull run. So if you're looking at a 5, 7, maybe even 10 year investment horizon, you don't have to get in a year before the bottom, you could get in a year after the bottom and your five, seven or ten year hold is going to fall within the bull market. You get in when it's bull, you get out when it's bull and you do great. So you don't have to try to say like, oh, I missed the bottom, so therefore it's not a good investment anymore or it's just not true.

B (9:02)

That is a great way to frame it because some reason always want to invest the bottom. It's like a, I don't know, it's like a human tendency, like, okay, I want to get at rock bottom. And you can only really ever see that from hindsight. Right. But you can see the, the market when it does creep back up and some of these conditions are met. That's just an interesting take. Buy in the bull market, exit in the bull market and you're protecting yourself from the downside of buying too early. Right. Which is a really good insight that, something I didn't really think of. So I was always thinking too, like for my own investments because I do do some LP investing. It's like the question I have right now is like, am I missing opportunities? You know, because you're not placing capital in what some people are looking at as the bottom. But that's, that's a great way to frame it.

C (9:43)

Yeah. And is at the bottom. Right. I mean, you know, you got to think about the various risks that are out there. What about AI? What is AI going to do to the employment schema, especially across the primary rental demographic, which is the younger it, your 20 to 35 year olds, which are your primary apartment renters, what's going to happen to their employment with all the AI that's coming in? I mean, there's different viewpoints on that. Right. Some people say it's going to create an employment boom. Some people it's going to create employment challenges and that's an unknown. We could allow a little bit of time to play out and quantify that better. We don't have to take that risk right now just because we think the market's at the bottom because we don't really know if it is. And so I just like to see some evidence and then, then I'll be ready to get back.

A (10:30)

Yeah. So what are some good markets that you've currently pivoted into?

C (10:35)

We've pivoted into senior housing, specifically into skilled nursing, assisted living and memory care under an entirely different thesis. You know, again, buying not at a bottom, but right after a bottom. That's where this sector, the health care, senior housing, real estate is. It's in the, just after the bottom phase where we had a pandemic. In 2020 that just cleaned their clock. I mean, I mean first of all, you had a virus literally killing their residents. Second, you had family of residents removing their loved ones from facilities because they were afraid that they were going to contract the virus or they were frustrated because they couldn't visit them. And you know, occupancies went up, income went down. It was just absolutely mass chaos throughout all of this. Interest rates went up, expenses went up, labor costs went up. And you know, the industry just got decimated. And about two years ago it started to recover from all of that. Right. The facility started getting occupancy again. They started, the income growth started coming back. You know, cap rates kind of started to flatten out and transaction volumes started to pick up again. And you know, kind of there it's like they're back. Right. And that's when I want to invest. Like I can see this is like it's already bottomed out. Decade lows. I can see it's already off the bottom and it's actually trending in the right direction. That's when we want to bolt on and we don't have the same risks that I'm seeing in multifamily like AI. AI isn't going to hurt the employment of a 90 year old that needs 24 hour nursing care. It's also not going to impact their income. It doesn't matter if there's job growth, income growth and population growth, which is what drives other types of commercial real estate. These are people who worked an entire lifetime to build up wealth and are using the resources that they've accumulated to pay for the care they need for their final years. And so we don't have a lot of those other systemic risks that I'm seeing right now in other types of commercial real estate. So I see it as right now almost one of the only bets in commercial real estate that I'm comfortable with.

A (12:51)

Excellent point. Like I haven't thought about like the lack of limitation that AI will have on senior housing. Right. So like very much so on, like you said multifamily. But like the Senior Resident, the 90 year old's not really, who hasn't even heard about Claude. Right. They have no idea it exists. Not really going to touch them or what they do or the fact where they really need to live. So that's super interesting.

C (13:09)

But it might help with our expense containment and by utilizing AI as a tool. So you know, it's, it's one of those things where it can help us but not really hurt us. Whereas in multifamily housing it can do a little bit of both. Right.

A (13:24)

Yeah, no too. It's true. And then I think Tom and I actually last week talked about the new Senate's bill. I'm sure you're familiar with it, the housing and in the bill they're focusing specifically on for syndicators to have. They have all these exempted purchases that are going to these large they want to target as of right now, large institutional investors, anyone that owns 350 single family homes. But one of the thing, one of the places that they're going to exempt is senior living, rent facilities or homes. Right. And so like anything for like the. Clearly there's a massive growing need for this. And so like you said, a growing market that's not at the bottom because we're out of COVID now.

C (13:57)

Yeah, I think they recognize the need for senior housing and if you look at the demographic trends, you know, there's an old saying in real estate that if you want to make money in commercial real estate, you follow the demographics. Well, let's follow them for a second. Population growth in the US is near all time lows. In 2020 it was either 2021 or 2022. Population growth in the US is at its lowest point since World War II. It bounced up a little bit for a year or two, but now it's declined again to a half a percent or 2/10 of a percent. It's just some really low, ridiculously low amount. Right. But senior housing, you know, if you look at the population, the growth of population in like the 80 plus demographic on a percentage basis it's like five times that of the population as a whole. So there's all these aging seniors that you know, eventually some of them, not all of them, but some of them are going to need care and there's not a lot of places for them to go because nobody's building any. You know, kind of the inventory we have is what we have. It's not like what we saw in multifamily where they were building a million units a year. I mean here you got very little new construction and how could they. I mean it costs more to build these facilities than you can buy them for. So that makes them really difficult to construct.

B (15:15)

It seems like a good area to be in. Are you seeing more like the type of investing that you're doing in the senior housing space? Is it more like are you buying to like do a value add play on these properties or is it like more of a steady like hey, we're going to buy this property and like, just cash flow from it. Like, what do you. I guess, what types of opportunities are you seeing there from, like, that angle?

C (15:36)

Yeah, I'm seeing the opportunities that I think people want because people have gotten so dismayed with the promise of, you know, appreciation and value add returns. And like, oh, we might get this higher rent and we might be able to sell for this big number later and we might get this huge irr. But, oh, by the way, you know, the cash flow is 1%. Right. And that's just not what I think investors are looking for right now. I think investors want to see proof on a regular basis that their investment is actually producing a result, and that proof comes from a deposit in their bank account. So this really is a cash flow play where we're buying these assets at a price where we can regularly distribute really attractive cash on cash return. And then if there's a bump at the end, that's just extra. Yes, there is a value add component to some of this, but that's not the main investment thesis. You know, I don't need to raise income from X to Y in order for the investment to perform. It can do exactly as what I'm doing right now, and it'll perform great. But the extra value add is, you know, it's. It's nice to have, but it's certainly not. Must have.

B (16:46)

That's good to know because they. I think a lot of people are looking at the, kind of looking at the marketplace, like, where do you invest in that? What type of opportunities are actually realistic versus what people are projecting. Right. Or people want to project. So that's really helpful there. You know, you know, before this, before the show, before we hit record, we're talking a little bit about data centers. And of course, you know, we've been talking about the AI theme throughout, you know, this episode so far. And what are you seeing on the data center front? Like, are you seeing that as a viable asset class or kind of. What are your thoughts there?

C (17:16)

Yeah, I mean, I think it is. The thing with data centers, I think, makes it a little bit challenging is they're so capital intensive that the field is primarily restricted a lot to, you know, larger PE funds, REITs and that sort of stuff where it's a little bit less accessible to the everyday investor in a sense, you know, I guess, you know, REITs are very accessible because you could trade them in your stock account, but it's not really like one of those, like, get you excited kind of returns. You know, it's, it's really just kind of meh. So I think data centers are a little bit overblown from the individual LP's perspective. There's an interesting report that came out from Green Street. They're a major real estate projection firm, highly respected in the industry. And they put together A list of 19 different types of commercial real estate and the expected investment returns across all 19. And number one, and number two were skilled nursing and senior housing. Imagine that number three is ground lease, number four is malls, if you would believe it. And number five is data centers. And so what do we expect from data center? Well, one thing, if you look at the NOI growth they're projecting 11.2 NOI growth in senior housing from 2026 to 2029. Data centers is number two on that list, ranked by that measurement. But it's at 5%. So it's less than half. Yeah, but 5% is still quite a bit more NOI growth than almost every other type of commercial real estate. So there's obviously a bull market in data centers. I just think the question comes down to how accessible is that to the everyday investor and how opportunistic is it and what does the risk profile look like? Because I, I think it's one of those things that's talked about so much that it could find themselves, you know, getting a little bit bubblicious. Right, right.

B (19:17)

That makes a lot of sense because yeah, once if everybody keeps shining a spotlight on it, right. Everybody's gonna be like, oh, wow, that's the area. And people are gonna go and buy and buy and buy. You push the prices up almost like, I don't wanna say artificially, but you know, push the prices above what the fundamentals can support. And yeah, I mean, it could just end up like the AI, like AI, just all this money flowing in.

A (19:35)

But one thing I'll say is that they're so far behind on the need for AI dentist centers.

B (19:41)

Right.

A (19:41)

Any of the crypto mining centers that they're really saying, oh, we built one, we need three more, and they needed them tomorrow or next week. Right. That's one thing too that I find interesting is like a slight devil's advocate conversations that they're trying to spin it up as fast as they possibly can because they have such a need for them, the access. I agree, Brian, is probably the biggest, the biggest issue for like you said, the everyday investors. But like, it's also just like larger private equity funds that are looking at that too. And I also, it's Actually a really interesting tax play I think you can do with this is because a lot of these data centers are going in rural areas and in 2027 we're going to get this new qualified opportunity zones for rural areas actually. So I think there's going to be a lot of movement in that space and like how to like, hey, we're going to be doing this rural opportunity zone that's focused on data AI centers or the crypto mining centers too. I think we'll be seeing that in the future. Have you seen anything coming in that to fruition there in your space?

C (20:34)

I think that that's a valid point and I think that might be why, you know, in the Green street report I mentioned skilled nursing is number one, senior housing number two, and ground leases number three. Well, is ground lease so popular? Because you're finding ground leases for data centers in rural areas where you have, you know, really low cost land, you can ground lease at a really high price for somebody to immediately get a data center going. You know, that absolutely could be a factor. You know, I get a little bit nervous about these fad style investing where you know, you're kind of like, okay, yeah, there's a huge need for this. You know, for every one they build, they need three. But then once they get the three built then do they ever need any more after that? That's the question is where does it go? And now they're talking about, well we're going to start sending them into space. We'll make satellite data centers up in space. Well now we don't need him on the ground anymore. Well, I can tell you they're not going to send all the seniors to the moon. So I think my, my senior housing is probably going to be, you know, be here to stay. Will data centers be here to stay? I maybe, I don't know.

A (21:35)

You know Brian, that's interesting. Maybe we should talk about that. Maybe that maybe the seniors do need to be in space. I don't know.

C (21:40)

I don't know. Maybe that would help. You could get, you don't have to support your own body weight if you have, if you're non ambulatory, you could be ambulatory again and just float around. I mean that's, there certainly might be some validity to that, but that remains to be seen.

B (21:54)

Yeah, so basically it sounds like senior housing. There's a lot more certainty around the demographics and the need for senior housing and how AI will impact senior housing than say data centers or multifamily in the current market space. If we shift gears just a bit, I'm not going to hit you with any tax questions per se, but you're an experienced syndicator in this space for many years. How do you factor the tax benefits of real estate into the deals you do or do you take that into account at all?

C (22:19)

Well, certainly we take it into account and it's definitely a piece of all real estate. I think that's why real estate in general is a popular investment because there are tax benefits that come with ownership of real estate and it doesn't mean you have to go and buy a house or an apartment building and manage it to get those tax benefits. You can invest passively as an investor in an LP syndication and still get those tax benefits just as if you were an individual owner. But you know, frankly, I don't place an incredible amount of emphasis on this. I'm not one of those. There's some syndicators that, they lead that off, right? Hey, we got this great opportunity for you to invest in and you're going to get 100% bonus depreciation and you're going to get accelerated depreciation and cost seg depreciation and this and that and the other thing as Opportunity Zone and all this other stuff. And oh, by the way, you're going to get a half a percent cash on cash return. And you know, if we do everything perfectly, we're going to get a 12 IRR if everything goes according to plan. And it's like, oh, you know, the, oh, by the way part is the real investment thesis, right? You save that for last and you lead off with tax. My approach is more like if you want to invest to make money, I'm happy to help you. If you are looking for losses, there are plenty of other sponsors out there willing to take your money if you're looking for, for losses. So I don't, I just don't focus too much on that.

B (23:43)

Yeah, and I, and I think you do have a lot of syndicators who will focus on the tax benefits and make that like a core pillar of, oh, you should invest because of the tax benefits. But sometimes where people fail to realize that, hey, it's got to be a good investment opportunity first and foremost. And yes, it's great that it's tax advantaged, but if you're investing into a poor investment opportunity just for the tax benefits, you have to ask yourself your question. What's your motivation behind the investment? Investment.

A (24:06)

Right.

B (24:06)

Like to your point, if you're looking for a good investment, you know that should be the first thing on your list. I think as an investor like that. That's the first thing on my list. The tax benefits come secondary to that. And I think that too many sponsors sometimes focus on that as a selling point for their investments. And then LPs get caught too much into that, the tax benefits that they fail to just look at the investment and say, hey, one of my mentors told me this, he goes, tom, if the, if the deal makes sense without the tax investment, then the deal's good. If you have to play the tax and benefits into it to make the deal make sense, then it's probably not a good deal. And I don't know if you would agree with that statement or not. But the point I'm just trying to make is that people sometimes overweight the tax benefits of a deal.

C (24:44)

I could not agree more. It's one of my pet peeves actually. And I see it so often where the, you know, like I mentioned before, the, the sponsor is leading off with the tax benefits. To me, that's almost a full stop right there as soon as I see that. Because it's like your investment should be good enough to attract capital for its investment results. And that's why we're all investing, right? You know, the real estate is a tax advantaged asset class regardless. So if I have a really good investment, I'm going to get the same tax benefit as the guy that's got a crummy investment who's touting all the tax benefits. They don't get anything special. They're just attaching tax benefits to a crummy investment and using it as marketing. You know, you can get the same benefits from a really good investment as you would a really bad one. So you can have your cake and eat it too.

B (25:36)

Yeah, I think that's good for, for people to hear. Cause like I said, I think people sometimes get that confused. So, Brian, I know we talked, we talked a lot about a lot of things here on the episode so far. But if you were to give sponsors or general partners who are trying to operate in the current environment some advice on what they should be aware of, what they should navigate, what are those things that come immediately to mind for you?

C (25:56)

Well, I mean, you got to put your investors first and prioritize investment return and also minimize downside exposure to risk. And that means, you know, none of this underwriting to perfection and pie in the sky assumptions. You know, be realistic about where the market is, be realistic about what the opportunity is, and be ready for the fact that there's going to be times when, you know, your great idea is mistimed and maybe just wait a year and do it then, you know, don't be in any, any rush. I mean, I think the ideal sponsor to invest with is one who has enough resources and income from a variety of sources to be able to sustain extended periods without having to, quote, unquote, do deals. You know, if you've got to do deals just to keep the lights on, you're making bad investment decisions on behalf of your investors. So I think LPs and GPs would serve each of their own interests better if they put a little bit more focus on the financial strength of the sponsor. And that means sponsors, you know, look in the mirror and you know, shore up your own house so that you can wait out bad markets and not make bad investments and put your investors in harm's way.

B (27:13)

That's good advice. And for LPs, for limited partners who might be looking to place capital right now, what would you tell those people to look out for as they're kind of looking at various opportunities?

C (27:24)

Oh my gosh, where do we start? I wrote a 350 page book on things that they need to look out for because there's really that many things I think you should be investing in, an underlying thesis that's well timed for actual current conditions. I think that's important. But I've always said that the sponsor you're investing with is far more important than the deal you're investing in. So what you really need to be paying attention to is the experience, track record, longevity, all the things, the strength, financial strength of the sponsors that you're investing with. Invest with really good sponsors who should then in turn be bringing you really good deals if they're in fact as good as you think they are. And then you don't have to worry quite as much about whether you know the deal is really good if you know you're working with a really good sponsor. So put the sponsor first, deal second. But don't disregard the warning signs and gut feels that you see out there in the market that might be telling you that it's not time right now.

A (28:25)

Really good advice. One question we always like to leave everybody with two. I think it's perfect with our conversation we've had today is how are you in your business as like as a gp? How are you guys using AI? What are you guys doing these days? We always try to ask that question because it's like, is everyone trying to figure out what to do with it? And how it applies. So we would love to hear input from you and like what you think, think about it and if you are using it and how, and if you are, how.

C (28:48)

Yeah, we're actually using it in a lot of ways. And it's just, its purpose for us is to just make things easier for us. Right? I mean we can spend a lot of time and a lot of money doing a lot of things that AI can do for us for a little bit of money in a little bit of time and probably do better. So, you know, we use this a lot in our operations side. So, you know, as multifamily owners, we still do own about 1000 units. Even though we sold most of our portfolio, we still own about a thousand units and we use AI extensively in the operations side of our portfolio. We use it for things like marketing for new residents. We use it for things like responding to maintenance tickets. If you submit a maintenance ticket, it goes to our AI assistant who will get in a conversation with the tenant about the nature of the problem and decide whether or not the problem can wait until morning and give the maintenance guy a ticket in the morning or if they need to call in an on call maintenance person right away. It can make those decisions 24, 7, 365. If a resident is late with their rent, our systems will converse with the resident about the fact that they haven't made their payment and adjust the conversation according to the responses. That it's getting to apply whatever pressure or relieve whatever pressure is necessary depending upon how the circumstances warrant it. And it's helped us a lot with timely collections of rent receipts. Really, really helps. And you know, the on site staff doesn't want to call a delinquent resident every morning at 10 o'. Clock. Where's the rent? Where's the rent? Where's the rent? But AI doesn't care. It'll do it every morning at 10 o', clock, you know, because that's what it's told to do. So, you know, it's been, it's been very efficient for us in, in that regard. We use it to help set rent levels based upon demand and supply. How many of each floor plan is available versus how many inquiries we're getting for that floor plan. You know, we can adjust rents based upon AI recommendations by reacting to supply and demand in real time and helping us make better decisions. So we use it in a lot of ways like that operationally. We also use it for just like basic assistance. Like, you know, I'm doing a presentation on macro Economy factors, right? So the AI has helped me like take a slide. I can put in five or six bullet points and say, make me a graphic because I like to present in graphics, not in bullet points. It's just boring. So, you know, make me a graphic that represents my point that I'm trying to make here and it will make that graphic for me and I can insert it into my presentation where I used to spend five or six hours hunting around on Google Images for a picture that kind of told the story I was trying to tell. Now I can make the picture custom on the fly in minutes. So it's really saving me a lot of time in just kind of doing basic, you know, knowledge work and graphics and things that I used, you know, I used to pay a guy 100 bucks an hour to edit slide decks and you know, now I can do that through AI for nearly no cost in minutes. And it's very efficient and inexpensive. So it helps me save time, it helps me save money and helps me perform to a higher level. So certainly using it in quite a few ways.

A (31:57)

That's great to hear. Those use cases, right? Like the slide decks. One that I feel like is applicable to literally all industries. And there's like the automations piece of like contacts, right? Following up with people, like it's so easy. Like, yeah, it's like, like no one wants to call the same person over and over again. Especially when you're like, maybe they'll walk by at some point in time. Creates a bad relationship. But I love the, the fact that you can automate that piece or even get in front.

B (32:18)

Right.

A (32:18)

I know there's some people out there who are saying, hey, your lease is expiring in six months. Do you want to like renew? Right. And just get ahead of that on the front end without having anybody else go, oh man, I gotta follow up with so and so they're about to expire, which makes it really quick and easy. And that way you can start the marketing campaign with them too. So there's so many cool use cases that we can figure out. Basically all the administrative stuff that we have not been the biggest fans of, like, we forget about because they're not like super exciting either. I just feel like can be really helpful in all industries, honestly.

C (32:46)

Yeah, that's right. And you know, the technology is getting so good now. Like, you know, our AI assistants that help with our tenant communications have even gotten so sophisticated that when they're conversing verbally, it will match like accents and dialects to different regions of the Us so that it's basically speaking like people expect to be spoken to in a particular area. So you know, just the, the advancements that it's made over the last year have just been absolutely phenomenal.

A (33:17)

Okay, so let me ask this question then too. So what is your thoughts on the employment piece? Are you saying it's going to be an employment boom with AI? I think it' going to be an employment downturn with AI looking into the real estate.

C (33:26)

Yeah, I think, I think initially it's going to be, it's going to create employment challenges because you know, these, we're doing things with AI that before might have required a role, you know, a human resource role to fulfill. And so, you know, at a property, you know, we might be able to have one less person in the office than we previously would have needed to run an apartment, like a large apartment complex. You know, if you needed a manager, assistant manager, two leasing agents, you know, maybe now you could do it with one leasing agent and an assistant manager or you might be able to do with one less person. So I think you're seeing that kind of stuff happen in a lot of different ways. I mean especially like coding and programming. There was a recently. Well, what company just laid off a third of their workforce or something like that?

A (34:12)

Yeah, Jack Dorsey, I think, I think my, my own personal thoughts. I think most of the AI layoffs right now are early. I think they're just using it as like a headline purpose, personally.

C (34:20)

Yeah.

A (34:21)

To say like.

C (34:22)

Yeah, that very well could be. So I think in the short term it may cause some disruption. Now the question I think comes down to what happens long term. Because just like everything else that really disrupted in the past, it's created entirely new industries that we never even thought of, which creates all new employment opportunities of roles that didn't even exist last year are going to become roles that we never even imagine. So I think in the long term we're going to be fine, but there could be some short term disruption and you know, and that kind of plays into my waiting it out multifamily thesis is well, maybe I'll wait out and see some how some of this plays out for a little bit and you know, then get in. So you know, there's nothing requires a rush right now.

A (35:04)

No, totally agree. Those are great thoughts. I'm glad to, thanks for sharing those with us.

B (35:08)

You know, this has been incredibly insightful and I'm sure we could go on for hours on, on various topics. But if our listeners wanted to learn more about you, what you have going on currently in the marketplace. Maybe there's limited partners out there, you know, looking for a place to place capital. Where would be the best place for them to learn more about what you have going on?

C (35:25)

Yeah, the best place is probably our company website for Praxis Capital. The website is prax cap.com it's P R A X C AP.com. you can certainly also check out the book the Hands Off Investor. It's available on Amazon or from the publisher BiggerPockets.com forward/ Syndication Book. It's a great resource to bone up on your skills as a passive investor so you can try to minimize the mistakes that you might make when making. Passive.

B (35:52)

Yeah, no, that. That truly is a phenomenal book. I only buy the physical copies of books that I truly believe were like pillar books for me. So whenever I have a physical copy, you know, it's good and I tell you, it's right there on my bookshelf. Right there.

C (36:04)

Love it, love it.

B (36:05)

So definitely a great resource. We're drop all that into the show notes of the episode for, you know, everybody who wants to check that stuff out. You know, prime, is there any final comments, thoughts or things you want to share with audience, whether it's from a syndicated perspective or from an LP perspective?

C (36:20)

Yeah, you know, I think I want to mention again something I think is really important and that is is that, you know, in the commercial real estate space, we are coming off of a very steep downturn. We fell off a cliff in 2022, and a very steep downturn like that will result in a lot of collateral damage. But the more chaos there is, the more opportunity you'll find. But also I think that the longer of a bull run you get. So I think that the most important advice I could give anyone is that we're seeing a basis reset in the making. There's opportunity out there now, which is needles and haystacks, but if you give it a year or two, there's going to be a lot of opportunity into a better market. That's going to be a long bull run that's going to put us in a position to capture a lot of upside. And so there's great investments coming, but there's just no rush to jump into them any sooner than you have to. So I think that would be my biggest piece of advice.

B (37:22)

Wise words. Wise words.

A (37:23)

No, that's great stuff. Brian, thanks for coming on today. We really appreciate it, bringing us your insights. I think it's an awesome conversation that I think a lot of people will learn a lot from. So thanks for coming on.

C (37:32)

Thanks for the invitation.

A (37:35)

Thanks for listening to the Major League Real Estate Podcast. There are three ways you can connect with us. If you're interested in getting email updates on upcoming shows, go to www.therealEstateCPA.com and subscribe there. If you'd like to explore a tax and accounting relationship with our CPA firm, you can go to www.therealestatecpa.com MLRE and fill out a web form to get started it. And if you'd like to connect with Matt or I on social media, you can find us on LinkedIn or Twitter. Just search Nathan Sosa, CPA Matt Hamilton, CPA and shoot us a request. We'd love to connect. See you guys.