James:
Deals are often evaluated on what they could make, but sometimes it’s more important to question on what they could cost you and is the juice worth the squeeze? Today, Kathy and I are opening up our portfolio and we’re talking about the deals that we’re doing today and the ones that we’re letting go and passing on. I’m James Dainard. I’m stepping in the host seat for day today with my good friend Kathy Fettke, and this is Beyond the Market Podcast. All right, Kathy, so I want to know most importantly, what deal have you passed on recently and why’d you pass on it? Because there’s so many opportunities getting thrown people’s way right now.

Kathy:
Yeah. I mean, we all know that multifamily is an opportunity right now. We’re seeing massive discounts, we’re seeing foreclosures. The banks are done extending and pretending. So many of these loans now are in default. It’s headline news everywhere. So one would think that there would be just a ton of multifamily deals out there if they’re down 20, 30, 40% from what they were. The problem is they’re just where they should be. And even if you’re getting a 20, 30% discount, you might not be getting a deal. And that’s what’s confusing because somebody just paid too much before. So the fact that you’re paying less now doesn’t mean you’re getting a deal. So it’s confusing, right? Are you seeing that too?

James:
I mean, right now, because there’s so few transactions going on in certain spaces, the opportunities just keep coming your way. But yeah, you look at it and you’re like, “As investors, we want to shift with the market.” And what’s coming across doesn’t make me want to. It’s like you engage and then you’re like, “Yeah, I’m good. I’m going to swipe right and moving on to the next deal.” There’s nothing that really jumps out at you, especially when you’re looking at the bigger deals. Now the smaller ones, we are seeing more opportunities. Kind of like when you’re in that 10 to 20 units, we call it no man’s land.

Kathy:
It is no man’s land. The institutional investors don’t want it. It’s too small for them.

James:
Yeah. It’s not worth their time and effort because it is a lot more work. When you’re trying to scale a portfolio of 10 to 20 units, it’s like flipping a house. You just run into all sorts of different issues. Yes. But yeah, nothing’s been that attractive. Do you remember in 2008, Kathy, when there was the bank tape where people could buy all these good deals on tape? Yes. And everyone’s like, “We’re waiting for this tape to come out.” Doesn’t multifamily feel the exact same way? It’s just not coming.

Kathy:
Yes, because we have a multifamily fund. We were prepared for this moment. We got the money ready because we though, boy, when that deal comes, you got to have the money. You don’t have time to syndicate, to raise the money. It’s got to be in the bank and ready to go. So we’ve been planning this and we have our fund ready, and we have been underwriting three or four deals a week. And these are not just any deal. They’re the good ones supposedly that are being brought to us. And we made offers, but we’ve had to negotiate the sellers down because it’s got to be hard to be the seller saying, “But I put this much into it,” or, “I paid this much for it. I can’t give you a bigger discount.” But on the buy side, you’re saying it’s not working. It’s just simply not working.
Once you add in the cost of finance, which is three times maybe what they had when they originally bought it, maybe double, just more. And then you’ve got the higher insurance rates and the higher costs and rents haven’t really gone up. They’ve gone down in some areas because there was so much new supply added. So when you add that up altogether and you forget about what the owner paid at the time, you just look at does this pencil, is this going to work? They don’t. They don’t. Back then when you’re talking about the tapes, they didn’t really work then either. Not at all.

James:
The

Kathy:
People bought them anyway with foresight thinking prices are low, they’re going to go up.

James:
It’s crazy because you’ll see some of these discounts they’re throwing on these multifamily, it’s like $10 million, $15 million less than these people paid a couple years ago for. And you still look at that discount and it doesn’t pencil out.

Kathy:
The other thing is that over the COVID boom, the apartment boom, investors weren’t necessarily doing apartment investing. This wasn’t buy and hold, they were flipping apartments. And a lot of investors didn’t understand that. These are not long-term buy and hold. This will never work. The only way this is going to work is because you think you’re going to fix it and sell it and raise rents and sell it for more. And if you can’t raise rents, you’re not going to sell it for more. And that’s exactly what happened. Then in addition, they had all these extra expenses, so it’s all gone whack and upside down.

James:
That was a blip in time where everything went up rapidly and people made a lot of money flipping their apartment deals. They really did. They did it right. And then they got more capital, more people talked about it, and all of a sudden you go out and that’s the problem with scaling. When you try to scale up, you buy more assets and then if you time it wrong, it can really come down the wrong way. And I think that’s what’s happening, but the deals just aren’t that good. Have you seen any where you’re like, I am going to buy this deal?

Kathy:
Yeah. Yeah. So we have made a lot of offers and we did tie up a property in Kansas City. The location was absolutely incredible right by a university, a new building. They had just built it three years ago during COVID. They paid way more. I mean, all the construction costs and everything, they put way more into it than we were offering. And it was all going to work. Actually, the numbers on this were great. They finally were at a point where they had to concede. Their loan is due. So either the bank’s going to take it or they take our offer. And they did. So then we were like, oh, finally, we got a newer grade apartment. It’s only a few years old. It’s by a student housing. It’s fully occupied. We could still raise rents. They haven’t raised rent. Everything was perfect about it until we got there.
And this is what is such a bummer. We talk to the tenants, they’re happy, they love it there. But then the inspector comes by and we’re there for the inspection. And he’s like, they didn’t put gutters on this thing. They ran out of money when they were building it because construction costs went up during COVID. So they had to cut corners, but they cut stupid ones. And one of the corners they cut was they didn’t put gutters on this building. And so when there was rain over the last three years, now the property has foundation problems. And that is not something I’m going to fix. I’m not doing that. We would have to put in new drainage and that would be fine and not too expensive. But what we don’t know is how much the building has settled. And the inspector thought it settled too much.
Every building settles, but when you don’t have gutters and now you have water, you can’t have water around your building. You got to keep the water away from your building. And they didn’t do such a simple thing. So we had to walk away because of their negligence.

James:
The way the market is, I know that’s what we’ve done in our offices. We just won’t buy certain things now because it’s easy to get blinded from a performer sometimes where everything looks beautiful on paper.

Kathy:
Oh, it was great. It was a great deal. Yeah, on paper. Yeah.

James:
And then you open it up and you’re like, oh wow, why did I buy this? But the paper and the performer told us to buy it. For us, that is one thing we’ve done when the market is more volatile or flat and there’s less upside where you can’t get that pop to cover for unexpected. We definitely get our buy box way more narrowed down. There’s certain long permit timelines. We won’t mess with them. There’s certain buildings now in certain cities in Seattle we won’t buy anymore because we know the tenant relocation is going to be expensive and take a long time, which slows down the deal. And so we’ve had to update our buy box with just not buying these certain things. Because this had foundational issues, is that just a no-go for you guys anymore in today’s market?

Kathy:
It was fixable. The inspector told us what we could do and we just put in drainage. The problem is the settling, there was going to be more problems. We knew it. And problems that you can’t really see yet because the settling was so quick that first year and it didn’t have to be. I mean, again, buildings settle anyway. And this was a little bit of a different type of build. It was shipping containers. What? It was a shipping container apartment. Have you seen those?

James:
I’ve seen them. The whole apartment building was made of shipping containers.

Kathy:
Yeah. So I mean, I love the concept. I love new stuff, but there’s not enough research, I guess you could say, on what happens when these shipping containers settle too quickly. And can they handle that? It just was too unknown and we’re not going to take that risk. We have investors in this. We’re not going to give them that risk. So we walked away from something that could have been cool, but also could have been a nightmare.

James:
We’re going to take a quick break, but when we come back, Kathy and I will be breaking down the decisions shaping our portfolio. Welcome back to the On the Market Podcast. Let’s get back into our portfolio update. What deals are you actively looking? You have a bigger fund that is looking for deals. What’s Kathy’s buy box for a multifamily deal now? If you’re like, “Hey, this is the three things we need to hit,” or it’s not worth looking at when you may have looked at that earlier.

Kathy:
For sure. Well, we don’t want them too old. I’m not like you. I don’t have the guts that you have, James, to go get this old scary looking stuff. So we want newer product. I know that’s kind of what Ken McElroy’s been able to do is by work with builders who kind of similar situation as I was doing is they just spent too much money building it and now the numbers don’t work and now they got to get rid of it, but it’s fairly new and the new second owner gets to come in and get all the benefits. So we’d love that, but those go quickly. Then you’re competing against institutionals and the big boys. So we are looking, like you said, for something that’s out of their radar. So a hundred units or less, fairly new and in growth markets, the kind of the markets that I’ve been investing in for years, which is more the Midwest or Southeast.
But then those are the areas where there was overbuilding in general. So then you’re going to see softer rents in those areas.

James:
Yeah. And so you have to pad that out. And how you do that is you want a higher cap rate and you want a higher return going in because – Got

Kathy:
To get a better deal. Yep.

James:
Yeah, things are still sliding in certain, especially those high pop growth. I know we have Spokane and Washington, Eastern Washington. I love

Kathy:
Spokane. I went to school in Spokane.

James:
Oh, that’s right. Yeah, Spokane did

Kathy:
Great. I did.

James:
They got a serious pop on rent growth and units during COVID. Now it’s retracting because it just. I remember someone sent me a perform on a deal. It’s like three years ago. The rents were at three bucks a foot. I’m like, “This is Spokane. This is a $1.50 a square foot rent market. How are we up to three bucks?”

Kathy:
I saw that too, and I was questioning it as well because everybody’s kind of going over to Idaho through Spokane, to Coeur d’Alene. And so I get to go see my school hometown and I saw the same thing. How have these rents and prices and everything gone up so much? I don’t know if this is just sustainable, but if you got in there when it was cheap, then it would’ve been good.

James:
Yeah. And that’s what we’ve seen is they’ve gone back down to two bucks and that’s a big drop. And then a lot of units got built all at one time.

Kathy:
Yes.

James:
I mean, actually, if you like Spokane, Kathy, I’d look in Spokane. There’s some deals out there from new construction.

Kathy:
New construction where the builders were expecting higher rents and they’re not getting

James:
Money. Way higher rent. They’re in

Kathy:
Trouble.

James:
Yeah.

Kathy:
Okay. Thanks for the tip, James. We’ll go look.

James:
But those are the markets that are struggling. And it’s right, there is some new property, but yeah, the institutional and the deals just aren’t there. But you have to avoid falling into those numbers traps, which are the old buildings right now, those look the best on paper, but they are a nightmare inside the walls. And we don’t even buy old apartments. You

Kathy:
Don’t.

James:
No, we’re 1960s or ’70s or newer if we’re above 10 units because it is a nightmare. We’ve bought those properties for 50 grand a door and we thought they were worth 200 grand a door and the middle just made no sense. It takes too long. It costs too much. And then the thing is too, because it takes so long, you can’t really know exactly where your rates are. Is there going to be a war going on and energy cost is still high? There’s so many different moving parts and if you can’t launch the rate, the deal just, you can’t perform it outright. And so that’s definitely something we’re not buying is those old big buildings because there’s too many unknowns and unstable markets, you have to remove the unknowns.

Kathy:
Right now I’m doing a post burr, which is basically I’ve had a property for 10 years. I haven’t really done much to it. Now I’m fixing it up and we’re going to flip it. We’re going to sell it. So I’m kind of doing, you know what I mean?You’ve held it for a long time and the tenants were fine with it. Now it’s time to make it modern and nice and we’ll make hopefully money on the sale now. But of course this is a very old home and we’ve got to completely replace the furnace. So there’s an extra 10 grand that wasn’t originally told to me from the contractor that I feel like I hear James in my ears saying, “Well, you should have known. You should have known. If it’s an old house, it’s going to need a new furnace.”

James:
10 grand for a furnace. Where’s this house at?

Kathy:
Ohio.

James:
Oh no, I don’t like that number at all. 10 grand. Oh, we pay

Kathy:
Too much. Well, and AC. I don’t know.

James:
Oh, AC. Well, that doubles it. So then you’re closer. That makes more sense. It is a good time to be doing those little secondary upgrades. We’re actually selling a lot of homes or hedge funds right now and they’re choosing not to dust them up like you’re dusting them up. And they’re selling them for probably 15, 20% less than they could. They just don’t want to put any more money in these things. And doing what you’re doing is the right call because you can get that extra 10% to 15%, but you can’t put out a rental used house.

Kathy:
Yeah. We’ve had this thing, we paid 50 grand. I don’t know. It’s in the middle of Ohio somewhere. And somebody has rented it for 10 years. But then she left and my property manager said, “You could rent it again or we could put 20 grand into this and you could sell it for 100,000 more.”

James:
It’s

Kathy:
Like, “Okay, I’ll do that and I’ll just 1031 because this is kind of the nice thing about a post burr or a property you’ve had for a while. We can 1031 it. It doesn’t have to be a flip. I don’t have to pay those taxes and we’ll be able to buy a couple of newer properties.” So I’m like, “Yeah, let’s do it. Let’s do it.” So I think this is something people could look into is what does your portfolio look like? And can you just sort of make money on what you already have just by doing a few improvements?

James:
What are you guys like, “Hey, this is on.” In the next 12 months, you feel really confident, you’re like, “This is what we’re targeting and we know we’re going to get this.”

Kathy:
There’s a couple of things. So this is not a I’m doing by myself thing, but we do syndicate. And when we syndicate, we can do bigger deals. And then the risk is shared by all those who are investing, but the reward is shared too. One of the things that we’re seeing is obviously a great need for new housing. A great need for new housing, certainly everywhere, but also in California where it’s hard to build. I won’t build anymore. We’ve built subdivisions in California and the demands are just so high. It’s so hard. Just school fees alone and all the fees. I mean, you’re in 150,000 just in fees and probably more now. So we don’t really want to do more building in California, but we have a team that’s very good at land entitlement. And for those who don’t know what that means, it’s taking raw land and getting approval to build something on it by the city or by the county.
And that’s a, I guess, riskier thing because it’s political. You’re dealing with neighbors who maybe don’t want that developed, or you’re dealing with the city council that may be slow growth or pro growth or whatever. Or you’re dealing with a city council who wants it, but then there’s an election and new people come in and then they don’t want it. So it’s more of a political play, but that is what’s needed. And that’s supposedly what this new housing bill is trying to help, is trying to make the process of building easier. Well, we have for 15 years been doing entitlement projects. My partners are 40-year veteran land developers, and we’ve been doing a lot of land entitlement. So we just got some land in Truckee, which is a fast-growing area. A lot of the tech moguls are moving there. It’s right in Tahoe. And so Truckee has.
I love Truckee and that it has just grown to be very bougie, kind of like Park City style where you take an old town and make it gorgeous. And this parcel is walking distance to downtown, but it’s Truckee and it’s California and they’re slow growth. They don’t want new development. So of course I put my feet on the brakes here. We got to make sure the city really wants this, that the people want this. So of course, one of the things you do is you make sure that a large portion of it is affordable. And that’s partly how you get it through is don’t you want a place for teachers? Don’t you want a place for firefighters? It’s Tahoe, you need firefighters to be living locally. So we need to have housing for them. And as long as you carve that out
And the city wants it, and it’s already approved as a housing subdivision. So it’s not like we’re having to go through that whole process. It’s already that far. Somebody else took the 10, 20 years to get it to that point, so we’re taking it over. So we like doing that because then we don’t take on the risk of building. We already have a buyer, a national builder who wants those lots. So land and title. But that’s not something you do on your own. You got to know what you’re doing if you’re going to do that.

James:
We’re taking one more quick break. We’ll be back on more deals that we’re pursuing, passing on, and why? This is the On the Market podcast. Let’s jump right back in. It’s funny, that’s what I’m seeing the best deals on too, is anything that has to do with land development or dirt moving because builders are getting beat up right now. Rates are really high on your hard money loans. Costs are still rising. We have this energy problem. I mean, I though construction was coming down, then it went the other way again. Things are more expensive. Things are taking more to transport out. And the absorption rate on new construction is not great in a lot of markets, especially for that starter. I remember we have two units in Kirkland, Washington, great market to be in. We sold the first two for 1.5 million. 290 days later, we have our third unit listed for 1.3 million.
Same units, same location. The difference is one went up for sale a month after the last sale. That’s all that is. And so there’s a lot of opportunity there. But the good thing about entitlements, and this is why I like dirt deals too right now, I don’t actually want to build them either. I want to flip the lots off, is it takes some time. And because there’s so much pain in the building community with their deals they’re trying to get out the door.

Kathy:
Yeah, they don’t want to do the entitlement.

James:
Well, and the demand for dirt has just dropped. Yes.

Kathy:
Yes.

James:
People’s backyards and lots, it’s worth a lot less now. If you had some land, it’s worth a lot less than it was two years ago.

Kathy:
Well, let me give you an example. We’re tying up this trucky land for three million. It’s worth 12. It would’ve been. So yes, great deals on quality land. That’s why you see a lot of the billionaires buying it up.

James:
Well, and it’s funny, the last couple of years we’ve been talking about multifamily. This is coming, this is coming. It’s actually a lot of development opportunities. I remember 2008 too, same thing. There were so many vacant built lots that had foundations in them and they were spinning them off for like 25 grand. And I feel like actually the opportunities are going to get better in this space.Because the difference between multifamily in distress, they can do capital calls, they can try to get this deal back under control. The rents, they can get more efficient, create more profit. But dirt, inexpensive money, there’s nothing. You can’t fix that problem. You can’t build your way out of it in today’s market. And that’s why we’ve seen a lot better deals. And the nice thing about entitlements, and as soon as you said that, I was like, that’s exactly what I’m looking at right now.
It’s like, how can I spin off not big ones, but how do I spin off two townhome lots in the back of a unit? Because the prices came back too much and I’m permitting three right now where I’m permitting two town homes on each lot on each site. But it takes 15 months in the city of Seattle to get these permits. So the good thing about entitlements is you get to miss the crappy market that we’re in. Because it’s so volatile, people aren’t transacting. By the time your permit’s issued, the market’s going to be different. Hopefully it’s better. In theory, it should be better. And so that’s where you can get this giant pop on the exit because land, if it can drop 50% like you were just talking about or more, it can also pop back up very, very quickly. And that’s how you hit a home run.

Kathy:
All you need is some lever to move, whether it’s interest rates or wage growth. Eventually we’re going to be in a different market. I just spoke in Danville, California at an investor group, which was so full circle because that’s the very first place I was invited to speak 20 years ago. My first time speaking was in Danville, California. So it was fun being there. Very high net worth area outside of San Francisco. And I stayed with my mentor. So then he took me on a tour of some of the things he’s doing in this very high net worth area. He paid two and a half million dollars for a tear down basically. I mean, I think it was a perfectly fine home, but he tore it down, paid two and a half million dollars for it, but he chose it because it was a big enough lot to subdivide.
And he’s able to sell the other half for about that amount. So he’s basically at a zero basis on the house that he’s rebuilding. It’s brilliant, right? This is the kind of land deals you could do out there if you can get enough land or get in an area where land like that is so desirable.

James:
Everyone’s saying there’s no opportunities out there. This is where it is. And I think even us the beginning of the year we’re like, “Hey, we’re going to go get more multifamily deals.” And we did actually, we got some really good multifamily buys, but they’re a little bit heavier operated ones where they’re still newer, but they have some issues that you got to get through. And we’ve been buying the 15 to 25 units in Seattle, have been kind of in our wheelhouse. And we found some good deals, but there’s also not as many of them. And land is coming our way. And what I love about this is, Kathy, we always talk about how we’re opposite on investing. You’re like, oh, you’re crazy. You like to work too hard, you’re too stressed out. But if you look at our buy box right now and what the deals that we’re actually moving forward, we’re buying the same things.
We’re not buying old, and we’re looking at land because it’s the best opportunity. And there is so many things that you can actually look at in today’s market. And like you said, that lot that you’re looking at is almost 70% less than it was worth three to four years ago. That’s madness on pricing.

Kathy:
In a very hot, desirable area. It’s amazing. And the way we structure these, this is what’s cool about raw land, is that we have a purchase agreement and we put down the deposit, but we have a three-year close date. So we have to make payments every month towards that date, but that gives us three years to get the entitlements in place. And then we do a double close at the end.

James:
Yeah. And so to unpack that real quick, you guys, entitlements are great because when you have a land seller that wants a bigger number, even if they’re coming down. Kathy, if you call a bank, who wants to finance that deal right now?

Kathy:
No one’s financing

James:
That

Kathy:
Deal.

James:
And not unless you’re putting 50 to 60% down and that’s not going to work.

Kathy:
The holding costs will kill you. That’s why we get the land deals because people put too much, they get too big a loan that’s a hard money loan. They don’t get the entitlements done in time. We come after they’ve done all the work and get it for big discount.

James:
Yes. You guys, for everyone listening, don’t buy land in hard money. It’s not a good idea.

Kathy:
Don’t do it because I’m going to come and take your property after you’ve done all the work. That’s just how it works. You’re going to run out of money and have to sell it, fire sell

James:
It. If you have to finance at expensive rates and wait for permit costs, there’s way too many unknowns in the city. Destroy your deal. And what Kathy’s talking about doing, you guys, is just terms work. Offering the term to the seller, they’re going to get paid off. They can then look for a 1031 exchange or what they want to move their money to. And typically you’re making payments when you hit benchmarks. Exactly. And so Kathy can hedge her risk as soon as she goes, “Okay, I’ve hit the next phase in my development and we still have a green light going through.”
Then you make your next deposit. But the beautiful thing is you can structure to where your cash out of pocket isn’t that heavy. And by the time Kathy goes to sell that in three years, the market is going to look substantially different. And this deal could go right back up to being worth 20 million. It should be worth more with entitlements and a home run can happen. And that’s what we’re seeing too on a small scale, that’s the big scale. But if you’re in any kind of market, you can do the same principle with a backyard lot, especially if you’re in an expensive city, Austin, Seattle, LA. A lot of daddu lots are a big deal right now. Because dirt has gone down, there’s a lot of opportunities to buy a burr, sit on it, rent it out, cut the lot off and sell it.
And you’re going to be able to sell that in a better market, which is going to get you the pop. And that is exactly the deals that I’m in right now too. I’m looking at a lot of bigger lot houses. I just bought a big one that I could put three houses on and I’m getting this thing fixed. I think I’m going to keep it as a rental and then carve the three lots off. And the lots have gone down so much in value, I’m going to wait for two years until it shoots back up because it’s in a primo street. And so the good thing is you don’t need to take out expensive debt, just go start looking for the right type of land deals and getting them entitled, but work with the right team. You got to have the right feasibility team.

Kathy:
Yeah. If I were starting out, I would look for a big lot with a house on it and I would get the financing because you’re buying a house, cash flow of that house, rent it out so you have a way to hold this property while you’re trying to subdivide it. I’m sure that’s what you see all the time.

James:
And Kathy, that’s why I think me and you need to do a trip to Austin.

Kathy:
Let’s go. But

James:
It’s not going to be a big one. We’re just going to get a backyard lot. I think we’re going to have big FOMO if we don’t do this.

Kathy:
Okay. It has to be after my daughter’s wedding.

James:
We need to do this before the end of the year. How about that?

Kathy:
Yes.

James:
And then if we don’t do this, what happens?

Kathy:
Yeah, we’re going to talk about it here that we’re just big losers.

James:
Okay. Well, for everyone out there who doesn’t think that there’s deals, there is deals. It’s just not maybe where you’re thinking. Actually, the deals that I thought I was going to be doing the beginning of the year, Kathy was also looking at. We also didn’t get a whole lot of them done, but I didn’t think land was going to be on my buy box. And it really is right now. And you don’t need to build, you can flip it off. So there’s opportunities everywhere. And it’s funny, me and Kathy, we’re pretty opposite. She’s calm, collected, well-spoken. I’m a little bit nuts, but we’re doing the same deals.

Kathy:
That makes me feel better. Yeah. Maybe I do eat stress. A little stressed for breakfast too.

James:
Well, Kathy, I love that we’re doing the same types of deals. We’re looking for the same things because a deal is a deal and you got to shift with the market. And it’s been kind of fun talking about, because people are talking about how there’s no deals out there. I love hearing that you are looking at container boxes that might to bogging down a hill because of lack of drainage, but you pulled out at the right time and then you’re also crushing it in the secondary markets. I do think vacation, secondary home areas with development dirt, that there is great opportunities there right now.

Kathy:
The bottom line is there’s always opportunity. So if you’re saying there isn’t any, you have a narrow focus.

James:
No. Yep. You got to always open your eyes and talk to everyone and see what’s working for them and what terms they’re offering. Because if you did the same deal that Kathy’s looking at right now a different way and you bought it with hard money, the deal’s probably not going to pencil out. So find the right opportunities, do the right turns. And how you do that is make sure you follow the on the market whenever you want to get any updates on what we’re doing and what we’re buying, because there’s always an opportunity out there, you got to subscribe to our YouTube channel and make sure you get the update on all the news because it is crazy what’s going on. There’s so much volatility in the market, you got to stay on top of it.

Kathy:
Absolutely.

James:
Well, thank you, Kathy, for coming out. Hopefully me and you just get to chop it up more. I love hanging out with you.

Kathy:
Me too.

James:
We have one-on-one time. So hopefully we do this more. And I’m James Daynard and thanks for listening to the On the Market podcast. We will see you next time.