Builders Are Ditching This State as Laws Rise

Henry:
After I first began investing in actual property, I had tunnel imaginative and prescient and I solely considered shopping for rental properties, however I’ve gotten a lot extra strategic with my investing by taking a look at different exit methods and asset sorts. So in the present day we’re discussing tendencies from three totally different areas of actual property and why they matter even if you happen to’re not investing in these areas. Hey everyone. I’m Henry Washington, one among your hosts in the present day whereas Dave Meyer is out. And welcome to On the Market. I’ve received Kathy Fettke and James Dainard with me. What’s up guys?

Kathy:
Good morning. Morning guys. Right this moment we’ve pulled a few of your most intriguing observations and tendencies from the BiggerPockets boards. We’re going to have a look at them from all sides in order that we are able to make extra knowledgeable investing choices, how California laws are shifting the market panorama, whether or not we agree with the oldsters dropping by the wayside on industrial actual property and the best way to juggle rising development prices and unpredictable ARVs. That’s after restore worth.

Henry:
However earlier than we soar in, let’s give a fast shout out for the BiggerPockets boards. The tendencies we’re speaking about in the present day are all observations by BiggerPockets neighborhood members identical to you. So head on over to biggerpockets.com/boards to affix the dialog. So our first discussion board put up comes from Reese Schulman and it says that actual property builders are eradicating their operations from California. Two contributing elements are excessive development prices and laws that make acquiring development permits tough. California already has a big housing scarcity, and if builders don’t construct extra housing models, it’s probably we’ll see rents improve on a lot older and certain inferior housing in comparison with what builders would have constructed. So we received to level the finger at Kathy. Kathy, what’s the cope with the constructing laws in California?

Kathy:
It’s fairly powerful to construct something. We had been constructing subdivisions most likely 10 years in the past, and at that time I believe we in contrast simply the associated fee to get permits. Let’s simply take college charges. The varsity charges in California had been tens of hundreds of {dollars} extra than simply over the border in Nevada. So I believe simply making an attempt to get into the bottom, the distinction was $120,000 prices versus possibly 20,000 to go to Reno. So we shifted our operations to Reno at the moment and we’re in Bozeman and Oregon and different locations. However California’s powerful. However, I actually simply talked to an actual property investor who stated, that is excellent news for me. I’ve much less competitors after we convey one thing on-line. There’s a whole lot of clearly curiosity in it as a result of housing is so desperately wanted. So relying on the way you learn this, there’s a possibility for someone who can are available and repair the issue and a few persons are, however for these of us who simply don’t wish to cope with it, completely not. Right here’s an instance, only a line from this text. It says, your entire state of California with 40 million folks will produce much less rental housing than Dallas-Fort Price with 8 million folks in 2024. So locations like Texas, it’s lots simpler to get permits and to get one thing up and working and constructed. That’s why we’re doing a construct to rank neighborhood in Texas as a result of we are able to get it up and working in a few years. I don’t understand how lengthy it will absorb California, however I’m not keen to take that threat.

Henry:
It appears to me like to start with, I imply this solely is sensible, proper? If it’s difficult for somebody to have the ability to make a revenue constructing new development, they’re clearly going to have a look at locations the place they’ll make a revenue and transfer that infrastructure from a enterprise standpoint. That is sensible. But in addition you’re proper, it’s virtually like all trade. There are areas the place it’s difficult to earn cash and areas the place it’s not, however the individuals who do very well are those who can navigate the more difficult areas successfully due to the restrict on competitors. However I believe it actually goes to boil all the way down to individuals who have some form of edge. Your edge needs to be, you will get labor extra inexpensively than different folks or you should buy the land extra inexpensively than different folks. You’ve received to make up the associated fee someplace. And so I believe individuals who sort of have these superpowers inside their enterprise will do nice in California, however different individuals who don’t, they’re going to need to look different locations.

James:
So one factor to notice about this text is it is a developer that builds rental models not for resale. That’s the problem with the west coast proper now. I imply the west coast is definitely, it’s not a nasty place to construct houses. In the event you’re going to promote ’em for resale, you should buy the properties. You get excessive appreciation, you get larger margins at that time. I imply, I take a look at these guys that construct single household houses in SoCal or the place I simply moved from, they might pay two and a half million for lots. They’d spend two and a half to construct and so they’d promote it for seven. That’s an enormous revenue. And the builders which might be constructing to resale, I believe they’re nonetheless doing okay in California as a result of the cash is there. The difficulty being is within the west coast there may be means an excessive amount of regulation and the prices have gotten too excessive to cope with that.
Your grime prices, your borrowing prices, your invoice prices, they’re by means of the roof. And never solely that, that course of takes ceaselessly to get these permits. Within the metropolis of Seattle, we simply bought a property 12 months in the past the place the developer had owned it for 3 years and was allowing over a 200 unit. Ew, an house constructing the place they had been bringing 200 models to market. The difficulty being is the town took ceaselessly. It took ’em three to 4 years to get this allow. Throughout that instances charges shot up, constructing prices shot up, and so they couldn’t make this deal pencil anymore. They might’ve needed to write an enormous verify simply to get this factor to interrupt even. So we ended up buying this property off that developer scrapped their complete plan that they waited three years for. We’re holding the house constructing, we’re constructing about 20 townhomes subsequent door.
And that’s how the deal is sensible. It’s not nearly being on the west coast and may you earn cash. It’s extra of the timelines and the prices simply don’t make sense. And with all this regulation coming down the west coast on hire management and what you are able to do to your rental properties, it’s not definitely worth the ache. I might by no means construct an house constructing within the west coast. We do all kinds of various issues. We construct city houses, single households. I’m not constructing flats, I’d moderately hire or them. It’s a full waste of time and a nightmare for builders and that’s why they’re leaving and so they have to repair this if they need extra models on the west coast.

Kathy:
Yeah, I wish to add one factor that there’s much more than simply discovering some land and constructing a home or a property. You’ve received to do visitors research. You’ve received to ensure there’s sufficient utilities for all of these new folks. And that’s an enormous concern, particularly in California when simply a few years in the past, we’re out of it proper now, however a few years in the past we had been in a fairly main drought and we had fairly extreme water shortages. We couldn’t water our lawns and don’t really feel sorry for us. I imply, poor us, all of us had these beautiful homes with brown yards, however that’s simply how do you convey on much more provide and unfold that water out while you simply don’t have it. So once more, there’s much more to it and that’s why areas that don’t have these points, that don’t have the water points that’ve received loads of water and so they don’t have the visitors points that we’ve got in California, that are sort of exhausting to repair when it’s an space already constructed. How do you convey in additional roads into la? It’s prefer it’s an enormous mess already until you’ve extra public transit. So these are issues it’s a must to take a look at too, and that makes it powerful.

Henry:
That was actually going to be my subsequent query is it’s simple to say California is tough to cope with due to the quantity of regulation, however is the regulation needed? And I believe that that’s not one thing we all the time have a transparent image of.

James:
It’s not, I’m sorry, a number of the regulation just isn’t needed as a result of right here is the problem with that. The grime’s too costly, the invoice prices are too costly, your debt’s too costly. Which means it’s a must to construct an costly product that’s the playing cards which might be being dealt to those builders. They can’t do something totally different than what they’ve a possibility for.

Kathy:
Yeah, that’s proper.

James:
That’s not product that’s for inexpensive housing. That’s model new, extra luxurious product that has to return to market. And there may be that demand too over the low earnings and the extra inexpensive housing. And so it’s like they’re placing this regulation on and all it’s doing is affecting the working class which might be really bringing in tax {dollars} and that’s why they’re getting drained with large deficits yearly. What are they 50 million within the gap proper now? Or 50 billion? Excuse me. It’s a nasty plan. You can’t, you’re overregulating an asset class that doesn’t even slot in there. It makes zero sense

Henry:
And then you definitely construct it and you may’t insure it in California. So it’s tremendous powerful.

James:
Sure, I imply my insurance coverage received canceled 4 instances in California. I used to be like, I’m out. That is loopy.

Henry:
We brag on California, however each state has some form of regulation and I believe if you happen to’re going to be a profitable investor or builder, it’s a must to perceive what the states or aren’t in search of in your space. You need to perceive the best way to work with these officers. It doesn’t matter. I’ve a undertaking proper now that I’m going to need to go to the town and also you all the time wish to go to the town and go in a spot the place you’re capable of say, look, how can we associate collectively to resolve an issue that the town wants? And I believe that it’s a must to be a great operator irrespective of the place you might be. However in locations with excessive regulation, you actually, actually need to have a superpower when it comes to working with the cities

James:
And in addition search for the gaps of the place you might be. The west coast doesn’t make sense to construct multifamily a whole lot of instances these days it used to. Now it doesn’t as a result of the playing cards which might be there, however you’ll be able to hire ’em. You’ll be able to go purchase flats and hire them and do very properly in California and the west coast. You’ll be able to construct houses for resale. I imply there’s a hole someplace. You simply received to adapt your plan. Possibly you don’t construct the hire however you hire out to hire. That math works fairly good for us in Seattle, work down in LA County as properly.

Henry:
Alright, we’ve got to take a fast break, however don’t go anyplace. We’re discussing extra of your discussion board questions after we come again. Welcome again to on the Market. Let’s soar again into the boards

James:
And this leads into our subsequent put up. So this put up comes from Eli Cantor and it’s about industrial actual property. What’s going to occur with all these buildings which might be beginning to not be occupied and landlords are beginning to surrender and provides the keys over to get out of the offers? The query says in in the present day’s markets, many workplace landlords would a lot moderately stroll away from their properties and take a loss than battle to draw tenants and keep away from foreclosures for these house owners. The way forward for workplace area appears so grim that the best choice is to easily hand over. What do you suppose lies forward for constructing and their house owners? I assumed this was a really attention-grabbing query as a result of I believe this particular person may’ve learn too many headlines. I believe we had been all predicting that they’re going to be strolling away, however the foreclosures simply aren’t that a lot in industrial actual property.
Our landlords throughout the nation combating new prices, lack of hire progress, sure, that’s what’s occurring, nevertheless it’s additionally clearly in workplace. It has slowed down. The pandemic has modified issues, however it’s not as loopy as what they make it out to. In 2020, industrial foreclosures had been at an all time low hitting 141. Now in the present day, 2024, it has risen 117% to six 25. That looks like an enormous quantity, however while you take a look at the entire industrial buildings in America are over 5.5 million properties or estimated to be, that’s a really small splash within the bucket for what’s really occurring. So I don’t suppose that industrial actual property house owners are simply handed the keys over. I believe if it actually mathematically doesn’t make sense and it’s by a bigger hedge fund or an even bigger financial institution or somebody that’s investing for the long run and so they see as a nasty funding, they’re handing these keys over as a result of they’re simply making a call.
However I don’t know any industrial landlords proper now which might be simply handing over their properties and I don’t see that coming as of proper now. If we hit some form of main combine up within the financial system, we noticed an unemployment been leaping the final couple months, if that continues, then we’d begin seeing just a little bit extra ache within the industrial area. However proper now the financial system’s nonetheless transferring. Industrial actual property isn’t this large collapse that we’ve seen up to now. And I believe house owners, if they’re handing over their properties, it’s only a dangerous funding and generally that’s the very best factor you are able to do. In the event you don’t have a private assure and you may deed that property again to the financial institution since you had been hemorrhaging cash and you don’t see the upside over a five-year interval, that might be the best enterprise determination too. However I simply don’t see a whole lot of that occurring. Kathy, in your area, you’re employed on a whole lot of large tasks, I do know you do extra residential. Have you ever seen this as you guys have about in search of new investments throughout the nation? I do know we haven’t seen this many. I imply, have you ever guys seen the alternatives come your means? Properly,

Kathy:
We don’t spend money on workplace. We’ve got one suburban workplace constructing that we even have in the marketplace proper now. And Suburban appears to be doing higher than downtown workplace if we’re going to partition what sort of actual property we’re speaking about. I used to be interviewing for somebody to handle our syndication division at Actual Wealth and I had this Wall Road man, he wished a $500,000 wage. We’re like, yeah, that’s not within the ballpark, however he goes, properly, actual property is so easy, it’s simply math. I’ve been doing this for years. I stated, nice, let me see your portfolio. I’d wish to see the efficiency of the offers that had been so easy as a result of I don’t agree. That’s easy. Positive sufficient, it’s like he had this complete part of workplace that was principally going below after which he’s like, properly, yeah, however that’s cycles. Sure, it’s cycles, however you clearly paid an excessive amount of for these workplace buildings When rates of interest had been low costs, asset values went up, and particularly on Wall Road, these are large numbers, numerous zeros, and it may possibly generally simply really feel like, oh, it’s simply math till the maths will get screwed up due to some exterior power, which is, oh, I didn’t understand charges would go up from 2%.
After all they had been going to go up. So I believe there are a whole lot of, I imply you simply see it within the REITs, proper? There’s a drop in worth. Only in the near past this information got here out, I believe it was from Biznow, nevertheless it says Information from MSCI reveals that 20 billion price of economic actual property was seized within the second quarter. That features not simply workplace states however multifamily and different industrial property. It additionally says that greater than 94 billion in industrial actual property was distressed in June and one other 200 billion in danger. So it’s not over, it’s simply folks have been saying survive until 25. That’s been the identical. We simply survive until 2025 and we’re virtually there, proper? Charges are coming down and a few of these loans which might be due is likely to be in a greater place as a result of they’re on adjustable charges and as charges go down, they could have the ability to get themselves out of this, however there are corporations that received’t survive until 2025.

Henry:
So I’ve a few ideas right here as a result of I personal a industrial asset and we’ve got one emptiness on this asset particularly that we’ve been struggling to get crammed that we didn’t battle to fill vacancies a yr in the past. And so we’re seeing just a little little bit of the impacts of what we’re speaking about on this article. And I simply discover each time I’m driving by workplace buildings in my market, I imply they’re vacant, they’re empty, and I’m speaking legit workplace, not retail. There are companies who will need to have a brick and mortar and so they’re going to proceed to replenish retail areas, however the pure workplace complexes, I simply see numerous vacancies and for hire indicators. Now I’m not seeing a whole lot of foreclosures on this area, however how lengthy does that final? And even when charges come down to some extent the place these folks can refinance and proceed to carry onto the property just a little longer, that doesn’t clear up the issue of with the ability to fill vacant areas with workplace tenants who don’t want workplace anymore.
And so I do suppose that a few of these house owners are going to need to get artistic on how they fill these areas or how they monetize their buildings as a result of even if you happen to can decrease your mortgage fee, you continue to can’t pay it if you happen to’re not getting hire. And so I believe creativity goes to have to return into place right here. Possibly you’ll be able to shift using a few of your workplace constructing to another form of industrial asset the place someone can pay you hire, possibly you are taking some workplace and use it as occasion areas. Possibly you are taking some workplace and convert it to inexpensive housing. I do suppose that whoever figures out the workplace, vacant workplace to inexpensive housing downside, whoever solves that downside goes to make a ton of cash. We’d like inexpensive housing. We’ve received a bunch of vacant workplace. That looks like an enormous alternative, however there’s a lot that might want to occur for that to truly turn out to be a actuality. However I believe that there’s an enormous alternative there.

James:
And what Henry simply touched on about being artistic within the demand the place when you’ve a bunch of open buildings, the place is the demand? The demand is inexpensive housing, like Henry simply stated, there’s not as a lot demand within the workplace world and there might be a development the place somebody’s going to determine that out or work out the best way to minimize these items as much as go the place their demand is as a result of it’s a must to do it while you’re coping with these dimension of properties. In 2009, we purchased, it was a ten,000 sq. foot medical workplace and we thought we received the deal of a lifetime. We paid 100 bucks a foot for this factor. That’s like 20% of what you’ll be able to construct it for. It was 50% beneath appraisal and we’re like, we’re going to be wealthy on this property was up for hire for a yr.
After which what we discovered is it doesn’t matter what you purchase it for, if nobody needs to hire it, it’s price nothing. And what we needed to do to get that factor crammed was get artistic. We ended up transferring our workplace down, which was 40 minutes out of the place we wished to be. We occupied the constructing, we pumped some life into the constructing by having somebody there. After which we began principally WeWork down there in 2009 the place we minimize up and did workplaces at 150 bucks to 250 bucks, small little workplaces. And that crammed the area. And as we crammed the area, extra folks got here in and ultimately we bought that constructing down the street. It was not a win. I imply we wrote a verify to promote that constructing eight years later, however that constructing would’ve sunk us until we received artistic. And to Henry’s level, these buildings which might be simply sitting there deserted, they higher begin figuring that out as a result of there might be points. If the {dollars} aren’t coming in and your insurance coverage and taxes are going up, you’re going to start out writing checks each month that you don’t want to put in writing. And that’s the place we might see some extra foreclosures occurring.

Henry:
So I believe the ethical of the story is you have to be monitoring your industrial asset to determine a, can you retain it and maintain it lengthy sufficient to maintain your self and may you get artistic sufficient to truly generate earnings and preserve the asset as this market continues to alter and develop. Alright, we’ve got yet another of your inquiries to deal with proper after this advert break. Welcome again traders. Let’s soar again within the dialog

Kathy:
Onto our final discussion board put up. It’s a couple of development one consumer’s noticing with renovation tasks. Henry Lazar, Lowe’s put up reads. I’ve observed an attention-grabbing development that’s been an increasing number of widespread since about 2018 buildings promoting for greater than their after restore worth deserves. For instance, a constructing that wants $150,000 of labor will promote for $300,000, however the after restore worth is simply $420,000. And so that you take a look at that will be a $30,000 loss. Possibly persons are shopping for and never fixing who simply needs a multifamily unit at a lower cost level. So yeah, that feels like dangerous math principally. Precisely. I’m guessing if it is a development, possibly it’s a home hack the place it’s like, Hey, I can reside with this not being mounted for some time and repair it over time. I don’t know, James, what are your ideas? Have you ever seen this development?

James:
I believe that is dangerous math and also you’re simply trying on the incorrect offers. We purchase all kinds of various properties and so they’re heavy fixtures and other people suppose they need to be torn down and we’re capable of implement a plan on a rise the worth. And if you happen to suppose it’s 150 within the Matt’s not figuring out, they’re determining a technique, form, or kind. The very first thing is you’re both lacking hidden worth within the property. Can you chop up that lot? Is there zoning upside? There is likely to be a special goal that you just’re possibly not underwriting for. The second is you may have to audit your development prices as a result of if I’m at 100 thousand and also you’re at one 50, that’s an enormous distinction. If I can get my value down 35% decrease than you, which means I can execute on it and truly flip a revenue. And so if the maths’s not making sense, I might moderately take a look at my inside processes moderately than take a look at the offers and go, these offers don’t make sense as a result of if different persons are shopping for them, you have to swap some issues up. I do know Henry is continually shopping for offers and it’s about implementing the plan, not simply shopping for the deal.

Henry:
Dude, that is if you happen to simply reword what this man is saying, he’s saying one thing we’ve got all the time stated, which is like while you put in a proposal on a property and you set it in at a value level that is sensible and someone is available in and scoops it up for like 100 thousand {dollars} extra. We’ve all requested that like, man, how are these folks earning money on these offers? After which I simply transfer on as a result of it’s not my technique. My technique is to purchase offers the place the numbers work, proper? Like I’m shopping for worth add, I’m shopping for below market worth, I’m including worth and I’m monetizing on the larger worth. And you’ll rack your mind making an attempt to determine why someone is keen to pay greater than you in a state of affairs. And there’s a whole lot of explanation why folks could also be keen to pay greater than you.
Not everyone is trying to take that asset and make earnings on it the best way that you have to make earnings on it. Some persons are actually parking cash to keep away from taxes and so they don’t care if the property money flows. Any individual might promote an asset in California or New York and have to plant that cash someplace in order that they cannot need to pay a lot taxes and so they’ll go and so they’ll purchase one thing that’s not going to cashflow however advantages them in another means. You’ll rack your mind making an attempt to determine why different folks do math otherwise than you do. It occurs on a regular basis.

Kathy:
Oh, Henry, that’s such a great level as a result of I bear in mind again in 2012 when the hedge funds began to return in and purchase single household, that’s after Warren Buffet got here out and stated, oh, if I might purchase just a few hundred thousand houses, I might if I knew the best way to handle them, wall Road listened. That’s after they got here in and so they had been paying far more than any investor would even contemplate and we’re all simply scratching our heads. What are they doing? Properly take a look at them now. 10, 12 years later. I believe they did all proper. They had been taking a look at totally different math. We had been taking a look at how will we make this cashflow? And so they had been taking a look at, these are low cost. We’re shopping for stuff for therefore low cost, they’re going to go up over time. So that’s so true, Henry, I’ve performed it. I’ve paid an excessive amount of for stuff and I’m positive different folks had been scratching their heads, so both persons are going to earn cash or lose cash. Time will inform.

Henry:
Look, I introduced two new development homes this yr that make me virtually no cashflow monthly. They simply barely pay for themselves, however I purchased them in order that I might value save them and it’s going to avoid wasting me a bunch of cash on taxes. So did I pay greater than someone else will most likely pay? Completely. However I had an entire totally different motive for purchasing it than different traders had been in search of. That’s simply it’s actual property guys. That’s the way it works.

James:
Properly, yeah, and an on market deal, if you happen to’re paying essentially the most, you’re paying essentially the most. We purchase tons of on market product. We’re paying the very best out there. Does that imply we’re shopping for a nasty deal? No, it doesn’t. It means we’re shopping for a deal that works for us. In the event you’re getting out-priced and you may’t work out the tub, go take a look at what different persons are doing. If Henry outbids me on a undertaking and I’m going, I can’t perceive how this math works. what I’m going to do? I’m going to get my automobile and I’m going to start out driving by Henry’s home and see what he’s received occurring there. I’m going to see who he has working there. I’m going to see what he’s doing and I’d have to borrow his contractor. And that means I get within the recreation, do no matter it takes to get your self within the recreation. And if it means stocking the traders which might be out bidding, you go try this and go get the sources as a result of yours aren’t working.

Henry:
So on the finish of the day, look, your actual property math is your actual property math. It’s essential to keep on with your numbers that work in your exit technique and don’t kill your self making an attempt to determine how all these different persons are earning money on numbers that don’t be just right for you. You simply need to preserve to your numbers and perceive your enterprise after which use it as info like James stated, to go be taught what they’re doing and possibly get just a little bit higher if that technique suits your monetary targets as properly.

Kathy:
Let’s contact on the AR v although, as a result of we had been speaking about prices, however we weren’t speaking about that after restore worth. And so you’ll be able to sort of management what you suppose the prices might be to restore the home and clearly to buy the home and the holding prices and so forth. However how do you actually know you’re on the mark with that rv?

Henry:
Yeah, it relies upon if it’s industrial or residential. I imply, if it’s industrial, that asset’s valued on the earnings it’s producing, so you are able to do issues to extend your A RV by both growing your income or reducing your bills. That may aid you get {that a} RV up. And you may primarily power appreciation with industrial, which is fairly cool with residential, you might be reliant on that appraiser. Possibly some persons are in there candy speaking these appraisers and making them imagine they did greater than they really did after they purchased these properties as a result of we are actually by the hands of the appraiser in terms of that. And so generally these plans backfire as a result of folks estimate or underwrite their A RV, assuming that the worth that they add goes to get them a sure a RV quantity, after which that appraiser is available in and says, nah. And so now you’re the wrong way up based mostly in that appraisal. There’s simply much less management there.

James:
And if you happen to don’t wish to be off in your A RV, and that’s one thing that’s actually necessary for purchase and maintain traders and even flippers as a result of if you happen to’re off on that exit quantity, it’s a must to both write a verify to get out of your flip, you’re going to lose cash now promoting for much less, or if you happen to’re going in your first bur, your cash’s going to be trapped there as the worth is available in. If it is available in low and your foundation is simply too excessive, it’s a must to cowl that because the investor. The banks are solely going to leverage you a lot, 70 and 75%. Usually, how you make sure that your A RV is available in at worth is mostly a detailed scope of labor. What worth are you making an attempt to realize that you just placed on it throughout your underwriting, what upgrades had been performed? Don’t spend extra on that property simply since you really feel prefer it or your intestine says it’s just a little bit nicer. Use logic and use math. Appraisers. Don’t care if you happen to upgraded your counter tops to the slabs which might be double. In the event you spent 10 instances extra in your tile, it appears like tile to the appraiser, spend your cash correctly. That’s the way you management your value by controlling your value. That’s the way you keep inside your refinancing tips and making revenue on a flip.

Henry:
Properly, thanks everyone. That’s our present. When you have opinions on these matters, chime in at biggerpockets.com/boards. Possibly your query will find yourself on one other present identical to this, and we’ll see everyone on the following episode of On the Market.

Dave:
On The Market was created by me, Dave Meyer and Kaylin Bennett. The present is produced by Kaylin Bennett, with modifying by Exodus Media. Copywriting is by Calico content material, and we wish to prolong an enormous thanks to everybody at BiggerPockets for making this present potential.