David:
That is the BiggerPockets podcast present 697.

Dave:
Are you then recommending principally long-term purchase and hold-type offers to your purchasers?

Dahlia:
I do. I imply, I simply really feel prefer it’s the most secure route as a result of folks at all times want a spot to reside, proper? And so your long run rental is simply going to be essentially the most secure. And never solely that, particularly in these markets the place you’re seeing loads of short-term leases after which not sufficient properties for simply common renters, which is why I’m positive they’ve applied these restrictions for you guys.

David:
What’s happening, everybody? That is David Greene, your host of the BiggerPockets podcast. And in case you’ve been dwelling beneath a rock, we’re the perfect, the most important, and the baddest actual property podcast on the planet. The present’s being hijacked at present by my co-host and buddy, Dave Meyer, who joins me from Amsterdam to deliver you guys an superior present with a bit of bit completely different of a state of affairs than we usually have. Dave, welcome.

Dave:
Thanks a lot. Yeah, it’s a bit of little bit of a hijacking, however we additionally simply wish to deliver among the issues that we’ve been doing on my podcast available on the market to this episode to assist everybody listening to this episode get some information about what’s happening available in the market. We do these common panel episodes the place we get specialists from throughout the trade and do type of a spherical desk dialogue. And so at present we’re going to do one with completely different brokers. So we’ve introduced in two new actual property brokers who’re going to be coming to offer their perception, and David goes to change roles and as a substitute of being the host as he often is, I’m going to type of average the dialog and Dave’s going to placed on his agent hat and assist us perceive what’s happening within the markets that he operates in.

David:
That’s precisely proper. I really like getting to do that, I’ve been an actual property agent for some time now, and I’m nonetheless intimately concerned within the particulars of the David Greene staff and what’s happening available in the market. And I purchase homes in these markets too, so it’s enjoyable after I get to leap in and provides the recommendation and the council of somebody who’s main others in direction of constructing wealth the identical method that I’ve.

Dave:
Had been you an agent or an investor first?

David:
Investor.

Dave:
Actually?

David:
I’m most likely the one one dumb sufficient to go from being the investor to willingly stepping into the true property agent area. Virtually everyone in our market does it the opposite method. They’re like, “That is driving me loopy. I wish to be the individual to personal the true property, not promote it.” Nevertheless it’s that drive to wish to share the knowledge, and there’s probably not a greater approach to share details about how one can wealth construct than leaping within the combine together with your purchasers and strolling them by way of that course of.

Dave:
Yeah, good level. It appears to have labored out nicely for you. And yeah, it’s the perfect state of affairs for an investor, proper? In case you are an investor and also you willingly grew to become an agent since you knew you had one thing to supply, I imply, that’s precisely as an investor who you wish to be working with. And that brings us completely to at present’s fast tip. Fast tip. Do I’ve to say it bizarre? Do I’ve to say it like-

David:
Brandon made me say it bizarre for years and I could make you say it deeper. Yeah. However no, that PTSD that I’ve from these excessive pitch fast suggestions I did, I’d by no means want that on my worst enemy, so no.

Dave:
Okay, we’re liberated now.

David:
That’s precisely proper.

Dave:
Than you, thanks.

David:
Free market.

Dave:
All proper, at present’s fast tip. There we go. That was as boring-

David:
That’s such a Dave Meyer method of claiming it. That’s the way you’d anticipate an information analyst to say fast.

Dave:
I calculated essentially the most environment friendly approach to say fast tip, after which I mentioned it that method. All proper. Nicely, at present’s fast tip is to take a look at the BiggerPockets agent finder. It’s fully free. And as you’re going to study over the course of this episode, having an awesome agent is not only about doing all of the transactional stuff that’s concerned in being an actual property investor and shopping for a property, but it surely’s additionally somebody who’s a companion with you and helps you navigate these difficult instances that we’re going by way of. David, I’m guessing you agree, however I personally imagine you may make cash in any kind of financial cycle, it’s nearly adapting your technique accordingly. And in this kind of surroundings, it’s extra vital than ever to discover a good companion who’s often an agent that will help you adapt your technique to satisfy what’s happening in your market.
So if you wish to try this, you wish to discover an awesome investor-friendly agent, you are able to do that free of charge on BiggerPockets, simply go to biggerpockets.com/agentfinder, you set in your market like San Diego, Washington, D.C., or Tulsa. These are the place our visitors are from at present. You simply enter in what you’re in search of, put your funding standards in, after which you may get matched with brokers who may help you succeed. So that’s the fast tip. I suppose I’ll give a second fast tip since you mentioned I can do no matter I need. And that’s if you happen to like this kind of market-based data, these panel discussions, take a look at BiggerPockets’ different podcast, it’s known as On the Market. You will discover it wherever you take heed to podcasts, Spotify, Apple, no matter. David, anything earlier than we get into this episode?

David:
Yeah, very last thing I’ll depart folks with is while you’re utilizing the agent finder, you’re nonetheless going to should vet the agent to ensure this can be a individual that you really want representing you, so take the conversations that we’re having right here at present and use them as a type of template or a mannequin that you really want to have the ability to have the same dialog with the agent that you simply’re selecting. In case you have an agent on there that’s by no means offered a home, simply because they’re on the deal finder doesn’t essentially imply they’re going to be wonderful. It additionally doesn’t imply that they’re going to suck. You don’t know. You bought to have the dialog with them and work out what they know in regards to the market, what methods they’ll suggest, and what they’ll do that will help you in your aim. Lots of people at all times say, “What am I speculated to ask my agent?” Nicely, take heed to at present’s present, hear the conversations we’re having, and attempt to discover the closest factor you may to that.

Dave:
David, I really like that recommendation as a result of I simply suppose that’s true of something. Like discovering an agent or something folks, you must simply vet whoever you’re working with in actual property investing. Even if you happen to rent a turnkey firm, you do a syndication, be sure you do your due diligence that’s an vital a part of being an investor. Okay, yet one more factor, sorry, you instructed me that I may do what I need with the fast tip and now I’m drunk with energy and I’m going to provide yet one more tip. And that’s if you happen to like this present, if you happen to like On The Market, please give us a constructive evaluate. We actually respect them. It actually helps us make these nice reveals that you simply all love and depend on to grow to be knowledgeable and profitable traders.
With no additional ado, let’s get to at present’s interview. All proper, nicely thanks all a lot for being right here. Tremendous excited for this present. Let’s simply begin with a spherical of introductions. Rob Chevez, may you please inform everybody listening a bit of bit about your self?

Rob:
Thanks for having me guys. I respect it. I’m Rob Chevez out of the Washington D.C. Metro market. I’ve the honour and privilege of main The CAZA Group. We’re a staff inside Keller Williams that may do round $180 million in quantity this yr. And I run one of many largest actual property funding networks within the nation known as GRID. And I’m simply blissful to be right here. I’m blissful to take part, so I respect it guys.

Dave:
Nice, thanks a lot. Subsequent we’ve got Dahlia Khalaf. Dahlia, may you please introduce your self?

Dahlia:
Sure. Nicely, additionally thanks for having me. I’m so excited to be right here. So my title is Dahlia Khalaf, I’m the proprietor and managing dealer of ASN Realty Group. I’ve been an agent for about 15 years after which a dealer for the final two. I even have my very own funding portfolio that I personally handle and I primarily work with traders and my actual property agency has simply sort of naturally advanced into an funding agency and it’s sort of our area of interest. And that’s just about me in a nutshell, and I’m simply tremendous grateful to be right here.

Dave:
All proper, nice. I really feel sort of bizarre asking you to introduce your self, David, however only for giggles, why don’t you introduce your self to everybody who most likely already is aware of you?

David:
I’m the opposite David within the David and David reveals right here, typically known as Dave and David by actual property connoisseurs who’re a bit of extra cultured. However I’m an actual property gadfly. I do a complete bunch of various stuff. I run the David Greene staff, so we promote houses all all through California seeking to proceed serving to the BP neighborhood, representing them out right here. I’ve a mortgage firm known as The One Brokerage, the place we assist folks monetary property all throughout the nation. After which I purchase leases everywhere, write books about actual property, and host the BiggerPockets podcast, which is what folks already most likely know in the event that they’re listening to this.

Dave:
Let’s hope so. At the moment we’re going to be speaking to all of you. All have loads of expertise, however speaking to you within the context of being actual property brokers as a result of a lot of what’s happening proper now available in the market may be very quick paced and it’s type of exhausting to maintain up. Even somebody like me who appears to be like at loads of knowledge, knowledge is at all times in arrears, it’s backward wanting. And so we wish to hear from all of you about what you’re seeing on the bottom in your respective markets and what you’re counseling your purchasers with and the way you’re getting ready your self for this shifting market dynamic. So Rob, I’d love to begin with you. Are you able to rapidly simply inform me a bit of bit in regards to the D.C. market during the last couple of years? What occurred through the pandemic and has something modified just lately?

Rob:
Nicely, lots has modified, however let’s return in time a bit of bit. Let’s begin from 2017 to 2019. We noticed simply sort of this modest appreciation at 3% to 4%, which was regular. Similar quantity of properties was promoting yr over yr. After which in 2020 we noticed an 8.5% spike in appreciation, after which we additionally noticed a 5% improve within the variety of houses that had been promoting, so extra dwelling offered for 8.5% extra. However then the subsequent yr was tremendous fascinating, 2021, we noticed an enormous spike. We noticed one other 8.5% or 8.2% development within the D.C. Metro market, however there was a 13% year-over-year improve within the quantity of houses, the variety of houses that offered. So we simply had much more houses offered, it’s nearly like we pulled a few of these future gross sales into the current.
After which yr to this point, it’s been fascinating as a result of yr to this point we nonetheless have skilled a few 6% appreciation, however we’ve seen a 19% drop within the variety of houses offered. So fairly vital. And actually we all know it’s the second half of this yr, it’s actually been the second half of this yr. Once I in contrast the Q3 of this yr in comparison with Q3 of final yr, it’s fairly fascinating. I imply, it’s like a 26% drop within the quantity of houses, however we nonetheless had a 3% appreciation. So there’s nonetheless low stock in our market was about 24 common days, our market’s 24 days and there’s a few month and a half provide within the D.C. Metro space.
However if you happen to drill even, go down a bit of bit deeper, what’s fascinating is that D.C., D.C. correct is definitely having sort of its worst five-year cycle. And so D.C. is experiencing longer days on market, extra stock than the historic five-year common. And it’ll be fascinating to see how this performs out over the subsequent couple years. I believe what we’ve finished is we’ve gotten to the opposite aspect and so we hit this inflection level and now over the subsequent quarter to 2, we’re going to begin seeing a big drop for my part.

Dave:
All proper. That’s nice. I wish to get to the purpose the place you inform us a bit of bit extra about what you suppose is occurring. So it sounds such as you had strong development for 5 years with the final two years seeing above common appreciations, I believe you mentioned 8.5% in 2020, 2021, which in a traditional yr in instances is fairly excessive. I imply, that’s extraordinary, however not essentially in comparison with another markets like David in San Diego. What had been appreciation charges like over the pandemic? I imply, I assume it was double digits, proper?

David:
Nicely, earlier than the pandemic issues had been buzzing alongside actually, very well in that market. California’s an enormous market, we wish to name it California round right here. And so lots of people don’t notice Northern California and Southern California might be completely different states. They may as nicely be like North Carolina, South Carolina. So each metropolis’s completely different, you may’t take a look at this state and say that is what’s taking place, however San Diego’s been one in every of our crown jewels for so long as I’ve been round. It’s massively common. There’s hardly any motive to see why that might change, the trade’s very strong there, the climate’s unbelievable there. And so earlier than the pandemic, days on market was at lower than two weeks, like homes, even an outdated ugly home was simply flying off the cabinets as a result of everyone needs to be in San Diego and stock was at all times the most important downside that we had there.
Now with charges going up, I’ve talked about this earlier than, the upper {that a} value level is in San Diego, the typical value level within the metropolis is about 1,000,000, and if it’s within the county it’s about 800,000. However increased value factors, the markets grow to be very delicate to rate of interest hikes. Whenever you get the next price, if it’s a $200,000 home, it doesn’t have an enormous impact. However on 1,000,000 greenback home, that’s huge. And so that you type of see some extent the place a market can solely get to be so costly if individuals are utilizing loans to purchase the properties.
Now, you even have a pair areas in California the place folks simply pay money. They don’t care. They’ve received $8 million, they go throw it down on a home, they’re not going to be utilizing financing, so these markets are completely different than these, that’s simply pure comparable gross sales. And so they really can do higher in down markets as a result of folks wish to throw their cash onto a beachfront property in Southern California. In the event that they’re nervous that the market’s going to crash, that’s a secure place to carry it. However San Diego particularly has slowed down from what it was like pre-pandemic. It’s really rising in about 1%, which isn’t wonderful, however that’s really an unbelievable good alternative if you happen to’re seeking to purchase in San Diego, as a result of it’s been very, very troublesome. It’s not crashing by any means, however days on market have about doubled within the final yr. In order that they had been round two weeks, now they’re sitting slightly below 4 weeks proper now, which suggests consumers even have an opportunity to get into some of the strong markets within the nation.

Dave:
Superior, nice. Nicely, that’s tremendous useful to grasp as a result of already we’re seeing completely different dynamics in sure sorts of markets. D.C., it looks as if has type of been the final 5 years, sluggish and regular, hasn’t began to return down a lot but, however is possibly on the precipice, whereas San Diego noticed this explosive development and now could be, I suppose at the least approaching flat.
Dahlia, how is it in Tulsa? I believe that’s most likely one of many markets I’m personally not as aware of. So curious to study what’s been taking place in your space over the previous couple of years.

Dahlia:
Yeah. So Tulsa goes to be very completely different from you guys’ markets. We’re at all times a really secure market so long as I’ve been in actual property. So even issues which might be affecting you guys on the coast and also you’re seeing much more by way of value drops and that sort of factor or big inflate appreciations and that sort of factor, we see a few of these issues, however on a a lot smaller scale simply because we’re simply so secure there within the Midwest. So we noticed our median gross sales value again in 2020 was round $200,000. And now we’re at round $250,000. That’s our median gross sales value proper now. So we noticed some actually good appreciation these final two years, however what loads of us in the true property enterprise listed below are saying is that that is Tulsa taking part in catch-up. We had been so undervalued for thus lengthy and now we really feel like we’re attending to the place we must always have been and simply stabilizing.
After which so far as days on market, clearly in 2020 issues had been simply flying, our common days on market was lower than eight days. Now we’re round two weeks. So issues have slowed down, however they’re nonetheless transferring pretty nicely, particularly in sure value factors. Our stock remains to be low again in 2020, it’s nonetheless very low. We’ve lower than two months price of stock proper now. After which clearly the rates of interest are the massive issue that we’re seeing between 2020 and now could be how that has impacted purchaser demand. So these are the principle issues. I’d say, particularly our beneath $200,000 remains to be transferring very nicely. When you recover from the 220, 230 value level, and I believe that’s clearly as a result of it’s nearer to our median gross sales value, issues will not be transferring as a lot, staying available on the market longer.

Dave:
Nicely, only for context for everybody listening, going from eight days of days on market to 2 weeks is a dramatic shift percentage-wise, however remains to be remarkably low in any historic context. Something actually beneath, I don’t know, 30 days remains to be fairly low, I suppose relying available on the market. So it appears like issues typically in Tulsa are nonetheless, would you say it’s nonetheless a vendor’s market or how would you categorize the surroundings now?

Dahlia:
Now, after I’m speaking about that eight days on market, we’re speaking about in 2020. Now, if we’re speaking about previous to that, it most likely was nearer to round 30 days, however this was as soon as we began seeing the stock shortages and all of that. Now, so far as purchaser’s market, vendor’s market, I really feel like beneath $200,000 is a vendor’s market nonetheless. That’s a aggressive value level. I imply, take into consideration what your entry degree value level is in your markets versus ours is simply a lot decrease. However when you get to that 230, 240 and up, it’s positively grow to be extra of a purchaser’s market.

Dave:
So, Rob, you talked about that in your market in D.C., that you simply suppose at the least D.C. correct, and I do know D.C. is a fairly numerous group metro space, it’s comprised of Virginia, West Virginia, Maryland, everywhere?

Rob:
It’s received loads of aspects to it, sort of like California.

Dave:
Yeah. And so that you talked about that you simply suppose issues are happening. Are you able to inform us first why you suppose that? After which secondly, if that’s the case, how do you advise your purchasers proper now about what to purchase and how one can make investments properly?

Rob:
I really feel like what we’ve skilled is tons of momentum and inertia. So we’ve got all this inertia that pulled us, has been pulling us by way of in 2022, and we begin seeing a slow-down. I’m listening to Dahlia say the identical factor, there’s a bit of little bit of a slow-down in her market. Similar factor with David. And that inertia will begin going the opposite method. And we’re already seeing it in D.C. correct, it’s nonetheless… Right here’s the factor guys, severely, it’s nonetheless a vendor’s market. There may be in Virginia, in Northern Virginia, there’s a month and a half of stock, some sub-markets it’s beneath 30-day stock. In D.C. correct it’s like 2.4 months, so that’s nonetheless a vendor’s market. It simply feels a lot completely different than the 15 days. I believe that was the bottom that we had, Dahlia, in our market was like 15 days. It’s now crept again up.
However what I’m seeing is that identical to there was momentum going up, there’s now momentum going the opposite method and there’s no approach to time a market like Dave, I imagine that if the numbers work for any person, and relying on what their speculation is, and the numbers work, they need to purchase. And if any person’s seeking to maintain onto an asset long run, that they need to purchase if they’ll make the numbers work. Leases elevated fairly a bit, so it helped calibrate a few of these increased costs. And inside our market, folks have gone simply an hour away in locations like Entrance Royal or in Winchester. And the Airbnb market is flourishing in that market proper now. And so what we do is we simply sort of take a look at the place can we get the return and the way can we assist purchasers win over the lengthy haul? And over the lengthy haul, issues look nice, proper?
Employment on this space is ridiculously wonderful. We’re like a tech hub on this space, we’ve received the federal government that’s in our yard. I imply, that’s the factor with the Washington D.C. Metro market is that we’ve at all times had the federal government that sort of helps stabilize us and is a spine to the enterprise. After which we’ve received all these tech corporations which might be producing loads of new jobs. And so regardless that we’re going to see a dip in pricing, which I imagine we’ll see a dip in pricing towards Q1 of subsequent yr, nonetheless extremely good market over the lengthy haul to purchase it. And I went by way of the entire 2007, 2008 craziness and values got here proper again and previous that. So long run, nonetheless an awesome marketplace for us to be shopping for into.

Dave:
I’m glad you introduced up 2008, Rob, as a result of I needed to ask you about that. D.C. strikes me as a type of markets which might be comparatively recession-resilient, I’d say, if that’s a time period.

Rob:
Positive.

Dave:
And simply due to the federal government public sector jobs, they’re much less cyclical and unstable than loads of non-public sector jobs. So did D.C. bounce again sooner than different areas of the nation? Was the dip as extreme or how did it evaluate to different markets again then?

Rob:
So it held higher than different markets for positive, particularly in comparison with loads of the Sand States which might be on the market, however we nonetheless received whacked in sure areas within the D.C. Metro market, like 30%, 35% off market highs. However then by 2009, 2010, you began seeing values come again up. And Dave, I bear in mind in 2012, 2013, as a result of we purchased, I’m an energetic purchaser as nicely, we purchased issues at such low cost. When issues began rebounding in 2012, 2013, I felt like issues had been overpriced and I sort of pulled again a few of my shopping for a bit of bit, disgrace on me for doing that, proper? However there’d been a 30%, 35% drop and I simply purchased at fairly low costs, but it surely got here again fairly rapidly.

Dave:
All proper, cool. Thanks, Rob. That’s tremendous useful. I imply, suppose over time, I’ve simply seen this dynamic the place sure markets are a bit of bit extra unstable, they spike up, they arrive down, they peak and valley a bit of bit extra, however sure markets, it appears like D.C. is extra of like a sluggish and regular sort of factor, however that may be very helpful, particularly for long-term traders. David, what about you? You mentioned appreciation’s out to 1%, which is clearly nonetheless up, however a reasonably large shift. I used to be really… Nicely, I’ll share one thing I learn the opposite day after, however simply what do you suppose the play is in San Diego proper now? What are you advising your purchasers?

David:
You’re most likely not going to, your common individual isn’t going to go get 9 San Diego rental properties. They’re going to should put $200,000, $250,000 down on each one in every of them, then you definitely received to simply search for the needle within the haystack to make it work so far as the money circulation is anxious. It’s probably not a market the place you’re going to make this the meat and potatoes of your portfolio, however I’m very large on what I name understanding portfolio structure. How do you add properties to your portfolio that go with one another, that make up for the weaknesses of different properties with the strengths of this and vice versa? San Diego may be very resilient. To me, I believe it’s the perfect climate I’ve ever seen and it may be the perfect climate in the complete world. We simply had BPCON there. Each time I am going, I’m like, “I may by no means reside right here as a result of I’d by no means work. It’s the Bermuda Triangle.”

Dave:
It’s so good.

David:
It’s so good. Yeah. Those who have cash are going to wish to be there. There’s no method round that. And climate just isn’t depending on trade or inhabitants tendencies or no matter know-how firm occurred to go there and produce all the roles with them they usually can’t actually construct a ton as a result of town’s constructed out actually far. So the play for San Diego for my part, is that if you happen to’re a resident there, you must be shopping for a property in home hacking. I believe that is the perfect home hacking market in the complete nation so far as what I do know. And it’s as a result of it’s received all of the items that you simply want, a bunch of folks that wish to reside there that may by no means be capable of afford a house, so that they received to have the ability to hire one thing.
Everyone knows any person who moved to San Diego after highschool and by no means got here again they usually’re nonetheless working at a bar, working at a restaurant. They’re not ever going to be a house owner as a result of they’re caught in that Bermuda Triangle, they want a spot to hire. You then’ve received the rents which might be loopy costly for you if you happen to’re making an attempt to reside there. So home hacking works finest in areas the place housing is dear, it provides you this added good thing about doing it. And then you definitely’ve received the truth that it’s received a robust short-term rental market, but it surely’s very troublesome to get a short-term rental occupancy deal from town. They restrict how many individuals can really do short-term leases, so if you wish to attempt to simply go purchase a property and throw it up as an STR, the chances of you getting picked are low and that’s a really costly property to carry whilst you’re ready, however if you happen to reside within the property your self, you may hire out one other a part of it as a short-term rental.
It’s type of a again door you could get in, which is simply one other profit to deal with hacking. So I don’t suppose that you simply’re going to construct your total portfolio stuffed with San Diego properties, however you positively ought to have one or a pair if you may get it over a span of a pair years as a result of the appreciation goes to be unbelievable and it’s not an funding you’re going to should have vital fear about dropping. It’s not an space like, “Oh, fracking went away. So all these properties in North Dakota that had been exploding at one level lower off fully.”

Rob:
Dave, the D.C. Metro market is analogous. It’s a home hacking sort of marketplace for traders. However then if you happen to simply go an hour and a half exterior of D.C., you’ve received some stunning nation, you’ve received the Blue Mountains, you’ve received the Shenandoah River, and STRs are the place I’m seeing loads of traders exit to these markets and making the numbers work. And it doesn’t sound like there’s the identical hurdles that you need to undergo in comparison with a spot like California. One of many guidelines is within the Warren County space, you simply should be 100 toes away out of your neighbor. That’s it. In the event you’re 100 toes away out of your surrounding neighbors, if you happen to undergo the method, fairly straightforward to get a allow for an STR.

Dave:
Yeah, that’s superior. Dahlia, I wish to test in with you. What are the highest three methods you suggest proper now given what’s happening in Tulsa?

Dahlia:
So Tulsa’s positively extra profitable on the subject of long-term leases proper now. Surprisingly, we do have fairly just a few short-term leases, though we’re not essentially a trip vacation spot. I believe the tradition has simply modified, particularly within the final two years, the place folks would simply relatively hire a home or a city dwelling or no matter than keep in a resort to accommodate their household or simply to be extra comfy. So we did see fairly a little bit of saturation with STRs right here. And we don’t have all these limitations by way of getting a license right here, it’s very straightforward. It’s mainly, I believe $300 for a license for the yr. There’s no inspection, there’s no course of you undergo different than simply making use of and paying the license price.
So we noticed an enormous inflow of STRs within the final, I’d say 4 years. And so now we’re fairly saturated. So I had purchasers buy STR within the final couple years, now I’m advising it’s at all times nice to buy one thing that might serve nice as each, one thing that’s in a location that might do nicely as an STR or an LTR so that you’ve the pliability to flip backwards and forwards if you must, you might have an exit technique.

Dave:
Yeah. I imply, I really like that time about creating that flexibility. That’s a good way to guard your self and mitigate threat. I used to be simply curious although, how are you seeing, how is that this oversaturation in STRs manifesting itself? What are you seeing that’s telling you that there’s too many proper now?

Dahlia:
Emptiness.

Dave:
Okay. And are you seeing purchasers which have purchased STRs wrestle to make their numbers work?

Dahlia:
And I attempt to maintain in touch with my purchasers after they buy. We keep related. I attempt to maintain a pulse on what’s happening. To this point, those that had STRs, they’re doing okay, those particularly which might be in additional high-demand places. However I’ll let you know the place I noticed extra of a flip is my purchasers that purchased midterm leases, particularly catering to touring nurses, which we noticed an inflow of these throughout COVID. However then as issues calmed down, these contracts received canceled. And so I did see a number of purchasers of mine that had purchased midterm flip to both brief time period or long run.

Dave:
Bought it. That’s tremendous useful to know. Truthfully, I believe you hear lots in regards to the issues which might be working, which is at all times useful, but it surely’s nice to listen to the issues that you’d suggest folks steer clear of. That’s actually useful for our viewers. So are you then recommending principally long-term purchase and hold-type offers to your purchasers?

Dahlia:
I do. I imply, if you happen to’re going into it, I simply really feel prefer it’s the most secure route as a result of folks at all times want a spot to reside, and so your long-term rental is simply going to be essentially the most secure. And never solely that, particularly in these markets, so particularly for you guys, the place you’re seeing loads of short-term leases after which not sufficient properties for simply common renters, which is why I’m positive they’ve applied these restrictions for you guys.

Dave:
Yeah, that’s tremendous fascinating. And yeah, personally, I do know this can be a boring factor to say, however I simply suppose you may’t go incorrect with buy-and-hold investing. It simply works so long as you maintain onto it by way of the cycle.

Dahlia:
If it’s not broke, don’t repair it.

Dave:
Yeah, precisely. David, I’m curious. There may be this dynamic the place I principally spend money on Denver and there’s this dynamic the place they put in loads of short-term rental restrictions the place it must be your main residence. So mainly you want an ADU or I’ve a main, I reside overseas so I may hire out my main. However for the individuals who have it, it really seems to be much more profitable in these markets as a result of there’s constrained provide. So do you see individuals who do that home hacking technique actually do nicely with their short-term leases?

David:
Yeah. And also you made such a superb level. The truth that it’s a constraint provide to many individuals is a motive they don’t wish to make investments available in the market. “Oh, it’s exhausting. I wrote a proposal I didn’t get accepted. I wrote two, it simply isn’t going to work. I’m simply going to exit of state. I’m going to go discover a market the place I can get a home and a contract immediately.” However there’s this rhythm to life, I must give you a reputation. If Brandon Turner was right here, he’d give you a reputation. He was superb at that.

Dave:
Manufacturers the whole lot.

David:
Sure. If it’s straightforward on the entrance finish, it’s exhausting on the again finish. If it’s straightforward on the again finish, it’s exhausting on the entrance finish. And human beings have this misguided perception that they’ll have each. They suppose like, “All proper, it’s a market the place actual property’s appreciating quickly. It must be straightforward to get into that market.” No, the very fact it’s appreciating quickly is why it’s exhausting to get in. And if it was straightforward to get in, you wouldn’t get on the again finish all of the appreciation, all of the rising rents. Each actual property agent understands this, you may’t have a purchaser’s market and a vendor’s market on the similar time. You need to study what makes this market interesting. So if for example, within the metropolis of San Diego or the realm, it’s the truth that provide may be very constrained, there’s huge demand for it, and it’s very costly.
So the stakes are excessive. You can also make good cash if you happen to do it nicely, however you may’t simply go purchase a tract home. It’s received to be a spot that’s received an ADU or ideally two ADUs or play you can flip one thing into an ADU that different folks aren’t seeing. It’s received to have one thing distinctive about that. After which while you purchase it, you’re going to do nice on the short-term rental market. There’s loads of conferences that occur within the San Diego space that lots of people journey to, there’s loads of vacationing. I imply, the climate’s so good, there’s folks that don’t go to Mexico, they’ll simply go to San Diego regardless that it’s proper there as a result of it’s so, so good.
However the important thing that I believe each good agent understands helps their purchasers see the angle that works on their market. You’ll be able to’t hear about what works in Tulsa, Oklahoma and go attempt to do the very same factor in Washington, D.C. And vice versa, there’s very particular methods that we speak about on these podcasts that work higher in sure places and in higher cycles available in the market. And the suitable agent who’s listening to BiggerPockets, who owns funding properties, who’s working with traders on a regular basis, they’re just like the Sherpa that may lead you to the highest of your individual market’s Mount Everest, that may assist you discover the offers.
And so these are the questions I simply suppose folks ought to ask. In the event you’re going to work with us in San Diego, you wish to know, “Nicely, what are your different purchasers doing that’s working? What are some stuff you’re determining?” The identical would go for Tulsa and for Washington, D.C. Don’t attempt to take that primary understanding that, “Nicely, I heard this technique on the podcast, so go make it work,” when the market just isn’t relevant to that particular set of circumstances that the market’s going through. Or, “Nicely, I wish to be a short-term rental investor, however I wish to make investments on this space as a result of it has the perfect one thing else.” Typically they’re in battle with one another they usually don’t work.

Rob:
I don’t know if you happen to guys are seeing this in your market, however in our market we’re seeing much more sub-twos and lease choices, loads of artistic financing. There’s loads of that occuring proper now as a result of we’ve had all of those actually low rates of interest that individuals have locked in for a while and but life occurs. Dying, divorce, medicine, like all the remaining and folks want options. And so I’m seeing a lot of my traders sort of shift to a few of these methods. And we simply put a property at a contract, it’s a lease choice at $1.2 million they usually put down $100,000 non-refundable deposit as a result of they only couldn’t settle immediately, however they nonetheless needed to lock-in the property.
And so we’re seeing a few of these methods sort of come again and an agent that understands how one can navigate these methods or has finished this earlier than, is extra worthwhile on this market. They see actual property from a 360 standpoint versus simply sort of the slender lens of serving to any person purchase and promote, you’re actually turning into an issue solver in a market the place individuals are going to face issues and the suitable agent’s going to know how one can resolve these issues for his or her purchasers.

Dave:
Rob, are you able to clarify rapidly what sub-two is and why it’s rising in popularity?

Rob:
Positive. Nicely, everyone knows rates of interest had been actually low for a very long time. Individuals locked in at 2%, 2.25%, 3%. And these loans are on the market and life occurs the place any person for no matter motive may lose a job. You see all these tech corporations that did lay off 1000’s of individuals and now they’ve an asset, not solely the bodily asset, however the mortgage, the underlying mortgage itself is an asset that turns into worthwhile to any person. And sub-two is merely simply taking up the funds for any person in change for the deed of that property. And also you may pay them among the fairness up entrance, you may be capable of construction it so that you pay them among the fairness on the again finish. Nevertheless it’s a approach to resolve any person’s downside if, let’s say, not even when they’re behind. Let’s simply say they had been an expired one who did not promote the primary time, however they should promote as a result of there’s a job relocation taking place and it’s a fairly home.
Nicely, in the event that they’ve received a extremely good mortgage on that asset, an investor like myself may be capable of put that property beneath contract and primarily purchase that property with the underlying debt that’s there, so successfully the mortgage stays in that vendor’s title. We successfully nearly grow to be companions collectively in that respect. And so I do know our staff has accomplished a pair this previous month, we’ve helped navigate that course of with a few of our sellers. We personally have purchased, I purchased one final yr within the course of of shopping for one proper now that method. And it’s only one further technique, Dave, that individuals can use in a shifting market like we’re in at present. And so long as you may create a win-win-win for everyone, then you need to make use of.

Dave:
Thanks, that’s tremendous useful. Yeah. And you could find these sorts of offers tremendous helpful proper now and hopefully there’s extra sellers keen to try this for traders on the market who’re fascinated about it. Dahlia, David talked about earlier about folks looking for nice brokers, and I believe it’s an ideal instance, particularly in some of these markets, during the last couple of years, you can simply purchase something and it might go up and it appeared nice, however these are tougher instances. Do you might have any recommendation to people who find themselves looking for a superb agent to work with to assist them navigate these instances? What ought to they be in search of in an investor-friendly agent?

Dahlia:
Positive. So I believe one vital factor is are they an investor themself? Do they personal funding property? It simply provides them what Rob was speaking about. It simply provides them perception {that a} non-investor simply most probably doesn’t know. I’ve had, I don’t know what number of instances the place I’ve somebody come to me they usually say, “Hey, I used to be working with this different agent, they had been nice, however they only don’t get it. I want somebody that understands the funding world.” As an investor agent, you simply have such a pulse on what’s happening, or at the least you need to. It is best to know what the rental charges are like, you need to know the way lengthy properties are sitting, rental properties are sitting available on the market. Is that this a superb space? Is that this a rentable space?
You’re going to have an understanding about, you’re going to have assets, contractors, property managers, artistic financing lenders. All this stuff {that a} non-investor agent simply doesn’t have entry to as a result of it’s simply not a part of their area of interest. In order that’s why I simply suppose it’s crucial to have any person who’s an investor themself and simply very aware of what’s happening within the funding world.

Dave:
Dahlia, had been you agent first or an actual property investor first?

Dahlia:
So I used to be an agent first. I received my license about 15 years in the past. It simply sort of occurred by probability. And never solely that, my dad’s an investor, so I at all times knew that in some unspecified time in the future I used to be going to go that route, it was simply getting financially prepared for it. However I grew up round it, grew up with my dad shopping for rental properties, so it’s simply at all times been round me.

Dave:
That’s superior. Was it exhausting, did you need to study or do something additional to begin catering and dealing with traders when you had been already an agent?

Dahlia:
I imply, I really feel prefer it simply occurred organically as a result of I used to be already an agent and an investor. I used to be getting referrals, folks that had been simply referring folks to me as a result of they knew that I used to be doing each and that I used to be educated. And so it simply sort of naturally occurred that method. So far as doing something additional, probably not. I simply gained expertise working with loads of traders, particularly the out-of-state traders. I’ve just about created a really seamless course of for them now since I’m eyes and ears for these out-of-state people that loads of time by no means even set foot within the property they buy. So it’s actually simply expertise.

Dave:
Superior. What about you, Rob? How have you ever constructed out your experience as an investor-friendly agent and what different recommendation do you might have for individuals who wish to discover an awesome companion to work with?

Rob:
So a pair issues. One, I really like… Really, I’m going to say it proper now, the investor-friendly agent Moniker. Hate that Moniker.

Dave:
Actually?

Rob:
Yeah. Solely as a result of I really feel like what you’re, it nearly appears like GoFetch. GoFetch is a pleasant investor agent, however actually the Moniker is basically extra of a marketing consultant, like serving to any person perceive all of actual property from a 360 standpoint. So I do know everyone makes use of it, it’s simply one in every of my issues. However I began off as an investor first, in order an investor first, my spouse and I’d purchase 20 to 25 homes a yr, we’d repair up small multi-family properties, we’d then promote them to investor’s turnkey, then we’d handle belongings for different traders, and we discovered the sport there. And what I noticed was that we had a talent set at that time to have the ability to information different folks to have the ability to do the identical.
Whenever you put your individual cash the place your mouth is to promote your individual asset and to handle your individual asset, you perceive all of the little nuances that assist you make a greater return on the investments that you simply purchase. And so I actually really feel that an awesome agent investor understands these nuances. They’re consultants, like David mentioned, they’re Sherpas, they’re actually guides within the market that may assist you construct huge wealth. And I believe the one method that you simply’re going to learn to do that’s by doing it your self. How may you presumably take anyone on a wealth journey if you happen to haven’t gone on the wealth journey your self? And so I believe that that’s a vital part of with the ability to assist different folks. You simply received to do it your self.

Dave:
Bought it. That’s nice recommendation. And I’ll by no means name you an investor-friendly agent once more. It’s [inaudible 00:43:50].

Rob:
No, it’s superb. All people makes use of it, can’t escape it. David, you bought to give you one thing that’s higher than that.

Dave:
Sherpa.

David:
Yeah, the Sherpa. We inform our brokers, “You’re not an order taker. This isn’t a restaurant the place somebody says, ‘Can I’ve a Coke?’ And also you run and get it and produce and say, ‘What else would you want?’” All that’s folks absolving themselves of the accountability of management. It’s simpler if somebody tells you what to do, you don’t should suppose. You need the individual at the perfect eating places, I used to work in superb eating locations after I was in school, the place I don’t say, “What would you like?” I say, “Would you want wine tonight?” “Perhaps. What do you might have?” After which I present them the checklist and I say, “In the event you’re in search of one thing like this, this may be a superb decide, however if you would like one thing like this, that might be.” And then you definitely ask me questions after which I present you I learn about wine, so now my suggestion appears like one thing you’d wish to belief.
Actual property ought to work the identical method simply with increased stakes and extra particulars. In the event you’re an agent and also you don’t know what’s taking place in your market, it’s like being an individual that’s making an attempt to promote wine and also you don’t know something about wine. You wish to be recommending issues to folks, you wish to be advising them, main them in a way. And you bought to believe to do it. And I really like the purpose you made that you have to be constructing wealth for your self. Ideally, you need an agent that owns properties in that market and may be very comfy with it, as a result of in case your motive to grow to be an agent was, “I hate my job, I hate my life, I simply need a completely different one. Perhaps I’ll strike it wealthy.” You’re like the person who transfer out to California for the gold rush and check out to determine like, “Perhaps the face will bless me.”
These weren’t the folks that did nicely. Those that did nicely had a plan. They had been the folks that went on the market, they offered the picks and the shovels to the gold miners. That’s what you want. It is advisable be the agent who has a plan, who’s doing it your self, who’s in it for the suitable causes. You will have the suitable motives, you’re making an attempt to assist folks construct wealth since you’re additionally constructing wealth. No one needs a private coach that appears horrible. In the event you decide a private coach, that appears very nice. So if you happen to’re financially unfit, then you definitely’re going to have a really exhausting time being the Sherpa that may get folks to the highest of that mountain.

Rob:
Yeah, the agent investor advisor or one thing. I don’t know.

Dave:
Yeah, you must lead by instance, David. It’s like you may’t simply spit principle, you need to additionally be capable of stroll the stroll a bit of bit.

David:
Sure, completely.

Dave:
Nicely, this has been tremendous enjoyable, however we do should get out of right here quickly. However I’d love for you all to go away us with one piece of recommendation. So may you every give me 60 seconds or much less on why you suppose your market is a good place for traders to contemplate investing proper now? David, your expertise. I’ll make you go first. Expertise at podcasting, I do know you’re all skilled traders and brokers. I may simply make David, put him on the recent seat first.

David:
Yeah, I dropped so many mics that they really put it on a stand in order that I can’t drop it anymore. I used to be breaking materials with all these nice clips. My recommendation is don’t suppose I’m too busy that will help you with getting a home. That’s one thing that individuals simply cease reaching out to me after I began internet hosting the podcast. I’m like, “I’ve a whole freaking firm that’s designed simply that will help you earn cash with actual property, with the entire data that I’ve discovered that I’ve tried to cross on to my brokers that will help you. So attain out.”
The second piece of recommendation that I’ll give is cease taking a look at what’s proper in entrance of your nostril. Each time we speak about methods that work, folks that constructed wealth, except they invested in FTX they usually thought that they had been actually wealthy, which they’re now regretting, it’s folks that took a long-term perspective. The folks that made cash actual property did it over 20 years, over 30 years, they didn’t purchase a home and when one fence board broke, they thought, “Ah, this isn’t price it. There’s an expense I didn’t know.” They performed the lengthy sport.
So cease zooming in on what’s taking place proper now or how one can get the right deal or ready for the right market. After which 10 years go by and it by no means got here and also you misplaced lots of of 1000’s of {dollars} that you can have made had you simply discovered the perfect deal you can within the state of affairs that you simply had been in proper there after which went and recapitalized in order that you can do it once more and let time does what it does with actual property. So I’m continuously simply making an attempt to be an evangelist for this zoom out perspective that I’ve. Nobody remembers what was of their inspection report 30 years in the past. You’ll be able to all ask your dad and mom or your grandparents what freaked you out about shopping for the home, they usually don’t bear in mind. They don’t know the escrow officer’s title, they don’t know the inspection report, they don’t know what rates of interest had been. What they know is how a lot cash that they made in actual property holding it over a time frame, letting the mortgage receives a commission off, and letting inflation respect the asset.

Dave:
Find it irresistible. And I assume you imagine that San Diego’s an awesome place for that long run, proper?

David:
Yeah.

Dave:
There’s been loads of exodus from California or folks say like that, however you continue to imagine San Diego long run goes to carry out nicely.

David:
Yeah, that’s a superb level too. Your agent ought to be capable of information you. I’d inform San Diego’s very sturdy, Orange County’s very sturdy. There’s loads of locations in San Francisco which might be nonetheless sturdy. Like Downtown LA, not very sturdy. That’s not a spot that I’d be aggressively routing provides proper now. So not each path to the highest of Mount Everest, to make use of that analogy, is identical. And when climate modifications, you’re going to take completely different paths. Sherpa’s know all of them, in order that’s why you wish to have an agent that is aware of your market, so we will information you away from the incorrect areas and into the suitable.
San Diego’s one the place I’m blissful to speak about on a present like this as a result of that’s as resilient and bulletproof of a market as I’m conscious of. And when issues are slowing down like they’re proper now, you wish to be within the grade A locations. This isn’t a time to get into D neighborhoods and even C-minus neighborhoods. You will get away with that when the market’s going up, up, up or proper after you’ve already had a crash, not once we’re sitting at some extent the place we don’t know the place issues are going like proper now.

Dave:
Nice recommendation. Dahlia, what about you? What would you say for people who find themselves contemplating Tulsa, what’s your pitch?

Dahlia:
I imply, the beauty of Tulsa is affordability. I imply, you may get an awesome single household rental for beneath $200,000. And stability. Like I mentioned, we’re not seeing the loopy ups and downs, it’s you park your cash there. Similar to what David was saying, this isn’t a dash, this can be a marathon. So Tulsa is a good rising market, we’re seeing some actually good appreciation catch up, it’s simply the right time to take a position right here. A number of issues that I’d identical to to the touch on is if you happen to’re seeking to get began, simply take that first step. No one regrets their first funding buy, they remorse not doing it sooner. So there’s by no means a greater time than now. Get your funds in place, get your lending found out, discover the suitable agent, which is hopefully why you’re watching this, and studying about all of this nice brokers on right here. And run your numbers, use these BiggerPockets instruments. They make it really easy so that you can run the numbers after which simply take the emotion out of it. And if the numbers make sense, do it.

Dave:
All proper, thanks. And Rob, what in regards to the D.C. space?

Rob:
Nicely, that is our nation’s capital. We’ve received the federal authorities that’s sort of just like the backstop right here on this market. We’ve received loads of development, loads of know-how development taking place on this market. And I echo what David mentioned. I imply, long run this market has simply been secure, simply retains rising, retains getting larger and greater. I imply, a pair years in the past I listed my dad’s finest buddy’s dwelling. His household, his mother and pa had handed. And this was in Arlington, Arlington is a ridiculously scorching market in our yard, they usually purchased the home, they’d purchased their home for $45,000. And I bear in mind speaking to him. He mentioned, “I felt like I overpaid for the home after I purchased it. And at present that grime was price $850,000.” So simply time, time and a development market. This can be a enterprise that performs out over time. So I echo the whole lot that David mentioned and this market is only a nice market to see it play out over time.

David:
Yeah, let me say one final piece earlier than I get out of right here. It’s not at all times about, “Do I spend money on San Diego, or Tulsa, or Washington D.C.?” I believe that there’s completely a method you assemble a portfolio the place you spend money on all of these markets and also you simply assemble it in a method that the long-term appreciation you get in San Diego goes to be paired with the short-term money circulation you could get in Washington D.C., and the money circulation paired with precise odds of scoring and being profitable investing in Tulsa.
You discover the perfect properties for what you wish to do in every one, you set them collectively, all of them type of make up for the weaknesses of the others with the strengths that they supply, and also you proceed to construct momentum shopping for in the suitable markets and placing it collectively like a puzzle piece versus pondering, “Ah, I received to choose the perfect one.” And then you definitely keep in evaluation paralysis for six years after which simply beat your self up since you by no means purchased a home for six years. After which each time you take heed to the podcast you get guilt and you are feeling horrible and then you definitely don’t wish to do it. You see, that is the spiral that I’m speaking about stepping into. That’s what we wish folks to keep away from.

Rob:
David, do folks should… Do you suppose they’ve to go away San Diego to construct that portfolio? I imply, not San Diego, however California’s big, proper? I imply, Northern California is significantly completely different than Southern California. Are you able to assemble that very same portfolio properties there and by no means depart the state?

David:
You completely may as a result of the ideas are the identical. And in locations versus California, you can seize one from this metropolis, or this metropolis, or this technique and this technique. It’s a precept that may work. And it doesn’t should be throughout the nation. The thought can be in Dahlia’s market, you can get one thing that money flows, you’re not going to be preventing with 100 different folks, the worth factors will not be going to be massively excessive, so that you’re not making 1,000,000 greenback mistake, you’re making a $200,000 mistake as you’re studying. After which when you’ve received some momentum, you’re like, “Hey, now I wish to go spend money on one in every of these different markets the place the stakes are a bit of bit increased and I may take the coaching wheels off. Perhaps I don’t wish to begin off there.”
After which the identical can be true of particular person properties in these particular person markets. Everyone knows the markets inside our personal metropolis the place that is the place the massive boys play, and that is the shallow finish of the pool the place you may get your toes moist and you may get into with an FHA mortgage and comparatively scale back your threat as you study the rhythm right here, but it surely’s breaking out of that mindset. “I received to be good, I received to seek out the right deal on the good time in historical past with the right tenant.” And when nothing is Excellent, and also you don’t take any motion.

Rob:
I’ve yet one more query. I’m sorry, Dave. Simply my query for Dahlia as a result of the place had been most of your traders coming from? Like California?

Dahlia:
Sure.

Rob:
Okay.

Dahlia:
Most of my traders are from California. I’ve some from Colorado, Texas, another locations, however the bread and butter is California.

Dave:
Okay, nice. Nicely, thanks all, initially, a lot for being right here. I’d love so that you can simply inform our listeners the place they’ll join with you in the event that they wish to try this. Rob, the place ought to folks discover you?

Rob:
Positive. They will go to gridinvestor.com or simply discover me on Instagram. Rob Chevez, @RobChevez. Fairly easy.

Dave:
All proper. What about you, Dahlia?

Dahlia:
So my web site is asnrealtygroup.com. You may as well discover me on my Fb web page @ASNRealtyGroup, after which in fact on BiggerPockets.

Dave:
All proper, nice. After which David, I do know you’re fairly robust to seek out, however the place may folks search you out?

David:
I gives you an e-mail that you’re assured to get a solution at. Electronic mail us at [email protected] [email protected] There’s an E on the finish of there, I’ve an individual monitoring that e-mail all day lengthy. We might love that will help you with purchaser promoting in California. I’m not too busy that will help you purchase or promote a home, that’s really why I exist. So please, like the most important sting ever is when any person makes use of one other agent and involves me they usually say, “They screwed all of it up. What do I do?” I say, “Why didn’t you ask me?” “I assumed you had been too busy.” “However I wasn’t too busy to return ask me how one can repair it, huh?” So attain out to us first.

Dave:
All proper. Nicely, David, Rob, and Dahlia, thanks all a lot. This was actually insightful, and hopefully everybody listening can study a bit of bit about how one can navigate the present market, what’s happening, and what to search for in constructing while you’re constructing your staff on this correcting transitionary market that we’re in. Thanks all a lot for being right here.

Dahlia:
Thanks.

Rob:
Thanks.

Dave:
All proper. Thanks a lot to our panel for becoming a member of us at present. All of them deserted me, so it’s simply me right here, Dave, now. And I’ll simply remind you that if you happen to do wish to join with any of our panelists at present, David, Dahlia, or Rob, or any of the good investor-friendly brokers who’re on BiggerPockets, all you need to do is go to biggerpockets.com/agentfinder, seek for a market like San Diego, Washington, D.C., Tulsa, some other market. Enter your funding standards, and decide brokers that you simply wish to join with, all of whom are investor-friendly brokers.
Lastly, bear in mind, if you happen to do wish to study extra in regards to the present occasions knowledge, information that’s impacting the true property investing market, be sure that to take a look at BiggerPockets’ different podcast known as On the Market. You will discover that on Apple or Spotify. And lastly, for David, the Gadfly Greene, David Meyer. And simply so everybody is aware of, I needed to search for, I Googled what gadfly means, and it means it’s a fly that bites livestock, particularly a horse-fly, warble fly, or botfly, or an annoying individual, particularly one who provokes others into motion by criticism. I don’t suppose David actually meant that as a result of he’s neither of these issues, however I simply needed to poke enjoyable at him. So thanks all for listening. We’ll see you subsequent time.

David:
It looks as if everyone received a haircut at present. All of you guys’ hair is wanting actually good.

Dave:
Oh, thanks.

Rob:
That is how I rolled away from bed.