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238: THE NEED FOR SPEED: The Western Wealth Way!

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Buck: Welcome back to the show everyone. Today my guest on Wealth Formula Podcast well he’s certainly not a mystery man around these parts. He is a guy who if you’ve come to a Wealth Formula event you know him well. If you’ve been part of our Investor Club you know him well from there as well. His name is David Steele. Dave is of course one of the principals of Western Wealth Capital which is a major partner of our accredited investor group.You know David’s been in real estate in this space for a long time and you know Western Wealth Capital is not his first rodeo. He’s offered leading edge investment opportunities of thousands of individuals in Canada and the US from 1997 to 2001. He was the CEO of an international properties group it was the Toronto stock exchange listed real estate company that purchased apartment buildings and converted them to condominiums, he’s been in real estate for a long time, has seen it all, he’s actually also been involved with the entrepreneurs organization known as EO and I believe that’s where he met Ken McElroy which we’ll talk about in a second as well. Dave welcome to Wealth Formula Podcast.

Dave: Thanks Buck, I appreciate you having me on.

Buck: Isn’t that the story, if I remember correctly? Isn’t that where you know each other from?

Dave: Correct and when I got started in real estate I had a business partner named Phil Carroll and we were business partners from the day we got out of university and Phil moved to Phoenix probably 25 years ago and met Ken McElroy and we bought a whole bunch of buildings with Ken McElroy and really got to know Ken well. He was a great property manager and Ross was building and so they had a great program and about seven or eight years ago my partner Phil passed away from cancer and so you know we had a long history together buying and selling you know tens of thousands of units all throughout the US and Canada.

Buck: Yeah now I mean and you know we’ve had Ken on the show a couple of times of course and you know he always says such great things about you he talks about you as being a genius and you know about everything that Dave touches does well and all these things so obviously there’s a lot of mutual respect with one another for you guys. So obviously we have had you know you at the meetings we’ve you know talked to you before in the Investor Club etc but you know for those people who don’t know a little bit you know about your story tell us a little bit about how you ended up in the multi-family space because as I recall you you started out as an entrepreneur doing something different you were entrepreneur of the year in Canada so how would you you know what were you doing then and how did you end up in multi-family?

Dave: Well it’s kind of interesting Buck I mean I’ve been an entrepreneur my whole life right out of university the only job I ever had was a commercial mortgage broker and I did that for six months and then my partner and I were on a vacation and we saw these houseboats and we thought wow are those ever cool and we thought man we could build those so we built two houseboats and we rented them out for the summer and it turned out to be quite a cool little thing. And then we got approached by a tax accountant and he said hey do you realize you could sell these to individual investors and rent them out on their behalf. So over the course of the next seven years we built a fleet of 1200 houseboats all across the US and Canada in 10 different marinas from Florida to Oklahoma to Missouri to California and all across Canada so it was a you know it was quite a business we did win Canadian Entrepreneur of the year for the kind of the starting of that business and our claim to fame which you know now you get older you want to have certain claims to fame our claim to fame was when we got to 1200 boats we officially had more boats than the US navy

Buck: Then so then you go from there and then you probably got the idea well you’re renting stuff out and and you know the next thing you know you’re in housing right.

Dave: Well and then we then we saw an opportunity in Calgary to start buying these small apartment buildings so we started buying little kind of four plexes and eight unit building and 16 unit building and so we found a really cool building that was about 20 suites and you know we thought we needed some panache to the building so we went down to the corporate registry office in Canada and got the name registered for Trump Developments. So our company was called Trump Developments and this little four-story building we named it Trump place we bought one down the street we called it it was five stories so we called it Trump tower and we named another one so all across Calgary there’s these you know rinky dink little buildings all across all across Calgary everywhere where we have these little buildings called Trump and still to this day you know whether it’s good or bad now in today’s world we still have the name Trump Developments and just before Donald Trump ran for president we got a letter from his lawyer said you know you have to cease and desist using the Trump name in Canada we have the name registered so we got on a call with him and I had to remind him look we’ve had this name registered as a corporate registry for 25 years so he very quietly hung up the phone and we never heard from him again.

Buck: That is too funny. I had not heard that one. And then of course Western Wealth Capital comes and this was you know this is the last six seven years, how did that come up?

Dave: Well my partner Phil and I were speaking at a conference on real estate and we had bought a bunch of houses after 2008. we were in Phoenix at the courtyard steps buying foreclosed houses and you know we’re buying a you know a fifty thousand dollar house that today is two hundred thousand and we were you know buying them as fast as we could, we raised a big fund and we’re speaking at this conference and this you know real cracker jack gal comes up on the stage and it’s Janet she’s talking about buying and flipping houses and she’s bought them and you know she’s obviously very smart she’s really got her act together so you know afterwards we went for a cup of coffee and then over the course of a month went for another cup of coffee and eventually she came to me and said Dave look I found this little 28 suiter in in Phoenix and I need three hundred thousand dollars and so over the course of lunch I said look Janet this is a no-brainer I’ll just give you the money myself. And it was quite funny because her business plan at the time was the previous owners were two school teachers from California and they had personally painted the building lime green. So our business plan was we were going to repaint this lime green building back to brown. Janet told me as enthusiastically as someone could tell me that her business plan was she was going to tow all the cars from the parking lot that no longer had tires on them. Okay that’s quite a business plan but you definitely get the point that hey if you just clean this property up there were 28 suites, eight of them they’d rob the you know the stove in the fridge from a unit to put into another unit, so they were selling 28 units worth of a building with only 20 units of revenue. So you know you know all of a sudden what it looks like we’re getting eight units with no revenue and you’re basically getting them for free so she called me back that night she said Dave look I’m you know I’m super excited you’re going to give me the $300000 but I don’t want to just take your money I want you to bring in a couple other investors and I kind of laughed and thought wow that’s pretty I guess ballsy if you will for her to you know have the guts to say that I said yeah Janet no problem I’ll bring a couple buddies in and I said by the way why do you say that and she said well Dave because you know we’re going to make so much money on this deal that I want other people in so when we go to do it again you know I’ve got a bigger base of people to go through. And so we gave her the money turned out to be a spectacular deal and sure enough two weeks later she calls me back and now she’s got a deal that needs three million dollars. So you know again we kind of circle the wagons, we go speak at a couple different events and you know Janet is as everyone has met through through Wealth Formula you know she’s just very methodical very analytical she’s got that computer science brain where I’m you know I’m just much more of the entrepreneur I’ve you know over the years you sort of develop a feel for real estate. And so we get I get an invitation for us to speak to this group and there’s a you know big group about 150 people to speak to that are going to potentially invest the money and as we’re walking onto the stage she taps me on the shoulder and she says Dave I think I’m gonna throw up you know I don’t like speaking in front of people. So anyhow needless to say we you know that that became the second deal and from there it’s been you know almost 80 properties that we’ve bought and you know obviously you know through our affiliation we’ve expanded the network and just really continued to build on this this amazing system of doing the same thing over and over to these buildings.

Buck: Yeah so you know and and just for reference now what are we up to in terms of real estate transactions you know after those first couple buildings?

Dave: So we’re up to 78 buildings and 17 600 units. I think at last count and we’re getting close to closing number 79 and number 80. So you know again it’s you know we’re kind of knocking on the door of 20 000 properties. Of the cult the 78 that we’ve bought we’ve sold 30 of them and of the 30 that we’ve renovated done the program on we’ve held those for an average of 30 months and the investors have an average annual return on those of 30 a year. Ao you know that again I think that’s the proof is really in the pudding as to why.

Buck: Yeah absolutely and you know that’s what we’ve been talking about so much and what people are so excited about within our group and you know you know just talking about Western Wealth Capital the model is really about velocity in so many ways which made it a really good match for Wealth Formula because velocity is such a key part of what we always talked about even before our affiliation with Western Wealth Capital you know when we talk about the speed of you know getting your money back in your hands to redeploy and the speed of the program you know at which we get into properties and we turn them around and you know we don’t sit there and you know acquire property and then start figuring out what color to paint things right, I mean that’s really what this whole model is about is execution and velocity. Do you want to talk a little bit about that because I think that that in many ways is what really makes this model truly unique.

Dave: Well you know it’s interesting I was sitting on one of the asset manager calls the other day and I probably heard it said 10 times from different asset managers and it’s so ingrained in the culture and the culture is the need for speed. The words that are used in our company are the wow factor and the need for speed. So the wow factor is, how do you take a very basic old 1985 building that’s tired that’s been operated usually remotely how do you take that building and give it new life so that people really want to live there and secondly how do you do it really fast because the simple math is this: if I can buy a property and I can move the rent up by a hundred and fifty dollars that increases the value of that apartment unit by thirty thousand dollars if I can also put a washer dryer in and get fifty dollars that increases the value of that unit by another ten thousand dollars. So that’s forty thousand dollars. So if I’m buying a hundred and fifty thousand dollar unit and I’m putting say thirty percent down that’s forty five thousand dollars down per unit and I can just do renovations and just do washer dryers and make forty thousand. That’s a hundred percent return on my money right, so now that he is that’s very definable right and I think one of the things that our investors love about the program is they can look at every investment and say how much below the the rent how much below market are your units how much how many washer dryers can you do and how many gold star renovations you can do and then mathematically they can just figure out well if you can do 200 and you make 30 000 a unit you’re going to increase the value by 6 million. If you can do 200 washer dryers and you make 10 000 increase the value that’s 2 million. So everybody can mathematically do the calculation quickly. But the key now is imagine if you could do that in a year instead of three years so that hundred percent return on your money you could make in a year or you could make in two years and so what we’ve really driven is how do you create that formula and how do you get everybody rowing in the same direction, the asset manager, the property manager, the design team and a lot of it is we just plan so much of the work that it’s virtually it’s go time from the day we take over the property, the day we own it whereas typically in our business what happens is people buy a building and on the day they take it over they start to have meetings and say I wonder what color we should paint the building, we should order some new lawn furniture we should redesign the leasing office hey I wonder what stove we should put in the renovated units. We’ve already got that system and so we’re doing that 60 90 days ahead of takeover and it’s really what drives the speed.

Buck: And I think that is one of the critical pieces of this and I think where a lot of people get the aha moment when they when they listen to why it is and how it is that Western Wealth Capital has been able to do what they’ve been able to over the past you know six years or so if you’re talking about you know 29-30 annualized returns, how is that possible over and over again and the answer is that it’s execution and speed right. So think about what Dave is saying just to emphasize the point because I think it’s a really good learning point. Typically you’re going to see a pro forma and you’re going to see rent bumps that may not look that dissimilar from what a pro forma from Western Wealth Capital might look like but that might be over five years. Now if you’re doing the same work over the course of three years or two and a half years guess what the bumps are right and that’s driving the net operating income and then the value of the property. If you are doing that in half the time you’re going to make double the money and so it seems so obvious but it really doesn’t work that way for most syndication real estate’s indicators so anyway that is that is a huge thing. The other part that makes it really unique in my opinion and Dave maybe you can talk to this is the the type of financing that’s used because not only are we talking about fairly quick holds and big bumps but we’re talking about getting people to be able to recirculate their money back into the next deal and and essentially invest their money in the same place at two times and at the same time because of that velocity. Do you want to talk a little bit about the refinancing type programs?

Dave: Yeah totally and you just to step back to the last point just to make one small point on that the other thing that’s a huge advantage now that we’ve got scale in certain cities that we’re in so you know we’re the second largest landlord in Phoenix right so we’re looking at a deal today that we compare and the comparative buildings that we’re looking at in the neighborhood, five of the ten buildings that are comparable are buildings we own. So when we’re sitting there and someone says hey do you think you can get the rent bumps? In a way in our business it’s a little bit like insider trading in the stock market we know the rent bumps because I can go look at my buildings that I own two blocks away and I go hey are we getting the rent bumps on that building and I can look at my daily report my weekly or my monthly report and I can see the last 10 leases and I go wow these guys not only are they way under on what they’re going to get when they’re renovated but they’re probably 75 or 100 below what the market is today because we have such good information on the market. So again it’s another piece that really is helpful to the whole program. What’s really driven the whole program is the first 30 deals we did when we first got started there was different financing than there was today so if I bought a building I’d go get lender A to lend me the money. I would do this work on the building and I’d increase the building by 10 million dollars in two years and the only way that I could pull equity out for my investors was to go to a new lender and get a new mortgage on the property and that was expensive it was time consuming you know the lenders would take a big piece you had to do appraisals and then all of a sudden the lenders that were lending were like geez we we don’t actually want to not, we want to keep this loan like we’ve gone through the tough lifting with you guys now you’re we’re going to lose the loan to another lender. So the lenders came up with a program where basically on the day we buy the building they will approve us for a loan of a hundred percent of the purchase price of the building. They’ll typically only lend us about 70 percent on the day we take it over but at the end of that first year when that building’s gone up by 5 million and the end of the next year when it’s gone up another 5 million because we’ve renovated so many suites we’ve moved the rents to market we’ve put in washer dryers and we’ve completely transformed the property. So at the end of that two to three year period when the building’s worth 10 million dollars more the lender will just let us almost like a line of credit increase the mortgage on the property by 70 percent of the increased value and then we get to take that equity and give it back to the clients and the investors can then take that money invest it elsewhere put it into another deal with us and as you know Buck we’ve got many clients that that same hundred thousand dollars that they started investing with five years ago they’ve now cycled it two or three times and they still continue to earn four to five percent on their money invested annually on money that they no longer even have invested on that first deal.

Buck: Yeah and there’s another element here not that in my personal opinion about multi-family real estate is if it’s in the right hands it’s a relatively safe type thing but in reality if you’ve got your money out of a deal you’ve essentially completely de-risked that deal as well right I mean you’re basically only getting the upside on that deal so that’s another advantage as well

Dave: 100 there’s no liability for any investors investing in the limited partnership beyond the amount of money they invest in.

Buck: Right so that’s essentially the model we’ve talked about that we’ve had Janet on the show we’ve had Tim but I want to talk a little bit about what’s going on now right because the last six years pre-covet obviously was a pretty epic run you talked about the numbers you know annualized average returns of you know just about 30 percent and so now we’ve had some serious stress testing happen so maybe you can talk a little bit about you know what’s happened to the portfolio since March and you know in that regard you know what role did market selection play in these times you know what what role did the fact that were in workforce help if any if you could talk a little bit about that that would be awesome.

Dave: Well I mean you know as a company first of all we just feel we’re you know incredibly blessed by being in the space we’re in and the places we are you know multi-family generally has proven to be a great place for people to have your money it’s been very safe you know obviously the collection rate in some markets has been much better than others you know Phoenix Dallas Houston San Antonio Atlanta have all proven to be good collection markets so a lot driven by that affordability, obviously California and new york the collection rates are only say 85 versus 95 in these markets so you know as a place to put your money if I was going to put my money into real estate you know I definitely would want to be in multi-family ahead of office ahead of retail you know it’s debatable it’s kind of neck and neck with industrial industrial has been another decent place to put your money but you know I think we’ve been incredibly blessed and you know I think we’re going to be really well positioned coming out of this because two things have happened: one we’re seeing super low interest rates which are making you know just very strong opportunities and secondly we’re seeing this this migration of people. You know if someone said to me Dave you know should I invest with Western Wealth I would say that the first thing is do you believe the movement of people out of California and New York City these big you know these big new york state these big states do you believe that trend of affordability is gonna continue because if you do then yes you should just you should work with us and get and fully understand the cities where those people are moving to and if you’re doing it on your own you should go and look and understand where the people are moving to because they’re moving to Arizona for affordability the companies are moving them there because it’s affordable for the companies to hire people and you know much like online shopping has just taken off through the pandemic this same phenomena of people not having to go to their offices has driven more people into those markets. So you know we say it all the time we’ve been blessed you know we have we have the teams on the ground and that are that are you know have worked incredibly hard to completely change the way we do the business and we’ve you know we’ve adapted I think incredibly well to what we’ve gone through and and but I think we’re very lucky to be in this space in the markets we’re in.

Buck: You know at the macro level there was a lot of doom and gloom type talk there was you know I had actually early on talked about how I felt like there was you know pending defaults and all that sort of stuff but it ends up that there really wasn’t that much distress in the multi-family market at least in the markets that we were in is isn’t that right?

Dave: Well I would say and I would say the bigger issue is you know with sort of the news of a vaccine potentially on the horizon you know think of these massive institutions Buck and they really at the end of the day drive you know they drive the business you know they have not deployed anywhere near the amount of capital that they’re going to want that they wanted to deploy in 2020 and they’re going to have entire sectors that they’re not going to be deploying in they’re going to be sitting taking of you know a broader view of where they really think retail is going to go where they think office is going to go? So what does that mean? In my opinion it likely means we’re going to see a lot of institutional money coming into multi-family space and then specifically then I look and go okay well what space is it going to go into? Well in all likelihood it’s going to want to be safe at the beginning people aren’t going to you know they’re going to be they’re going to be maybe worrisome about you know these these mid markets or these markets that aren’t showing really strong job growth and population growth. So I think the markets were in and the space we’re in I think it’s going to see in 2021 I think it’s going to see a lot of capital coming into those markets so you know the properties that we own I think we’re going to be very very happy with.

Buck: So for those you know David you know there still is this kind of talk out there that many are waiting on the sidelines right now thinking that there is going to be a flood of defaults and blood in the street obviously you don’t think that that’s the case

Dave: Well I shouldn’t say I don’t think that that’s the case I think you have to be specific to the markets you’re in those just generally don’t happen to be you know if our goal was to just buy everything we could buy that was value-add we could go by in Kentucky and Tennessee and you know there’s all kinds of places we could go by but as you know we put a pretty strict box around the markets we’re in that we’re in the markets that are showing the top job growth the top population growth and the biggest in migration and so you know that pool of that pool of cities is really about 10 15 20 cities that we really like. I’m much less worried about those 10 15 cities being in default mode because those are the cities that I think are going to be the biggest beneficiaries of people continuing to move there even after we come out of this but you know if you said to me would I be worried about markets number 35 through 70 yeah I believe in those markets there will likely be some defaults I think there’s there’s people leaving there’s you know rents are going to fall no question again they mean very little to us because those just aren’t the playground we play in.

Buck: WSpecifically we’re not in the space through Western Wealth Capital or you know anything else that we’re doing in Investor Club we’re not really in the A class space you know the pretty trophy properties etc we’re in really working class stuff. What role or benefit are you seeing you know with that with that particular niche right now?

Dave: Well you know it’s still pretty strong because again it’s a safe place for people to put their money they you know there was a transaction this year in scottsdale on a class a trophy property I think it I think it sold at over 400 000 a unit right so you know I look and I go there’s the top at 400 000 and here’s us down here you know we’re at 150 doing our magic to get it worth 200 right and I love that gap right I love that distance because you know again another thing we’ve seen through the pandemic that’ll be that I think would bear what well for us if there is any kind of a slowdown again is a lot of people in those bigger more expensive units that were paying 2 000 or 2200 a month said hey I got to buckle down I gotta get through this thing and they they got out of their 2200 lease and they moved into one of our 1200 a month renovated units. Now interestingly they obviously wouldn’t rent one of our classics for a thousand they were like you don’t want any of that but they look at the thousand dollars saving and they go you guys have stainless steel appliances washer dryer in every unit hardwood floor beautiful countertops, I’m gonna save it the thousand bucks. So again I think that’s that’s why that’s why we like that space if you just think of it very simplistically and logically it’s you know it’s what would we all do if we were in the same place.

Buck: Yeah absolutely you’re gonna you know you’re gonna have to buckle down a little bit and you may not be able to be in the fanciest building anymore right. So you know our last meeting which seems like a million years ago now I don’t even remember when it was dallas at some point but I remember you in front of our audience that you had an interesting talk that I thought was a pretty unique perspective and you talked, and this is obviously pre-Covid, but you despite the fact that interest rates were as low as they were your talk was about how interest rates were going to go down that ultimately it came down to well compare us to the rest of the world we’re we’re actually pretty high. I guess maybe if you could elaborate on sort of that thinking that got you to that place because obviously you didn’t know about covid but it but you were absolutely right in terms of the rates, I don’t know anybody else who was calling rates to go down at that point.

Dave: Well we were at that time we were really disconnected from the rest of the world in terms of you know a five-year mortgage you know that you could get in the US at three and a half percent. There were you know countries that have nowhere near the financial stability of the US where you could get you know I think it was I think it was Britain you could get a mortgage for 0.75 percent or France was 1.25 so they were you know there were there was just such a disconnect in the market and you know again if you really drive the simplistic version of real estate, if you get inflation right you’re going to get interest rates go up. So if we believe that there’s a lot of inflation coming then we’re going to see interest rates potentially go up. I don’t see a whole lot of it on the horizon. I think we’re going to see a nice spike when we come out of this I think the the economy will get back recovering but I think it’ll take a while but so I again I don’t think there’s going to be a lot of upward pressure on interest rates and you know the key is is you know right now we have the option on our mortgages to go both variable and fixed or to take a variable mortgage and lock it in. Right now we don’t see anything on the horizon to go out of variable but we’re certainly keeping an eye and at the appropriate time we think at a very very low rates we’ll lock these into fixed rate mortgages.

Buck: So you know along that lines I mean when you look at the macro level at multi-family you talked a little bit about some of the pressures you know interest rates are low pushing cap rates down even lower and all of a sudden you’ve got a bunch of money sitting on the sidelines vis-a-vis these larger you know groups that are essentially not going to put money into sectors that are clearly failing so obviously the next year or two I’m guessing you’re thinking multi-family is you know going to see some significant value you know coming its way

Dave: Well I mean as you know Buck we we tend to really put conservative estimates into our performance because yes we’ve hit 29 30 percent returns but there’s no win for any of us to go up to everyone and say hey put your money in you’re going to get 29 or 30 percent because even when you do that you know first of all people say well Dave it’s too good to be true so it almost makes it harder to convince people of the simple thesis right. But you know if you really look at it the simple thesis is number one do you believe people are going to leave California and if so where are they going to go and are they leaving New York where are they going to go. They’re leaving these more expensive markets. Companies are doing it because they can hire people for a cheaper amount of money that’s being layered on with low interest rates. But the biggest thing that it’s being layered on with is in the next 10 years just to get to equilibrium the us has to build four and a half million new apartments and right now even pre-covid they we were nowhere near hitting that number so each year we’re getting a little bit further behind in the in the amount of new construction and so that means more people are moving in there’s a you know greater demand there’s no new supply coming on at the rate to fill the demand so it’s going to drive up the rental rates. And so now with covid you know the number of new units being built is down substantially so they’re going to look back at 2020 as a missed year. They’re going to look at it as a year that we should have built you know a half a million units and we and we didn’t really build any and so you know at some point we’ll come out of that and it’ll start building up again but again I think there’s going to be this pent-up pressure of people moving in not enough supply and and again then it’s just a matter of how fast you can renovate the classic units because the gold star renovate renovated units are way more in demand than the classic units.

Buck: Now what do you do okay so obviously we’re getting we’ve got a low interest rate environment we probably have something that’s you know presumably I believe it to be a very bullish environment for a multi-family at least the way we’re doing it where we’re doing it right now but at some point in the next decade there you know likely will be a time when rates start going up a little bit when when about you know when construction catches up a little bit you know that’s maybe a few years out but how do you time that? How do you hedge for that I mean is it about you know timing your exits in other words I mean at some point you have to say we’ve got this stuff I mean when do we know when to take chips off the table, I mean can you comment a little bit about that.

Dave: Yeah I mean it’s a great question and you know we’re constantly going through the portfolio and saying you know what’s the timing on the refinances on these which ones should we put in a pot to see what they’re worth we go and get them we go and get them you know we don’t get them fully appraised but we call the really good connections we have in the real estate world and say hey if we were to put this on the market today what would it what would it go on the market for which is actually almost more valuable than getting it appraised and you know then we look down through but you know so the risk reduction for us is the ability to lock that into a long-term rate but again if you’re going to get a rise in rates, it’s generally going to be because we’re having inflation. If we’re having inflation it means the rental rates are going way up. So as much as people say well the cap rates are gonna go up the interest rates are going to go up you bet but it’s probably because you’re not going to be getting you know three and a half or four percent rental rate increases that we’re putting in our model you’re probably in those days where you’re getting seven or eight percent interest rate so or not interest rate but seven or eight percent rental increases and trust me if we’re getting seven or eight percent rental increases on these buildings if the interest rates go up a bit it’s not going to move the needle too much.

Buck: Makes sense. So leave it at this one last question for you obviously we have a lot of Western Wealth Capital investors in our group just in general if you look at the organization and what you’ve done over the last six years what do you see Western Wealth Capital doing over the next decade?

Dave: ell you know it’s funny because in the last six months you know we had a meeting the other day and we were sitting around talking about it and I would say in the last six months we’ve probably moved the company two to three years forward in terms of initiatives that we wanted to put in place, you know we put forward things like all the technology now in all the properties the way people tour is now done differently the way rent is collected some of our properties now that were 30 rent collections some of them now are over 80 percent rent collection online, Now think about that Buck that means that we show up for work on the second of the month and eighty percent of the rent is already in the bank. So our onsite teams have just such a much narrower focus on all the not all they’ve got to do but they know exactly what they’ve got to do to deal with the 20 percent and getting that collected working deals out and all kinds of things. So you know if you said where are we going to be? You know the technology is no question is going to be game changing just because this industry has been one of the last industries that have that’s really embraced getting into the 21st century and really making property management and you know because at the end of the day if I’m an investor and I’m looking in in a window into western wealth, the most important thing to me as an investor is our focus and what we do to make the experience phenomenal for the residents that live in these properties. Because if we can continue to, you know people think well Dave you just take this unit and you spend six thousand dollars and you make it beautiful well that’s a transformation right, but if I can do that to the whole community and get it to the point where everyone wants to keep living in that community, they want to refer to their friends they have great things to say about it, they’re going around the pool and they’re not complaining because the pool furniture is not good or they go into the leasing office and they go wow look at this place. So when we can make that transformation that’s where that’s where the money in the deals just falls out. So you know I guess if you said to me what’s our what’s our number? I don’t think we’re really we’re not really a company that strives like what would it be great if we could get to 30 000 units right, we’re all still probably like all our investors we’re just in awe that we’ve ever got to even got to 17000 units but the number of units has never really been the game the game has been how do we just keep doing this differently? How do we make the experience better for our clients that are putting money in how do we make our experience better for the people that are living in the property because if we do that we’re all going to do very well by this.

Buck: That’s right. Well Dave I want to thank you very much for being on Wealth Formula Podcast again and look forward to having you at her next meeting, whenever that’s gonna be.

Dave: Look forward to the Friday night part Buck.

Buck: We’ll be right back