All right, Very good. Awesome. So, Ashlee, how are you? I’m doing great. How are you? Good. If you could please keep admitting people. Hello, everyone. So today is March 8, 2025, and we have our monthly call. So everybody’s coming in. And Ashlee, we can start. Alrighty. Okay, so we had a ton of great questions come in. A few of our attendees are not going to be able to make it or they will be late. So I said you’d still cover their questions. And then we have a few guest pass people that are joining us for just this call. So I want to welcome everybody from the tribe before you buy. It’s great. Great to see you. And you’ll see the power of everything that Cherif shares with you guys month after month after month.

So we’ll get started. Now, Daniel from Florida, he said, I have a practice and a few LLCs. What is the story and status of the BOI FinCEN filings in Florida and with the feds? So this is the disclosures that the Department of Treasury had asked for. And it was supposed to all be filed by a certain date, et cetera. And then they kept changing it. Then they said there’s no reason for the filing, no need for the filing.

So here is the conclusion. The new rules will come out on March 21, 2025. You cannot avoid it. They’re going to ask for it, put it. I don’t know what anybody’s stressed about. I mean, I already filed it kind of a couple days later. And if you need help filing that stuff, just reach out to Ashlee, Ashlee@cmrei.com and we have an attorney’s office that will do it for you a lot less than anybody else. I mean, we can help you with that. It’s no big deal. You have to. It’s the Transparency Act. They want to know the beneficial owner information, boi, the beneficiary owner information for whatever entity you have.

I mean, I think some people thought they were going to hide. You can’t hide. How are you going to hide? You have IRS and you file taxes. You don’t file taxes. They’ll come after you. There’s no mystery. It’s not like DODGY is coming after you and Elon Musk and whatever I see on the Internet. So let’s be real. The US has everything and they will need this information. We’ll just get an update on it on March 21st. Hey, Cherif, can I add something to that? Sure. As it stands right now, they’re going to come out.

The Congress has passed some New laws regarding that, but the Treasury Department is no longer going to be enforcing it. So it’s kind of like an optional thing. Now at this point, it’s kind of a bark with no bite. So like you said, you can do it if you want, but at this point, because it’s not being enforced, who’s really going to do it? Yeah. And there is no penalty for it. Yeah, yeah. As soon as they took away the bite, it comes, becomes ineffective.

Okay. So let’s wait till March 21st and then we see what they’re going to say because we, as you know, we’ve heard so many things. Oh, don’t worry about it. No, Worry about it. No, you have to do it. No, don’t do it. There’ll be a penalty of 500 a day. No, there won’t be now. There won’t be any penalty. So it’s all over the place. I have no problem disclosing. I disclosed everything. Because sooner or later, if there is an issue and they want to get the down to it, they’re going to bring you and they’re going to bring you into what’s called discovery. And when the government, a government employee asks you a question, I’m telling you right now, you cannot and should not lie. Because even if you did nothing wrong, but you just lied in that interview, that’s jail time. Ask Martha Stewart.

Okay? She. They could not prove she traded stocks illegally with insider information. So they asked her, do you know this guy? She said, I never met him. He said, well, you never saw him anywhere. I never saw him, never met him anywhere. So. Well, how about this picture? You’re standing with him in a party and that was jail time. Look at the case yourself. But anyway, I agree with you. Let’s just wait till March 21st and see. And then you do what’s what’s easiest. Very good. Thank you, Paul, for your insight there. All right, the next question that Daniel has, he says, I’m in South Florida and areas that were booming 12 months ago. Why is nothing moving in this market? I have three residential homes that I have been on market for seven months. I can’t handle the holding costs any longer.

What are my options? I can’t lose these homes. They are my retirement money. I am not even speaking of this to my wife. Well, Daniel, I totally agree with you. Frankly, since October of last year, things started dropping in terms of activities and demand. Then you had November, December and half of January. With the election, there was practically no activities in the United States. I have properties in Florida as well. These are brand new homes. With the hurricane in October, we had the insurance doubled in prices. This is a very difficult time because the interest rate is still high.

There’s a lot of activities going on government wise, creating complete unrest and tension. And I’m not pro or against, like you know my philosophy about politics and all this. I think every president is trying to do his or her best, eventually will have a lady president. But the point is the way they go about it sometimes just unbalances the market. And we are at the mercy of political changes, weather like hurricanes, floods, etc. We’re at the mercy of so much that you have to understand the game of real estate sometimes is a holding game.

You just gotta hold on. All right, so what if you can’t hold on? It’s a terrible situation. So if you can’t hold on, try to talk to the bank to renegotiate your loans. If they don’t cooperate, you can do chapter 11. If you have an entity and it’s filed and those are LLCs, you can talk to Chapter 11 attorneys. These type of bankruptcies, what they do is they just call the banks on your behalf and they say, well, we’re going to stop completely or file bankruptcy like Chapter seven or something.

Like we’re going to just shut it down or work with us. Let’s hold off on the payments for six months or a year because we’re trying to sell or trying to do this. I mean it depends on how disastrous the situation is. If you’re falling behind and, and you don’t have cash reserves to sustain for at least another three to four months, you should start planning now for that demise. I’m sorry to say, but chapter 11, if you have an entity, will make the banks hold off any creditors. They will have to either settle for less or hold off a little bit.

And some of the lenders may say, okay, if he’s selling, we’re going to, he owes us, let’s say, I don’t know, let’s say he owes us 100,000, we’ll take 80,000. We just want to cut our losses. We don’t want to go into bankruptcy and try to collect and do foreclosure and auctions and all this stuff. Okay, so that is one way, the chapter 11, the other way is to, before that is to talk to the banks. The other thing is maybe try to sell them creatively. But I think you had a follow up question which is do you have any price adjustment advice? The sad thing about specifically Florida As I see it right now, because I’m experiencing it myself, it’s, it’s based on demand. I mean, we were supposed to sell some homes at $480,000. We finished building them, hurricane hit, we had to adjust the prices to 460, 459. We listed them and sold them. So but then the economy hasn’t improved and there is less demand and less demand and less demand. So now we’re doing 450. We see others drop to 440. So we’re saying 450 give you 10,000 closing.

So but then all of a sudden I can tell you that since January still there is no demand. So the best suggestion I have for you is if you’re going to put them for sale, put them for sale. Put them for sale everywhere. Put them with a broker, put them on Craigslist, put them everywhere. And send whoever is going to call you to the broker. If you have it listed on the mls and if there is no money to even pay commissions, list them yourself. For sale by owner will pay any broker bringing me the deal 4%, 3 1/2 percent. Okay. It’s better to get out of the problem than let it just bury you completely. I’m so sorry that you’re going through this, but maybe, hopefully if you sell one of the properties, it will give you some holding time on the two others.

And every investor should be ready to deal with the good, the bad and the market going nowhere. Nowhere. So if it’s up, what do you do? Pay down the debt. Economize. If it’s down, start acting fast. Why is it down? When can it actually turn around? What do I need to do now to solve the situation? You cannot wait and hope for a miracle. Some people wait and they don’t even have a for sale sign. Yes, this is your retirement and all this, but if it’s not working out, get out from under it because it’s going to take over even whatever retirement money you have. So all the best to you and keep us posted, please. Thank you. Cherif and Sujan on the side said that she had a similar issue like this and she went down $5,000 each week if it didn’t sell. And tried this twice and it worked both times. Thank you, Sujim for the. Thank you. Yes. Price. Before you do the price dropping, my suggestion is talk to some brokers around and monitor it very closely on the market.

Who is dropping prices, who’s doing incentives, etc. Because, but, but there has to be. Be some demand if, if nothing is moving and everything is sitting and you can see the days on market is sitting, price drops are going to make much difference. But as soon as you have an interested buyer, work with them, Work with them and how you got the interested buyer, promote the property and put a reasonable price compared to the market. Okay, very good. All right, moving on to aj he is in New Jersey. He has great question here. He said, I am considering investing in a hotel that has been sitting vacant for two years. I want to operate it as a hotel or convert it to affordable housing or small condos. I want to know how to negotiate the deal and review a sample contract with you for feedback. Please advise. And his second question, just so you see the full picture is what due diligence should I have in mind as I look at this opportunity? Okay, all right, this is very good. So the key thing here is to understand that hotels are very flexible asset.

That means you can actually negotiate with the sellers. Creative financing. Why? Because getting loans on hotels is not so easy. The banks don’t want to give more than 60 to 65%. Regarding how to do this, I have actually a video on the on YouTube for free. And Ashlee, can you send everybody the link to the video? Absolutely. Just to give you an idea. The video is how to do the letter of intent. It’s about 22, 23 minutes. It’s in details. I have expertise in hotel business because that’s my background. I was with Hilton for many years and we purchased hotels for Hilton, sold hotels, took over hotels. My product, my business was to manage hotels and have them keep the management contract. And so we’re going to give you a link to that. And then I also let me share with you something that we have sent before. Let me see here, give me a second. I have a due diligence checklist that we’ve shared before with you. Here it is. Okay, so let me open it and then I’m going to load it up so you could see it.

And then so here it is, the due diligence checklist. This is practically for any type of commercial property. Okay. It’s 100 key, you see. So I divided it into the buyer. If you’re selling, is the buyer qualified? Are they experienced? Do they have good credit? Are that, do they have good down payment? Are they local? Are they flexible? Are they creative, responsible, motivated, ethical, focused? Does he or she have a plan when they’re buying the property from you? And if not, if you’re the buyer, do you meet these criteria? All right, so the market, then you’re going to look at the market and I’m not going to go through all the details, but you, you’re going to look at the market itself is good. Current occupancy for that hotel or an apartment building or whatever type of asset you’re buying. Now it’s very important to follow a checklist because checklist makes you not have problems.

I was talking to one of the attorneys about the checklist for closing and he said, I’m an attorney, I’m experienced in closing and all this. I said, okay, just draft a checklist and show it to me since you want to do the closing. He drafted the checklist, I took it, missing six points. How about canceling the insurance? How about canceling the utilities? How about getting the prorated thing for this and that? Because in some places you don’t deal with title and escrow where they have a checklist. In some places Napoleonic law, like in Puerto Rico or Louisiana, stuff you’re dealing with attorneys and attorneys can make a lot of mistakes. All right, so this checklist, we’re going to send it to all of you, it’s 100 key points. And one of the most important thing is about the property itself.

You don’t want the condition of the property to be disaster because the reason the price is low could be a distress situation with the property or the stress situation with the seller, which is better. It’s a stress situation with the seller because the property could be intact but the seller over leveraged themselves, they’re going through divorce, they have a sickness or sadness, what of some sort. So you’re able to talk to them about how you can save the situation. Make it a win win, always make it a win win. You don’t want bad karma in business. You don’t want to drive somebody down when they’re already down on their luck. I can tell you it’s just like not a great feeling. Some people relish on that. I mean, I don’t know in real estate I’ve seen people present and I went to this old lady, I kid you not. And he’s doing a whole presentation in front of people bragging about how he, he told her this. And then she said, okay, I’ll take that even lower.

And then he waited and stayed quiet. Then she took even less. And he’s like telling us how great negotiator he is. And I’m thinking this poor old lady could have been my mom, could have been somebody I know, I don’t know. You have to make it a win win. But you’re buying a hotel here. So it’s an investment property, not a home. Follow this checklist. And the key thing in hotels you need to know is you’re able to actually do something really neat with hotels is you can get what’s called the Star. It’s called the Star Report, it’s Smith Travel Research Report. They can tell you what’s happening with the market. So it’s extremely powerful because it’s going to help you a great deal to know and assess the, the market situation in terms of what’s going on with the occupancy. So the Star report tells you here is the market this hotel is in. It’s got all these hotels. Let’s say it’s a mid budget hotel. You’re buying a Hampton Inn. And there is a residence, there is a Holiday Inn Express, there’s a Residence Inn, there’s a, there’s a Marriott, the Marriott Residence Inn.

There is a Hilton Garden and stuff. So this is the group of hotels competing with you. So this is the number of available rooms, but your hotel is getting a big part of the market share. And then on that report also it shows you what’s going on with, with other things like the, the occupancy versus the competitive set. So you could see the potential of the hotel you’re buying. And then you can study the market and see if you can turn into an apartment building or maybe medical building or extended stay type of hotel. Based on the numbers from the Star Report, it can help you a lot. I’m trying to get out of this sharing, but it doesn’t show me how to get out of the sharing. Hey Cherie, this document that you’re sharing out of due diligence, this is the same document that you talk about. A YouTube video? No, no, the YouTube video. The YouTube video talks about the letter of intent, but also mentions the due diligence document.

Is the document you’re talking about right here? Oh, that’s that. Is the document over now? I referred. Okay, great. Yes, thank you. All right, thanks. Sure. I don’t know how to stop sharing. I guess it should be somewhere down here, but I can’t stop sharing. Doesn’t it show something say stop sharing under your share. So you click on share and click on. There should get rid of it. Share like on the bottom. Give me an option. Yeah, sorry, Ashlyn. Oh, it’s okay. Like on the way bottom of the black screen, it has like participants chat share. If you click share, it should Pop off.

It popped off. Nope. Very strange. Give Asi permission to override your screen and she can do it. Okay. How can I give you. I guess a little harder than. Maybe a little harder than what? I just. No, it’s just very strange because I usually. See, it usually shows up. Do not share. Okay. The Zoom app. Cherif, the Zoom app. Yeah. You must be. Yeah, you’re on Zoom, right? Maybe click on the Zoom itself and you’ll have an option to like on. The very bottom of your computer screen. Okay. I’m trying to like. It’s not allowing me to kick you out either. Sorry. Okay.

Very strange, guys. Sorry about that. I don’t know why. Oh, very strange. Okay, how about. This should be an option that you go on. If you click on Share, there’s an option that you can give Ashlee permission to override your screen. I’m trying to see where it is and that way she can do it. Because you’ve never had this problem before. So I’m kind of wondering if you got a computer glitch or something. Yeah, I think that there’s like something stuck here because usually I can do things and it’s not even allowing me. Allow. Control your screen. Allow Zoom Workplace to control your screen. I don’t know. Yeah, give it to. Give it to the other Cherif Medawar Ask. You should be able to do it. Ashlee, did you get it? I. Sorry. Okay. Okay,

this is what I’m. Cherif, I got it. I’m going to request remote control and do it. So you’re going to see requests are made. Okay. It says you’re about to request remote controllers. Shereem. Okay, here’s the problem. It looks like Ram Kasaraju is controlling it. What? It’s not allowing me to go to you. It’s going to him. So hold on a second here. Are you controlling everything? Are you like. It looks like he has control of something. Give me a second because I don’t. Even see him on here. Yeah, this is very strange. Hold on a second. No, Sriram is right here. I know, I know, I know. Hold on a second. Shared screen. Yeah, I don’t know what’s going on. Somebody took over. Your screen. There it is. Yeah, I just, I went up to the top, Cherif, and I pressed. I don’t know. But my apologies.

Okay, let’s continue. Sorry about that. We need a special IT personnel. Okay. So if you can send everybody the 100, the checklist, the 100 point checklist, I’d appreciate it. Thank you. Absolutely. All righty. Okay, moving on to our next questions, we have Carl. He’s in Colorado, obviously. Carl, hi. Welcome to today’s call. He has a real estate fund and he is one of our JVs. He’s got three great questions for today. First one, what are the pros and cons of using a co tenancy or force majeure clause? Okay, co tenancy is when you have different tenants sharing the same space and renting. And I have that in a lot of my buildings. Sometimes I even so it’s a big space that had to divide. So there is a lot of things that I didn’t divide, like the utilities, etc. So sharing rental space is co tenancy, not just one tenant, but they’re sharing maybe two, maybe three, maybe four. 

So the key things are who pays what and who does what. So who pays the rent and how much each? Who’s going to pay the utilities? How is the utility going to be divided? Is there a common area that they have to pay for it and who does what. So who is responsible for what? Okay, this person is going to be responsible for their part and the area in front of them, the other one is going to be responsible for this. But the stairways that go up to the, you know, area where they’re in, they have to maybe pay for the cleaning company that’s going to come in, etc. That’s a shared expense. And then of course, anytime you have an agreement between two people or three people, whatever, you have to have a conflict resolutions situation. And really the whole idea is to have some clarity regarding financial obligations and responsibilities and duties. Right? And then you have to have some type of accountability, like somebody has to supervise and enforceability. Okay, so I had two tenants that were paying utilities and then they started complaining. Well, we’re paying it 50, 50, but he’s leaving the AC all night.

I mean, it’s like problems will come up when you bring a bunch of people together. Problems come out that you never even fantasize about. So but we had the clauses that say, you know, if it’s used more than X, Y or Z and this, then we have to do that. So how you write the contract is so important. But I’m going to give you the key points because I have one that I pulled out and I looked at. Here are the key points. You may want to write them down. When you have co tenancy or agreements, the parties involved clearly identify who and who. Okay, Is it by entities, by names, whatever. So the parties involved, number two, the property, the space. Be very specific regarding the space. When I rent to people, I do cross hatch.

 Like I send them the contract and let’s say the space is 3,000 square feet and I’m like cross hatching. That means I’m just showing, this is yours is 1400, his is 1600. Okay, so the rental property, specific location, size, etc. The lease agreement, who are the co tenants, what do they agree on, what are the terms, for how long, etc. Number four, the rent and utilities. Okay, I tell them how the rent will be paid, Are they depositing directly in the bank, are they mailing it to me, are they paying it online? And then utility, how it will be split. I turned almost all my retail tenants into flat utility. I don’t want to be invoicing them. Some of them we get the bill because it’s like a big building and many tenants, I used to get it and I say, you know what, it’s been averaging like 400 per tenant per month. So I tell them this is what it is and if you’re going to exceed that usage that we see, we’re going to bill you for more.

So rent and utilities. The next one is going to be responsibilities. I define what each of the co tenants are going to be responsible for, such as cleaning, maintenance and what I as the landlord will be taking care of household tasks. Okay, the next one is house rules. Meaning, okay, don’t the noise levels like, I had one tenant playing music. They thought like the music is what’s attracting people into his building, his side of the building. So, okay, noise control, gas policies, pets, things like that. The other one, dispute resolution. If there is a dispute, how are we going to resolve the dispute? Okay, for example, one tenant was having barkers. 

Barkers are people outside the store say, hey, come in, come in. We have the samples of this coming. So the tenant next door was like, wait a minute, they’re blocking the people coming through the sidewalk. And I am suffering from this. Thank God we had some dispute resolution regarding that. And it did not end very well for the tenant that did not want to cooperate. I told them, hey, I’m not renewing the lease and good luck to you and goodbye and the other tenant now expanded, took the space and I’m charging 2,000 more per month. So what a great. I like when problems get solved in a positive way. You know how you have a wrong solution? I’ll tell you this. When you come up with a solution that brings a new problem, that means you brought the wrong solution.

Because the right solution eliminates the problem. Okay? It’s very simple. If the first solution created a bigger problem, that wasn’t the right solution, that’s the wrong solution. I have now a bigger problem or a different problem. So you need the right right solutions, okay? And so dispute resolution, the process for it. What, what’s going to happen when there’s disagreement, termination. I outline for the co tenants, each one of them, how can they terminate or amend their leases? Oh, you want to terminate, you’ll have to pay penalty. Oh, you want to terminate? You can’t terminate. 

You owe me the rest of the lease balance. You want to terminate, Take somebody to take over, assign the lease. You see, there are many ways to solve problems. You have to be so creative and you have to communicate then liability. I always have another clause for liability. I specify the liability. If there is a damage, who’s going to be responsible, what kind of damages I will be responsible for, what kind of damages I’ll be responsible for as a landlord and what issues they’ll have to handle, what issues I’ll handle and charge them, et cetera. So the liability and who’s responsible for what. And usually they have to have insurance and show me, indemnify me, indemnify me. That means there is an issue, they cover it, I don’t get sued. And then I like to put the issue of subletting all by itself.

Subletting as in if they want to get out and assign to somebody else. I like that because it makes me avoid paying commissions to brokers, make me avoid having the place empty for a while, etc. Any place you’re renting, it’s good to work with them. If you want out, this is what we would do. So parties involved, rental of the property, specific description, the lease agreement, the rent and utilities, who’s responsible for what, the house rules, location rules, you know, building rules, dispute resolution, termination, liability and subletting. So hopefully that helps you. This is, this is a very good question, by the way. Very useful, very good. Thank you, Cherif. 

His next question. How does one receive municipal funds to buy or construct a project? What are the pros and cons of receiving municipal funds? It’s a very interesting Question. And I really had to research it a bit to see because I’ve never gotten any, any money from the government. Never even been on unemployment. I’ve always paid the government. I paid the government for the privilege of having me here. Anyway, just kidding. I would suggest for you to look@grants.com grants.com and then I also can simplify your life by telling you that I discovered there are grant consultants, which I didn’t know.

And I made some phone calls yesterday and this morning one of the people called me back and he said there is a company called V. V as in victor3co.com v3co.com now v3co. I don’t know if they cover the whole country but they can help you with consulting. So if you are telling them, listen, there is a community development grant in my area because I saw it in the newspaper and I’d like you to help me get that. They will search, they will talk to the municipality, they’ll talk to people. But I’ll give you, actually I wrote down here seven different programs that are, that could have municipal funds. Okay. It’s very interesting because if you can get government money, it’s the best money in the world to get because usually the interest rate is lower. 

You’re helping the community, like everybody wins. Okay? What a great way to deploy the capital and do it ethically and helping everybody. So there is what’s called Community Development Grants. These are programs that are funded like, like the cdbg, the Community Development Block Grant. These grants support activities like for the poor people, like housing rehabilitation, infrastructure developments, public services. This is for low, we can say low to moderate income individual. And usually if you find an urgent need, they’re going to rush your application and the process through for you.

So I like low income stuff. Government always has to have money for low income stuff. Section 8, ironically, I was just looking it up the other day because we’re trying to do a project with Section 8 and Section 8, you know, the more money you give them, the more money they need, the more money you give them. So they needed like 4.8 billion and even Biden could not approve that much. And now this, earlier this year they asked for 5.3 billion. So they keep asking for more. And the reason I had to search, I mean, are they misusing the money? But the reason is the landlords are constantly petitioning for the areas around the country and saying, I’m not getting enough rent. 

I’m going to have to discontinue this section 8 because everything cost me more utilities costing me more. Rehab cost me more fixing cost me more labor, insurance. It just really. Inflation is eating people alive, so. So look at these programs. They’ll be very well funded because they have to help these situations. They call the community development block grant. Look for that in your area. You’re in Colorado, so I know you probably have some good money there. Infrastructure grants is another one, which is. I don’t think you’ll be too interested in that one. This is for sewer facilities. And, you know, actually Michigan is one known for getting a lot of money for that.

Environmental grants. These are the epa, the Environmental Protection Agency. That’s not also our realm. It’s going to be for people who specialize in that. Number four, economic development grants. This is for like. These are great ones because you can say, okay, you can see that they’re doing some revitalization programs for the downtown area. Business assistance loans. Like I have historic buildings or the facade improvement projects you do. You improve the facade of this building and the historic preservation of this one will give you, for every dollar you spend, 30 cents in tax credit that you can sell to the government back, that you can sell to banks, that you can sell here in this ticket against your taxes, etc. They called economic development grants, public safety grants, not a great one. This is for, like, emergency responses and giving money for ambulances and stuff. Block grants. Those are state and federal and they have different programs for needy families. They call Temporary Assistance for Needy Families. You don’t want that one. It’s not going to help you with real estate, but it’s great for big organizations that work in that area.

Recreational and cultural grants. That’s the seventh one. These grants are to fund parks and all this. It’s not the realm of what you do. You have your own real estate fund. So you focus on the. The economic development grants and the community development grants. So I repeat, the seven grants that exist with municipal grants, and they’re pretty powerful. Community development grants, infrastructure grants, environmental grants, economic development grants, public safety grants, block grants, recreational cultural grants. Look@grants.com and try to find if there are consultants in your state, in your area, in your county. Very good. Thank you for that very detailed list. Yes. Carl, do you have any other questions based on what Cherif just talked about? 

Oh, no, It’s a lot more than what I. What I found, so. All right, Good luck with getting those, Carl. We look forward to hearing about it. And then his last question is, how is a video done for build to suit scenarios? Oh, okay. So built to suit. The way we send the information to potential tenants is really just the way a broker advertises it. They usually have aerial Views. So you can, if you don’t have that, you can do the Google Earth. There are sometimes the brokers when, if you’re getting it under contract from a broker, they usually have drone videos. So then we talk to them about the neighboring tenants in the area. To the tenants in the email that we send, we talk to them about the traffic and we mentioned that we are flexible to work with them on the build out cost and the erection of the new building for them.

And you just leave it wide open. You know this is part of the JV program, right? So you just tell them, hey, you know, I’m happy to finance you, I’m happy to give you the money, I’m happy to. You tell me the specs that you want, like specifications of the building you want and let me work with the developer contractor and then we’ll tell you how much it’s going to cost and then we’re going to quote you a price for what the lease will be when we’re done. Because usually when you develop from the ground up for these big tenants, they’re now going to want to lease 20 years plus 5 and 5. You see, they are going to be committed to a long term. And sometimes we just get the land and they build it. We just tell them, okay, we’re going to give you eight months, no rent, you just develop it. 

And when we do that, what I like the most is they usually occupy the building for 25 years and after they leave and the building becomes ours. So when they build it, it could be one of two things. When they build it, they can pay a land lease, just pay us for the land, which could be very good, a nice return, very steady, no hassles. Or they say, you give me the money, I will build it and then I’ll pay you for the entire thing for the fee. Simple. Meaning the land and the building. I’ll pay you a very decent rent because we have a brand new building and we’re going to make up for you that you fronted the money for us. If tenants can avoid spending money upfront, they will reward us from the cash flow of the business. And if that’s the case, I want to shift the risk from me to them.

Being a publicly traded company, that’s like a Starbucks or Jack in the Box or one of the big, like McDonald’s. We’re doing a deal with McDonald’s. I mean their corporate guarantee is as good as it gets. All right, so very good. Great question on the build to suit. All right, Margaret just emailed Me, she’s running late, but she has two questions. She said she’ll catch the replay. She said, first, I have questions about hotels. What is a good hospitality deal? Great. 

A good hospitality deal is the one. Let’s start with the. The way I think in anything is with the. What I call the five P’s. It’s like when you write a business, I want you to think with the structure in your head. So even if you’re under pressure, even if you’re under financial pressure, a personal pressure, whatever pressure life is handing you, if you have the formulas in your head, you’ll be able to maneuver and win. So the five P’s are, first of all, the people. Who are the people that are managing this hotel? Am I going to buy the hotel with a group of people already existing? If you’re buying, by the way, an apartment building. Also the same way I like to go and stand there and talk to the staff. And when I talk to them, I don’t act like I’m very important. I act like I’m just joking around.

I’m so friendly and all this. So they drop their guards. I made this lady so friendly, such a friendly conversation with her that the phone was ringing. It was in an apartment building. For a side note, here, phone was ringing, ringing, ringing, and I just got very uncomfortable. So I said, aren’t you going to answer the phone? She said, it will go to voicemail. She’s just like trying to give me attention. I’m thinking, she’s going to manage this apartment building. She’s the one answering calls and handling the clients. But I made her feel comfortable. I didn’t come in, like, I’m going to be the new owner and like to know what you do. Give me a description of this, this, you know, by the way, I use a deep voice because always people who want to act very knowledgeable and important use a deeper voice. That’s something about. That’s a male thing. Men will understand. Women will laugh about it. But, you know, so thing is number one in a hotel. I look at the people. Who is the staff? Who is. 

How are they managing things? Who does what? Do they have the executive housekeeper? Do they have the front office? Do they have. How are they handling any food operation in this place? And if so, is it handled in house or is it subleased to a restaurant that does it? You know, there are just many ways to do it in hotels. Hotels is such an amazing, profitable asset. It’s not even fun. So many ways to make money. Okay. And then Part of the people is, is there a management company running it or is this the team in house running it? Because if there is a management company, I want to meet them, I want to know how they’re going, who are the people I’m dealing with, how they handle problems and what’s the history of their relation and how they handle the hotel. So people first and part of people also who are the guests am I getting? So you have different type of guests. You have vacationers, do you have military, do you have, Is it near a hospital, is it near an airport? Is it a destination location where you have weekends, busy, midweek empty. Is it a business location downtown, midweek, very busy weekend, empty. Is it kind of steady?

So what kind of people come to this hotel because it’s going to affect your marketing and what you do? If it’s corporate, hey, who are the corporate companies nearby? Oh my God, IBM is down the street. Let’s go work a deal with them and give them block of rooms at a lower price so they can always bring their executives with us, etc. So people, number two, property, is it in good shape? You don’t want a property that’s a hotel that’s in bad shape because the hotels. The one downside about hotels is very capital intensive. As a matter of fact, when I ran hotels for Hilton, I was a regional in the west coast. So it was several billion dollar portfolio. We had to keep 2% per year in reserve from the revenue, from the gross revenue, 2% for what’s called capital expenses. That’s along with the maintenance expenses. So it’s very expensive yearly. We had to. 

Every hotel had to submit to the owners, hey, we’re going to change the pool chairs, we’re going to change all the umbrellas, we’re going to change the air conditioning units and these units. We’re going to change this. You have to constantly. So you have to see the property, is it in good shape? And if there is a flag, meaning if it’s a Ramada Inn, if it’s a Holiday Inn, what is the last quality assurance report? There’s something called the quality assurance a QA report. Every hotel brand has that, which is they send somebody to tour the whole hotel and write the report which is a checklist. Again, here is the good old checklist where they say this hotel needs new couches throughout the hotel ticket Embassy Suites hotel that have pull out couches and now you have to change the couches throughout the 300 room hotel. That’s a big expense right there. You know, you have to also change all this and upgrade all of this.

And then There is an ADA non compliance for 16 rooms, American with the Disability Act. You have to widen the doors. But we got $3 million 15 of You’re buying a building for million, have 3 million in expenses. Negotiate that now to your advantage or maybe get the seller to do it. Or maybe you get the seller not to carry the financing and get better terms, et cetera. So the price. Property, is it in good shape and what kind of work do they need to do to maintain the flag? Because if you’re buying it for to keep that same brand because of the reservation system, you want to make sure it’s a good property, in good condition, operating well. Now, the third thing is, the third p is the positioning. How is this property doing in this market? Remember I told you, you can get the star report. You can call Smith travel. 

You can google it, call them and tell them I’m buying this property at 123 Main Street, Downtown, San Jose, California. Okay. So then they say, all right, what do you want? I want the star report. So they tell you, okay, it’s going to cost you so much, we’ll send you the last six months. So you get it and you’re going to look at it and you just. The more you. The more you look at it, the more you’ll understand it. By the way, same as in solving problems. Do you know that the more you look at the problem, the more you will confront it and understand it and solve it. I repeat this. The more you look at something and confront it, the more you’ll understand it and solve it. The more you observe an individual, how they act, how they talk, how they move, the more you’ll understand them. You’ll know how to handle them. But if you’re running away from them, you’re not gonna be able to confront the situation.

Situation becomes bigger. So in the hotel, Smith travel report will give you the assessment of the market and what’s happening. You can see the opportunities. You can see, oh, my gosh, we can actually increase the rates because everybody’s way higher than us and drop the occupancy, which will exhaust the hotel a lot less will need less staff will have better flow through small nuances. It can make you a big difference. Understanding the positioning. How is this property positioned in this market? What’s so unique about it? It’s an all suite. We’re offering. We’re not offering breakfast. Everybody’s offering breakfast. That’s what they’re charging. More than having better flow through. I need to add that. 

All right, the next P is the performance. What’s the track record? How does have this. You just get the profit and loss statement to see, okay, how they have done in the past. What’s the occupancy? What’s happening? What kind of issues with mainten, who’s doing what. So the performance, the track record and the potential of this property, because it’s great to buy property running at 80% occupancy at 150 average daily rate called ADR. Then you measure it with what’s called the available room rate. Available room rate. So we have 100 rooms available and we’re making so much. So for all the available rooms are making so much. Well, let me. So what’s the occupants. Let me see if I can decrease the occupancy and increase the rent, increase the per night fees. Oh my gosh. If I decrease the occupants, I need less housekeepers. Front desk will do a better job. 

I increase the rates, I’m going to have a better flow through and the hotel will be doing better. And by the way, right now there is AI that’s controlling all these numbers by areas and telling you as a hotel owner, you have a potential to increase your rates by $30, $40. It’s insane what’s happening in hotels now. I talked about how great hotels were during COVID If you guys remember that when we’re doing Covid, I said hotels, the place to go. They are selling a 10 and 12% cap rate. And with AI right now, these people who bought hotels, I mean, I have some students making absolute killing in this. I made so much

money in the hotel, we’re selling it. Actually we’re closing next month. And that hotel I doubled and I put pennies in it. I did it on option to buy it for six months and went in, ran the hotel based on the people, the property that I saw I needed to the changes I needed to make. So I told them, I’m not going to close till I make these changes. I’ll invest in the property. The positioning that it had in the market changed everything. Based on the reviews I saw online and then the performance, we saw the track record, we knew how to improve. It took it to its highest potential and then the last P is for the profits. 

Okay, how much profit am I going to bring? How much do I need in reserves and how can I run it for no hassles? And with all that said people, the property, the positioning, the performance and the profits. The key thing when I look at the performance is what’s the potential? Because if there is no potential, I may still buy it because of something called stability. That hotel is near the, let’s say, I don’t know, LAX Airport, Los Angeles Airport. And it always performs at 80% occupancy. It always brings to $150 average daily rate. The staff is very steady. They have their benefits. There is an outside management company. I’m going to buy this cash cow and I’m going to be traveling the world. I don’t have to worry about anything. 

And being part of Hilton with that Hampton Inn by the airport, I’m going to be using the Hilton discount for owners and I’ll be staying around the world at a discount. What a great, beautiful thing. With stability, simplicity, I can pass on that asset to others. As a matter of fact, I always say if you win a billion dollars tomorrow, because I don’t know, you just found that your cousin had some crypto and he willed them to you. And the crypto points, it’s the dumbest thing in the world. The crypto all of a sudden gives you a billion dollars. What will you do with a billion dollars? Go buy a bunch of apartment buildings and give yourself a headache?

No, you either buy single tenant buildings that are already rented because this is triple net, no hassle, or for a billion dollars, you’re going to buy a lot that’s not, or buy three, four good hotels by Hilton and Marriott and let Hilton and Marriott run them for you and you just enjoy and quarterly meet with the asset managers and kick their butt. All right, enough on that. Anything else? It sounds like you have a dream. Yeah, the ultimate exit. All right, and so Margaret’s ultimate last question. How can I finance that type of deal? Okay, so banks will finance them, but 60 to 65% of the appraised value, which comes very heavy, weighted towards the income of the hotel and the stability of the hotel. But the good news is sellers do a lot of carry back on smaller hotels. That’s very common. And if you can’t get the financing and the seller doesn’t want to carry because they want to do 1031 exchange into something else, ask the seller who is your current lender and go to that current lender.

 That was one of the best things I negotiated, but in on a property I was going to buy in Orlando next to the hospital. So most of their business, because you always want to know what’s driving the business, most of the business was coming from the hospital and the hospital was growing. So that was a great money machine. So I was going to buy it, I went to, nobody would finance it. Then I went to the seller and he said, oh my God, let me introduce you to my banker. When I went to the banker, he said, yeah, we have all the numbers on this hotel. All we need to do is the new appraisal. Check your background with the experience in hotels. And I said, yeah, I have plenty. So you’re not going to use a management company? No, I don’t need one. We’re going to do it. But then another company came in from India. They were expanding and doing very, very well. And they bought it all cash, same offer I made, which was a great deal, but they paid all cash and closed in two weeks. So how can you finance it? Same lender or outside lender?

60, 65%? Or do a seller carry back with the seller with a small down? Thank you very much. All right, the next question that came in was from Hassan in Michigan. It was a very long one. Would you like me to read it to them or do you want to summarize? Give me a summary. All right. He is saying that he is participating in our current class. He’s looking forward to the sessions next week. He’s currently working on a development project in Michigan. He, he attached the copy of that brochure for you and it’s obviously an exciting position. He said that he finds himself also with some capital gains resulting from a recent stock sale on his IT company. So he wants to know how to use that and position it while developing the commercial property.

 And is setting up a fund the way he should go? Absolutely. Setting up a fund is the best structure to be able to grow and be protected and do things at the ultimate level of real estate invest. There’s just no two ways about it. Now you’re selling stocks, so you’re going to have some gains. The only way to defer the gains on selling stocks is to make your project that you’re doing a qualified opportunity zone. All right, so there is the opportunity zone are these areas that are destitute, they’re not doing well financially. When Trump was in his first term, he created that program that says when you sell something, in case you don’t want to do 10 to 1 exchange, you want to do a bigger projects in different way or whatever. You can roll your money from stocks even at business sale, roll the money into building the qualified opportunity zone and then you create the qualification. I mean, you say here, because if you Google opportunity zones in and then put let’s say Colorado, Texas or whatever, there is a map. It tells you exactly what areas, what zip codes. Okay? Because these are. Every governor petitioned for that with Trump in his first term and they got it. And it’s been a good program. Not for

everybody, but it’s a good program. And so you can roll the money there. And yeah, definitely doing a fund will be very, very interesting for that. It has a lot of rules, like they’re gonna have to pay some taxes now and then if they wait 10 years, then all the upside is tax free and stuff. It’s a lot of interesting rules, but that can help you a great deal, I think. Wasn’t he also doing something in Puerto Rico? Hassan? Yeah, he was asking about that. But the main capital raise that he has is for the Michigan Project. So the Michigan Project could definitely benefit from Opportunity Zone. And I know you’re taking the class we’re doing about three is setting up your, your fund. So most definitely you will hear in the next session on Tuesday. Tuesday night and on Thursday, how to actually set up the debt fund, which is my highest Recommendation, the Reg. D506C.

 And how to go about it in details. I dissected the business model on Thursday, and I’m going to dissect for you what actions one needs to take to make it happen. And we can help you set it up, as you know. Yeah, good luck with that and good luck with the Puerto Rico structure that you have. You have all these tax incentives going on and look forward to hearing more from you. We should talk. Very good, Hassan. All right, next question’s coming in from Cheyenne in Texas. Three questions. What are the five things you look for in a real estate strategy? The five things I look for, I’ll give you six. I look for safety. I look for cash flow. So safety, meaning is my money safe in this deal? Is the deal located in the right safe area? Do I have some margin of safety? I’m buying it slightly below market. All these are falling under the safety measures that I need to take for a deal. Number two, cash flow. The cash flow, is it producing now? Some cash flow, Is it going to produce later? Cash flow. And if there is no cash flow, will I be rehabbing it to cash out? So that’s the strategy. The cash flow has to be part of the strategy.

Liquidity, do I have liquidity? Will I be able to borrow against it? Will I be able to sell it if I want to get out? Will I be able to borrow against it, then get a credit line for the rehab? Will I be able to after I fix it, refinancing a shot. That said, to be some liquidity, it has to do a lot with what I’m going to do with it, what I paid, and how desirable it is for the lenders. Okay, number four, reserves. Can I keep some cash reserves on the side while I’m doing this deal? So that’s part of a strategy. If you have a strategy without safety, cash flow, liquidity, and some cash reserves on the side, market hiccup will wipe you out. Number five, backup plans. I like to always have a backup plan. Okay? So the goal here is I’m going to build it and then I’m going to sell it. Oh, if I can’t sell it, I need to then separate it and sell one part and keep one part. It’ll be cheaper.

 It will be easier to sell it, or I can sell it. Either way, I’ll have to then rent it. I’ll have to maybe do creative financing for somebody to come in and Partner I have to do so the backup plan’s got to be so clear in my head when I start. And I’m constantly always thinking of another backup plan, another. Okay. And then finally number six will be the diversification. Am I diversified enough in what I’m doing with this building that I can do something else? Meaning can I change the use, can I add income by putting some signs upstairs, etc. Is it going to attract people to buy it? Is it going to be also potential to maybe do build something additional, add a floor? So safety, cash flow, liquidity, reserves, backup plans and diversification. Six things are always part of my strategies no matter what I do. And by the way, I’m going to jump back to a question I did not answer. I think Carl had asked about. I just remembered it. There was the force majeure clause. Carl had asked not just the pros and cons about co tenancy, which I branched out in a lot of details. But yet as for the force majeure. 

What’s force majeure? Force majeure is a French word saying it’s a major force which is an act of God. And you have usually a clause when you’re working with others, like with tenants saying if there is an act of God, then this is what’s going to happen. So there has to be some provisions in a contract to excuse the parties from fulfilling certain obligations due to what’s called unforeseen circumstances. Those are like give you an example of acts of God. I’m sure you can come up with a bunch. Natural disaster like earthquake, wildfires, hurricanes, floods, take it from there. Political events, war, invasion, civil unrest, infrastructure. Okay, and then you have the infrastructure failures like bridges falling, transportation shutting down, energy disasters, utility failures. For example, I remember this friend of mine went to a small island in the Caribbean for vacation and they, they, it was a whole family, they took like three rooms and they’re staying.

I don’t want to say the name of the island in case somebody gets offended, but anyway, the utility there was no electricity and no water. Just shut down from the government. So that’s an act, That’s a force measure. That’s an act. I mean meaning. Okay, what, what are the criteria for force measurement? There are three criteria. You might want to write them down. No human intervention. This was the government had the wrong whatever with the electricity. It shut down the system which was affecting the water as well. So no human interact intervention. Like it wasn’t the hotel management or the specific municipalities. Was the government shut down that whole Thing. No. Human intervention could not have been reasonably foreseen by any of the parties involved. Okay. They couldn’t have known that this didn’t happen before. Number three, it’s completely beyond the party’s control.

 Hence, they could not prevent its consequences. So could they get their money back? No. Did they have insurance, though? Thank God they had insurance on their trip. I usually don’t buy insurance, but their story made me think twice. So these type of situations have to be in the clause. For example, we had a pandemic just not long ago, as you know. So I say in my leases, hey, in case there is another pandemic, you have to work out that you have to get insurance for interruption of business. My brother had three tenants that don’t pay him rent. He’s been fighting these people to leave and all this. Then he found out that in his insurance, he had actually paid extra for interruption of business. They didn’t cover all his expenses. But $30,000 trying to evict three people, you get back $20,000. That makes you feel a little bit better about your eviction problem. All right, sorry, Carl, I missed that. But it just hit me right now that had no problem. We continue. All right, just to clarify, Ivan wants you to just cover safety again. So safety is as a strategy.

Safety is number one in the price I’m going to pay for the building. So that’s your margin of safety. The building is worth a million. I’m getting it at 800,000. That’s an amazing safety margin. Going to get. Get it at 700,000. My God. My margin of safety allows me to make some mistakes. Okay, number two, the location. Is it safe to operate there? Or is the area just getting so bad that, you know, at night you can’t park your car. At night, you can’t have. You can’t walk or jog. Okay. When Pacific Heights and Presidio Heights in San Francisco, California, started having women getting raped that are just jogging in the area, in one of the most elite locations in the United States of America, the entire city started to collapse. Was there safety? I’ve done all measures, but it was actually almost like totally unforeseen. So safety, the price I’m paying, the location itself, and then the other safety margin is, is this something that I can keep for long term? In other words, the building itself is safe.

 The infrastructure. I bought a building and the guy selling it to me disclosed. And the paperwork did not say it verbally. I’m looking and it says the building may fall apart. And that’s why we do not have insurance to even recommend for you. And all this. So it’s like, oh my God, everything is safe. I like the area, I like the price. I like all this. But then it disclosed that the building itself wasn’t safe. But then when we got the insurance, I said, I need this. And they got a structural engineer, he said, no, the core of the building will hold even in an earthquake. It’s just the rest of the stuff, it’s just fine. So when the structure engineer said it was fine, I bought it. So that just all these are margins of safety. So when you buy that asset, you have a safe asset in a safe location at a safe price. And now you can have sustainability for long term. All right, good. All right, very good. Cheyenne’s second question. What are the five things you look for in a residential deal? Okay, in a residential deal, I got to have it below market. So here are the comparable sales. I gotta buy below comps. And what does that mean, below market as one of the five things I look for? That means for me, it’s a good deal. That means I can buy it right now at, let’s say, 400,000 and I can resell it for more money.

I can resell it at 430, 450. Or if I can’t, maybe if I can resell it creatively and carry the difference or like resell it and do a wraparound mortgage or something, then that’s number one thing. I want it slightly below market. Residential deeds, it got to be below market. I’m talking about investments. I’m not one I’m going to live in. I may overpay for something I like, but that’s investing below market. Number two, the rehab that I’m going to do has to be done wisely. Wisely meaning the cost has to be contained and the time frame. Okay, I have yet to meet somebody who can tell me I bought this building and I was going to rehab it for 70,000 in four months. And that’s what they end up having to do. They end up paying 90,000 and it takes six months. 

Okay? So you got to be wise about it. You have to understand and work with a contractor where there are penalties and rewards. Okay? The study of incentives is the study of economics. The study of economics is the study of incentive creating incentive for them to finish fast. They’ll work around the clock. You will save money, they’ll make money. You’re going to give them a penalty if they stay later. Then even if you don’t penalize them, you’re the good person now because you didn’t. But they tried their best. All right, so number two, the rehab has to be very reasonable and very good and fast. Number three, the rent with very good reliable cash flow. That’s a very important thing when it comes to residential deed. If you’re going to get residential deed, you want the rent to be pretty good compared to all the expenses you spend to buy it and rehab it. So that rent, how can I get a steady rent? You can do section 8. You can do a desirable area. You can actually rent slightly below the market.

So the person would never want to leave, will never want to be late again. Incentives. You pay me the rent is 3,100amonth. But if you pay me before the third each month, it will be 2,900. So I put the rent higher, but you pay me before it’s lower. So I’m not negotiating late fee. Late fee is something on top of that. Number four, I don’t want it to be problematic. I want it to be easy to manage. If it’s a residential property, I’m dealing with mom and pop, a family, I don’t want problems. I want to do the direct deposit. And this is how it’s going to be. Problems up to $250 in that house, you fix it. If more than that, you call me and usually we have a management company. And then number five, I want to know that I can resell it later with a very good upside so it can get me not just the cash flow, but when I exit so below market when I buy, rehab, done wisely.

 Rent, good cash flow, easy to manage. I don’t want issues, constant issues. You can tell right away a problematic tenant. From the get go. You can tell right away a problematic, problematic buyer when you’re selling a property. I’m selling a property. Just to give you an example, Just recently, this property, I wanted to sell it. That hasn’t been activities in the market. I’ve been trying to sell it, drop the price. We negotiated with people, it just was not selling. It’s a gorgeous property. Finally I got a couple to buy it. These two people were the nightmare from hell. They were like the devil reincarnated trying to buy a property of real estate, residential home that I rehabbed and fixed. And I said to myself, I told the broker, get Me out. These people are too much. They’re asking for so much. They have a Chicago attorney trying to tell me, sending me letters when they should go through the broker to do this.

When there are certain things done by the state of California. When I rehab a home until last minute when they wanted something, requested something last minute through the title company said I’m not going to do it. So they got so upset they pulled out. Was I ever relieved? I was so relieved. I got a bottle of coconut juice, which is my celebration. Some people drink champagne, I drink coconut and celery and different other healthy stuff. So you don’t want problems with these people and you can see them coming a mile away. So. And then final, I can sell it later for a good better price. Cool. Five things for residential. What else? Billy has a follow up question on the residential. What are your thoughts on lease to own for renters? Great strategy.

 Oh my God, it’s one of the best. Okay, let’s walk through it. Somebody want to sell the building? Let’s say you’re the buyer, you can come in and you offer them a little bit money up front. So lease to own. So I’d like to make this lease payment and then I can own it maybe in two years. You can then in your contract should have the right to sublease to own and then go and sublease it if you want to somebody else and then sell it to them have an ownership potential at a higher price. So when the, the one you sublease to is going to pay you more and you’re paying pay you more and you’re paying. When they exercise the right to to now own it, let’s say they’re gonna pay you 700, but you’re paying 600. So you can be very profitable if you’re doing it as an investment thing. If you’re doing it to buy and you’re doing a rent to own, you just come in and you make good rent payments. Try to negotiate that part of your rent payments will go toward the down payment.

And now you can go show the bank. Look, Mr. Banker, Mrs. Banker, I’ve been making payments on time for 12 months. I have a history of making payments. It’s a lot better. And by the way, what I paid here is part of the down payment. I’m going to tell you one more thing, one of the best thing. If you’re in business and you’re leasing office space, when you lease the office space, ask them, can I lease with an option to buy? If they say no, this building is not divided into this. This. What if you create a segregation in deeds, Some owners don’t have an idea. They just bought buildings. Some people are very traditional in the way they do real estate. They only go through brokers. The brokers only knows how to fill out the paperwork. Every building has three units. That’s how they think it should operate forever. They. But if you tell that owner, listen, you don’t need a broker. I’ll be the one buying from you. And you know that you can segregate this. You can create from one deed for the three units. 

You have here, the commercial office space. You can create three separate offices. I mean, if I really, really want to sell a building, I can go overtake it. And if there is a good tenant, I can sell it to the tenant. I know you’re going to pay me more, but you have a business somewhere running. I’ll give you the chance to own it. Let’s do a lease with an option to buy or a rent to own eventually. And I can sell it for more. Right now I’m doing a deal with a tenant that it’s a jewelry store that’s downstairs in a building. I have my office space, the second floor, and there is a penthouse, rented. And he said to me, I’ve been listening, I’ve been watching your stuff and I want to buy from you. I just realized this is the only thing I can pass on to my daughter. She’s not going to be working in the jury business. She’s not interested in that. So, okay, we’re making the deal and I’m kicking in some of the rent he paid me through the years. I said, this is

going to go toward the down payment. You’re going to put so much more money and then we’re going to close within X months. The bank loves it because there’s a history of him paying on time. All right, you got me all excited. Yes, good stuff. Very good. All right, and let’s see. Cheyenne’s last question. What are the five things you look for in a commercial deal? Here you go. One location. By the way, price, it does not matter for me because commercial, I pay full price. In residential, I gotta find a good deal. In commercial, I gotta make a good deal. Make it so. Number one, the location of what I’m looking for. Remember Hilton Hotels? When Baron Hilton, the developer of Hilton Hotels, when they interviewed him on TV and they asked him two questions. What’s the most important thing for you to buy and invest in a hotel? And they said, what are the most important three things to buy and invest in a hotel and put a Hilton name on it. He said, location, location, location. 

The second question was, anything you want to tell to all the millions of people that have been staying in Hilton hotels around the world? He said, yes, please. When you go to the bathroom, put the shower curtains inside the bathtub, not outside. Anyway, so number one, for commercial deal location. Number two, the use. What kind of use can I do in this commercial building? Can I change the use? You can take something that is running as office space, but if you change the use to medical space, you can make twice as much. You can take a building that’s sitting there just, just doing nothing for you to change the use. And you say, okay, now we’re going to actually close this side of the building and put the signage and put this. This make more money. So number two is the use. Number three, the neighboring tenants. Neighboring tenants affect, especially in retail, in hotels, neighboring tenants. The proof that neighboring tenants is extremely

powerful. When you go to a mall, you see the jewelers next to each other. You see the high tech store, the Microsoft store and the Apple store across from each other. Right there, you see the food court. All of them together. Why? And they’re spread out because neighboring tenants, when segregation of the congregation of tenants next to each other is very powerful. So if you’re going to get a lease and you want McDonald’s to come in and there is Burger king next door, McDonald’s is very interested. All right. The traffic. Traffic is so important for so much of the businesses. I remember somebody telling me storage facility traffic is not important. Well, storage facility traffic is very important. As a matter of fact, not only should there be traffic, it should be visible from a freeway. If you have a storage facility that’s visible from the freeway, that’s your marketing. 

So location use, neighboring tenants, traffic. And finally, the potential. How. What is the potential of that commercial building? I’m buying them based on the potential. I’m paying full price. I’m talking to brokers in commercial owners. It’s very seldom when I talk to an individual owner for, for a commercial building. So it’s good because the brokers can convince the owner since they trust each other and I can go in, I get a good location. I see the potential use of the property that I want to do. I look at the neighboring tenants that are going to support my plan. I look at the traffic that’s going to bring them business. Less marketing costs because traffic is already coming. And then I look at the potential. How am I going to add additional income based on this building? With this location, I’m going to put antennas to shoot the signal on the freeway. That will be rental income on the roof. I’ll put the side for the advertisement. I’m going to divide the units into condos and sell this and keep the other. So I’m going to add to that five questions that I ask myself. Can I cash flow? And this is in addition to kind of a bonus 5.

The bonus 5. I’m very active now in commercial repositioning a lot of things. Number one, can I cash flow based on the purchase price? So let’s say it’s a building that has 60% occupancy. So there is 40% more I can add. But if I buy it at that 60% occupancy, it’s going to. Cash flow, fine. Like I’m going to put a down payment, I’m going to make, get a loan from the bank based on the 60% occupancy number. I have my margin of safety. I can do the deal. The strategy will work. The commercial thing is going to happen. Why? Because I’m going to have now the other 40% I can add to it. So can I cash flow based on the purchase price. Number two, can I add income realistically? Not some fantasy realistic. Don’t listen to the broker. The brokers are always selling ideas and concepts based on perform of the future. I’m talking now. Can I add income realistically and within a relatively short period of time? Because if I can, that 40. 40 units that are not rented. 60 units rented. 

40 units not rented. Now, what I mean by realistic, you can add income is like, is it rentable or is that I have to fix it to rent it? Okay, number three, can I refinance after I finish all this? Okay. Can I refinance and cash out all my money, the down payment and the rehab cost that I put to rent it for more. Now it’s making more money. Will the bank now refinance and cash me out? So I saw. If that’s. If that’s true, I tell the bank, I know you have a 2% prepayment penalty if I pay off the loan. But if I refinance with you within 18 months after I finish all what I need to do and the rent goes up, would you refinance for me and not charge me that 2% penalty? Of course we won’t. You’re refinancing with us. We just push it to the new loan. Okay, good. Then we got a deal. Number four, can I manage it without headaches? Don’t underestimate the headaches in life with business and everything. Okay. And I’m not saying that it’ll be headaches. So you don’t do it.

If there will be headaches, you commit to it. I mean, when you say I’m gonna get married and have kids, for example, as a thought, you think there’ll be no headaches. There’ll be problems you never even fantasize about. The kid is sick, this person’s upset, this person got a job, this person loves. They relocate you, you got to move. But you have the commitment of being together. I’m going to do that building. I’m going to be committed. When I did a lot of business in old San Juan, Puerto Rico, I knew there were a lot of problems. The historic Zone, it’s got a lot of rules. It’s the Caribbean, so it’s slower pace. It’s Spanish. I’m not very fluent in Spanish. I learned Spanish because it’s a need. And it was a lot of challenges, but I was committed. 

I knew that I’m going to manage this and how can I reduce my headache? I have to get more buildings so I can afford more staff. And then through the years I have in house, attorney in house, this, this. So can I run this without headaches? You’re going to buy an apartment building. Okay. Do I have enough people to handle the problems? Because I don’t want to deal with the problems. I want them to be terminated before it comes to me. There is communication lines, that means they report the problem to me. And there is terminals, terminals that terminate the communication line. So I had the terminals and then I supervise only four or five people. Okay. And then last thing, can I sell it easily because of location, the use and all what I’ve done to it.

 So the five questions are can I add cash flow based on the purchase price? Can I, can. I’m sorry, can I add cash flow? Can I cash flow based on the purchase price, can I add income Realistically and within a relatively short period of time, can I refinance and cash out as much of my money, if not all my money, then hold it up, hold it for as long as I want because all my money will be out. It’s an infinite rate of return. Number four, can I manage it without the headaches through other people or through a structure of some sort? And number five, can I sell it easily after that if I want to sell it because of all the work I’ve done and the cash flow it provides? So that’s. Those are great questions, Cheyenne, thank you for your questions. All right, on the side, we just have a couple follow ups here. Sriram is asking how do we approach the brokers and clients for medical office buildings When I have a property in that market, is it different than QSRs? Well, actually a lot of the same principles are the same. You’re looking for a property that is going to bring solutions to you in your life based on the income it produces, not

problems. The end goal is freedom, not more complications. So how long will it be till I get my freedom which comes from the cash flow, from a good safe asset. That’s what I call a productive asset. So you tell the broker and you be straightforward with the brokers. And the more you tell the broker, this is what I’m looking for. This is what I want to do without telling them. I mean, your insider information, how you do certain things, the better they will be able to help you. And actually, some brokers have the ability to ask the right questions so they can extract the right information and help the client. 

A good salesperson is the one who can diagnose and help the person come to the conclusion of what is inside their head without them knowing that it’s in them. You know, I mean, selling is. Is an art and a science, but you should take that ownership of what are you, what am I trying to accomplish? I constantly write something I call the ideal scene. This constantly gets updated every two, three days. The ideal scene in this building is for me to finish the rehab, have the restaurant open for this guy that that’s coming in, the company that’s coming in. And when I come in, it will be full with people paying, the tenant paying me, and the place looking gorgeous. And I have refinanced, cashed out all my money. That’s the ideal scene. It’s something I can see, not ideal scenario, something I can hear. Sometimes I think of the ideal scenario when I meet with these people. 

The ideal scenario is the end of the conversation will be that they will say, yes, we want to buy. Yes, we’re going to put this and we’re going to close on this day. That’s the ideal scenario. So I always look at the ideal and where I am and how I’m going to get there. How am I going to get there is going to be just based on other people as well. The world is not just based on me. The world is based on what happens out there. So hopefully that answers your question. Very good. Follow up to the question. Ask me, don’t worry. Yep. Any other follow up to that? Thank you. Thanks. Cherif. Yes, sir. All right. We have a question on the side here coming in from Siri. She said she has bought a land and she’s thinking of entitling it. Is it a good idea to do that? And can you explain what is involved? Oh, entitling a land, yes. It depends what you want to develop on it and all this. But entitling, really, you have to go to the city planning and zoning and see what’s approved for and what are the steps. But if you want to make it a little easier on yourself. And by the way, to finish the answering the question, you’re going to have to talk to an architect who’s going to tell you, you know,

suggest for you some things you can go in depth and do what’s called absorption studies. That means find out what’s needed in this area and is lacking. So let’s say there’s huge absorption for apartment buildings. So they tell you if you put 8 unit, it’s a small land 8 unit, you’re going to have quick absorption. It’s going to just rent very quickly at very high rent because that’s what the need is. Or there is full absorption for retail. You need to put a small strip center. 

They will guide you. There are studies that you can hire people to do it. An architect is a great ally for this, can help you a great deal. An engineer for what you can build and all this. And really a contractor if you’re going to start building. But entitling it and selling it could be very good. There is an easier way is you promote the land and say great location. Here’s the land. Would like to partner to do a joint venture with a developer contractor. And somebody will come and say, well, how much you want for the land? Look, I want, let’s say 700,000. Say well, it’s too much because I’m going to do. Listen, don’t worry. You can have an option to buy it from me. So you give me a hundred right now and you can have a payment plan of so much. So you have some cash flow and some money up front and you can go get the entitlement.

 I’ll work with you, I’ll sign whatever is needed and you can do all this as an owner of the land will do it. And when the building is done and we sell, since I waited, you’re going to pay me then let’s say 800 or 750 on top of the 100 you gave me. It’ll be 750 or 700 or we’re going to split this and that. So you work it creatively and let somebody else do all the work. I’ve seen it done several times, so hopefully that helps you. Thank you architect. Siri, any follow up on that? I’ll take that as no. All right, we have Cliff on the call. He’s a new JV student. Welcome Cliff. And he said, Cherif, what are your thoughts? Can you purchase a QSR with a current triple net leaser in it? Yes, but you’re gonna only get 6% return. I mean you can buy a single tenant building with jack in the box, but you’re not gonna get that much money. But is it good? That’s fantastic.

 6% with no headaches equals 10% with headaches but in the beginning of your investment life you want the 10% with headaches because you’re trying to get as much money to build your cash and build your assets and then eventually you can say I don’t need to take any more risk. As a matter of fact later in life you want to pay down your debt to less than 50%. If you can pay it off completely God bless America and get a credit line and you’re you’re home free. You cannot go bankrupt if you have no debt and you pass on assets to your kids you can put them in the living trust and you say they can sell it

, they can do this, they can do that. They hold on to the assets forever. America is going nowhere. Thanks, Cherif. Hey Cliff. All right. Let’s see here. Sujin has a question and I’m preferencing this Cherif just so that she isn’t going to get into the details only because. It’s a private deal. So she’s saying can I just have a quick answer here today? And if she has to get a private call with you, she will. So she said she’s trying to come up with a deal structure for a very large portfolio purchase.

 They are promising 2% buyer brokers compensation. I want to leverage that to get this under contract without any of my money down and dispose infraction. What are your thoughts? Well, the key thing is how flexible are they to let you leverage that? I mean are you going to put, you don’t want to put any cash? Sujin. I, I could but honestly I don’t, I don’t know what is appropriate amount to do that. Like they’re, they’re, they’re asking for $10 million for the entire portfolio. But I feel like I did some comps calculation and like what’s More appropriate is 7.24 million. Majority of the single family homes inside the portfolio. The owner purchased anywhere from 6,000 to 35,000 back in the days. But I want to pay a fair price which is 7.24 based on my research. But they are asking for 10 million. Well then you being the broker representing buyers, you can tell them, well realistically I know you want 10 million, but realistically this portfolio is worth X because this, this, this, this. If you’re interested, we can pursue it. What do you say? And then let them tell you. Maybe they’ll say something like well how about if we go to 8 million but we carry financing, will that help? So we don’t sell it as low as that.

 You know, the problem is always the seller thinks the value is here, up here. The buyer wants the price to be down here and the reality is somewhere in the middle. So you just have to tell them this is what it is. If not, you just try to sell it to somebody else who would be happy with the 10 million and then make your commission. Okay. Yeah, there is really. I mean it’s based on numbers and, and I may say, may I suggest do not bring to the buyer to. I’m sorry, do not bring to the seller the fact that they bought them so cheap or that their cost is so low. This is the point that will kill the deal. It will be dead on arrival in the conversation. Okay. Like this guy was negotiating with me and he said, I know you want $2 million on the deal, but based on what you paid, what I’d like to offer you is I just had shut down. I just couldn’t listen anymore. 

Based on what I paid you know, I mean, what do you care what I paid and when I paid it and what I did for the building after I paid it? All this has no factor in the deal. So it was like, I knew he’s negotiating hard, so he made me the offer and said, thank you for the offer. It is very low. It is so low. Is shocking. And I am busy right now, and I’ll be talking to some other people interested in seeing the property. And in the interest of full disclosure, today is Monday. The people are coming on Wednesday. Now, were there any people coming? There were no people

coming. Am I lying? That’s negotiation. That’s commerce. So I hung up with him. Very friendly. You never close the door. You never tell somebody, how dare you. And all this unless it’s part of your strategy to get upset. And then you have to have that range of personality to know how to be upset and all this. And it depends on the person, etc. But. So I just was very nice to the guy. Thank you so much. I appreciate it. I paid 835 for the building. I won 2 million. But I rehabbed it. It’s nicer. And the area had gone up like crazy. And when I bought it, the people wanted, like, close, close right now, all cash. No, we can get. Okay, okay, here it is. So anyway, so the next day, I knew what he said. He thought to himself, he said, oh, my gosh, I can’t. He offered me a million two or something. So he called and he said, okay, I talked to my wife and I’ll pay a million three. 

So now what’s happening is he’s negotiating with himself. I said, you know, I don’t know. Let me just tour them on Wednesday. They just pushed it to Thursday. Now, why am I playing with him, the pushing game and all this? Because I’m giving him more time for it to eat him alive because he can sleep. So my process is, you let the people talk themselves into something. And I don’t want to talk about price as much as value. So I started telling you realize that there is an ocean view. This property does not have the noise on the street that other ocean view properties have because they’re closer to bars and all this one is on the side. So I sell value. This property has the best layout on top. You can have parties. Every floor has ocean view. 

So this is what you need to talk to the people in reverse. Tell them, look, I’m talking to some buyers, but they’re making very low offers. So I had to look at this as If I was personally buying it and I actually got excited. So you make, you create that connection with the person, then the per. And you say, I admire you for how you got that portfolio, but don’t tell him you’re making great deal you’re making. Kill. You are an amazing business person, you know, and you know, I wish I, you know, could get you to 10. But realistically, the offers are coming so low, they’re coming in at six and a half. I told them that’s ridiculous. I won’t even present that. They came up to 7.2. Maybe I can push him 7.4 or. What are your thoughts? What do you make him like? He’s trying to help you to get him what he wants. And if you can’t reach the seller

himself in dealing through the broker, walk the broker through the process and you’d be amazed. Some things that I. It happens to me in reverse as well, because at the end, guess what? We were going to close at 1.5 million. I was going to go down to 1.8. But the process was played on me as well because I started thinking, geez, it took me so long to get this guy. Took two weeks. And then his wife hired an attorney. All this. But the deal didn’t happen because the attorney they hired is not somebody I liked. And the attorney started going back and forth with me in the contract. So I sent them a text. I said, do not call me again. The deal is over. This attorney’s playing games. I told you, use this other attorney. Deal is over. 

And thank God I canceled the deal because I think I can sell it for more. But you understand the process is to get them slowly to what you want. And if they tell you 10 million, you don’t have to rebuttal too much. You can ask them, well, how can I do that? How could it be 10 million? I mean, well, and then they, they. And then you start to wait. And when you negotiate, there’s one thing also in real estate that works out so well is you repeat the last few words they said, right? So they say, well, I mean, the, this portfolio is so valuable, all the properties are in good condition. So you say portfolio is valuable because all the properties are in good condition. And then you wait. Now they feel like she’s really listening to me. I’m hurt. I’m feeling like she’s really listening. And then you repeat back to. But their best I can do is seven points up. I would love to hear the follow up on that. Good luck. Thank you. The hurdle is That I, you know, all of these are under llc. I cannot look up who the. Who the seller is. I’ve been speaking to the listing broker but she is so hard to reach. I have not spoken to her in on the phone. She only Responds to email 3 days after I email her.

But she, she does reply but it just takes so long and she never picks up the phone. Yeah, that is a problem that the seller should understand. But you, I mean you know who, so. So you don’t know who the seller is. Even though it’s so many different entities, it’s one entity. So do you know who the owner is if you need to reach the owner? I haven’t stopped the person online but I think I can try. You could try and then don’t do it as a broker because you’re a licensed person. You should deal through the licensed person. But then yeah, could you could send her an email and CC him? Oh, okay. 

Heard the email and CCM that I had to do that one time and they called me like not even five minutes later and I said oh, I’m so sorry. I had to reach out because I thought something happened to you because you were not calling me three days I’m trying to reach you, you know, and, and then guess what, they were like not more engaged in the conversation. So try to. Okay. Thank you. You’re welcome. Thanks Sujin. All right, next questions, we’ll move through pretty fast. These are coming from Dan. He is in Michigan. He used to be a JV and now he’s on this call. He said, Cherif, there is low inventory in vacant pre existing buildings in my area. Michigan has been for five years. I’m really focused on development. What are your suggestions on starting? Well, great that the area is so, I mean low in vacancy. Look at old buildings that are in great locations to see if you can just destroy the building and do a build out from scratch. You may get them for a song. Maybe the owners are tired of them. Maybe the people that inherited them are not dealing with them. Maybe they don’t care about the building. So look for existing building that you can destroy and rebuild and work a deal on that.

Maybe work a creative deal like at least with an option to buy, giving you the right to rebuild. And then the second thing I would do is see if the area since it’s low vacancy, it’s growing. So see where the growth is. You can talk to the city people, right? City planning and the zoning department, they will tell you, oh one time I walked in in San Diego and they had a map. And then I said, oh, what is this about? Said, oh, this is the growth area where we have all the new stuff coming. What new stuff? So I could tell right away from that map where they have developments and approvals for expansion, so you can see where they’re expanding and then go get ahead of the game and maybe get a land under contract and then develop something that will make sense for you. Very good.

 And then his next follow up questions are kind of related to the whole build to suit. He said, do I look for the land first or the potential partner or tenant? Who, who needs the space? How do I partner or JV with that person or tenant? What would the actual contract agreement look like on the split? Okay, so the tenants are out there and the land is going to come. I always say look for the money first. Anybody telling you different has really not experienced life in the world of investments the right way. Okay, Money first, then deals. You get the money, you get the best deals. Money brings deals. Money will make people sell that didn’t even think of selling. Money will make the bank call you and offer you things. Money will make the bank listen to you. Money will make the bank put you in the client services section. Money first. That’s why I say when you set up a real estate fund, when you start getting money and all this, your life changes because you go to another level completely. If I give you a million dollars right now, you’re thinking your entire energy level changes. Money is energy. So who are you going to talk to first based on the land? Joint venture partners or tenants? Talk to partners first. This is what I have in mind. Would you be interested in joining me, etc, etc.

And see who’s out there that want to do it. Once you know that, you see what tenants want to expand, what’s going on, where are the lands, and then go see what you can work out something creative to get the land. And as soon as you get that, you start talking to different tenants, who will want to come in, who will want to build to suit, etc. You’re on the right track, you just have to put it in the right order. Oh, right. And then his last question is, will the bank like this type of development? If I have a letter of intent with a tenant or a business like you do for the single tenant, retail deals, what kind of loan is that? So banks like developments and the way they do it is if you pay for the land in cash, boom, it’s very clear they will give you a construction loan in phases. You probably know that already. So also the banks like multi units they like to loan on multi units because the risk is lower. They know it’s going to rent and if not, you’re going to sell it for more. They just want to make sure that you have experience in developing, number one and number two, that the location makes financial sense for them. And I’d like to also talk about, I think you had a question.

How do I partner or joint venture with that person that would come in or the tenant? Okay, you can structure a real estate fund. That’s the best way because you can keep negotiating with different people, different structures. When you structure a real estate fund and you file it with the sec, you have legitimacy. You show that you’re at a different level. You structure a debt fund like I talk about, it will spell out everything, how the structure of a joint venture is going to be because it’s going to be investors coming in with a certain thing. If not, it’s the joint venturing. But the fund has priority, has power. So use that to your advantage and that’s how you expand. And you’re protected under the law because you’re following the SEC rules instead of just doing a partnership that you have to argue about everything. You say, I’m a fund and here’s what I can do with you. 

And then they will have to fit in your world. They play your game, you don’t play their game. All right, got too excited. Good day. Keep us posted. Michigan seems to have a lot of stuff going on. Okay, next question’s coming in from Edward. He is a solve your capital attendee and obviously this is his first call. He has three questions. Number one, how do sponsors get paid in the short term in a fund structure, if it’s your first deal? Okay, so in the debt fund, when you get the property under contract and you assign it to the deal, you can get what’s called an assignment fee. We call it assign for consideration. It is what I do in your paperwork in the private placement memorandum. That’s how you get paid. And you can get paid a lot more than those who charge 3 or 4%. It’s extremely profitable. Very good. Next question. How much is marketing? How much are marketing cost and how do you budget that for the first year as I raise capital? You know that today marketing is a completely different game.

Marketing today you can go on social media, on the Internet, you can post short clips of yourself. You can literally take your phone and then and post as you walk and say, I’m looking at this property right now. Today I am actually talking to some investors and I’m walking into this restaurant because I’m meeting with two insurance brokers whom I’ve known for years, and we’re going to have lunch and I’m going to talk to them about the benefits of joining a real estate fund that I have. And you know what? That’s what it’s going to cost you. It’s going to cost you a little time, a little effort to load up these videos on YouTube and on Instagram and TikTok. Okay. Once, I mean, I met this guy who tells me he is a hard money lender and he set up a fund and all this. And he told me, he said, Cherif, I have been posting so much that now the marketing is making me make money.

 I said, what do you mean? He said, I’m having so many hits on the clips that I get paid so well, it’s not going to cost you much. That’s how it just, it works. If you need to buy list of accredited investors and all this. Yeah, it may cost you some money for the list of investors, but that’s not a problem. It’s not so much. Very good. All right. And his last question is. Sorry, the last question is, will you help us with our presentation? And how do you help us? Okay, so when you finish the training and you’re going to enroll into me setting the fund for you with the attorneys we have and all this, I have a training for you. What? I show you exactly how to pitch one on one, how to pitch to groups, how to do your video. I give you a sample of how I structured my video, where I can send the video. People look at it and then they want to invest.

I’m not raising money right now, but just those who are in the program. I show you exactly the steps, how you cover it and how to answer certain questions to be in compliance with SEC and raise the money. And I’ve done it for a lot of money. I mean, we’re liquidating now when we have assets in the millions, in the tens of millions. So. Very good. All right, next question is coming from Paul. He’s in New Jersey. He said, if I have a chapter 11 on my credit from 11 years ago in a tech company I started, can I still set up a real estate fund or a syndication to raise capital for my deals? Yes. How long ago? Well, to answer your question, yes, you can. You don’t have to be accredited and if your bankruptcy was over two years ago, you can. 

We’ve done it before. We even had people who had some issues in the past in their past with. With the law. But it depends what the issues are. So. So to answer your question, most likely, yes, but I have to know exactly because there is something called the bad actors form to fill out. I discussed it with the attorney and will probably. I mean, only one person, we could not because they had just recently filed for. For bankruptcy on properties that got repossessed from him and that we would. He could still set it up, but I can tell you he’s going to have to disclose that in writing and he’s going to have a hard time raising the money. So that was just an extreme situation, but most likely, yes, but we’ll have to look into it closer. All righty, next question. What are the five most important reasons to have a fund? The five most important reasons to have a fund is number one, it legitimizes your position with, with anybody you’re doing business with, whether it’s the bank, the investors and all this. So one, the legitimacy of. I am, I’m a real estate fund manager. I’m filed with the sec. You know, for those who do it with us, we even like work it out with you. We can give. Get you set up with a website where the actual information of the Reg. D with the regulation of the securities and Exchange Commission, which is the sec.gov will be on your website.

You click, it shows the regulators saying you have $100 million fund set up, it’s a debt fund, it’s for real estate, etc. Debt legitimacy is extremely important, number one. Number two, the structure is there so you don’t have to negotiate with each person coming in what to do. It’s there. They’re going to fit within three criteria, Class A, B or C shares. Number three, with a debt fund that I suggest, you’re paying the investors a steady return. And when you sell the property, all the upside is yours. So what ends up happening is you don’t have to sell the property like equity funds where you tell them, I have to sell in five years to pay you so much. So when you keep the property for a while, with the increase in value and the decrease in debt, you can literally refinance it and pay off the investors and keep it in your family forever. It will change your life. Number four is the fact that you are protected. Why are you protected? Because as EC says, if you want to raise money, I want to make sure I know who you are. 

You file a private placement memorandum, you’re under one of the regulations that we allow and you’re exempt. You don’t have to go to register. You’re not going public. It’s a private fund. So you do all this and you do things ethically to the best of your ability. You’re protected. Nobody’s coming after you. As a matter of fact, you’re better off doing the deals in your fund than it is to go like a cowboy. Try to do deals out there, here and there, and then have problems so that you’re protect number five, you’re able to group. Bunch of people with smaller means, everybody with 25,000, 50,000 would love to get into the big deal, but they can’t. But when you come to them and you say, I’m putting investors together and this is what we’re doing, and we have a fund, so it’s not just one asset, but many assets. So it reduces the risk. And we’re managing the risk. And we’re doing this, this. Your 50,000 is as valuable to me as somebody coming for 5 million. And we’re going to give you this and that and help you grow with us.

That’s extremely powerful. You’re truly, truly helping the community, helping people, and the game keeps growing. That was a great answer. Well, thank you, ma’am. All right, let’s see. The next question is, I feel like I need to pay out 8, 10 or 15%. If I set up the way you are telling us to, you aim at 6, 8 and 10%. Can you explain the philosophy behind this? On the money and management? Can I afford to go higher than you do if I estimate my deals will return 20% or higher? I’m doing residential fix and flips and in and out of these deals within six months or less. Who asked that question? This is Paul. Okay, Paul, we got money for you, then. No, I’m just kidding. Okay, listen to me. I am saying we have Class B shares. Okay? So everybody’s listening here. Class B shares. 

Let’s say you have a fund. Here’s my recommendation. When I do the training, I show you all the details. When I give you the summary, Class B shares, you put 25,000 minimum, Mr. Investor, Mrs. Investor, 25,000 a unit. And you can get from 25,000 to 249,000. You get 6% per year. We pay you twice a year. Now, you want to put 250,000, we’ll pay you 8% a year. 250,000 plus 8% per year. We’ll pay you February 28th, August 31st, that’s 4%. 4%. Now, if you have more than that. Let’s say you have over half a million. You want to put a million to 2 million. What we can work for you is Class C shares. Class C is at my discretion as the fund manager. You tell them that, and then based on that, that’s a private conversation.

Now, you cannot do it from a pitch from the room. You could if you want to give them a standard price. But I didn’t say 10%. Only say 6, 8 and 10. I give the 6 and 8 because there’s a lot of people that want to invest their money safely, steady, and they just want the cash flow. They don’t care about an upside. They don’t care how long it took you to fix a property. Six months, you’re saying, or whatever. They just want the cash flow. They have their money sitting in an item making them nothing. They’re just paying the ira. All right? And with you, they’ll probably reinvest the money compound. But when you see somebody coming with a million, you want to give them 12%, you want to give them 15, you have that leeway. And that’s what’s coming next in my next training on Tuesday, this coming one for those who are enrolled in that training, what I’ll explain to you how I do it and how to pay, how much to pay and how much to accrue in payments and how to do it in a way that you’re in compliance with SEC and you get exactly what you want. And it’s extremely powerful. Extremely powerful. So, yes, you can do it. 

Six, eight and let the six. Six. Let’s say you don’t raise any money at six. It’s anchored in their mind. I’m not getting the six. I’m getting the eight. Oh, I’m not getting the eight. He’s paying me 12, so I’m going to give him more money. I’m selling this building anyway. I don’t want to go work so hard. I’m just going to give him the money. So, Paul, you’ll make a lot of money because you have a good business model. That’s how to do it. Very good. All right, we have two investors questions left. Mac, he is new to the these calls. Welcome back. I know he is actually working today, so he’s going to be checking this out on the replay. He has a list of questions. I am a new agent and see deals come through on the commercial side daily. What is the best way for a real estate agent to break into commercial investing?

I have taken your commercial roundtable and see value in the highest and best use section. How do I market that to potential clients and cut myself into the deal to start my own portfolio? I am starting with very little cash. Okay, got it. Well, one of the best ways is you can actually literally position yourself as. I have these deals. I was going to buy them myself, but I would love to partner with you since you’re the buyer. If I bring you a deal that does this and that for you and your portfolio and I’m willing to bring the deal, help you put the stuff together help you add value based on the highest and best use. Can we partner up? And I will get 10% and you get 90%. If in the beginning they say no, look, you know, you put in your commission and then you get just 5% the first deal. Heck, if you do it for free, you’re just building an understanding and a momentum to get yourself in the game. 

And then the second deal from the 10, you go, 23rd deal, you go and set up your real estate fund. And then you tell these people you want to invest, you come with me, I’ll do most of the work. You put your money, your money will work for you like magic. And that’s how you do it. Work your work your way to a fund. I would tell you set up the fund right away because it could be such a more powerful conversation, but you say, I have no cash. You’re going to need some money to set up the fund. I’m just going to be totally upfront with you. I’ve transformed some broker’s life by setting up a fund. You can. Even when you set up a fund, you can go to the seller and tell the seller you want to sell this apartment building for 10 million. Yeah.

How would you like to sell it and keep it as well? And the seller says, what? How is that possible? Let me put it. I have a real estate fund and I’m a broker. I’m going to come with you. Let me list this building and when we sell it, you continue managing it with me. I’ll put you as a co sponsor. I’ll put you as a co partner with me in that fund. And when we sell the building, instead of selling it, one buyer, we just raise the money to cash you out. You can roll your money at 1031, exchange something else. I’ll get you. But stay long with me for four or five as we manage it, since you know the building and you know the management team, etc. And then five years later, when we sell it for more money, you get paid again as co fund manager with me. You, you can make so much money with a fund when you know how the funds work, it’s not even funny. But you want to work one deal at a time, make a commission, that’s fine too. You could do that. You’re with me. You’re listening to me, Mac. Mac is going to be listening to you. Oh, he’s not on.

Okay. All right, good. So that was great answer for Mac. Next question. Out of all the asset classes, I feel office to condo Conversion could be the best. What are your thoughts and how and what creative and highest and best use ideas do you have for this type of asset? Should I sell as condos or rent for low income? Okay, this question is so general, but the answer is very specific. Meaning if the area has office condos or let’s say have office building but there is medical buildings that are totally absorbed, like 97% occupancy over here, then you’re going to say if I get this at a lower price because it’s office space that’s not rented and I convert it, it’s going to cost me this to buy. It’s going to cost me that much to reposition it and convert it and separate the deeds into condos and make a medical officers then sell half of them and keep that.

 It’s going to make sense. So it’s all based on the numbers. The strategy is great, the idea, the concept is great. But then it’s got to come down to the numbers of a specific property. That’s why when people tell me what’s the best market, I say, well let’s say, let’s talk about what’s the worst market. I don’t know, let’s take out in the boonies in Wisconsin will be a very bad market. Let’s just assume that it’s snowing all the time, it’s very slippery, the roads are tight and all this. But you find a deal for $100,000 that McDonald’s wants to come into because McDonald’s know people eat everywhere and now it’s worth half a million dollars. Was that a great deal? That’s a great deal. But Cherif, you said the small town out in the boonies in Wisconsin is not good. Well, that deal is good. Just so market specific and so property specific. But yes, I like where you’re going. Office to condo conversion is great. Let’s work the numbers and see what it is based on that market and then we can talk more. But you got the idea very good.

This question you kind of already gave him the answer to, but he said he has a list of pretty well off buyers who could be investors. Do you really think an agent could do a syndication or a fund and have a success with no credibility? Well, why? Yes, the answer is yes. I mean this self high self criticism that people give themselves is so self destructive. I mean your credibility is going to come with the structure of being a real estate fund manager and talking to people and understanding what they want to do and how you can structure the deals with them. If they’re investors, that means they want to buy buildings. If you bring the good building, that’s your credibility. If you’re a real estate fund manager, that’s an added credibility. If you’re telling them, I’m willing to do this and that work, that’s an added credibility. Some of the best success stories that over the years that I’ve had from students were situations like a broker would come and tell me, I got this deal. It was such a great deal.

I went to this person that I had met years ago and I told him, I have this great deal. This other person sees all positioning. This other person is telling me he wants me to bring it to him and I partner with him. But it’s just so difficult to get along with him. Would you partner with me the same way you see? And then the person says, yeah, partner with. Bring me that good deal. I’ll give you a percentage of it. But you deal with it then. Because an investor has to always think, where do I deploy my capital? And I give you all the criteria safely with cash flow, liquidity, reserves with backup plans and diversification. So it’s a new deal. Those are the formulas. You talk, talk, talk. Like I’m telling you, listen. To my formulas. Talk to them, to somebody in front of you. 

They’re going to be like, oh, my God. This is. This is who I want to do this with. I’m fun. I have a fund. It’s filed with sec. I know you’re a good investor. Somebody else is offering me this opportunity. I’d like you to come in with me into this because I think I get along better with you and I can do this, this and that. So, number one, they want to know where to deploy their money. And number two, they don’t want to do much work. They don’t. The more money somebody has, the less they want to do. Except for people like Elon Musk. I mean, the guy just loves to work. He’s just the way he is. So some people are like this. I don’t. There is a lot more in life I want to do than just work every day. I just so happen I enjoy my work. It’s like, what do you do for enjoyment? I like to work. I don’t mind, even in the fights, going to court. 

I feel like it’s a game. Let’s see what they’re gonna say now in court, I was like, but I have. But I’m the master of asset protection. So, okay, take me to court. Let’s go to court. It’s part of the business game. And some people don’t want to listen. They just want to sue because their attorney is telling them this and that and they want to make money. Okay, let’s go. Let’s go. So you are on the right track. Don’t self criticize to a point where you destroy your own credibility. You’re building your credibility. All right, I went too much on the credibility thing. No, I. I think we all appreciate that. All right, the next and last person asking questions is Mark V In Michigan. We were Michigan strong.

Yeah, Michigan is. He has two questions. First one, what is reverse wholesaling and would you recommend it? How much money do I have to have to start with that strategy? Reverse wholesaling. Okay, so. So let’s define what. First of all, what’s wholesaling? Wholesaling is when you as an individual go find a property from a list of distressed sales. So you find people that are in probate, people that are late on their payments. Property that’s in distress, that somebody want to sell it. And you go, and you are a wholesaler. So you put the property under contract at a very good price. Let’s say it’s 100,000. You put it under contract at 67,000. And you go around and you find investors that will buy it all cash and move quick. So you assign a deal to them and now you have to make sure they’re going to make money. The seller is happy and you can make money. 

So let’s say you assign it for from 67 to 75,000. So the buyer that you assign it to is getting it at 25% below market as is and they’re going to improve it and they’re going to sell it at 120, eventually 130, whatever. I’m using very simple numbers. So that’s wholesaling. Reverse wholesaling is you don’t go get the property, put it under contract, you go find investors and the steps to do it. I’m going to give you the steps to do it. Number one, you’re going to have to get compile a buyer’s list. Where do you get the buyer’s list? You can buy what’s called the cash buyers. You can Google in your area, zip code or whatever.

Cash buyers. And then you can need to buy cash buyer lists and there are companies that will sell them to you in your area. There are 200 cash buyers going to cost you X. I don’t know. I don’t know. I never bought these lists. But you’ll see how much it is. So when you get the buyer’s list, you look at them and then you try to reach some of them and then you have conversations. Thank God. Now we have Zoom. You don’t have to go have coffee. Okay. You don’t have. You’re going to be, you’re not going to sleep at night, too much caffeine. Okay. Just do it on Zoom. And then you can send them emails and all this and say, I got great properties. I work with. Select few buyers would like to know if you’re interested to give me the criteria you want so I can locate the right property for you. I’m very active in this market. 

Any buyer that’s looking for good deals is going to say, let’s get on a Zoom call. So compile a buyer’s list. Number two, choose a buyer or buyers from that list that you want to work with. Once they tell you. Now you go buy the list of distressed sellers. Distressed situation. In these markets, they sell all the time. There are so many people selling them. Go on Facebook. Okay? Locate these properties. So that’s step three. Step four, you got to get that property under contract and then go to that buyer. First buyer you like, second buyer, third buyer, and say, here’s the property. So the five steps are get a buyer’s list, choose some buyers to work with, focus on two, three. You don’t have to get a lot. Go get a property, get it under contract. So now you got the buyers before the property.

So that property is very specific to that buyer. So, you know, that’s what he told you. I want something. Let’s say it’s 400,000 market. I want something between 250 to 300. I’m not paying a penny more than that. I got to have that 250 to 300. Boom. You find something at 270, you negotiated to 250. You got it under contract. You’re excited. You got the criteria. He wants. You want single family. You want it at least three bedroom, one bathroom. He wants this, this. You got all the criteria. Now you call the guy. I got it under contract. Let’s make it happen. He’s going to come tour. 

Now you’re done. So I guess you’re gonna ask, well, how much money do I need to get started in this? Well, you’re gonna have to buy the leads, so you’re gonna have to pay for the companies that send you, the cash buyers. You buy it once you have it, and you have to have time to meet with them on Zoom. And you have to talk. Just have a conversation. When you talk to somebody, be prepared, okay? Be prepared. It’s not a conversation. People that, that come in on Zoom, they want boom, boom, boom. I find the properties. Tell me what you’re looking for. Be very business like, okay? Not like, oh, my God, I love your tie. What? Who cares? Okay, so you go right into the subject matter.

I’m finding properties in the market. I selected you from one of the cash buyers in the market. If you’re interested, I can get you exactly what you need. What are you looking for? Give me the parameters and they’ll tell you. So it’s going to cost you money to get the cash buyers list, meet with the right ones, pay for another lead source for the distressed properties for sale, and then go get these properties, one or two under contract to show them. And in this type of deal, you can show them a couple properties, you can show them three, okay? You, you. And if you have two, three buyers, you can work that simultaneously. It’s a lot of hard work in anything. In the beginning, it’s like pushing a truck, but then when you have momentum, it gets easier. They buy from you. You have credibility. Next time you call the person, they’re like, okay, I’ll see you tomorrow. 

Don’t. Don’t show it to anybody else. I’m very interested. Now you have a mom, so. So that’s how you do it. Very good. All right, and Mark’s last question, and our last question for today is how do you manage investing, a job, home life, and success? Okay, so that’s a great question to finish with because I. I’ll give you the formula of what I use. So what I do. Let’s talk about work, endeavors first. Business, the work, the investing world. I follow very specific steps so you can write them down first. I observe. So I like to look. I observe and analyze. I’m analyzing numbers. I’m observing. I’m looking at the people working in an area. Let’s say I’m buying a hotel. I’m looking at the people working. I’m analyzing the numbers of the hotel, what they do. Then I communicate. I take people. I talk to them one on one or in groups, and I evaluate. What are they saying? What kind of problems do you have? They tell me, and how do you guys communicate here? So observe and analyze.

Communicate and evaluate. Next thing I do is I clarify and assign the duties and responsibilities to everybody. I clarify before I assign. I don’t say, joe, you’re in charge of this and Susie in charge of that without clarifying. So I tell them you’re in charge of this. And I want to tell you you’ll be successful when this and that happen. Here are your duties, here are your responsibilities, and I assign it to them. Then I motivate them. I know you can do it. You’re great. I like your background. And all these people want to feel good. They want to feel responsible. They want to feel respected. And then I enforce. What they mean by enforce. It sounds like such a powerful, strong word. I make sure it’s going to get done. So I say, Joe has to follow up with Chris and Chris has to follow up with Susie, because all the work is like a chain link of events. So I motivate them individually, and I enforce it as a group.

 I send an email. It has two people copied. All right? Then the next thing, I supervise to correct what needs to be correct. So periodically, I come and I look and I supervise. I always talk about it’s not just regular vision supervision, like you’re looking and you’re trying to say, why is the person standing? Why is this not happening? And then I correct what has to be corrected. So supervise and correct. And then below that, I say, adjust whatever needs to be adjusted. Because when you do a correction, you may talk to somebody seriously, they be upset, they may start talking to other people. So you got to adjust the dynamics, what’s going on in the group of people that you’re working with in the business you’re doing, and then improve. You constantly want to improve it. The next thing is, I want to simplify to be able to grow. And then finally, I want to sustain. The sustainability is so important, and I want to find ways to pass it on to my loved ones, to pass it on to my executives so I can step back.

So I’m going to repeat the steps, observe and analyze, communicate and evaluate, then clarify and assign, motivate and enforce, then supervise and correct, and then adjust and improve, simplify and grow, sustain and pass it on. So that’s in my business life. So. And then I organize my day when stuff is coming to me. What makes me money first, that’s my priority. Not what’s the most difficult. What’s the priority? There are so many priorities that are not priorities. Okay, I want to focus on, okay, if I make this phone call, I’m going to close this day. I’m going to sell this property. What makes me money? First, you’re a fund manager. What’s going to help you raise money? So what makes money first? Number two, what saves money or cuts expenses? Second, okay, you don’t start by cutting. You start by adding revenue. That’s the main. Most important thing. 

Okay, and then what saves money. And I don’t want to save money on marketing. Marketing brings me rewards, brings me money back. So what makes money first, what saves money second? Then what do I need to deal with now? So it is stuff I need to do. What do I need to deal with now? Okay, then what do I need to delay? I’ll deal with this later. What do I need to delegate? Who can do this better than me, faster than me, easier. And then what do I need to destroy? I don’t want to talk to this guy again. Hey, thank you. Do not talk to me again. Do not. There’s no need. You’re not getting to the price I want. You don’t. Or I don’t even have to talk to him. Just disconnect. So it’s the do, delay, delegate and destroy the four Ds. And what am I looking for really in business? I’m looking for money and relationships, okay? And when I talk about money and relationships, I want a residual income and a compounding return. So when I buy a building, I wanted to keep producing income and the compounding returns. As the rent increases, the debt decreases.

I have to make it like this when I have a relationship in business. I wanted to have a long term relationship because it compounds on the trust. It’s easier to deal with people even when they get me so mad and all this I tell myself I’m so upset, but before I give them the debit, I want to give them the credit. But last month they were very good. The guy is sick today, so I’m not going to be upset. We got to close him going to delay it. I want to close. I don’t feel good about delaying with this buyer. But then I try to balance it because I want the long term relationship with the people I work with. And those I don’t want. Cut them out. Cut them out right away. But in a nice way. No reason to. Even when I fight with people in court and whatever. 

I mean, no reason to make a drama. Okay. In my personal life, since you asked about that, I think you know my formula, but I’ll repeat it anyway. It’s all based on three things. Happiness, health and wealth. And happiness comes first. My mother is 95. She’s pretty much almost one foot in heaven. But she’s very happy. So it makes me feel so accepting to her situation. I’m 95, she’s bedridden. She’s four doors down from me here where I am, and I’m going to go see her. When we’re done. But she’s happy, so her health is finished. It’s gone. But happiness is so important. She’s, like, always happy to tell me about all this and your relationships and your life and your kids and your sister. And I’m so proud of you guys.

I have accomplished everything. I’m so proud. So this is important. So how do you have happiness? I’ll give you the steps, in case you don’t remember them or you haven’t heard them from me before. Number one, to be happy, you have to be ethical. Ethical. That means at the end of the day, before you go to sleep, you can look yourself in the mirror and nobody knew what you did. Only you. And you say I did well by everybody. I did well because God is watching me. And if you don’t believe in God, well, because there is a divine intervention if I do something wrong. Okay? So I have done everything right. I can sleep at night tonight. Oh, I lost my money. They’re suing me. I’m still gonna sleep at night because I’ve done everything well. 

I’ve done it ethically and I can prove it. And if they don’t believe me, and this is my faith is to be killed or whatever, I’m still okay. But if you’re unethical, it’s like that drug dealer, selling and ruining people’s lives. Do you think he’s relaxed? You see them in movies, he’s relaxed. No, he’s walking around, gonna kill somebody or gonna bomb someplace. You know, it’s not ethical. So you have to be happy. Then be ethical. Have relationships that are positive with others. Have more positive relationships. Have people experience life when they’re with you in a positive way. Accept life, experience life in a positive way. Your relationship with others is the test of longevity. You’re not going to get along with everybody. There’ll be some that you’ll have to fight, but at least fight them. Just push them far enough to get them out of your life. You don’t have to destroy them and annihilate them. This is not a war.

Okay? So ethical, positive relationships, more than negative ones. You have to have goals that inspire you. Inspire. That means in spirit. Just takes you to a level of, I am willing to conquer the obstacles to reach that purposeful, meaningful goal in my life. It’s so exciting and it’s so challenging. I’m going to conquer that stuff and it’s going to be so rewarding, and then I’m going to feel so good. We must have goals to be Happy. And then you have to know how to enjoy, enjoy and have gratitude that you’re growing and contributing. If you’re not contributing and just growing, you’re missing out. 

So that’s the formula for happiness, ethical relationships, goals, enjoyment. The health is very simple, really. I mean, health is based on myself, how I’m gonna actually do certain things and how I’m gonna influence others in. I want to sleep well, so I do everything during the day to sleep well at night. I want to eat right, I want to exercise rigorously and regularly and I want to do the doctor checkups and follow ups because you can look good and be all physically fit, but you have some problem you inherited from your parents. So you need to go see the doctor regularly. It’s a priority schedule.

It like appointment, you have a zoom call, you go, go see the doctor. Okay, doctors and do checkups. Checkups and follow ups. And you got to exercise to have mobility. So you don’t tell me, I’m seeing people 45 and they can hardly go four steps up. Their whole body’s like, it’s like, what are you doing? I was like, oh, my knees. I haven’t lift some weights. No, they told me weights are not good. I don’t know what they’re telling you, but try, try some weights and then you build it gradiently and you will be better and you will have that mobility and you’ll grow healthy. All right, now the wealth, wealth is really going to be based on your knowledge, all what you’re learning, the action you’re taking, the network you’re having to increase your luck factor because the more you network, the better off you’re going to be. But one of the most important things that I don’t think I harp enough on it, maybe I’m not clear on it, is you must have a structure to hold on to productive assets that are protected and then create an estate plan to pass on the wealth you have to your loved ones. And I don’t care if you’re single, I don’t care if you’ve never been married or you’re going to be married or you have kids or don’t have kids. You got to have a way to pass on whatever you have to others. So you got to have a structure.

How are you buying properties? How are you handling things? And I’m telling you, wealth is based on having those productive assets that mean you can’t be wealthy until you have an asset that bringing you income. You can’t. You just have to have it because then Someday you’re going to say, I can’t work anymore, or I don’t want to work anymore. And you want to be a choice. I don’t want to work anymore. The building is making me money or the buildings. So what do I look for in my personal life? I look for long lasting relationships. Love is very important and you begin by loving yourself. You can’t love others unless you love yourself. Just a quick story. I remember in the hotel business, when I was in the hotel business, I had an assistant and she used to say things like, I would tell her, hey, you didn’t send me the updated list for this. Oh, she says, I’m so stupid. 

She would say, oh, I’m so dumb. Oh my God, I can, I’m so crazy, you know. And one time I told her, I said, you know what? I would like you all these self comments, you’d say to yourself out loud, just write them down. Just write them down for yourself. A couple days later, she came to me and she said, oh my God, I’ve been taking notes about what I tell myself. And I looked at it. I am so harsh on myself. I’m going to stop doing that. I said, I’m so glad you said that. And you have a daughter. If she listens to you saying this, she’s going to say the same thing. Don’t say anything negative to yourself about yourself. The universe has that power to make things happen. And if you’re telling yourself you’re dumb or you’re, oh, I’m so, I’m so sorry, stop that. And she stopped it. And you could see her energy just go up and she’s a lot happier. I’ll never forget that. So I ask you to write down the positive things, what you have gratitude about. And know that everybody wants love. And if you have that love and you try to love others, greet them the right way, and all this, you will understand others so much better.

And don’t be so harsh on yourself. The market will go up, down, sideways. You will do well. Work the formulas I share with you and I hope I helped you this weekend and you’ll have a great month. Until next month. Thank you so much. Take care. Cherif? Yes. Todd has one thing to say. Okay. Okay. Sorry. Todd. Hey, Cherif. How are you? Good. We lost a few people. I’m sorry. Sorry. Hey, not, not too long. I’ll take everybody. You know, you listen to this. Happiness is the best part. It’s overrated with people say it all the time, but there’s something you could do to take the first step towards creating that happiness and all the things that Cherif said. 

And I do it every January and I write a letter to myself. What I’m grateful for. Just. Just write something and all the things you’re grateful for. It took me about three weeks. Do a little bit here, a little bit there, and you’ll see how amazing that helps you get into. And on that path to what Cherif is talking about, that happiness, things start to fall in better. You get this positive attitude towards yourself and you see that you have done things that have helped you get to where you’re going, even some of the bad things. Which you learn the most from Cherif, right? Yeah, absolutely. You learn the most from the worst things that have happened to you. You could be grateful for that. Thank you, Cherif. Good to see. Thank you, Todd. Thank you all. Have a great one. Bye. Bye, guys. Bye. Bye. Thank you, Cherif. Bye.