Jan 14, 2020
James: Hey, audience and listeners, this is James Kandasamy and you're listening to Achieve Wealth Podcast where we talk about value-add real estate investing and we interview a lot of commercial real estate operators where you can grab a pen and a paper and start learning.
So today we have Jake and Gino from Wheelbarrow Profits. And Jake
and Gino own around 1500 units with 1000 of that units were done
solely by them without any syndication. And they have another 400
units, which they started syndication and their primary focus is on
Southeast market. Right now, the deals are in Tennessee and
Kentucky. So, Hey guys, welcome to the show.
Gino: Hey, James. How you doing? Nice to be
here.
Jake: Hey, thank you for having us.
James: Yeah. Did I miss out anything in terms of introducing you
guys?
Gino: Well, I mean, for me, I've got six kids. I mean that's
probably my biggest achievement to date. I live down in Florida. I
relocated two years ago from New York to Florida. I'm a certified
life coach. I think that's a really big accomplishment for me and
I've got a fantastic partner on the other end. So that's what I
guess made my success, having an amazing partner, having an amazing
person pushing me and telling me, Hey Gino, we need to buy this
deal. Hey Gino, you know, we need to write this book. And I'm like,
come on, another thing? So having a great partner really will excel
you in life. Did leave anything out, Jake?
Jake: We're economic deserters. We left the high tax Northeast for
a better life of sunshine and rainbows and
I'd [01:54unclear] friend. No, it's been a great
ride. You know, Gino and I, back in 2011, started really
looking hard at multifamily. We wanted yield. We wanted something
that was going to pay us every month. We had very challenging jobs
at the time. I was under threat of layoff all the time. Gino was in
the back of the kitchen trying to make sure that he could get
dishwashers in every night. And ultimately, we knew there was more
to life than what we were experiencing and we sought out to make it
happen for ourselves.
So we got into the first deal. It was a tough one. It was a
25 unit and we've never looked back. We've done multifaceted,
multifamily ever since. We have four core businesses, we have
property management, we have education, we have a mortgage
brokerage, we have an investment business and over 20 holding
companies to go along with that. So we really look at
multifamily, you know, being the place to be because we know that
it's a basic human need and we've grown our brands all within the
multifamily space. And it's been, again, just a fantastic ride.
We've focused a lot on culture scale, and growing the business day
in and day out. We had an epiphany moment a few years ago that we
were working too hard and we're running around doing
everything.
We call it the, 'I'm a' mentality. I'm going to do this, I'm going
to do that. I'm going to do everything. 'I'm a' could only go so
far. So I'm ahead to bring some friends. So Jake and Gino, you
know, brought some friends on and we started scaling up. And you
know, we've got some really great people on the team and I think
that's one of the things, I get so much of the enjoyment out of it.
Cause I see these people coming on really with us and they just
grow and they excel and then we've created a home for them.
Jake: And James, more importantly, that only started with a 25 unit
property with $27,000 from Jake, myself and my brother, Mark. So
that's the amazing thing. Talking about where to start. I'm too
young, I'm too old, the market's too hot. I don't have enough
money. Those are all myths that people want to tell themselves.
What they're lacking is they're lacking innovation, they're lacking
education, they're lacking creativity and they're lacking
mastermind. Those are the things that I lacked when I used those
excuses.
And if you want to use those excuses, that's fine. But we
have so many Jake and Gino community members that are in their
twenties and they're in their sixties and they've gone out and
they're doing deals. So if you want to get into multifamily, you
need to educate yourself first.
James: Yeah, very interesting. You guys are really, really
vertically integrated. I mean, as you've mentioned, you guys own
property management, asset management and also have a renovation
team. And you also do some agency that representation right to the
test lenders, I guess for the agency, which is really good. I mean
I have the first three but not the last one. Question is, I mean,
how did you guys do this 1000 units on your own? I can tell you
there's not many people who have done like even like a what, 300
units on their own, right? Everybody syndicates, right? Including
me; I syndicate, I used to own...I mean I still own some
single-family, which I'm selling off right now, but all my deals
are syndicated and a lot of people I talk to use syndication. But
how did you guys go from that 25 units to 1000 units on your
own?
Gino: We weren't that smart, first of all. We thought
that's how you had to do it, to be completely honest with you.
Because we said, Hey, we got to buy a deal. We'll buy the deal. We
buy it, right? The three-step framework, if you see the wheelbarrow
behind me, it's buy right, manage right and finance right. You need
to do all three of those. We were buying them right and we're still
buying the assets right.
It's truly important that you need to buy the asset right. So
we buy these assets, we refinanced the assets and we wouldn't go
and buy Ferrari's. We'd actually repurpose that money into the next
deal. What really propelled us was we bought a 281 unit property.
It was $11 million. It was owner finance. The owner basically said,
here you go, here are the keys. We actually had about $120,000 come
back to us at closing.
Now that doesn't happen every day, but that happens when you're
ready and when you are integrated and you know the business model
and you know, to take advantage of that. That really, really
propelled us because we were able to refinance that property. So to
date, we've refinanced over $9 million of our proceeds. We've
rolled that right back into the business and we continued to grow
that way. But James, to be honest with you, if we'd been
syndicating through three years ago, we'd probably be at the 5,000
unit mark, which is maybe that's great, that's not great but that
wasn't our path.
We started syndicating back in November because we saw we could
create another multiple stream of revenue, create the asset
management company, that syndication company, for syndication. And
I had five or 600 investors on our platform because of the Jake and
Gino brand. I just couldn't utilize them. We didn't have the space
so we brought on another partner to start that business and that's
been a fantastic business. We've done two syndications, we've got
another deal in the contract right now and we're continuing to grow
that. And James, as you know, they feed each other. It's just
wonderful. You go to an event, you speak, you do podcasts, the
education can sell education, sell books, and then you know what,
you're positioning yourself as an authority leader. And on top of
that, you're bringing investors on board and you're teaching people
how to do it and you're getting the deal source. And it's just such
a symbiotic, beautiful relationship.
James: Yeah, it's very interesting because I mean right now, like
for example, I was told once, I mean you can do syndication, but
your end goal is to own some of the units. But you guys are going
the other way.
Jake: We started backward, James. I'm going to tell you something,
and this is what I want your listeners to hear because it's the
kind of thing where a lot of people are afraid of nonrecourse
financing. And we'll tell you right now, non-recourse financing has
made me rich and it's made Gino rich; fortune sides with him who
dares. We took a chance on it. We couldn't even get into agency
debt back when we first started. We were doing a lot of deals that
would have been qualified for what is now known as Freddie Mac SBL.
Okay. We took on the recourse debt. We had a lot of battles on the
front end with the banks. I say a lot of times, it's just as hard
negotiating the deal as negotiating the deal with the banks a lot
of these times.
So we went in, we fought some good battles. As Gino said, we
manage these assets, right? And then we were able to take the
financing and sometimes we'd finance the deal once with a community
bank and then sometimes you'll refinance it again and send it out
to nonrecourse financing over time. So we just really did, we
focused on buying these things, right. Adding a ton of value to
them and then extracting the value, holding the assets longterm,
not selling them, keeping the cost segregation going. And really my
view of these is that we're going to buy them, we're going to
manage them right. And the party is going to keep going because
we're not going to sell them off if we're buying a deal in house.
If we're buying a deal in house, we're gonna keep adding assets to
it. Keep the cost SEG going and keep that party rolling.
James: But what's your end goal is syndication. I know
syndication can grow very quickly in terms of unit counts, right?
But your shared...
Jake: But it's not about just growing the unit counts for us,
right? We want to have a tool in the toolbox that fits every deal.
And we were talking before we got on the show today that we just
bought a very hairy deal. It's 26 per unit. People were not being
taken care of. It's 146 units. We have 40 vacancies right now. We
didn't syndicate that. That was not a good deal necessarily for us
to syndicate, but I know over time that deal's going to pay us back
very handsomely. So was that a deal that we want to syndicate?
Probably not. We're doing a deal right now. It's very clean. It's
going to be a nice cash on cash return, right down the alley for
syndication. We just want to, you know, any deal that comes our
way, we want to, if it's going to cash flow, there's going to be an
opportunity, we want to have a vehicle or tool to take that down.
And syndication is just one of those tools. Find it in house is
another one.
Gino: And I think the opportunity we have now, to piggyback off of
that, as where we are in the market, in the market cycle right now,
you just gotta be careful of what you're buying. You have to be
buying assets in pretty good locations, with pretty good rent
growth because when the economy slows down, you want to be able to
continue to have your occupancy and run 94-95%. You don't want to
see rents dropping. So you gotta be careful what you're buying.
Would we've been buying these assets three and four years ago? No,
the opportunity was more of those value-adds. Now there's less of
an opportunity for our value adds because those prices are already
built up. I mean, we went and bought an asset in November at 45 a
door. Two years ago, it would have been 30 a door, but that's where
we are in the market.
So with that value add, it's very difficult because you've
got to put more loan to value. So you've got to put more money down
on these deals and there's more risk, as going out 18 months or 24
months, if you're not able to make those preferred payments, you
know, they're going to come knocking at you. And then the
investor's going to say, well, why did we make the draw this and
this quarter? Well, we were trying to reposition it for the long
game. That's the thing with multifamily. Everybody out there,
multifamily is a long game. It's number one, but debt and taxes,
number two, it's about having a business. If you're not going to
run the business, somebody has to run the business. And number
three, it's a long game. You're not going to get paid today or
tomorrow. You're going to be the farmer planting the seed, watering
the seed, and waiting six months or 12 months for it to grow.
That's why it's hard to get into multifamily because people love
transactions. This is not so much transaction-based business unless
you start getting into it and then a year, two years down the road,
you can create some transactions by refing or by selling or by
trading up. But when you start out, it's hard because it's that
instant gratifying.
Jake: James, I want to say one thing that just piggyback on Gino
here and what he's saying is many of you out there may be
syndicating deals and we love syndicating. We love buying deals
ourselves. Just keep in mind the syndicators that are the most
successful are that they understand that the work starts after you
bought the deal. Just because you're syndicating, you need to have
that one on one connection, even if you're doing third party
management. James, we were talking earlier that you know, he runs
his own a property management group. That's when the real work
starts folks. So you know, whether you're syndicating, whether
you're buying in house, tee it up, make sure you're financing it
right. Make sure you're buying it right. But then that managed
piece, just because you know, you may not be running direct
property management, you need to be having those weeklies with that
property management, making sure you're nailing your
KPIs.
James: Yeah. I also think that the managed portion makes the most
money. Do you guys agree with that?
Gino: I totally agree with that 100% because that's where you're
going to increase your NLI. You're either going to increase the
income, decrease the expenses, create systems and be able to scale.
But the problem that Jake and I had when we hit 650 units, we were
still just telling somebody this the other day, we were still using
rent posts and we fumbled upon that folio and that was the biggest
aha moment. All of a sudden we said to ourselves, it doesn't matter
how many units you add onto your portfolio, if you're not managing
them efficiently and extracting as much value from them, that's
going to be a big problem. So I think managing is the most
important. It's ongoing.
Jake: There's more to it though, to James' point. Here's why. Once
you buy the deal, there's no going back. You paid the money, you
paid that price. That is fixed. That's why I always talk about the
back leg of the wheelbarrow being fixed. If you finance the deal
for 10 years, and I don't care if you have stepped down or you have
your maintenance defeasance wherever you want to say, you're fixed,
what are the levers do you have to pull? It's the management arm of
it. That's the piece that you're going to be able to. Exactly.
Right. That's a great point.
James: Yeah. Yeah, so that's why I always tell my friends and my followers in my Facebook group and all the people who come to me; the operations where you make the most money because before you buy the deal you are putting a proforma, right? You think it's going to be like that. You think it's going to be like that. You think it is going to be 3% operation. You think insurance is going to be this much. Right? So it's a lot of assumptions, but once you close on the deal, it's avail game, right? You are like, Hey, you know, now you have every tool in the box to really trap. That's where you really make the money and you, if you really work hard on the operation, you can make at least, you know, 2-3% more than if you give it to a third party management. Because third party management, they have a lot of other issues. It's not their baby.
Jake: You're not the only customer. Here, we're the only customer
baby.
James: And they have a different profit center that they need to
really make sure.
Jake: And we won't take on other clients. We only manage our stuff
because it's ours and you're absolutely right. We're managing our
baby, we're making sure our babies are doing well. There are little
soldiers out there working for us. We want them to keep
returning.
James: Yeah. Yeah. And also [13:28unclear] if you look at
even your own operation, I can decide to, let's say my occupancy
drop, I can reduce my staff today just by a phone call. Right. And
reduce my expenses as well because my income is reduced. Right. So,
but you can't do that on a third party. Right. You are like at the
mercy of them. Right.
Gino: I agree with that. And you're also controlling; you're
controlling. You can add on more employees. You can actually say to
yourself, Hey listen, I want to implement this system. I want to
raise my rents so you can have real-time. That's what's great about
it.
Jake: Even think about the marketing piece. They may be using, you
know, apartments or they may be using roof or whatever they're
using and you tell them, well, I want you to stop using that. Well,
that might be two or three emails or a week-long conversation to
actually get that pulled out. And they may tell you, fly kite here,
we just kill it.
James: Yeah, we just kill it. Yeah.
Jake: Move on. There's no question.
James: I have to give credit to my wife. She runs the property
management side of it.
Jake: She must be a strong woman.
James: She's a very strong woman.
Jake: We should have her on the show.
James: She's at the property today. So I do the
underwriting and investor relationship and acquisition and she does
the construction and property management. And you need a lot
of...
Jake: You're taking it easy, then man. Come on, you gotta get
hurt...
James: My work is a lot on the front end. Right? But one it's
closed, it's her work. And I do help out a lot too. Right? So,
let's go back to a bit more details on syndication was owning,
right? Because this is something that I've been thinking, right?
Because Hey, you know, I was like you guys when in the beginning, I
did a lot of short term loan, bridge loan and we make a lot of
money for us. I syndicated, but my investor was so happy with it,
he made so much money. But now with the market being at peak and
there are not many deals out there, you know, we have to still get
good cash flowing. We still do value-add deal, but no more deep
value add deals. Right. So I presume that's what you guys are
doing, right? Still, value-add deal but no more like a deep value
add when you syndicate.
Jake: No, even the one we just did, we were talking about that; we
did it in December, it was 26 a door and we're going in new decks,
all new interiors and we have a ton of vacancies. I'm not afraid of
it. The key is though, since we have our own management group, I
don't want to take on five of these things at once because it's a
resource issue at that point. We have resources to do one real
heavy value add at the time so we're fine having one of those in
the mix. But if you start stacking them, you know you really got to
add team members and that's when it gets even more challenging. So
for our size of scale right now, I'm very good with, you know, one
at a time, getting it kind of rolled up. And we kind of we're just
coming off the tail end of another one and then we ramped up into
this one. So it's been working out for us.
Jake: So the problem with this deal, not the problem, the
opportunity with this deal is we're using community financing.
We've got an 85% LTV with loan to cost. So we've got 80% of the
loan proceeds going into doing the cap-ex work. We're going to refi
that property and bring it to the agency once it's all done. So
there's the value there. And the only thing was when we bought it,
we were able to have economies of scale. It's near a couple of our
other assets are, we're able to use maintenance guys on that
property. So that's another one of the reasons why we're able to do
that cause just added to our portfolio. If this was something I was
all by itself in, you know, down
somewhere [16:30 unclear] assets, maybe you'd think
twice. But there's always other reasons for doing the deal. And
that was really one of the important factors that we saw.
James: And at what point did you start syndication? What was the
timeframe? Was it like last year, two years ago?
Gino: So we started, we actually when we came off of our first
event, I signed up like 30 people in our event back in November of
2017. I said to Jake, I've got all these investors floundering and
that's the thing, when you're signing up investors, James, you have
an important role. You need to reach out to those investors and you
need to make substantive relationships. You need to start giving
them value or else they're going to fall off. So I felt compelled
to say to Jake, we need to start creating these relationships with
these investors. We decided to hire somebody on and become a
partner of that company. The beginning of 2018, February, March,
April, we started ramping up, took us a few months to find our
first deal. We find our first deal in August and that period
timeframe for us, our first syndication, getting the PPM is soft
commitments, emails.
It was pretty overwhelming and daunting but we did a small deal. It was only $6 million. It was 132 units. It was something where you can like consume and do your first deal for us. We raised $2.6 million in two days because we had all the framework, we were ready to go, we had the investors, they were prime, we had the podcast, we had the brand out there. But one thing with syndication that's a little different is things move really quickly, and it's a little nerve-wracking that you have to get everything in order. You have to get your emails out, you have to have your documents down, you have to have everything in order. You have to make sure that, you know, you get your webinars going and everything's spelled out clearly to your investors. And that's why it took us a little bit longer cause we had never taken money from the investors. So when it's your money and cash flows and come into the month, Jake says, Gino, septic fields scrapped out. We're not getting paid this month. I can deal with it.
Jake: Plus there was a demand thing we had people asking for it.
And it was kind of like at some point where they're going to do, we
flirted with the idea for so long as either we're going to do it or
not. So we gave it a shot.
Gino: And that's the thing we could have bought that deal
without syndication. But I think it was just the ideal opportunity.
It was a new market. It was small enough for us to say, you know
what, we can handle this with the syndication. Let's try it. You
just got to commit and then figure it out. And that's what we ended
up doing. We committed to doing it. We worked with a great
attorney, Kim Taylor. She walks through the process. We had great
team members and then we just ended up pulling the trigger and we
ended up closing in November of 2018 and we followed up with
another purchase in April of 2019. About six weeks ago, we closed
on a deal and at an additional 240 units in that market. So it's a
great learning plus. Once you do one, you figure it out, you figure
out the ramifications, the webinars, adding the investors on the
documents. And then it's just 'rinse and repeat'.
James: Yeah. I think you guys are the example of why syndication
exists, right? So syndication is not like a get rich scheme, right?
Not everybody can do it. Not like somebody who was doing W2 can or
can do, I'm not saying they must do syndication, right? So in my
mind, syndication is like a mixture of an experienced operator,
right? So you guys have proven that operator and there are some
passive investors which want to place that money into this
experienced operator, right? So if I'm getting some guy who was
coming up from a boot camp or a 2-day course and trying to do
syndication that he doesn't have the experience, I mean he might be
coached by someone who's experienced, but I think that's where the
syndication comes very powerful, right? When you marry people who
really want to be passive with people who are really, really good
at what they're doing that's where you get the beautiful marriage
there. Right?
Gino: Also students who want to raise deals for others. So James,
let's say you're coming short on a raise and you say, Hey, listen,
I need to get some way, maybe you can get somebody to raise money
for your deal. Obviously they have to be comfortable with you as
the operator, as a sponsor. And Jake and Gina is a sponsor with a
lot of students start that way by raising money for other people's
deals, getting in the game, putting a little lower skin in the game
and learning how the syndication process works. And then learning
how much work there really is and saying, wow, this syndicator is
not putting any money in this deal. But there's a lot of work and
there's a reason why there's no money going on the GP side of the
business. It's they're signing under debt and they're doing a lot
of work for this and that's a great way for people to start getting
in the business. Raise a little bit of money for another syndicator
if they need that platform, then learn that process. And that's how
you learn the process and then you can move on and succeed in
getting your own deals.
James: Yeah, absolutely. What's the structure? Can you guys walk
through the structure of your company, right? Because you have
property management, asset management, you have renovation team,
you do some kind of a mortgage brokering as well. On top of that
you have an education platform, right? So how big is the whole
team?
Jake: You know, probably and not including vendors and whatnot,
it's probably just shy of 60 people,
James: 60 people. And how many people...I mean, property management
would be the biggest, I guess.
Jake: Oh yeah. Property management is definitely the biggest. And
you know, I'm really excited. You know, we do these weekly
meetings. I'll meet with every property manager weekly. You know,
we meet with the managers of the different divisions of our
companies and we call them weekly L10s and we're just really
looking forward to this year cause we're gonna really bring
everyone together. I think one of the biggest things is when you
start to scale and you start to grow, that culture piece is
tremendous. Last year we did this big whitewater rafting trip. We
brought everyone out. So we're looking for another event this year,
but we're going to break down the barriers. We're going to get the
core values going, get the tee shirts, bring everyone together for
an event. And it's going to be interesting because what we're
trying to do now is even get those synergies amongst the different
companies jamming that much better together. Get everyone walking
to the same beat and so I'm very excited about that.
James: And how many of the 60 people, like a property management.
Do you have a number?
Jake: Well, we're going to be creeping up close to 46-47 on that
soon. So, you know, we'll have a couple on the investment side of
the business and then a handful on the continue education side.
James: Okay. Okay.
Jake: Okay. Property management and that's including our renovation
team called the cap-ex crew. They are the elite Navy seal ninjas of
property management and they go in when others can't, they get it
done.
James: Yeah. So your renovation crew is supposed to be, I mean it's
in house, but it's not really announced in terms of financial,
right, because they're not supposed to be part of the P& L right?
Is that correct?
Jake: Yeah. So that's basically going through the property
management group.
James: Okay. Okay. Yeah. That's very interesting. And how
did you guys...
Jake: He wants to see an income statement now, Gino.
James: Because...
Jake: I'm just messing with you man.
Gino: So James, I'll dive into the education a little bit more. We
started the education about four years ago. October 2015 we
launched the book with our profits behind me and it was just me
basically quit my restaurant and said, Jake, I need to do
something. I'm in New York. Let's start a podcast. And we didn't
know why we started the podcast. We should have probably started it
to get investors. But we just started because we wanted to learn. I
mean, how many times can you speak to Ken McCroy or you know,
Robert Kiyosaki for an hour, right? I mean, it's just amazing. So
that's where we started. And then from that, we said, okay, how do
we continue to build this? So we started selling, creating
educational products. We wrote the book, we have trainings on
Kajabi, we have mentorships, we have coaching.
And to grow and scale that business, I can't be doing one on one
coaching all the time. So we hired a community director. We've got
an operations manager in that business full time. We've got three
part-time, we've got three full-time sales guys. We've got four
coaches right now. We have two deal review coaches on top of our
accountability coaches. So as you start growing, you commit, you
figure it out, you start scaling up. But the real thing that you
need to do is you need to get really qualified people. You need to
get great people. Like Jake talks with the culture and our culture
is basically a blue-collar work ethic. It's we don't want to hear
'it's not my job' because I'm still packing books. I'm still doing
$5 an hour work when I have to. And Jake's doing the same thing.
And I want that to convey those small startups with Jake and Gino
and we're going to be able to expand this. We're gonna be doing
weekend events to just start selling more products and we're going
to start bringing on more sales guys. And as the community grows, I
think that culture is going to be pervasive throughout all of the
entire organization where it's like customers first, you know,
students first. It's not me, it's we and whatever it takes gets
done. I think that can permeate throughout all of the layers and
all the multifaceted multifamily. And that's really important. So
when we first thought about Jake and I, Jake will tell you, he
thought culture was crap and it was working corporate because it
didn't serve him. But I think as he sees it, it's everything right
now. Because when they see Jake and I working hard and doing that,
it just, you're the leader, you're supposed to be part. If you're
going to put in a mission statement in words, and I got house rules
over here, if you're not following your own house rules, how do you
think your employees are going to follow the house rules.
Jake: James, nothing fires me up more than 'it's not my job'.
You want to see the roof come off this house right now, smoke start
coming out of my ears. That's the one thing that I can't
handle.
James: My wife and I get upset when somebody said I do not
know, I said, don't tell me 'I don't know'. Tell me, 'I'll figure
it out'.
Jake: Or you know, let's ask and work on it. You know, it's like I
can handle that a lot easier than 'it's not my job'. Cause that's
like a moral and a work ethic issue and everyone else is working so
hard and you're going to sit there and say something like that.
James: It's a clash between ownership mentality. I mean, especially
with the property management, right, with the ownership mentality
and employee mentality, right? Because a lot of times in property
management, the people are working with employee mentality, but
owners, we are more, we want to see the profit. We want to be
really part of the profit center. Make sure everything runs as how
we want for the investors. At the same time...
Jake: Gino knows about the blue-collar work ethic. We finished up a
podcast with who was the guy that used to be in Bigger Pockets, who
was the guy there? It was Brandon and Josh. And we got a video. We
were out there one day. A tree fell across one of our assets that
we just bought and was laying across the sidewalk. You know, we
didn't have anybody at the time to do it. So Gino and I went down
there, took out the chainsaw, chop that bad boy up, threw it in the
back of the trailer and made a day of it. We got a video, I think
it's still out there on YouTube, so it doesn't matter. I don't care
what job it is, I'll do it all myself if we have to.
That's not how you scale, number one. That's 'I'mma' mentality. But
if it comes down to it, if it needs to be done and there's no one
else to do it, I'm going in and I'm going to do it. It's just
period.
James: Awesome. Awesome. That's the work ethic, right? Sometimes
you have to do it.
Jake: It's gotta get done. Somebody has got to do it. And the idea
is to build a machine and put the systems in place to make sure it
runs fluidly. You know, every day the best work that I can do is
help working on the machine and building the machine. But it's not
always going to be there. And sometimes, you know, a bolt falls off
and if I gotta be the guy to screw it back on, I'm going to do
it.
Gino: I think it's important to say that the machine isn't
built from the very first day. From the very first day you're going
to grow as a person. So four years ago, I wasn't doing the best
work of what I had to do. I was just doing whatever work I needed
to do. But now as you scale, and as you're able to do that, as you
become financially free, you can start thinking about working on
the business as apart as the working in the business. And the first
three or four years, Jake and I were really working in the
business. And we weren't able to create these multiple streams of
revenue. We're just surviving and learning. And that's fine. That's
what everyone's progression is. But once you get into it, when you
start doing it, you can start transitioning out and start like what
Jake said, start creating those systems. But if you don't start
with a 25 unit property, you're never going to be able to do what
you know, what actually transpires after.
James: Awesome. Let's go to some market selection questions. So how
did you guys select this market?
Gino: Well, it's funny, Jake was going down in 2011 he moved down
there and I had it on one of my other podcasts with my wife. He
went to Knoxville, move there for six months without his wife,
struggled. I mean, it's not an easy thing. He left New York, he
abandoned New York and I'm up there at the restaurant. I had just
met him and I'm like, Jake, these numbers work down here. Let's
start looking at deals in Knoxville. His metrics for moving was;
there were no state income tax, close to New York, decent weather,
cost of living is great. So he moves to Knoxville. And ironically,
enough, that's what makes it a pretty good market to invest in
multifamily, right?
James: Population growth.
Gino: And we got lucky, we got lucky with that one. But we started
investing, we started looking at deals. I think, you know, the
Southeast is great. So like you said, we're vertically
integrated within three hours of Knoxville. So that's what we're
looking. I mean, throw a dart, there are so many great cities
around there to invest in that market. We don't want to go up in
the blue States, we want to stay. Texas is a little bit overbought.
I mean, you know why. I mean, you have been an engine of economic
growth there. People are flocking there because there are jobs
there because there's infrastructure there and because people want
to live there. So, that's what's happening. So I think, you know,
as far as us, we just got lucky. We picked Knoxville and now we're
able to go out into these other markets that mirror what Knoxville
is.
Jake: And in addition to that too, we have a specific strategy that
we're looking to be the best customer service property management
company for C and B apartment complex. We own some A stuff but it's
kind of because the deals worked and we bought it, but we see a
discrepancy where C and B operators typically do not have that good
of customer service. I love what Chick-fillet does with a $7
chicken sandwich. How are you doing today? It's a pleasure to serve
you. How can I help you? It's that great customer service and I
truly believe that is a blue ocean. That is our blue ocean
strategy. It's going to separate ourselves and we rebrand all our
properties, brand as our property management company so that when
people pull up, they're going to know that these people care. We
believe renting is personal and our residents are our number one
priority. Okay, that's what we're about and that's the difference
in how we run our properties and I think longterm it's not going to
happen overnight. That's a longterm strategy is going to take years
to fully implement, but that's the separator from us and the other
guys.
James: So how do you guys standardize this? You know, the awesome
operator experience for class B and C, how do you standardize it
across the organization?
Gino: Yeah. Well, first thing you do is you start going on training
platforms like Grace Hill, you start systematizing platforms and
training. We're creating our own internal training right now for
our maintenance techs. And then we're going to transitional to
training our leasing techs. That's really important to have
something standardized to train them. And I'm doing the same thing
on education. So when we were onboard, as a coach, I created a
training platform for our coaches to watch videos and show how to
coach them. And it's the same way in anything. You want to be able
to have something standardized where they're all playing from the
same drum.
Jake: So I'd like to elaborate on that a little bit as well
because, so it starts with the basic stuff, like Gino mentioned
Grace Hill. Now we also have a product called Kajabi where we've
taken the Grace Hill training and we have, it's basically our
elevated in house training that we're putting on the Kajabi
platform where we're teaching our guys if they don't know how to do
something, we're having level one, two, three and four for
maintenance techs, for example. And then there's a YouTube page
where they can go on and actually from their phone remotely check
the video, Oh, this is how I need to change out this garbage
disposal or thermostat, whatever the case may be.
And so as we're going through, you're talking to us as we're in the middle of launching this entire customer service training program. In addition to that, it started with Grace Hill. We're moving to down to a Kajabi and we're working with Grace Hill on Kajabi at the same time. Once we're done with the maintenance end of it, and we should be done in the next couple of months with that end of it, it's then going to the full-service customer service piece. We have weekend trainings now. I don't want you to think that we're just starting this, but this is how we have the full-on slot of our strategy implementation. In addition to that, we've started working with Petra, they work with scaling up. I don't know if you're familiar with that.
James: No, not Petra.
Gino: Okay. It's Verne Harnish's book, Scaling Up.
Jake: And essentially, they look at people, strategy,
execution, and cash. And you know, we've gone through top grading
and making sure that we're getting players on the team. But the one
piece of that is we fill our funnels up really full. We have all
these ideas that we want to implement. So we have a good strategy,
we have good people, we have good cash, but it's that execution
piece that we need to get better at. So, you know, while we have an
education company, we're open-minded and we know we can always grow
and get better. So we're bringing in the best of the best. This is,
you know, from everything I've seen, the best scale company in the
country and they're working on our business as we work on our
business to make us the best customer service property management
group in the industry. So that's where we're going.
Gino: The cool thing about the whole education platform is we never
would have done this training internally if we didn't have Jake and
Gino. Because Kajabi is our online training platform for education.
So it just bled over. And I've mentioned that, I said Jake, we need
to do these videos to show the maintenance tech when he goes in,
how to change a toilet, how to fix a hot water heater. This can all
be documented by training videos. So if we didn't have the
education platform, this never would have been even been a thought
in our minds. And I think the other thing when you are going out as
a business owner, keep your eyes open to what other businesses are
doing.
My son had gotten a job down the street or at a restaurant
and I was amazed at how many applications these people were taking
in. They had an ADP platform and I said to Jake, this is
another scaling up option where we can start onboarding our
employees. And it's just a great tool. So, you know, a tip for
everybody out there, if you're in multifamily real estate, see what
other industries are doing because you can adapt and pull from
other industries and use it to your advantage.
Jake: I want to talk about that a little bit though, Gino, because what we're basically getting with that is we've used ADP for years, but they have, I'm going to call ADP plus. It's their, whatever, you know, higher-end product. But they will give us for all our different brands, we will have a very corporate and professional landing page now. So we have something called the ran pride video. It's showcasing our folks, talking about our culture, which, you know, not have a history of the company video. All of these videos will go on these landing pages. So when potential employees want to look at us, Hey, that's what these guys are about. So we're selling ourselves; let's not kid ourselves, we are in the tightest job market in 60 years. So we need to be recruiting the best people in and we're not going to have a good organization.
So we're doing everything we can to make it a great work
environment, get great people in the door and keep them. Because
once they come in, we have a very low turnover. But you know, from
ourselves, marketing ourselves to the outside world, we need to let
them know what we're about. And then as they're coming through,
they're putting their W2 information all into the ADP. It's all
electronically saved in the cloud and that carries them through. It
also has the HRS software so that our HR folks can manage that
throughout the entire lifespan of their time with us. So we're
really focusing, like I said, on scale culture and operations
because, you know, the other things, the people, the strategy, the
cash we've done very well with. So it's that execution and pulling
it through I think is gonna propel us over the next 10 years.
Gino: And James, do you need it when you have 100 units? Maybe
not, but if you're thinking of getting bigger, you're going to have
to implement all these systems. Don't be overwhelmed with it now at
100 unit market, just think that you know, as you grow as a person,
as you grow as a business person, you're going to be able to figure
out those ideas and go...
Jake: Yeah, we're laying the framework to go from 50 to 500
employees.
James: Yeah, that's really good because I know Grace Hill, because
I use it as well, we use ADP, but I've never heard about HRS and I
mean I know about Kajabi, but I didn't know that you guys are using
Kajabi as well.
Jake: So we blended the two together and then we're actually using
a YouTube page for the videos so that they can get it right from
the app on their phone. And it's coming together pretty nicely
actually.
Gino: And there are so many app platforms out there. You can
use Lightspeed, you can use Kajabi. We are one of the founders on
there seven or eight years ago when they launched. So we've been
using it for a while and we just got comfortable with it. There are
so many different, you know, LMS systems that are out
there.
Jake: The executives within our company, they love building
this because they see the need for it. So they enjoy it and they're
great. You know, there some of the ones out there filming, well not
filming uncle Shawn's doing that, but actually, doing the tutorials
on the maintenance or the customer service videos. So everyone's
getting involved
Gino: And they're creating the assessments too, cause you want
to actually have them watch a video and then do the assessments. So
they're creating all that also, which is awesome.
James: So let's go into a deal, deal level detail or how do you, I
mean, let's say today you get a deal today, right? From broker,
off-market, right? So what are the things that you would look at,
look at it quickly to either reject it up? Cause I presume a lot of
deals, you guys don't even underwrite it, right?
Jake: We do a quick underwriting. So we're looking for cash flow
from day one and the opportunity to force appreciation in the
future. So what does that mean? You know, if it's a stabilized deal
we want to be, I'd love a six and a half cap, you know, if we're a
little bit lower than that and you know, six to six and a half cap,
I think we can typically make it work if it's in a good location,
if we're going to syndicate that deal and we're seeing, you know,
8% cash on cash, we like that. And you know that typically, we'll
take it to the next level and start looking a little deeper.
James: Okay. Okay. Got it. Got it. And I presume deep value add, it
really doesn't matter on the entry capital, on any of that.
Jake: Let's talk about that. So the deal we just bought, you
know, if you're talking about actual is was a, you know, like
probably like maybe like a...
James: 2%
Jake: And it was a beat to crap 1970s build. But you know, what are
we talking about? Like do we really care what the cap rate is on
that deal? No, because we know when it stabilizes the cap rates
going to be more like a 12 so it's again keeping your mind open to
each deal. What can I do and what's the opportunity with this deal?
How do we want to take it down? Is it going to be an in house buy?
Is it going to be, you know, a bridge financing, whatever the case
may be as an agency? Or is it a syndicated deal? You know, all of
these things weave together. And that's the beauty of
this game is that we have multiple things that we can do to extract
value and create great things. And so, it gives us an opportunity
to have fun with it.
Gino: And James, Jake's speaking up specifically, if we're in the
26,000 a unit, we need to add another four or 5,000. If you're into
it for 31,000 a door, I know that that asset in right now is
trading over 50 a dor. So I know that that right there is a whole
month for us. So that's another way I like to look at the per-unit
cost of what we're buying. And I like to look at the expenses. If
I'm underwriting a deal, we know that the expense should be 4,200
and the operator is running it at 4,900, you know there's
value in there. If there's other income that they're generating,
that's only 2%, we know typically we can get 10 to 12% of other
income. There's another income, there's another value add right
there so we're looking for those.
And you know, you'll hear from brokers every day of the week
that you can raise rents, you can raise rents. So I have to spend
10K a door to raise a $50 rent, or can I spend 3 K a door and get
that same $70 rent bumps. So you have to really try to analyze the
market. And I think the other thing you need to be careful is where
you're buying. You know, marginal areas, you're not going to get as
much elevation right now and it's a little bit riskier. So, you
know, we're just buying an asset right now; if it's in a great
location, we'd like it. And Jake likes to say he likes to be your
Kroger's Wholefoods and Chick-fillet if you can buy in that
location...
Jake: Starbucks, bring it on.
James: You guys do value add, right? So let's say your rehab budget
got cut into half, right? 50% of what you have. First of all, let
me ask you, what is the most...
Jake: Why did that happen and are we playing the what-if
game.
James: You never know. Yeah, that's a good question
because I want to, tune your mindset to the question that I want to
ask. So what is the most valuable value add that you guys have
seen?
Jake: What is the most valuable value add? Like what is like did we get the most out of doing flooring? Did we get the most out of...?
James: Correct. Let's say you have a budget got cut. Now you have a
small amount of budget.
Gino: That's a great question. It depends on what
property you're looking at because some properties may, if you put
a dog park and you fix up the clubhouse and you do a good job of
the pool, you may not see incremental value on that. But all of a
sudden you're keeping the tenants and in your act you have to
compete with the property down the street. So on one of our
properties, we put a dog park in, we've put a fitness center and we
did a nice job in a clubhouse and we actually did a pool and the
decking. That didn't translate...I'm thinking, it translate into
increased value and increased rents, but it also made be able to
compete with other people in the market space. I think landscaping,
people don't understand; power washing, landscaping, and painting
are three of the most important things.
On our property, when we took over November, we actually had rents
at 525; they went to 675. And we saw them in the Google reviews.
These tenants were saying, you know what, these people were raising
rents, but they care; customer service. That's one of the biggest
value adds, customer service. We put out exterior lighting so they
feel safe at nighttime. We took care of the landscaping there. We
put in a gazebo there. We stripped the parking lot and seal the
parking lot. We put in a dog park there. Signage was really
important. Not huge amounts of money, but anything to turn the look
of the property, the feel of a property, you want to show your
tenants and any of your customers that you're adding value and not
just going there and raising the prices. At the end of the day, why
are you raising the price on me if you're not giving me some type
of value?
Jake: I'll dive into it a little bit more too. I mean, the
basics that, you know, I feel like that you have to go with a lot
of times are, I personally love sheet vinyl. I know a lot of people
want to put in the plank and this thing. We have this amazing, it's
called nature's trail. If anyone wants to go out and look at it,
it's skinny, it's white. So it looks like the barn style flooring,
it's beautiful, it's got great, great tones in it. Installed, we're
$1.74 a square foot. I mean, that's phenomenal. And it goes in, it
looks beautiful. It looks like there's hardware throughout. So if I
had to really get down to bare bones and I'm turning a complex, I'm
going in with my nature's trail, I'm going in with my proposed gray
and I'm going white on the wood. So the woodworks, the trim, and
the baseboard, I'm going a nice pure white Sherwin Williams and it
gets like a 7004 or something like that.
Jake: And then, in addition to it, the property we did in December, we were like, okay, let's pull back a little bit because we're painting the cabinets. And we saw a little bit of a spike in our available units. So we went back in, we reassessed it, and we said, you know what? It looks too damn good not to, it's an extra 350 bucks. Let's just keep painting the cabinets and then we're back to zero available units. So it's always, I think, and this goes back to what you were saying earlier about being a hands-on operator; looking at these things, looking at your KPIs, saying, what the hell, why do we spike? Oh, it was my fault cause we're being cheap. So we went back in and now we're filling it back up like that.
Gino: At the same time, Jake also, you don't have to spend $170 on
a ceiling fan. Maybe you see your supply spiking like they did a
year and a half and saying, hold on, this unit doesn't need $170
ceiling fan.
Jake: It's a beautiful $75 ceiling fan. They're beautiful
fan blades. You get the multicolor here. So yeah.
James: What do you guys think that, I don't know, this is my
experience that I see. I mean a lot of times you can put in Capex
and all that, but I think the management itself, just managing it
correctly, people are just so happy paying you 50 to $75 more
Jake: But you're talking about customer service
then.
James: Yeah, customer service. Yeah, correct. I'm not saying that's
the most valuable value add, but I'm just saying in terms of...
Jake: I'll say it. Listen, if you come in and you say it's a
pleasure to see you, it's a pleasure to serve you. How may I help
you? What can we do to make your unit better? We have this unit
today. We're gonna treat you like gold. I'll take that over the new
paint.
Gino: Jake also, the other thing is when they call for a
maintenance request, don't want to wait six days for hot water
heater, you have to get to them.
Jake: You're not going back to the hot water heater on me
again; are you? Comeon man.
Gino: I love the hot water heater in my house the other
day. 44:20crosstalk] We took over the third property. I
remember I was in the restaurant and Jake is sending emails, we're
turning units. And we had a client come in and started crying cause
we've fixed the stove. He didn't have his stove for how long Jake?
It was just like the silliest thing in the world. I mean come on.
So, I mean, the customer service is really, when you get a
maintenance request, send out the maintenance tech and get it done.
You know, that's simple.
James: Yeah. It's just amazing on you to just take care of the
tenants or the residents and they are so happy to pay you so much
money compared to, why didn't a new ceiling fan you? I mean that's
all secondary for me. So it looks like we share the same concept as
well. So, let's go back to a bit more personal stuff flow. Maybe,
one by one, right? Why do you guys do what you're doing?
Jake: Yeah, I'll get into that. It literally is about control and
freedom for me. I am responsible for myself and my family and I was
not in a position of control or a position where my family's
life was secure. It was in the hands of others and I did not feel
good about that. I, ultimately at the end of the day, am
responsible for everything that comes into my environment and I
need to handle that. Multifamily gave me an opportunity to take
control of my destiny. And you know, by adding value to others, I
was able to in return receive value. And it's been a phenomenal
thing for me because I don't want to be, you know, dependent on
Wall Street. I don't want to be dependent on a CEOs decisions. I
have a lot of faith and confidence in myself and Gino and I know if
we do the right thing it'll come back to us. And again, it's
something that I don't ever want to be in a position where my
family is worried about, you know, where's their next meal gonna
come from. Great thing about all this is we've created abundance in
our lives.
And you know, we started something called Ran Carriers last year
and we were able to actually feed 10,000 kids for Thanksgiving. And
so, you know, we'll see if we can match that or do about 15 this
year, Gino. And so it's when you bring abundance into your life,
you can't help someone else if you don't have the means to do it.
So by us driving the ship, we've been able to create abundance.
We've been able to create good homes for folks and we've been able
to give back. So it's been pretty special.
James: Awesome. What about you, Gino, why do you do what you
do?
Gino: I wouldn't know what to do if I didn't know what I
wasdoing right now. I mean, honestly, I'm pretty much financially
secure. If I didn't have Jake and Gino, I could just probably live
off of the draws of the property. But that gets to be a little
boring after a while. So I'm doing what I really like. I mean, the
education, growing a business, I always wanted to grow a business
from the ground up. I was wanting to help people out by buying
properties and by coaching them in motivating and inspiring them.
And if I can monetize on that, it's a home run for me. So I enjoy
what I'm doing right now. I mean it took me a long time to figure
out, and it's funny cause I feel sad for kids coming out of
college. What do you want to do when you get older? If you're an
adult and you figure it out by the time you're an adult, you're a
little lucky. Most adults can't even figure that out.
So Jake talks about it, you know, don't follow your passion. I mean
sometimes if you're passionate about opening a restaurant and
that's what you want to do, but sometimes it turns into a job. So
you just be careful. You know, if you're lucky enough to become
financially free and then figure out what you want to do and do
something that you love, I think that's like the most important
thing in the world for me.
Jake: He's been humbled right now. The G dad is a giver. He likes
helping people and you know, not for nothing. The education has
allowed people to buy over 3000 apartment units. And I know that's
what Gino gets excited about. You know, it's helping other people
and, and it's that giving back piece because it's a tremendous
community that we have. And the folks inside the community are all
like-minded, hardworking individuals. And I think it's because of
the, you know, the sort of persona that we give off and we tell
people about the values and necessarily what we're about and people
are connecting, they're converting and it's been amazing to watch.
And they'll get inside the private Facebook group, Hey, we just
knocked out a hundred units today and then everyone gets on and
start congratulating, how'd you do it? Let's hear about the deal.
And it's become great networking. We'd love to see the
continued success.
Gino: The phone calls that you get and
the 48:42unclear] year-round. When a student says,
I just left my job, or I'm leaving New York and I'm moving
somewhere else. That's really worth a lot, man. Because when you
get those emails saying, Hey, you know, you've changed my life.
There's something that, you know, you can't replace that; that's
something that you can't put a dollar amount on, cause you're
helping others and you change somebody's life and you change
someone's family's life. And that multiplies in effects of people
that they know. So that's really cool. That's one of the cool
things about education.
James: Yeah, that's one thing that you bring to your end days,
right? So it's not about the money. I mean, you usually forget how
much you've made, but the appreciation that people have shown you
for you're helping them, it speaks. Second personal question. I
mean, this is probably, each one of you can answer it. Maybe you
can combine together. Is there a proud moment in your life that you
think you will never forget, that that moment really impacted you
then and you are really, really proud of that moment and you want
to tell their stories to your grandkids?
Jake: Yeah, I got one. I got one coming up now. And it's not about
myself. It has to do with Gino as well. We were at the event last
year, we had a phenomenal event in Nashville, you know, and Gino
calls them the 'do rules'. We had over 500 people there, whatever.
And it was all about multifamily for two days and just great
speakers. It's our annual event, multifamily mastery. And that it
wasn't necessarily anything other than it created an opportunity
for my daughter. And she went out there and Gino's kids were there
and they were learning business and we had some fun shirts that
said like Jake and Gino are multifamily masters or something. But
my daughter at the time was three years old, she went out and
started networking with people and she actually sold a shirt for
like 15 or 20 bucks and then she came over and she was so proud.
She hugged me and told me about it and I was able to announce it to
the whole room and the whole room like erupted because it was just,
you know, it's this little girl going out there and then she was
making it happen. So I'll never forget that. And it just is, you
know, because of the community that it created that moment for me.
So that was very special to me.
Gino: So we'll leave it at that cause I've got so many stories, but
that's one story.
James: Take one story.
Gino: I mean one of my proud moments March 1st, 2016 when I left
the restaurant and it wasn't because I was leaving a bad situation.
It was finally saying to myself that I achieved something that I
had been working for forever. I finally was saying to myself, I
don't have to do that anymore. I have been there doing it for 20
years, over 20 years, locked in the same job and if I can change
after 20 years and having those limiting beliefs and being able to
grow and do something different, I think I just wanted to inspire
other people that do that. So that was really a proud moment in my
life.
James: Awesome. Awesome. We're at the end of the show, why not you
guys tell the audience and listeners about how to get in touch with
you guys?
Gino: He's the sales guy, so I'll let him shoot.
Jake: Listen, if you can't find this, we're not doing our job very
well, but it's really simple. Jakeandgino.com, ranpartnersllc.com
if you're looking to invest or rancapllc.com if you're looking into
the debt side of things
Gino: and please subscribe to the podcast. We have the number one
multifamily podcast on iTunes called Wheelbarrow Profits. We have
four shows now. I've actually launched the show with my wife called
Multifamily Zone. We have the Movers and Shakers podcast, which
highlights a student's success every week. And then we have the
Rand Partners podcast on syndication. So we're doing shows, we like
going out there as part of our fashion.
Jake: Hold on, Gino, there's more. We're going to give a teaser. So
we had the best selling book, Wheelbarrow Profits on Amazon and
we're phoning it up this year, right? We've got the honey bee
coming out in October. We put a lot of work into this thing. It is
a phenomenal book. And it tells a great story and this is not your
traditional business book. Gino give a little bit more on that.
What would you say about the honeybee?
Gino: It's a parable basically about a gentleman who's
frustrated, is very similar to Jake's story. Going around, has a
boss, hates his job, and then just stumbles upon an older man who's
willing to mentor him and find out that, you know what, there's
more to it. How do you have all this? The analogy of a river with
little tributaries growing into a big Russian river and it's all
about creating multiple streams of income, starting small and
making the stakes, and then all of a sudden, five years later,
you've created something really great. So we just wanted to
translate our success and just have people open up to the idea of
that you can start small but create those businesses and then from
one little stream of revenue, you can end up having four and five
like you do James. And like we do.
Jake: And I'll just leave with this because the one thing that I really picked up from Gino early on in our investing career was to get rid of limiting beliefs. I know it's like a big Tony Robbins thing as well, and people talk about this, but it's so impactful because you know, you'll sit there and say, Oh, I can't do that. Well, you're right, if that's the way you're going to think about it, you're right. I grew up in a super small town on a dirt road out in the middle of nowhere. And that's the truth. And you know, we've been able to grow this business to, you know, over a hundred million in assets and you know, created financial freedom and generational wealth for our families. So there was, you know, literally in the town that I grew up in, you could work at the school, there was a factory that made chairs and you know, my family was like, well, maybe you should be a cop...
Gino: Or a gym teacher.
Jake: You know, I literally went to school to be a gym teacher because I played sports and that's all I knew. So don't limit yourself because look, multifamily is not rocket science. It really isn't. Get educated. I always say education times action equals results. It's possible for anyone out there to do it, especially a pizza guy and a job rep were able to do it.
James: Yeah, I always tell people, if you think there's no deal out there, you are right. If you think there are deals out there, you're absolutely right too.
Gino: I love that.
James: It's that mindset that you have to get away from.
Jake: Listen, look at the deals for two or three weeks and then having them not pencil out, it can be very discouraging. Try two years. That's how long it took this guy and I to get into our first deal. So yeah, I always say, you know, the best thing we ever did, we were pesky. We hung in there. We kept driving.
James: Exactly. All right guys, thanks for joining this podcast. You guys added tons of value and we're happy to have you share.
Gino: Thanks James.
Jake: Thanks James.