WEBVTT 1 00:00:00.635 --> 00:00:08.855 Tony Unkel: Hello everybody, thank you for joining us on today's webinar, The Hierarchy of Protection, Mastering the CRE Capital Stack. 2 00:00:22.105 --> 00:00:25.425 Tony Unkel: Before we get started, I do have to read a brief disclaimer. 3 00:00:25.725 --> 00:00:41.835 Tony Unkel: The Entrust Group does not provide investment advice or endorse any products. All information and materials are for educational purposes only. All parties are encouraged to consult with their attorneys, accountants, and financial advisors before entering any type of investment. 4 00:00:42.735 --> 00:00:54.634 Tony Unkel: On today's webinar, we will cover Commercial Real Estate 101, how to reduce your risk, and explore some case studies. At the end of our presentation today, we will have time for a question and answer period. 5 00:00:56.235 --> 00:01:08.454 Tony Unkel: My name is Tony Uncle, and I will be your host today. I'm in my ninth year at Entrust, and I pride myself on educating investors and professionals on a tax-preferred retirement accounts and alternative investments. 6 00:01:09.355 --> 00:01:11.954 Tony Unkel: A little bit… a little bit about the interest group. 7 00:01:12.155 --> 00:01:21.974 Tony Unkel: We are self-directed IRA administrators, we have knowledgeable staff with CISP certifications, and we hold these monthly educational webinars. 8 00:01:22.755 --> 00:01:31.324 Tony Unkel: We currently have a little over $5 billion in assets under administration, with 24,000 plus active investors and over 40 years of experience. 9 00:01:31.465 --> 00:01:41.944 Tony Unkel: One of our main benefits is a single point of contact model. Depending on the region of the country you are in, you will be assigned a specific individual to help with all your self-directed needs. 10 00:01:44.355 --> 00:01:56.835 Tony Unkel: That's been enough for us, FranTrust, for now. I would like to turn it over to our host and guest host, Joe Burco. Joe is a highly esteemed entrepreneur with over 30 years of experience in the real estate industry. 11 00:01:56.945 --> 00:02:00.385 Tony Unkel: As founder of CEO of Astir Capital. 12 00:02:00.615 --> 00:02:07.285 Tony Unkel: He is a distinguished private equity real estate firm. Joe has propelled the firm to the forefront of the industry. 13 00:02:07.345 --> 00:02:22.965 Tony Unkel: Aster Realty Capital specializes in lucrative investments across major U.S. markets, employing a strategic combination of equity and debt to maximize return, and participated in over $3 billion worth of diversified assets. 14 00:02:23.085 --> 00:02:33.185 Tony Unkel: The Entrust Group and Aster Capital have been working together to self-direct investments for over 6 years now, and we are happy to share our presentation with them. Joe, it's all you. 15 00:02:35.875 --> 00:02:42.084 Joe Berko: Tony, thank you. Great to be here, thank you also, Andrew and the rest of the team of… 16 00:02:42.295 --> 00:02:48.844 Joe Berko: untrust, And, of course, the team of Astro Realty Capital. Great to be here. 17 00:02:49.035 --> 00:02:52.555 Joe Berko: You know, wonderful to have you. Some of you are investing with us. 18 00:02:52.765 --> 00:03:11.564 Joe Berko: others are maybe considering investing with us. We're very excited always to do anything that is educational in nature in order to bring some awareness to the alternative options that you have on your investment universe. We do believe that there's great to have a balanced 19 00:03:11.605 --> 00:03:25.295 Joe Berko: Portfolio that does include some alternatives, and within those, of course, real estate should take some kind of a stake, a prominent stake, a minor stake, but certainly have some real estate in your portfolio. 20 00:03:25.295 --> 00:03:34.345 Joe Berko: Typically, it goes sort of, like, counterintuitive to how the market is, and certainly gives you a nice, you know, balanced situation. 21 00:03:34.455 --> 00:03:47.975 Joe Berko: A little bit about myself and Astro Realty Capital, we'll go through this, but I'll give you sort of, like, the background, the… not just the, what we do and how we do it, but also why we do what we do. 22 00:03:47.975 --> 00:03:57.665 Joe Berko: So, my background is, at this point, 30 years in the real estate arena. I started from New York City in 1995, first 20 years of my career. 23 00:03:58.195 --> 00:04:04.005 Joe Berko: I ran a shop that I started in New York City called Burko & Associates. 24 00:04:04.025 --> 00:04:18.704 Joe Berko: Bercow essentially specialized in representing developers and various funds, various groups in the acquisitions, dispositions, financing, and capital raise for various projects. 25 00:04:18.775 --> 00:04:34.135 Joe Berko: Primarily in New York City, very, very large, competitive, very fast-paced market, but also across the nation. Over the years, we've won multiple awards for the work that we've done, we worked on some very hard transactions, very tough transactions. 26 00:04:34.135 --> 00:04:49.984 Joe Berko: We were called and referred to as the snipers in the market. Our type of strategy that we've used was quite different than the ones that are maybe the largest shop, the CBREs, or the JLLs, or some of those familiar names that are more 27 00:04:50.015 --> 00:05:09.525 Joe Berko: sort of, like, relying on collecting information, spreading it out. We were called in to fix situations where things didn't go the right way, maybe the bank was not happy with the borrower, and we had to step in, maybe there were two partners fighting. So we've seen a lot of situations, certainly in a large-based environment like New York City. 28 00:05:09.525 --> 00:05:16.165 Joe Berko: And large ticket items, where some of the transactions can go well above $100 million. 29 00:05:16.235 --> 00:05:27.675 Joe Berko: Those, you know, who take front-page newspapers and so, like, get a lot of press and coverage, we always know how to keep it quiet, and so we have got a lot of those assumptions. 30 00:05:27.675 --> 00:05:39.735 Joe Berko: After 20 years of doing that, I decided to pivot. So sometime around 2015, I decided to pivot and place my focus on the segment of the real estate universe 31 00:05:39.945 --> 00:05:55.994 Joe Berko: Right? The overall universe between the funds, and the investors, and all those different things, and the developers, and the banks, and focus exclusively on this one segment that I found to be the least represented, and the one that seemed to be holding the bag 32 00:05:56.215 --> 00:06:01.784 Joe Berko: Especially when things don't go the right way. And that segment is the investors. 33 00:06:01.915 --> 00:06:03.065 Joe Berko: You see… 34 00:06:03.295 --> 00:06:23.094 Joe Berko: When things go the right way, the developers get their credit, and they get their reputation, and they get the front page in the papers, but when things don't go the right way, it's typically too late for the investors to try and step in, to understand what is going on, and essentially, they're the ones losing the capital. 35 00:06:23.435 --> 00:06:42.674 Joe Berko: And so I placed my own capital, my own money, that is of my family, our close friends, and we decided to start making investments and focus on investments, across… well, started from New York, but then eventually spread out over many various markets across the United States. So really. 36 00:06:42.675 --> 00:06:52.635 Joe Berko: it's… this conversation will talk about the various elements that we bring in, the various legal sides that we bring in, but I want you to keep in mind 37 00:06:52.965 --> 00:06:56.034 Joe Berko: As an investor, or as a potential investor. 38 00:06:56.465 --> 00:07:03.095 Joe Berko: that, you know, collectively, we're a lot more powerful. And what I mean by that is you're getting 39 00:07:03.215 --> 00:07:18.845 Joe Berko: deals thrown at you, all sorts of beautiful presentations with promises of high returns at various markets. They all look great, they all look very appetizing. What Aster is doing, what our company is doing, is basically saying, hold on. 40 00:07:18.985 --> 00:07:27.594 Joe Berko: We're gonna come in not as a single unit of investment with very little control, but rather as the collective bargaining. We'll come with a larger check. 41 00:07:27.785 --> 00:07:47.714 Joe Berko: And we're going to be keeping our eyes on the ball and making sure that the investment is going to go according to plan, according to schedule, according to budget. And if it doesn't, then we will know in real time how to handle it. And so this is why we've started Astra Realty Capital. 42 00:07:48.025 --> 00:07:51.615 Joe Berko: With that in mind, let's just open the presentation. 43 00:07:53.895 --> 00:07:57.695 Joe Berko: And… Let's discuss a little bit. 44 00:07:58.005 --> 00:08:01.114 Joe Berko: What ASTR has done on the last… 45 00:08:01.905 --> 00:08:12.455 Joe Berko: 10 years of operation. So, what we consider as a competitive advantage, right, is, first of all, understanding the real estate deal. 46 00:08:12.695 --> 00:08:23.525 Joe Berko: And looking at the deal, not from the standpoint of how much returns we can achieve, but rather on its weakest leg, right? Can we preserve capital? 47 00:08:23.615 --> 00:08:43.355 Joe Berko: In the event that market shifts, and they always do, situation changes, black swan, pandemic is a good example. Can we preserve capital, right? It's one thing to make great returns, we all love that, but what happens if things shift, right? If I built a condo building, but I can't sell the condos. 48 00:08:43.425 --> 00:09:02.115 Joe Berko: Can I do a Plan B? Can I rent the asset? Can I keep it? Can I maintain my capital until the market shifts again, and I can sell the asset? The answer is, a lot of times, no, and so we drop those deals. It's probably worth mentioning that we go over 700 transactions a year. 49 00:09:02.255 --> 00:09:20.095 Joe Berko: And we say no to about 98% of those transactions. So, ongoing asset management, right? Your second competitive advantage, the ongoing asset management. As a private investor, you place your capital, and you're sort of, like, at the mercy, I call it, you're at the mercy of 50 00:09:20.095 --> 00:09:30.365 Joe Berko: the reporting coming from wherever the developer or whoever's running the project, right? There's nobody out there on your behalf 51 00:09:30.385 --> 00:09:42.575 Joe Berko: That's going to take a look and verify that the information is, in fact, correct, that the steps taken are, in fact, the right steps, and so the ongoing asset management is something we take a big pride of. 52 00:09:42.625 --> 00:09:54.964 Joe Berko: We're real-time, lifetime, watching the ball, making sure things go according to plan, and if they don't, we dress it immediately, right away, in order to cure the situation, so it doesn't escalate further down. 53 00:09:54.995 --> 00:10:04.445 Joe Berko: Above market returns, because we do have the expertise, because we're doing it, in my case, 30 years, the rest of my team is a collective, well over 65 years. 54 00:10:04.915 --> 00:10:21.415 Joe Berko: we do have the ability to reach out to see a very big universe of transactions, hundreds and hundreds of transactions per year, and pick the right ones, right? When we have a much better pool to pick from, tend to pick the right one, and analyze the risk accordingly. 55 00:10:21.415 --> 00:10:27.534 Joe Berko: The alignment of interest, which is something that's very important to us, right? Those with skin in the game stay in the game. 56 00:10:27.845 --> 00:10:37.825 Joe Berko: We make sure that the managers, the developers that we work with really have something to lose. Not just the game, but really have something to lose. 57 00:10:37.855 --> 00:10:51.974 Joe Berko: Oftentimes, we see developers show up, they bring us a deal, their skin in the game is 1 or 2%, very, very minuscule. By the time they close the deal with the amount of fees, they really don't have any real money in the deal. 58 00:10:51.975 --> 00:11:03.385 Joe Berko: Those which skin in the game stay in the game. We make sure that there's an alignment of interest. If you risk your capital, I want to make sure that the developer risks his capital just as well. And consequently. 59 00:11:03.385 --> 00:11:10.675 Joe Berko: We also do the same. On every transaction, I put my own money, and so is the executive team of Astor Realty Capital. 60 00:11:10.675 --> 00:11:28.154 Joe Berko: And lastly, in a world where everything is AI-based and frictionless, as sometimes it's referred to, all sorts of crowdfunding sites and so on, click here, send the money there, no friction. If you want to talk to somebody, you're probably talking to some kind of a bot. 61 00:11:28.655 --> 00:11:43.395 Joe Berko: we make it personal, right? This is what we call our friends… our club of friends and family. Everyone is connected. We have over 500 high-net-worth family office and institutions that are working with us, and each and every one of them 62 00:11:43.395 --> 00:12:02.524 Joe Berko: came to us because they were referred to us, because somebody that they know has been working with us for a number of projects, sometimes a number of years, sometimes for the full 10 years that this company has been in operation, and they made a recommendation, hey, these are good guys to work with, so it's very much personal, it's not just business. 63 00:12:04.875 --> 00:12:15.805 Joe Berko: Quick snapshot, every quarter, we issue a report that discusses all of the assets that we work on, the various steps that they are, the various stages. 64 00:12:15.805 --> 00:12:22.584 Joe Berko: Things that are completed are also there. We show the returns. We show, we give a lot of transparency. 65 00:12:22.585 --> 00:12:36.175 Joe Berko: And that, I think, is something that's extremely important. So it's not just the project that you might be in, but in also all the other 38 projects to date that we have. So to date, from our 13 different markets, top-performing markets. 66 00:12:36.205 --> 00:12:47.364 Joe Berko: 38 different transactions with 18 exits, and I suspect that by the end of this year, we're probably going to add another 6 or 7 exits as well to our portfolio. 67 00:12:47.624 --> 00:12:54.565 Joe Berko: Overall, we're at $3 billion in real estate assets. That is, we take various positions in assets. 68 00:12:54.725 --> 00:13:13.265 Joe Berko: Whether it is we're building a 300-unit apartment building, we take a position in that, or whether we are the accompanying lender, or whether it is a preferred position, the overall mark-to-market represents $3 billion as of today, with over 3,600 units coming out of the ground, or completed. 69 00:13:13.265 --> 00:13:18.084 Joe Berko: That include condos, that include, multifamily rentals. 70 00:13:18.195 --> 00:13:30.374 Joe Berko: That includes hotel units and logistical centers, and even some retail as well. From inception, we've raised $259 million, and the overall square footage 71 00:13:30.625 --> 00:13:37.814 Joe Berko: All projects combined is $4.6 million. I'm sorry, 4.6 million square feet. 72 00:13:41.045 --> 00:13:56.064 Joe Berko: Our team has been with us, from… some of them, even from the previous companies, as I mentioned. We started as Burke and Associates years ago, so for the first 20 years, we're Burke and Associates. The last 10 years, as I said, it's Astor Realty Capital. 73 00:13:56.065 --> 00:14:02.565 Joe Berko: The focus has shifted, the work is not, right? We are here to empower investors. 74 00:14:02.575 --> 00:14:05.524 Joe Berko: Our associates are across… 75 00:14:05.565 --> 00:14:16.164 Joe Berko: the United States, Kevin is in Texas, Alex is in DC, Laura is in, in Colorado, Andrew is in New Jersey, and Nuri is offshore. 76 00:14:17.095 --> 00:14:22.494 Joe Berko: Our members, various positions, and even… 77 00:14:22.665 --> 00:14:30.974 Joe Berko: My oldest son, Maxwell, who just turned 19, is our new… part of the new junior analyst team. 78 00:14:32.905 --> 00:14:44.994 Joe Berko: Quick snapshot of some of the assets that we have. On the top left, you have an asset that we're very proud of. It's called the Caesar Republic, the first non-gaming Caesars in the United States, in Scottsdale, Arizona. 79 00:14:45.025 --> 00:14:59.704 Joe Berko: At Bergen Street, $259 million project, the Legacy Project in downtown Miami, it's a 50-story tower with 3 different compartments, including a hotel, including condominiums, Bay Harbor. 80 00:14:59.705 --> 00:15:06.444 Joe Berko: Brooklyn, other Brooklyn projects, various locations, Dania Beach, Fort Lauderdale. 81 00:15:06.485 --> 00:15:11.374 Joe Berko: You know, you can have access to our website. All of those projects are constantly getting updated. 82 00:15:11.475 --> 00:15:17.574 Joe Berko: We're very much focused on, working with top, top, top-notch developers. 83 00:15:17.785 --> 00:15:29.575 Joe Berko: Creating the right kind of structures and the right kind of partnerships in order to preserve capital, in order to make sure that we reach this kind of return, that the risks that were taken are, in fact, warranted. 84 00:15:30.655 --> 00:15:37.444 Joe Berko: Now, let's talk about what goes behind the scene, okay? What we call here the hierarchy of protection. 85 00:15:37.525 --> 00:15:54.364 Joe Berko: Basically, what we do is we're analyzing risk, okay? That's what we do. We just chose to do it in real estate, but altogether, we're here to analyze risk. And risk basically represents various parts of the capital stack. So, what is a capital stack? 86 00:15:54.455 --> 00:16:08.225 Joe Berko: Capital stack essentially represents either the capital or the debt, which basically will be the entire capital, the entire money that goes into a project, alright? So in a typical scenario. 87 00:16:08.375 --> 00:16:25.165 Joe Berko: There's a senior lender, right, represents maybe 70% of total project cost, and then there's the LPGP, Limited Partner Equity, and the developer equity, right? In here, we typically ask for 20% developer, right? And we'll bring 88 00:16:25.165 --> 00:16:43.485 Joe Berko: as a collective, the collective bargaining will be about 80%. It doesn't mean that we have to be 80%, but certainly we want to see that we are taking a majority stake, and we have what we call majority control. So the various players in a typical deal like this will either be a developer. 89 00:16:43.485 --> 00:16:48.585 Joe Berko: Which will be basically bringing us the deal, has the experience. 90 00:16:48.885 --> 00:17:08.265 Joe Berko: comes to us already pretty much fully prepared. It might be in contract on a piece of land, already designed, it already has the zoning approved, all that good stuff. It's sort of, like, have been checked and verified, and so they show up, we're looking at the budget, we study the budget, we compare the budget. 91 00:17:08.265 --> 00:17:22.784 Joe Berko: to other similar projects to see where we are, to see if everything is aligned, and their job is to basically, what we call, manage the day-to-day, right? They're on-site with the construction, with their team, managing the day-to-day. 92 00:17:22.985 --> 00:17:31.094 Joe Berko: The limited partner is our position. This is an equity deal, we have different deals that we do, but in our position, the limited partner is us. 93 00:17:31.135 --> 00:17:46.435 Joe Berko: And basically, we are the one who's supplying the project with 80% of the equity, like in this example. As I said, it can be less, doesn't have to be 80, but certainly it's… capital is coming from the limited partners. So what is the limited partners? 94 00:17:46.495 --> 00:17:59.055 Joe Berko: have, we basically are participating in the upside, and we create a structure where once the project is completed, sold, exited, basically we have a split with the developer. 95 00:17:59.365 --> 00:18:07.614 Joe Berko: Because we're coming in with a larger check, we'll have more way to throw our weight around, right? And to kind of, like, get a better… 96 00:18:07.755 --> 00:18:21.975 Joe Berko: structure of return between us and the developer, and of course, that trickles down to you, the investors. We avoid taking any signatures on debt, alright? So this is the… the onus is on the developer himself. 97 00:18:22.555 --> 00:18:24.485 Joe Berko: We… 98 00:18:24.575 --> 00:18:37.355 Joe Berko: Make sure that we are protected from capital calls. It's something that we negotiate. Avoid any capital calls. We basically said to the developer, you put the budget together. If there's a capital call, it's because 99 00:18:37.355 --> 00:18:54.684 Joe Berko: you caused it, and so it's up to you. You have the on-rest to make sure that you bring the capital. We always make sure that we work with groups that have money, right? Exactly our last dollar in this project, because things do happen. And of course, we have the lender, right? The lender is a senior capital. 100 00:18:54.815 --> 00:19:04.924 Joe Berko: They basically are the ones that are funding the project through requisitions. As the progress continues, basically, they'll bring various, various parts. 101 00:19:04.945 --> 00:19:16.964 Joe Berko: And we make sure that we're working with a reputable lender, a lender that's not going to overcharge us, that's not going to cause any issues, but certainly a lender that has the capacity to do what needs to be done over the course of the project. 102 00:19:17.675 --> 00:19:20.715 Joe Berko: And so, you know, the… sort of like the, 103 00:19:21.135 --> 00:19:35.265 Joe Berko: the life cycle of a project, right? Land gets contracted, developer steps in, get the project approved, start the private… start the project, private equity, which is us, bank financing is being sourced. 104 00:19:35.265 --> 00:19:41.804 Joe Berko: Construction starts, lease up, exit, and repeat. Okay, so some pretty intuitive stuff here. 105 00:19:42.885 --> 00:19:46.995 Joe Berko: How do we maintain control and reduce the risk? 106 00:19:47.115 --> 00:20:05.215 Joe Berko: Okay, which is really what our job to be. As a group that represents investors' capital, represents our own capital as well, we make sure that, first, we choose a market that we know, love, and trust, right? We have to choose a solid, solid market. 107 00:20:05.435 --> 00:20:18.894 Joe Berko: Market shifts are sometimes a situation where there's oversupply, sometimes the demand is very weak. We want to make sure that we're focused on top U.S. markets, so that's one thing I want you to take. 108 00:20:19.095 --> 00:20:31.855 Joe Berko: Location is king, right? You want to be in top-performing markets, the type of markets that attracts jobs, high-paying jobs preferably, right? But certainly, we want to see job growth. 109 00:20:32.145 --> 00:20:41.135 Joe Berko: The second thing is we want to see population growth. Those are the two determining factors that will help us make sure that once the project is completed. 110 00:20:41.415 --> 00:20:51.774 Joe Berko: There's gonna be people occupying it, there's gonna be individuals that's going to be buying condos, if that's the project, making sure that the dynamic is right for this type of a project. 111 00:20:54.225 --> 00:21:12.794 Joe Berko: As I mentioned, we go through hundreds of transactions, it's not uncommon to reach 600, 700 times a year. Various developers across the United States reach us with requests, come join us, be a partner, come lend us, come become a preferred equity partner. So we see a lot, we collect a lot of that information. 112 00:21:12.795 --> 00:21:27.184 Joe Berko: And we store it, and when the right time comes, if we like a certain project, and we love a certain type of development group, then we'll come in at the right time, we'll already have tons of information about the area, and we'll be able to make a quick determination. 113 00:21:27.305 --> 00:21:32.664 Joe Berko: And so, those things are very important. Now, looking at the sponsor himself. 114 00:21:32.925 --> 00:21:39.015 Joe Berko: We want to see that the sponsor that we chose to work with has a serious track record. 115 00:21:39.165 --> 00:21:50.264 Joe Berko: building the exact same type of a product, right? So if he's a builder that builds multifamily and want to see that for a long period of time, typically around 20, 25 years. 116 00:21:50.265 --> 00:22:00.094 Joe Berko: this individual or that group, have been building multifamily in the exact location, the exact geographic location. We try to stay away from 117 00:22:00.105 --> 00:22:06.844 Joe Berko: folks that are building hotels, but then decide to jump into multifamily. We stay away from those situations. 118 00:22:06.895 --> 00:22:26.464 Joe Berko: We want to make sure that the asset class is a fit, and they have multiple years, okay, as I mentioned, 25 years. It's not uncommon for us to work with groups that have been around for 40 years and 45 years, and second-generation developers. We love that, because that's the experience we'll look for, right? 119 00:22:26.875 --> 00:22:38.024 Joe Berko: We want to make sure that we negotiate, okay, a fair type of splits between us and the developer. Sometimes we see requests where people are asking us 50-50 splits. 120 00:22:38.065 --> 00:22:52.395 Joe Berko: We're coming in with all the capital, or 80% of it. The splits are not fair, the returns don't represent the kind of a deal. So we negotiate if we like the project. We want to make sure that everybody makes money. We certainly want to say that your capital was at risk. 121 00:22:52.395 --> 00:22:59.694 Joe Berko: It's actually making the type of return that are reasonable for the type of, the type of projects we're doing. 122 00:22:59.935 --> 00:23:06.665 Joe Berko: And we do sensitivity analysis. We study the market, right? If we're building a rental. 123 00:23:06.925 --> 00:23:10.735 Joe Berko: We make sure that we understand the universe of rental. 124 00:23:10.875 --> 00:23:13.895 Joe Berko: What are things, and what are units renting for? 125 00:23:14.445 --> 00:23:24.014 Joe Berko: Who's building, how successful they are, we'll go visit the various projects, we're gonna walk various projects, talk to the local brokers. 126 00:23:24.205 --> 00:23:33.825 Joe Berko: do the legwork that's necessary outside of the computer, right? Today, everything is available online. I say that, you know, information today is 127 00:23:33.825 --> 00:23:44.824 Joe Berko: available widely for everyone, yet most people understand very little about the values of things. And then we negotiate a legal contract, right? And in the legal contract. 128 00:23:44.825 --> 00:24:04.615 Joe Berko: We'll put in all the reporting requirements, what control we have, how do we maintain major decisions, how do we take over the asset or replace the developer if they don't do the right things. Those things are extremely important, and once the developer knows that he's dealing with a group. 129 00:24:04.665 --> 00:24:16.654 Joe Berko: Right? That has their eyes on the project, they're gonna do the right thing, because, you know, essentially, you know, we have so much control over any given situation. 130 00:24:16.655 --> 00:24:24.754 Joe Berko: And they know that there's so many eyes on it, that it's very, very difficult for a developer to do something that is not the right 131 00:24:24.935 --> 00:24:27.235 Joe Berko: The right thing by its investors. 132 00:24:29.065 --> 00:24:36.874 Joe Berko: Our typical takeover provisions, we negotiate very strong about what does it mean in the event that things don't go the right way. 133 00:24:36.995 --> 00:24:44.774 Joe Berko: If there's negligence, if there's any bad acts, what we do is we negotiate that, first of all, we take over the company. 134 00:24:45.235 --> 00:24:54.285 Joe Berko: And then we start managing the situation from the inside. As opposed to most contracts basically says, well, if you're not happy with the project. 135 00:24:54.355 --> 00:25:11.924 Joe Berko: or the way the project's being handled, then you can go and sue for control. No, the first thing we do is we take control, right? This is your money that we're protecting. This is our money that's in the project. First, we take control. If the developer's not happy with our actions, then he can go and try to fight it out. 136 00:25:11.925 --> 00:25:21.635 Joe Berko: But that's the first thing we do. And then we look at the situation. If it's a completed building, then we find out what's the right way. We have a right to force a sale. 137 00:25:21.795 --> 00:25:29.584 Joe Berko: We have the right to take over, refinance, to do whatever needs to be done in order to protect the capital. 138 00:25:29.995 --> 00:25:44.295 Joe Berko: And protection calls and additional capital needed, or anything, as I mentioned before, we make sure that if there's any additional capital needed, those dreaded capital calls doesn't become an obligation of our group. 139 00:25:44.295 --> 00:25:58.894 Joe Berko: Right? It becomes an obligation of the developer who's running the day-to-day budget. If he decided to change the budget, if he decided to do last-minute revisions and add things that we didn't agree on, then it's on the developer himself. 140 00:26:04.205 --> 00:26:07.854 Joe Berko: I'd love to share with you a little bit of case studies. 141 00:26:08.345 --> 00:26:16.495 Joe Berko: of some projects that we've done. So this, I think, is a good case study. It's a project that we've started in 2021. 142 00:26:16.535 --> 00:26:29.484 Joe Berko: Building 293 apartment units, Class A rental building located in a place called Dania Beach. We love the project, we love the location. We recognized very early on 143 00:26:29.485 --> 00:26:40.315 Joe Berko: Miami and South Florida is a very, very booming market. Rents have doubled, and in some cases they've even tripled in a very short period of time. So we wanted to be 144 00:26:40.355 --> 00:26:52.094 Joe Berko: close enough to centers of employment, close enough to retail and shopping, close enough to the beach, but then a little bit far enough, okay? So we don't have to pay the high… 145 00:26:52.275 --> 00:27:02.115 Joe Berko: so our tenants don't have to pay the high rents. We already recognize that there's going to be a very strong demand for young families and professionals and so on. It's going to look to 146 00:27:02.395 --> 00:27:21.815 Joe Berko: So, like, move around and be somewhere where they can afford those type of rents. And so, this represents a great deal. This comes where the developer's been around the block for about 40 years in Florida, so we went into the project. But yet, we decided to reduce the risk 147 00:27:21.955 --> 00:27:32.994 Joe Berko: by creating a class of our own, right? We only came in with $4.3 million, represents about 20-something percent of the project. We couldn't have the control that we wanted to. 148 00:27:32.995 --> 00:27:42.045 Joe Berko: with this type of a position, right? We were not the major position. We couldn't have the type of control. So we've negotiated something else. It's called preferred equity. 149 00:27:42.115 --> 00:27:52.084 Joe Berko: So we said, look, you know, the project shows amazing returns, and I'm sure you'll reach them, and I'm sure that there's not going to be any problems, Mr. Developer. However. 150 00:27:52.335 --> 00:27:56.265 Joe Berko: All we want is, once the bank is paid. 151 00:27:56.455 --> 00:27:59.595 Joe Berko: We, our capital, gets paid first. 152 00:28:00.335 --> 00:28:12.294 Joe Berko: And we want to tag along a coupon of 18% a year, plus a little bit of a profit kicker towards the back end, that will pretty much give us around a 19.5%, 20% return. 153 00:28:12.295 --> 00:28:24.004 Joe Berko: At the time, it sounded great for the developers and everybody else, because that would mean that they would need less money for the project, and it's easy to arrange a 20% return when the project showed us close to 30. 154 00:28:24.315 --> 00:28:30.544 Joe Berko: So they've taken our proposal, and we came in as preferred equity. Fast forward 4 years. 155 00:28:30.755 --> 00:28:45.635 Joe Berko: Basically, the project is completed, beautiful project, fully leased, over 96, 97% leased, and yet the project went through a bunch of delays. There were cost overrun, to the tune of 20-something million dollars more. 156 00:28:45.855 --> 00:28:53.275 Joe Berko: Because we've negotiated that we don't have to participate in any capital call, and because we've negotiated 157 00:28:53.275 --> 00:29:06.285 Joe Berko: that our capital is getting an 18% and a priority over all the other capital. Our position has maintained being in the more secured position in the project. We have the right to force a sale. 158 00:29:06.515 --> 00:29:22.584 Joe Berko: We essentially are the only group in the project that's making the type of returns, but because of the cost overrun, because it took longer for the project to complete and to build, our group is still maintaining the 18% plus the kicker, and our position is very safe. How safe? 159 00:29:22.755 --> 00:29:27.535 Joe Berko: The project is now valued at around $125, $130 million. 160 00:29:27.645 --> 00:29:43.675 Joe Berko: The bank's position is around $86 million. Our last dollars, right? So the bank at $86, our last dollar places us at a risk level of somewhere in the vicinity of around $93, $94 million, right? Because 161 00:29:43.794 --> 00:29:55.644 Joe Berko: Yeah, we've invested 4.3, but we also accrue the 18% a year over the course of 4 years. So our last dollars, risk position, is $93.94 million, right? So… 162 00:29:56.285 --> 00:30:04.975 Joe Berko: The equity itself is not going to be making good money, because the total project cost is somewhere in the vicinity of $113, $114, certainly not enough. 163 00:30:04.984 --> 00:30:20.065 Joe Berko: to, you know, just enough to pay back the equity and to make a little bit of profit, but just not the type of return that they've expected. However, our position is the more secured position. If we had to sell this project, we have the right to force the sale. 164 00:30:20.065 --> 00:30:28.565 Joe Berko: We could sell it tomorrow, even though during the fire sale, and our position will be certainly very much secured. So that's a good example of preferred equity. 165 00:30:30.165 --> 00:30:32.565 Joe Berko: Case study number 2, Brooklyn, New York. 166 00:30:33.035 --> 00:30:52.755 Joe Berko: which has gone into a project, I think we closed it in, sometime in December. We're building 117 units, Class A apartment building, where 80% of the equity in this project, strong developer, over 30 years, the type of developer that builds and holds. You've got over 100 buildings. It never, never, ever sell. 167 00:30:52.755 --> 00:31:07.954 Joe Berko: It amasses a tremendously large portfolio, over $2.4 billion in portfolios and in assets, and a massive, massive cash flow coming from over 100 buildings. I think over 2,400 apartment units that are paying rent on a monthly basis. 168 00:31:08.035 --> 00:31:20.875 Joe Berko: And so we've negotiated a preferred equity position, and generated a return to our investors. I'm gonna skip the return part, we're not supposed to talk about it from compliance purposes. 169 00:31:20.875 --> 00:31:33.944 Joe Berko: But ultimately, we have, we have a very, very strong, solid group. We've done, like, 7 or 8 different projects with these guys. This is a short-term project. We come in, we build. Again, we are the preferred equity position. 170 00:31:33.955 --> 00:31:40.234 Joe Berko: We've negotiated something different, and that is called a personal guarantee. With this particular developer. 171 00:31:40.395 --> 00:31:53.385 Joe Berko: because he's got an amazing cash flow, because it's got very good pockets, we've negotiated a personal guarantee protecting our capital in the event of, right? So we have all those extra things. We can force a sale. 172 00:31:53.385 --> 00:32:03.554 Joe Berko: We can take over the project, anything that we have in all the other projects, but we've pushed it one step further, and we've asked for personal guarantee on our investment amount. 173 00:32:06.545 --> 00:32:08.194 Joe Berko: Case study number 3. 174 00:32:08.995 --> 00:32:17.985 Joe Berko: We do play across the capital stack, right? We are in equity, we're in preferred equity, and we're also in debt position. In this particular case. 175 00:32:17.995 --> 00:32:34.384 Joe Berko: We are lenders, right? So we are lending to this project. This is a project in Newark, New Jersey. It's called the Ironbound section of Newark, New Jersey. Blue-collar section, growing section, close to Manhattan, close to centers of business. 176 00:32:34.835 --> 00:32:38.695 Joe Berko: The developer has acquired 4 pieces of land. 177 00:32:38.695 --> 00:33:03.644 Joe Berko: two buildings he already created. This is the third building, and so he came to us and said, I need money for the construction of this project. Overall project cost is about $27 million. We're lending $23 million. And so, by reducing the risk, right? I mean, the more you are, the upper you are in the stack, the more risk you take, the more higher returns you want to create. By reducing the risk, we've actually 178 00:33:03.645 --> 00:33:05.705 Joe Berko: We actually created ourself to be the bank. 179 00:33:05.825 --> 00:33:18.454 Joe Berko: And so what we're doing here is, in fact, we're lending to this project, and we're doing it by requisition. There's a developer who's got 35 years of experience, been doing what he's doing for a very long period of time. 180 00:33:18.585 --> 00:33:30.284 Joe Berko: and building this rental building, he also builds and holds. And so, in this project, we're going to be giving him money by requisitions. Now, how do we maintain 181 00:33:30.365 --> 00:33:44.735 Joe Berko: double-digit return, or kind of, like, mid-level, teen returns. We're basically bifurcating the loan. We're making the loan at a certain rate, we're taking some of this money, we're bringing a local bank to partner up with us. 182 00:33:44.735 --> 00:33:59.724 Joe Berko: We pay the bank a lot less, and so we together are enjoying a higher return, creating sort of like, you know, very nice risk-adjusted return for this type of a project. So if you think about those three scenarios. 183 00:33:59.905 --> 00:34:14.484 Joe Berko: then you understand, sort of, like, what we do. We look at projects, we negotiate very strongly, we maintain control, we maintain the right to step in, and we make sure that our capital is preserved, as I said. 184 00:34:14.775 --> 00:34:18.105 Joe Berko: What's next for Astor? 185 00:34:19.075 --> 00:34:22.865 Joe Berko: Let's talk about the overall market condition. 186 00:34:23.305 --> 00:34:25.154 Joe Berko: You know, we're looking into… 187 00:34:26.265 --> 00:34:42.394 Joe Berko: I like to explain it, if you can think about an analog clock, right? Think about an analog clock. At the top, you got 12, the center point at the bottom will be 6, okay? So that represents for us somewhat of a 12-year cycle, right? Like any industry. 188 00:34:42.545 --> 00:34:55.785 Joe Berko: Real estate is cyclical. There's the upmarket, there's the down market, and there's anything in between. It's typically represented by somewhere between, you know, 10 to 12 years cycles, right? Pick to trough. 189 00:34:56.415 --> 00:35:00.844 Joe Berko: If you'll consider that when in that 12-year cycle. 190 00:35:01.275 --> 00:35:12.735 Joe Berko: you have four quadrants, right? Each and every one of those quadrants represents different time in the market, right? If you look at the first part, you know, kind of like the downturn. 191 00:35:12.735 --> 00:35:24.564 Joe Berko: coming from 12 o'clock being the peak of the market. The downturn represents basically anything between, you know, 12 and, call it 3 o'clock, 4 o'clock, where we need… where we see a market in a downturn. 192 00:35:24.565 --> 00:35:33.454 Joe Berko: We pretty much saw a downturn in March of 2022, when the Feds decided to spike up interest rate in a very, very sharp 193 00:35:33.615 --> 00:35:36.464 Joe Berko: Very sharp period of time. 194 00:35:36.785 --> 00:35:55.634 Joe Berko: period of time, it was about 6 months, we've seen the market basically taking a very big hit, right? And so, as managers, the first thing we've done, recognizing that this is the beginning of a drop, we've stopped operation. All we've done was asset management, but no new deals. 195 00:35:55.855 --> 00:36:13.515 Joe Berko: We waited for about 3 years before we jumped into our first deal, and sometime around middle of or late 2024, we stepped back into the market. Why? Because the downturn, right, if you think about 12 to 3, represents a period of time when we decided it's time to hold. 196 00:36:13.715 --> 00:36:24.125 Joe Berko: presenting the period of time between 3 to 5 is the period of time when we started going back into the market. Why? Because that's when most capitalist disappears from the market. 197 00:36:24.125 --> 00:36:37.994 Joe Berko: The large players are not there, and we can do the best possible deals. Consider the following, right? When the market is certainly very much down, we'll never know exactly when is the 6 o'clock point, but when the market is down is when you want to start getting back in. 198 00:36:37.995 --> 00:36:54.254 Joe Berko: And so we started doing deals, preferred equity deals, and equity deals, where we believe we're going to see the biggest rewards, because it takes a good 2-3 years, 4 years to finish a project, and so by the time we'll exit, we're going to see a different market, a market in an upswing. 199 00:36:54.535 --> 00:37:05.114 Joe Berko: If you ask me where we are today, I probably think we passed the 6 o'clock point, represented by a very strong economy, right, in the last quarter. 200 00:37:05.265 --> 00:37:07.994 Joe Berko: GDP growth was over 4%. 201 00:37:08.655 --> 00:37:14.195 Joe Berko: projected this quarter, GDP growth between 4% and 5%, unprecedented numbers. 202 00:37:14.335 --> 00:37:26.645 Joe Berko: We're seeing drops in interest rates, we're seeing capital that's been on the sideline for many, many years starting to look back again, starting to come in again, starting to be a lot more activity in the market. 203 00:37:26.895 --> 00:37:35.315 Joe Berko: Banks that were on the sidelines, or were lending, but in a very, kind of like a slow period, or maybe in a conservative basis. 204 00:37:35.315 --> 00:37:50.694 Joe Berko: are starting to open up again, and once capital starts coming back into the market, we're basically coming in, we're seeing a market upturn, and that's usually represent that period of time. Again, wonderful period of time. If you ask me, the best period of time to invest 205 00:37:50.695 --> 00:37:56.014 Joe Berko: is somewhere between 3 and 9, right? The downturn is when you see a lot of good deals. 206 00:37:56.015 --> 00:38:11.114 Joe Berko: And then you continue swinging up with the market until such time that you hit the 9 o'clock point. Okay, of course, we never know exactly what's the 9 o'clock, what's the 6, what's the 3, but we sort of, like, move along with the swing, with our fingers on the poles. 207 00:38:11.805 --> 00:38:18.544 Joe Berko: what happens at the last period of time, right? The last period of time, I consider that period of time to be a great selling point. 208 00:38:18.715 --> 00:38:36.494 Joe Berko: holding real estate that usually represent the period of time where banks are open, the funds are basically throwing money in, there's a lot of liquidity in the market. There's the euphoria type of a stage. You might be going into a cab, and the cab is going to tell you about how he's putting a down payment to buy condos in Florida. 209 00:38:36.495 --> 00:38:39.085 Joe Berko: And, you know, you'll see all sorts of… 210 00:38:39.085 --> 00:38:52.065 Joe Berko: newspapers that are saying another record breaker, and another huge deal happened, and all this sort of, like, that period of time. It's a great period of time to sort of, like, hold on for a second, reassess what you have. 211 00:38:52.065 --> 00:39:05.054 Joe Berko: not necessarily start a new project, but rather look at the ones that you have and consider selling it, right? So somewhere between 9 and 12, you want to be in that period and consider selling your asset. You're going to sell it for the highest amount. 212 00:39:05.245 --> 00:39:10.764 Joe Berko: And basically gonna make the largest returns, right? So this is the 12-year cycle. 213 00:39:10.945 --> 00:39:30.105 Joe Berko: 2026 represents for us an environment where we want to be all-in into the market. We're seeing the start of the beginning of the rise, and start to move fairly quickly. Our objective is to capture a few transactions, 6 to 8 transactions during this year. 214 00:39:30.375 --> 00:39:32.065 Joe Berko: We already signed up first. 215 00:39:32.255 --> 00:39:43.144 Joe Berko: We're doing it as a fund, giving our investors the potential to create a beautiful diversification and to be in multiple projects, and our focus is on income. 216 00:39:43.375 --> 00:39:50.015 Joe Berko: Our objective is to create mid-teen type of returns. I'm not going to spend too much about 217 00:39:50.305 --> 00:40:03.914 Joe Berko: about the returns, and in this conversation, we can have a one-on-one conversation with myself or the team, and we can explain more about our activity. But ultimately, we created the One Easter Income Fund. 218 00:40:03.915 --> 00:40:15.175 Joe Berko: It's a $45 million fund, short period of time, three and a half years. Our objective is to catch as many projects that we can while interest rate is still reasonably high. 219 00:40:15.175 --> 00:40:34.655 Joe Berko: 6 to 8 projects, as I said, create diversification, and make sure that those projects are here, so that we can see those, basically, the returns in 2026, 27, 28, okay? When the interest rate will start dropping, we still have locked in deals that are still paying us very reasonably high interest rate. 220 00:40:34.725 --> 00:40:41.914 Joe Berko: And so that's sort of, like, where we see activity. I welcome each and every one of you to 221 00:40:41.965 --> 00:40:56.054 Joe Berko: scan the QR code, drop a line, set up a conversation with members of our team, or with myself, and learn more about our activity, be part of everything else that we're doing. 222 00:40:56.455 --> 00:41:02.265 Joe Berko: Let me move over to the other port here. 223 00:41:04.455 --> 00:41:20.515 Joe Berko: Yeah, I think that's worth mentioning. The market selection that we have, I mentioned before, the geographic locations are very important to us, and so, you know, we're looking very heavily into Arizona. We're contrarian about Arizona, not necessarily ready to move into 224 00:41:20.515 --> 00:41:39.874 Joe Berko: multifamily in Arizona, because it's a very saturated state, but certainly looking into it, Texas is a very strong market. We're obviously seeing the demand, we're seeing the growth of income, we're seeing more companies anywhere else in the United States. There's more companies that are being formed in Texas than anywhere else in the United States. 225 00:41:41.275 --> 00:41:52.024 Joe Berko: maybe second to not only to Florida, and certainly South Florida is a market that we're very active. We love this market. In Texas, for us, Texas is essentially Dallas. 226 00:41:52.245 --> 00:41:58.254 Joe Berko: We're pretty much snobbing all the other markets. We feel that Dallas is the market in Texas. 227 00:41:58.405 --> 00:42:18.165 Joe Berko: We have some evasion towards other markets, for various reasons, which we don't have to go into, but a lot of them have to do with oversupply and the ease of entry to the market. So Texas represents a pretty good, balanced type of a market. Colorado, certain parts are representing good markets for us. 228 00:42:18.165 --> 00:42:29.554 Joe Berko: Georgia is a market we're looking at. South Carolina, to some extent, North Carolina especially, Durham, Raleigh Durham, and, Charlotte is a very strong market, we're seeing good growth. 229 00:42:29.555 --> 00:42:38.854 Joe Berko: Tennessee basically, you know, also represents for us a little bit of an oversupply right now, so we're looking at this with a good grain of salt. 230 00:42:38.885 --> 00:42:50.214 Joe Berko: Virginia, parts of Pennsylvania we're looking at, and of course, New York City, where we've created a career, and other parts of the Northeast. Again. 231 00:42:50.215 --> 00:42:59.914 Joe Berko: those are anomalies, right? When we go into a project, we take various levels of risk, and our job is to reduce the risk and maintain situations where we can 232 00:42:59.915 --> 00:43:07.885 Joe Berko: Essentially, get you reasonably high returns and, and then preserve capital. 233 00:43:11.405 --> 00:43:22.835 Joe Berko: We're at the top of our 45 minutes, give or take. I'm happy we reached that point, without going over it. I know it's interesting for us, right? We can talk real estate all day long. 234 00:43:23.155 --> 00:43:34.484 Joe Berko: But I want to take a second and read your mission statement before we sum up, and before we're going to go to questions, so you pretty much understand what we stand for, and why we do what we do. 235 00:43:34.815 --> 00:43:52.105 Joe Berko: At Astor Realty Capital, we believe in breaking traditional boundaries by leveraging our collective bargaining power. We are dedicated to leading our community of investors towards financial security and growth with integrity, authenticity, and transparency. 236 00:43:52.775 --> 00:43:55.184 Joe Berko: For us, it's not just business. 237 00:43:55.305 --> 00:43:56.565 Joe Berko: It's personal. 238 00:43:56.805 --> 00:43:59.925 Joe Berko: And with that, I want to thank you all. 239 00:44:00.405 --> 00:44:06.685 Joe Berko: For taking the time and listening to our conversations. Any questions, I'm here. 240 00:44:15.365 --> 00:44:16.285 Tony Unkel: Thank you, Joe. 241 00:44:18.225 --> 00:44:22.415 Tony Unkel: We do have a couple more intro slides to wrap up before we get to the Q&A. 242 00:44:23.005 --> 00:44:24.084 Joe Berko: Oh, okay. 243 00:44:29.175 --> 00:44:30.834 Tony Unkel: You just have to pass over control. 244 00:44:32.395 --> 00:44:37.795 Joe Berko: Let me show how I do that… Okay. 245 00:44:38.995 --> 00:44:40.224 Joe Berko: You got it, Tony? 246 00:44:46.415 --> 00:44:47.445 Tony Unkel: Yes, thank you. 247 00:44:52.845 --> 00:45:11.184 Tony Unkel: What's next on the Entrust Agenda? We will be sending you the replay and additional resources. Our follow-up email will include the video replay, all the slides, and more education. And please don't forget to register for our next webinar this month, Farmland Investing with Your IRA, an Expert Introduction. 248 00:45:12.335 --> 00:45:19.165 Tony Unkel: Need more information on self-directed IRAs? Please visit our website and learning center, thentrustgroup.com. 249 00:45:19.905 --> 00:45:22.534 Tony Unkel: And now we can open it up for some Q&A. 250 00:45:24.415 --> 00:45:30.485 Tony Unkel: And I'll leave our contact information on the screen, so if you need to reach out to us directly, you can capture this here. 251 00:45:45.915 --> 00:45:53.575 Joe Berko: If there's no questions, I, I'm happy to, 252 00:45:53.995 --> 00:45:58.874 Joe Berko: Again, thank everyone for joining us today. 253 00:45:59.455 --> 00:46:12.825 Joe Berko: Good seeing you, and certainly looking forward to hearing from you, having a conversation, understanding more of what your objectives are, and how we can help 254 00:46:12.825 --> 00:46:21.274 Joe Berko: You with your portfolio, with your investments, and hopefully see you among our growing group of investors. 255 00:46:21.435 --> 00:46:27.485 Tony Unkel: Joe, we do have one question for you, one just popped in. What is the minimum investment for Astor's new fund? 256 00:46:28.725 --> 00:46:35.175 Joe Berko: So the way we have it, it's $250,000 as a minimum investment. 257 00:46:35.845 --> 00:46:43.055 Joe Berko: We call Capital is we do the deals, right? So I'll explain. 258 00:46:43.295 --> 00:46:48.095 Joe Berko: Our objective is to do 68 transactions over the course of the next 12 months. 259 00:46:48.805 --> 00:47:01.444 Joe Berko: And so, when a transaction gets signed up, we'll call the proportionate amount, right? So, it might be $40,000 for the first deal, and so on $40,000 for the next deal. It'll be over the course of time. 260 00:47:01.665 --> 00:47:17.725 Joe Berko: Of course, we make sure that everyone who's participating is an accredited investor. That's important to us. We do have the flexibility to participate on a single deal. And on a single deal, in other words, not part of the fund. 261 00:47:17.835 --> 00:47:24.834 Joe Berko: We have the capacity to start from $50,000 or $100,000 without having to commit to the fund itself. 262 00:47:25.105 --> 00:47:37.165 Joe Berko: So, I'll say it differently, to the fund itself, the minimum is $250, capital stays with the investor, and we call it as we go along. We sign a deal, we call it a proportionate amount. 263 00:47:37.685 --> 00:47:49.564 Joe Berko: For a single deal, we have what's known as a sidecar. You can participate in a single deal, and for that, you can start from as little as $50,000 to $100,000, and that gives you the flexibility. 264 00:47:51.565 --> 00:47:55.814 Tony Unkel: Great, thank you. Have you done any projects in western North Carolina? 265 00:47:56.865 --> 00:47:59.014 Joe Berko: Nope, not yet. 266 00:47:59.715 --> 00:48:00.655 Joe Berko: Not yet. 267 00:48:01.125 --> 00:48:03.985 Joe Berko: I think that North Carolina is a strong market. 268 00:48:04.555 --> 00:48:09.104 Joe Berko: We're in conversation with a number of groups. We're looking for… 269 00:48:09.305 --> 00:48:16.135 Joe Berko: a very, very solid, very solid group. We… our requirements are certainly up there. 270 00:48:16.255 --> 00:48:20.524 Joe Berko: And so we've seen projects, we're learning very nicely the market. 271 00:48:20.855 --> 00:48:28.524 Joe Berko: But this will be our first entry into the North Carolina market. Our focus is going to be on Charlotte. 272 00:48:28.735 --> 00:48:32.615 Joe Berko: And it's going to be on Durham. 273 00:48:34.095 --> 00:48:41.524 Tony Unkel: Thank you. And other than the tax benefits of using your IRA to invest, do you participate in any tax credit deals? 274 00:48:42.505 --> 00:48:45.945 Tony Unkel: Perhaps you need to expand on that question a little more for you, or are you okay with that? 275 00:48:47.885 --> 00:48:49.735 Joe Berko: So… 276 00:48:50.025 --> 00:49:07.174 Joe Berko: you know, a lot of the projects that we do don't offer tax credits, and if they do offer tax credits, they come from a different angle. We've done a transaction where we've had tax credits, sort of like a refund, it's called a brownfield tax credit. The ground was 277 00:49:07.365 --> 00:49:16.185 Joe Berko: Needed to be clean, and then we've got around $50 million, and that was kind of, like, part of the upside, but it's not in the sense of what you're thinking. 278 00:49:16.275 --> 00:49:26.375 Joe Berko: When we do transactions that are, in fact, acquisition of existing projects, right, like maybe buying a multifamily complex. 279 00:49:26.405 --> 00:49:38.845 Joe Berko: Then there are tax credits that we… there are some tax benefits that we can offer. Depreciation, accelerated depreciation, or sorts of… all sorts of different bifurcation of it. 280 00:49:39.105 --> 00:49:47.865 Joe Berko: But that's not our forte. Our forte is to get you very high returns, do it in a short period of time. 281 00:49:48.075 --> 00:49:56.524 Joe Berko: And so, when we do a project, for example, when we do a project that is condo-based, right, condo is very high-text. 282 00:49:56.705 --> 00:50:05.395 Joe Berko: And so we offer it only to those that are coming with a structure, like an IRA structure or various other structures our investors use. 283 00:50:05.625 --> 00:50:15.034 Joe Berko: But typically, that's… that's how we do it. The difference and the reason, possibly, is why we don't do those type of… 284 00:50:15.385 --> 00:50:24.274 Joe Berko: this type of value-add, as we call them, right? Existing properties, but rather build the ones, is because the returns are significantly higher. 285 00:50:24.405 --> 00:50:29.874 Joe Berko: And they're kind of, like, compressed to a short period of time, usually 3 years or so. 286 00:50:30.075 --> 00:50:34.674 Joe Berko: we can… we can create very high returns. Again, I'm trying to avoid 287 00:50:34.795 --> 00:50:50.565 Joe Berko: saying the exact returns for compliance purposes for Tony and Andrew. But you can certainly go into our website, and we have, sort of, like, the deals that we've done, and the exits, and you can see the returns, in various projects, in equity projects. 288 00:50:50.805 --> 00:51:00.005 Tony Unkel: Absolutely. You can also contact Joe directly, and he'll be happy to discuss the specific returns on specific projects with you directly, but he's correct. For compliance reasons, we cannot 289 00:51:00.355 --> 00:51:02.095 Tony Unkel: Speak about that publicly. 290 00:51:03.335 --> 00:51:18.755 Tony Unkel: Alright, we'll leave the Q&A section open for another couple seconds. If anybody wants to drop a question in for Joe or for myself, we're happy to answer. Otherwise, we can wrap up, and this webinar will be saved in our Learning Center and sent out to everybody, and our contact information will be included.