Practical Insights into Real Estate Finance and Tax Planning

TRANSCRIPT

Mike Pine: [00:00:00] Welcome to this episode of Hidden Money podcast. We are excited to introduce to you a returning guest, Gib Irons from Irons Equity, and Irons & Irons Law Firm. Thank you for being here, Gib.

Gib Irons: Thanks, Mike. Good to be here.

Mike Pine: Glad to have you back.

Gib Irons:

Mike Pine: it's not just about making money, but ultimately, we want to build some financial freedom and some security for our families, for our lives. It's a hard world to do that. It's always been hard, but we have some specific challenges now that we haven't had in the past, and our forefathers hadn't had, and one is this- like you said, paper thin profit margin. How do we manage that and grow and create financial freedom? Again, obviously one place is taxes. So, back to you five years ago- profit margins 35%, this year- 15%. What were your taxes like? How much do you think, five years ago, was a percentage of your income that you paid in taxes, compared to [00:01:00] how much you're paying in taxes today?

Gib Irons: Well, you might be able to educate me more on this, but I would say that, I've been in a 37% tax bracket for a long, long time, and so, five years ago, I would venture to guess I was in a 37% tax bracket. Although tax laws may have changed, and the brackets may have changed- I don't follow that like you do, but

I would say when you take the personal income tax that I paid and all the income tax that the business paid, I would think that it was over 50% of our revenue went to tax.

Mike Pine: Federal taxes, definitely.

Gib Irons: Yeah, I don't know how that resonates with you, but I think it was 50%, and over the last couple of years, I've been able to substantially reduce, and / or eliminate my tax,

and I think my plan is getting stronger and stronger every year with more real estate purchases. I've just been able to [00:02:00] capture a tremendous amount of tax savings by acquiring real estate, doing cost segregation studies, taking bonus depreciation, and look, bonus depreciation, I'm sure you could educate the listeners a lot better than I could on this, but bonus depreciation has not been around for forever.

Let me just summarize from my tax brain here.

Mike Pine: Five years ago- net 50% of revenue you got into the business- well, 50% of income you brought home from the business went to pay taxes- payroll, state and federal income tax. Well, back then, five years ago, when you were operating at 35% profit margin, 50% of that was going to taxes. So 35% times 50% is 17.5%.

So, you were taking home cashflow, 17-17.5% of revenue from your business operations, and that was before you branched out into all these other businesses- 17%.

Now, [00:03:00] today- you're taking 15% profit margin home, but the percentage of income that you're paying in taxes has gone down tremendously because you're proactive tax planning. You're one of my favorite clients because you take the ball and run with it. We talk about some tax planning, and normally with clients, I'll have a followup three months later, and they just want some more information on what we decided and want to feel it out a little bit more. Three months later,

they're almost ready to act, but maybe they're not feeling 100% certain. So, maybe a year later, they'll enact half of what we come up with. You on the other hand, we have a 30 minute tax planner meeting. I meet with you the following month, and you did it all, and then some, so that's fun, but comparing apples to apples again, taking 17% profit home after tax five years ago, this year you're making 15% profit margin, but I would say you're probably only paying about 15% net in tax. That's my best [00:04:00] guess right now.

Gib Irons:

Mike Pine: you're taking home about 13% profit of your revenue after taxes are paid- that's cash flow. So, you went drop from 17% to 13% while the economy has changed greatly, and that's how you're eking out and being able to build financial freedom, and investing and getting to enjoy the snowball effect, because if you hadn't planned, and you were still paying 50% of your income, you would only be taking home 7% profit right now.

That's a game changer. That's what taxes can do for you. That is the power of proactive tax planning. You're a perfect case study for it. We should actually write a white paper on it one day.

Gib Irons: Yeah. That would be cool.

Look, some people are doers and some people are thinkers. And if you look at money- money follows action, right? Money doesn't follow thought processes, or what kind of thoughts you had in your head about becoming wealthy- [00:05:00] money follows action. And so, when I speak to you guys, you guys are expensive, you guys are charging me for your advice and that's what I am benefiting from. So, I'm paying attention, and yeah, I'm going to go out and do everything that you told me to do, plus some. I remember, I think it was last year, associated with my 2022 tax return, we thought that we had me squared up to where I was going to pay next to nothing in taxes.

We thought we had me basically flush with zero tax, and I still went out and did another investment because I wanted to do an oil and gas investment. So, I put $100,000 dollars into it with an oil and gas operator, and I think we got about 87% intangible drilling costs,

and so, when one of my real estate syndications that was promising 1.5x bonus depreciation, only came in at 1.1. We then, were able to utilize [00:06:00] the depreciation that I had from the intangible drilling cost with the oil operator.

So, to me, you want to stack your plan on top of each other, and like you want to have multiple layers to the plan, and maybe even overdo it a little bit because you never know when something's going to fall short.

Like, for example, that cost segregation study on the real estate deal just happened to come in at 1.1x bonus depreciation when all the marketing materials said 1.5x, and me and every other limited partner in that deal was expecting 1.5 to 2, even 2x depreciation, but we turned out to be okay because we had that extra investment in the oil and gas company. Yeah.

Mike Pine: Kudos to you for doing that. I remember when we saw that K1 come by, because that's what we were playing on, 1.5x in that syndication, and it was only 1.1. My, the pit in my stomach just dropped, but then, it was nice to turn the page and see that oil and gas investment. I was like, 'Yeah, we're still in it!'

Nice [00:07:00] work, Gib. Nice work.

Gib Irons: Yeah, it's astonishing, the difference, and a lot of people don't understand, they don't even know that there's tax-advantaged investments out there, which is really one of the things that I try to talk to people about as often as I can. Stocks, bonds, mutual funds- basically you buy those assets at whatever cost basis you buy them at, and then, when you sell them, you pay capital gains on any appreciation that's occurred due to market fluctuation, and you're not getting any tax benefit at all. Now, if you're investing through a 401(k) or whatever, you're deferring tax, potentially, which can be beneficial to you.

Yeah, totally different. But the types of depreciation that we get are really game changers that can affect the long-term trajectory. And then, also, I would venture to say that a lot of these private equity investments are going to outperform the [00:08:00] stock market, and particularly in times like these, where there's a tremendous amount of volatility.

I like knowing that I've got a recession-resistant investment that isn't subject to whoever's in the White House, or what's going on on Wall Street, and I have a lot of friends that are financial advisors, but I don't want the Wall Street folks to be lining their pockets with my money.

To me, there's a lot of comfort in having your money invested in private equity.

Mike Pine: Yeah,

I agree. There's risk versus reward. Some of it's riskier, but again, net overall, as long as you diversify, as long as you invest with reputable- not fly-by-night, but reputable long-term operators, I would agree completely with you.

Gib Irons: Yeah, that really is the key. And, getting those distributions tax free is a huge benefit. One thing that my group is working on right now, [00:09:00] and we can talk about this at some point if you want to, but we've started a fund, and the way that the fund works in terms of tax savings is we're doing a technique called depreciation laddering.

Some people call it depreciation staggering, but what we're doing is we're purchasing multiple properties, and in the year that we sell a property, we will hold at least two properties, and the thought process there is that in the year that we sell, that creates a capital gains event, we will be able to take depreciation off the two properties-

we'll have at least two other properties that we are holding that we will be able to do cost segs on and take bonus depreciation on, and the goal will be to create a net zero taxable event. It's a 10 year fund, and we're hoping to be able to eliminate tax through the holding period.

So, throughout that 10 year period we're going to try to create a return that is tax [00:10:00] free. Now, what they do with it at the end of the 10 years is up to them and they may have a tax consequence at that time, although we've got a couple of different options, but that's just the kind of meticulous tax planning that some of these really good operators are doing, for example in our project that we're working on, we're projecting a 32x equity multiple over 10 years.

So a $100,000 investment would become $3.2 million, and our goal is to carry those investors through that 10 year whole period without any tax consequences, and we can do that because we're going to have at least three properties in the fund at all times. We're going to sell one property and take depreciation on the other two,

and through that process of depreciation laddering, we can sell and exit a property without paying any capital gains because we'll have enough losses on the other side to offset that.

Mike Pine: So, for your investors, you're taking over the need to do [00:11:00] really good, detailed, technical, proactive tax planning. You're doing it within the fund and just passing that on to your investors. Now your investors need...

...a tax preparer CPA that knows how to group them correctly, and make sure they actually benefit from what you're passing through to your investors.

But that's awesome, man! That is really awesome!

32x! Could you even get close to that with people having to pay tax on that equity over the 10 years?

Gib Irons: No, no, and it would be interesting to let you take a look at our offering materials and see what the return would be if we ended up paying tax on every single exit, but no, there'd be no way to achieve that type of a return if we were paying tax on every time we exit a property.

What we're doing is we're doing build-to-rent townhouses, and we're going to build 20 townhouse communities in Phoenix, Arizona- 20 or more townhouse communities in Phoenix, Arizona, over the next 10 years as part of this [00:12:00] fund, and without the depreciation laddering, you just get hammered on tax.

Mike Pine: Yeah. Let's demystify this because this is true. We're not making this up. Now, whether you actually do 32x or 50x or 18x.. know. You're in charge of that, but the theory behind this, the math behind this, the tax law behind this, it's real, it's legit, and we've seen it tried and true over and over again. It all comes down to the time-value of money.

Yeah. My grandfather, who grew up during the depression, actually ran away from home so his other eight brothers and sisters could eat more with him not being there, and hitchhiked across America in a

Boy Scout uniform, sleeping in jails and drinking coffee and eating doughnuts from the cops they gave him each morning. Pretty cool story, but he did well financially.

I mean, he went from rags to relative riches and he was great. Great investor. Just super wise guy. That was the first lesson investing, he taught me- you [00:13:00] never invest in something you don't understand, and I got greedy last year and I did anyways, and I learned my lesson the hard way. It'd be nice if we didn't have to learn our own lessons the hard way each time, but then, the other one he would always say is, 'If it looks too good to be true, it probably is. Run away.' --So, when I hear you say 32x in 10 years... I'll be honest, Gib, that sounds too good to be true. What do you say to that?

Gib Irons: I thought the same thing. I guess I would say that first of all, I agree with your initial gut reaction was the same gut reaction that I had, and I remember thinking this is just not possible because, quite frankly, if we're able to deliver on this projection, then we're going to beat out 99.9% of other syndicators out there. There's some that will outperform 32x, and if you do certain things like angel investing or something like that, you may lose your money 14 times, but you may hit it big [00:14:00] one time. I think with angel investing, it's like one out of every 15 deals actually become something positive-

you lose your money on the other 14. But no, to me, what we're doing is so simple in that we're converting raw land into a building, and if you talk to any developer, anybody that's well-versed in construction, they will tell you that it is not that hard to create a 2x equity multiple when you are converting raw land into a building.

The thing is, is that most operators that do build to-rent townhouses, which is the same thing we're doing, they like to hold onto those properties for a period of 10 years. So, the hold is 10 years, 3 years of construction, 7 years of... operations, where they've stabilized the property in there, enjoying the cashflow, and the operators are sitting back with very little work that has to be done, [00:15:00] and they're creating fees.

They're getting an asset management fee throughout that holding period, and so, it benefits them because the hard work was done during the construction phase, and now they can sit back and enjoy this beautiful Class A asset, and enjoy the cashflow.

Our investment thesis- we don't care about cashflow, and that's a very revolutionary thing to say in this world where everybody's talking about cashflow. Guess what? If I invest $1,000 in a multifamily syndication, and you pay me a 5% cash on cash return- $5,000, over a period of a year- let's say I get monthly distributions- that money is so insignificant that my wife and I will spend that money before we even realize it hit our bank account,

Because it's not going to move the needle in our lives. So, what we decided to do is to move away from the priority of getting the most cash [00:16:00] flow and focus on an exponentiality, an exponential growth equity multiplier. And so, instead of holding these properties for a long period of time, we're going to convert raw land into a building, and we're going to cycle out

and exit in two years. So, the land's fully entitled when it comes into the fund. And then, we build, and we do all the horizontal and vertical construction in 24 months, and we lease up and do all of that and sell. It's a very aggressive timeline, but we're not holding onto the property for that extra 7 years to live off the cashflow.

Instead, we're going to go out and build another one, which is a lot more work on the operator because the operators are constantly building, which everybody knows if you've ever built a house or had any construction done at your home, like a remodel, you know, how frustrating it can be to deal with.

Yeah. It's a complete headache, but luckily [00:17:00] our lead sponsor has a beautiful head of thick hair, and hopefully, he'll be able to keep it through this time period, but we're basically taking on a much heavier lift for the benefit of the limited partners, because rather than sitting around idly living off of the cash flow and our asset management fee, we are going to replicate that 2x equity multiple again and again, as fast as possible. So, that's what I would say to somebody doubting it, would be to really look at the mathematics behind it ,and think about how simple that is if all you're trying to do is 2x five times.

Mike Pine: Yeah. So, let me understand this- so y'all, let's say, buy and build a row of town-homes over three years. You build it, get it fully constructed, get it initially stabilized with tenants in and cashflow, and you turn around and sell it. So, let's say you get 2x on that- put in a million ticks, you turn it around and get 2 million in three years.

Then you're taking that 2 million and [00:18:00] building two rows of townhouses, and doing the same things.

Building it, stabilizing it, selling it, and then, instead of having two rows, you sell those two, you turn it into four rows and you do the same thing. That's what you're doing, right? That makes sense to me.

Gib Irons: That's exactly what we're doing, and so, each project has to be bigger than the last.

Mike Pine: Twice as big

Gib Irons: Yeah.

And because we've got to redeploy all of that equity, and we've got to continue to use leverage- we're never going to get to a place where we're not using leverage- could we pay all cash for the next project?

Yes. But why would we, when that would reduce our returns? So, we're looking at 70% loan to cost, most of the deals that we're doing, which is pretty good. There was a time period where it was down to, like, 55% loan to cost that the operators were getting, and it's gone back up to about 70% on this first deal cycle that we're doing. But yeah, if you want to maximize your returns, [00:19:00] you've got to use debt, you've got to use leverage.

Mike Pine:

You bring up an important point. So we started talking about, or earlier we were addressing the time value of money, and it's an ability to snowball growth much faster because of the time value money, but that's not the only multiplier using on this investment strategy.

You're also using leverage, and I would encourage anyone who is a wary of leverage, which I am too, to go back and listen to the Stephanie Riley podcast we had where she shows and draws out the example of how powerful leverage is to grow. It needs to be good leverage. It needs to be healthy. It needs to be relatively safe and underwritten leverage, but leverage gives you the power to grow equally, maybe even more strongly than the power of the time value of money by saving in taxes.

How do you know it's responsible though? When people fail, most investments and businesses fail because they run out of [00:20:00] cash. A lot of times they run out of cash because they got over-leveraged and they couldn't service their debt. How do you figure out what's responsible? What's safe debt? What's valuable debt? How do you figure that out?

Gib Irons: Well, I think you never want to be over-leveraged. With real estate particularly, it depends on what the purchase price of the asset was.

What's happened to some of the operators that have lost their properties in recent history, a lot of them had purchased the property for more than what they should have paid for. So, they overpaid for the property and then they turned around and over-leveraged the property, and then they mismanaged the property,

and so, it was just a culmination of every thing that could go wrong went wrong. It was a Murphy's law type of thing, and when you overpay for a property and then over-leverage it, some of those folks were doing 80% loan [00:21:00] to cost. They did bridge debt and they had floating interest rates,

and then they had property managers that walked off the job, that decided we're just not going to manage this property anymore, and they bought in crime- in areas where there was high crime. I think with real estate, you want to have enough leverage that you're going to be able to get good returns, but you do not ever want to overdo it.

If you overextend yourself, you're setting yourself up for failure.

Mike Pine: Let's talk about what happened in the real estate syndication market, and just in multifamily housing over the last 10 years. So, after we rode out the 2008 crisis, and then 2010, 2011, real estate started going up again, and people realized, after they lost a ton of the stock markets and other areas, they realized multifamily housing was a good solid asset- weathered it pretty well, the ones that were [00:22:00] underwritten well with good fundamentals. Let's get into this, and capital is also during the age of easy money where capital was flowing freely, and interest rates were going down almost every quarter, right? For a long time we experienced that. So, a lot more people who were aware of how this works started opening funds and syndicating multifamily housing, and the people who got in early made tons of money doing it, but as capital continued to be multiplied in the real estate market, people were looking to reinvest it. So, there were more and more syndicators and syndications competing against each other, and they were looking for ways to increase their ROIs and their cash flow, because again, everyone, unlike your fund right here, everyone looked at- 'Well, what is my annual cashflow going to be?' --So, a lot of operators started realizing around 2013, 2014- 'Hey, if we don't do these fixed rate loans, we can do these floating rate loans, or even take bridge debt.' [00:23:00] --which is basically a two or three year loan,

knowing you have, generally speaking, no guarantee of what your ReFi is going to look like in two or three years. But if we do that, we can return more money to our investors in the short term, our ROIs go through the roof- we should do that. And I would say by 2014, more than half of the syndications out there were using either variable interest or bridge debt. I remember telling a client of mine at that same time- they were going out and raising a pretty good size syndication. They're like, 'Our competitors are kind of pushing us where we need to go variable rate,' --and I said, 'Don't do it.' --Like, 'What about bridge? --I was like, 'I just don't see that being a good idea.

We know rates are going to go up again, so don't do it.' --Then they go through a whole deal cycle, three, five years down the road, and they're like, 'Man, rates are even lower now than they used to be. Why shouldn't we do this?' --And I think a lot of other syndicators were, who were conservative, who wouldn't go on the variable rate deal,

they started saying, 'We have a competitive disadvantage. Other people are doing it. They're making their investors a killing. Why shouldn't we do it?' --And once you see those returns [00:24:00] come back for half a decade, three quarters of a decade, you start to forget the long-term fundamentals of risky interest rates. They didn't seem very risky for the decade of easy money. So, more and more investors, even some of my most uber-conservative syndicators started getting really short bridge, like two year bridge, and a lot of people were also having to outbid prices, right? You'd go in and find one multifamily housing unit for sale, and you'd see 30, 40 syndicators bidding against each other for that one property.

It wasn't even a great property, but it was a property. So, that started increasing the cost, compressing the cap rates, and they were starting to be forced to go in variable rate or bridge debt to buy those properties, and it became almost where you had to buy, maybe not great debt- you had to over-leverage, or leverage with not-safe debt in order to compete in the market.

And when finally, 10 [00:25:00] years later, everyone.. I, expected interest rates to go up by 2016 and 2014. That's what you get when I tried to do the crystal ball- I'm not good at but eventually, when the rooster came home to roost, or whatever that word is, in 2022, interest rates started going up.

We had a lot of really good, solid operators- suddenly, they couldn't pay distributions. Suddenly, they had to ReFi at 7%, 8%, 9%, and when you do that, all of a sudden you're cashflow-negative and it's sad but I think it's an important thing to remember one of the bigger lessons I'm going to try to take home for the next few decades of whatever life I have left is- even during long periods of time when it seems like fundamentals have changed- focus on what you know the fundamentals are. They might have changed for a short period in time, but long term- they're probably going to come back to the normal fundamentals. Is that a good lesson, you think, I learned out of that?

Gib Irons: Yeah, I think it is, if you think about what was going on. [00:26:00] People were

doing bridge debt. They were taking floating rate debt, and some of them didn't buy any rate cap, and then other people did, and you used to be able to buy a rate cap for $50,000 okay? Then it was like a million dollars to buy that same rate cap, and so, a lot of the operators,

basically, had no choice but to sell or lose their property to foreclosure, and so, we definitely have learned to expect the unexpected in this market, and to be very conservative. And yeah, you're right. Everybody was making money for a long period of time. They could, basically, do a mediocre job on operations and still make a bunch of money.

And so, people were very, very greedy, and some people that I know that are very sophisticated, and have been doing this for a long time, we're caught in it. It was just the [00:27:00] general greed was so prevalent at that time, and everybody was doing it, and a lot of good operators even got caught in the crosshairs.

I'm not going to sit here and say that everybody got caught in the crosshairs had it coming to them because I don't think that at all. I think there's a lot of very good operators that just were in a very unfortunate situation. Now, I think it also says a lot about the operators.

If I'm in a deal, and the deal's not paying any distributions, and things are not going well, if the operator is communicating with me regularly about all the problems that we're having, I appreciate that. If we're in real bad straits and they come out of pocket with their own money to keep the deal alive, then I appreciate that.

And so, sometimes it's a good thing to learn who your friends are, and learn who you can trust, and a lot of times adversity, like we experienced in the financial markets, can be a great teacher and you [00:28:00] reevaluate your relationships and you say, 'Hey, I did a couple of deals with this operator which made money,

but now, we've got one that went sideways and they're gone. You can't get a-hold of them. They're silent. They're getting a bunch of emails from the investors and they're ignoring them. Or they're talking down to their investors, telling their investors, 'You don't know what you're talking about.

This is not the way you should be looking at it. You're a bunch of idiots!' -- And all of those things are very offensive, and if I see that, then that's somebody I'm not going to do business with ever again, and you see some of that right now, which is real interesting.

Mike Pine: It is. It's kind of sad, but I think you make a good point. These times of adversity help separate the chaff from the wheat. You can see who are the real good operators, who are not.

Let's go over some simple definitions for people who aren't in this market, or who are just getting into it, or considering it. What is a rate cap?

Gib Irons: Yeah. So when people were doing floating rate debt, they were buying a rate cap, which said- The [00:29:00] rate is not going to exceed this amount. And so, you would purchase a rate cap from a third party vendor. You get your loan through the lender, and then you would go to a third party and negotiate a rate cap where you pay $50,000, for example, but they guarantee that your rate will not go above a certain number.

So it could be like two, two points, two percentage points, and if it actually goes over that amount, then it's like buying insurance as a hedge against inflation, and the company that sells you the rate cap will actually pay that additional interest above and beyond whatever your agreed cap is. If the interest rates exceed that cap, they will step in and cover that for you, which will save you and your investors a lot of money.

You can always tell if the rate cap that you purchased was worthwhile, and if you got a good deal on it. In hindsight, you can always see that. The problem is knowing what to [00:30:00] do, at the very beginning, at the commencement of the investment process.

Mike Pine: If only we could tell the future, but.. So, rate cap providers made a lot of money in the last decade. They're not making so much money right now. So that's fair.

Gib Irons: There's really not a lot of bridge loans going on right now. From what I understand, most operators are looking at fixed rate debt, and they're willing to refinance if interest rates go down. But you also have a lot of loans that are interest-only, for some period of time, which is interesting because, you feel like it's a little bit healthier, generally, to have payments that apply to principal and interest, and you're actually paying down the debt over time, but interest-only loans are very common in the multifamily syndication space, and you might even get five years of IO.

Mike Pine: What is a cap rate Similar words- just reverse. Rate cap... now I'm on cap rate. What is cap rate? We hear that a lot.

Gib Irons: Yeah, so the cap rate has [00:31:00] to do with the value of the property, and it's a simple formula that takes into consideration the net operating income of the property, and the prevailing cap rate in the area to determine the value. So, the cap rate would be specific to a specific market. So, for example, if I'm doing deals out in Phoenix, Arizona, and I'm accustomed to the cap rates out there, and then I want to go do a deal in Dallas, Fort Worth, I'm going to generally call a realtor in that area, if I'm not already familiar with what the prevailing cap rates are, and they'll be able to tell you what the cap rate is for a Class A property, for a Class B property, for a Class C property, and you can use the combination of value, cap rate, and NOI- if you have two of those numbers, you can always back into the third number, if that makes sense, through basic arithmetic.

Mike Pine: What are the terms new smart syndicators use [00:32:00] to figure out, or to throw out how leveraged a property is?

Gib Irons: Yeah. So, generally, you're looking at loan to cost or loan to value. And so, if you're doing ground-up construction, you're looking at loan to cost. If you're buying a value-add property, you're looking at loan to value. Potentially, what you're doing is you're getting an appraisal on the property.

You're determining what percentage you can borrow against that appraised value and backing into your loan to value that way.

Mike Pine: So in a previous

theoretical example, we were saying you raise $30 million in equity, you borrow $70 million, you buy a $100 million dollar property. So, that would be a loan to value of... how's that term terminology go?

Gib Irons: Yeah, so, that would be 70% loan to value.

Mike Pine: Okay.

Gib Irons:

Mike Pine: Anyone that's looking at investing right now or just has questions, whether they should invest in real estate, or should I invest in real estate syndication? Should I invest in my own single [00:33:00] family house?

Where do they find you?

Gib Irons: Yeah. So, they can reach out to me by email, and my email address is- info@ironsequity.com

Mike Pine: info@ironsequity.com or just www.ironsequity.com, correct?

Gib Irons: That's right. Yep. They can find me there. And that email address goes straight through to me, and we check it regularly, and they're welcome to contact me with any questions about that deal, or just these types of investments in general, because they're not for everybody.

These types of investments are not for everybody, and it's always good to talk to somebody to see if it's a good fit for you. Like I always tell people- if you're making less than $200,000 a year, this is probably not a good investment for you. You have to have a certain level of net worth and liquidity to make it worthwhile.

They can be great opportunities.

Mike Pine: [00:34:00] There we have it- Gib Irons from Irons Equity.

Thank you for being here, Gib. We appreciate you and I hope you have a wonderful week. We look forward to having you on here again, Gib.

Gib Irons: Thanks a lot, Mike. Take care.

Mike Pine: Thank you.

‍