February Update with Justin Ford

 
Bob Irish: I say it every month, I'll say it again. Throughout real estate booms and busts, tax properties has never failed to produce a positive result for investors or missed a mortgage payment. With that said, Justin, how are you?

Justin Ford: I'm doing great, Bob. Thank you.

Bob Irish: I'm doing super.

Justin Ford: How are you?

Bob Irish: Listen, I thought we'd kind of start kind of pick up where we left off on our last call. Let's talk big picture. I know there's a lot of refinancing going on and I'm maybe you can kind of give us what the bottom line what does that really mean for investors not only in the standalone investments but for investors inside the uh the fund.

Justin Ford: So it's it's basically about three things that are all related. It's about recapturing cash. C cash that the fund lent out, funds lent out, and that packs lent out. So we're starting to do that. And then with the stabilized properties, it's about bringing down the interest rate significantly, which then increases cash flow.

 
Justin Ford: And then for the fund particularly, it's about then catching up on deferred distributions either partially or wholly. We'll see. And then resuming uh and maintaining distributions going forward. So it's about cash recapturing increasing cash flow and then resuming distributions and paving the way for good stable uh operations and financial
Bob Irish: Okay, great. Well, it sounds like we're at kind of a an inflection point for a lot of these properties.

Justin Ford: performance.

Bob Irish: Um, and why don't we kind of walk through them individually and you can uh give us the particulars. Let's start as we usually do with Vero

Justin Ford: Yeah. So Vero, you know,

Justin Ford: it's amazing. Um, Vero's market, the hospitality market is down. In the fourth quarter, it was down like 47% or no, I'm sorry, 49 and a half%. And in December, it was down 56% I believe.

Bob Irish: Wow.

Justin Ford: I'm very close to those numbers. 56%. More than half from last year. Yet we're beating our comp set by regularly 30 and 50 and even 60%.

Bob Irish: Yeah.

Justin Ford: It's crazy. But when the market's down 60%, we're still we're still down 35% from previous years, right? So, we're performing well. You know,

Bob Irish: Right.

Justin Ford: won the top award again, beating our comp set, but the market is way down. International travel's down like 25%. Um, even though that's not a huge part of our market, but it's indicative. The only hospitality segment that's doing well, if you read the trades, and I read the trades, of course, is luxury. Luxury is still strong. everything else, you know, upper midscale, midscale, economy, midscale, we're right in that in that niche with uh with bureau. They're down. I think discretionary, travel is down, all this kind of stuff. So, so you know, so we actually had the worst financial performance of the year of our probably our history probably in like 10 years or something because of the market. Even though we're outperforming our market, of course, we still pay the distribution because our cost basis is so low and we are at contract yet again to sell the thing at a good price and we're selling it at a price per pound is is what they call it, you know, because on a dollar basis, you know, it's the whole market's down.

 
Justin Ford: And uh I I probably execute that PSA maybe today. Uh last Thursday guys sent it back to us. They got these guys interesting and they're like last changes on the contract. They're like, "We would like to get this signed tomorrow because Friday is an auspicious day." Auspicious day, you know, it's whatever the calendar, the moon, Saturn, Jupiter, you name it. I haven't, you know, but we looked at it.

Bob Irish: Yeah.

Justin Ford: There were some issues. So, today's going to have to be an apicious day or tomorrow, but uh it's it's interesting, but we we do think that we're going to go to contract and uh and uh I mean, I highly confident on that. And there's a good chance we'll sell that um somewhere in June. will close and that will you know return a good chunk to investors who have made have you been in that Bob for almost 13 years now you know we paid we've paid we've paid double digit yields the whole time right and we returned a chunk of capital twice and so so we'll do very well there um but that's the story there uh the hospitality gods or whatever they are because of all the economic stuff who knows but but we're optimistic that we may have a sale there

 
Bob Irish: Okay, let's move on to Ocala. Let's talk about Equus

Justin Ford: It's it's very much the same story except there's even another twist there. So the the hospitality market in Ocala is also down something like 50% in the fourth quarter and 55% December and was it was the same in January. I don't have those numbers handy but the market is down like 50%. Crazy. Part of that again is everything I just mentioned from international travel to discretionary spending and all that kind of stuff. But Ocala is also hit with the ecquin herpes. I call I call it horse co. Yeah. I mean top of everything else they hit us with this.

Bob Irish: What?

Justin Ford: They hit us with ecquin herpes. So as you know is this beautiful equestrian center. It's like a billion dollar center. I've been there. It's really impressive.

Bob Irish: Yeah.

Justin Ford: And uh so that's that's a big economic driver there. As I always say, the shakes and the Kentucky Blueb Bloodoods, they stay at the equest center and their jockeys and managers and handlers stay with us, right?
 
Justin Ford: And uh and um but there are far fewer shows right now because of that. Um and and so business has been down. So we again there. So we had a comp set when we started in Ocala. It was equality and we dropped the flag, made it independent, became an award winner. We've won the top award every year. We've been stabilized like six years in a row there and we just we just really performed well. That's something also since inception we've been paying double digit yields and we got that NOI up from like whatever 4 500 we started to almost a million4 you know and now that NOI is down to like 860 because because the market's down so much

Bob Irish: Right.

Justin Ford: that now we again we're we've performed so well that even at 860 we're covering our debt fine we can pay the distributions but we have been working on this SBA refi an SBA loan the reason we're going for SBA is because it gives us the highest amount of leverage and leverage that we can comfortably cover with with our NOI traditionally, a debt that we can comfortably cover.
 
Justin Ford: Um, but one, we had the government shutdown right in the middle of it, you know, whatever, a couple months ago. So, that slowed things up. Then two, as we're getting to try to close this thing, they say, "You know what? You got one foreign investor. You can't Let's pause it right now. Stop. Sorry. I'll turn my phone off. Sorry guys, I should have turned my phone off. I'll turn it off right now. Okay, I'm going to resume. Chris, you'll know how to pick it up and clip this. Okay. Um, this is all good. Okay. So, we had one foreign investor and they and they said to us, "SBA doesn't allow any foreign investors." Now, I'm like, "What? Don't Aren't they bringing trillions of foreign investment, like 18 trillion or something, and we can't have one foreign investor? He owns a half a percent. He's from Canada. He's not from Iran. He's from Canada." So,

 
Justin Ford: so now we're like, "All right." But they go, "But in January, they're going to change the rules." Like, and this was already like December. We're like, "All right, so we'll wait till January." So we wait to January. Now we're resuming the process and they go, "You know what?" They changed plans again. They're not going to allow foreign investors after all. So now I got to reach out to my Canadian foreign investor, a guy I know very well, David. He he wrote a promotion for me a long time ago. Great guy. And I say, "Hey, David, I'm so sorry. We got to buy you out." So we figure out the NAV and all. He's he's you know, he's very accommodating. But he tells me a lot of Canadians are so offended. They won't come here. they won't I mean again our thing is not like driven by Canadians but it's indicative but anyhow it's just a comedy of errors just just really really miserable and during this time of course our trailing 12 profits are going down down down because you know equin herpes and and the the drop in discretionary travel and all this kind of stuff.
 
Justin Ford: So now we thought we were going to get a $9 million loan that would return around $4 million to investors over half their equity, you know, and get caught up. We we suspend we suspended distributions just for two quarters while we're going through the refi, right? To have have strong liquidity. Um now I'm not sure where the refi is going to come in. Might come in at 8 million. Might come in at 7 and a half. You know, now instead of returning four million, maybe we'll get back two two and a half. We'll definitely get caught up in distributions. We'll know about this very soon. But again, Bob, it's like I feel like Bruce Willis, Die Hard, too. Every time I think I got this thing figured out, a terrorist pops out and starts shooting his machine gun. And but yeah, so but but we're we're confident we'll close that loan. We're going to we're going to return a good chunk of capital and get caught up in the last two quarters of distributions within the next month.
 
Justin Ford: Um but um yeah, but again as far as the final details, we we'll see very

Bob Irish: Well, good. We'll hear more about that next month.

Justin Ford: soon

Bob Irish: Let's uh let's go to Tallahassee and talk about the two uh Yeah,

Justin Ford: conversions. Yeah, it's very good.

Bob Irish: exactly.

Justin Ford: So the first that we finished was the Swan,

Bob Irish: Yeah.

Justin Ford: which we it was the old 7 suites and award-winning hotel yada yada got hit by co so now we converted it and it's it's now called the Swan luxury studio apartments. And I tell people it's just the best best studios you can rent for under let's say $1,400 in the southeast United States. It's just beautiful, right? It's we we gated it. It's got these nine rolling acres. The the the units are tiny. They're 278, but we created this partition wall, so it feels like a little one-bedroom. It's like a piet for people who know who know that kind of that term. You know, it's the kind of flop where you live outside really.
 
Bob Irish: Right.

Justin Ford: We have beautiful amenities and we are I think right now we're at 78% occupied, right? So we're get Yeah.

Bob Irish: Wow.

Justin Ford: And and we um and the big news there when we talk about refies now. Big news there is we just we had a bridge loan there, right? Because we're doing construction. So bridges are expensive, right? This one was about 11%. We just refied at about close to the same cost. We're at 10 and a quarter now plus um whatever some points, right? So, it's very close to the same cost, but we we we went from a $10 million loan to a $12.5 million loan because we had to recapture some of the liquidity that we had lent it, right? The fund had lented some money and PAX had lent it some money. Pax always lends at zero interest. The fund was earning about eight and a half%. And that money was from when we when we formed the fund almost five years ago and we started buying properties, we had excess cash.
 
Justin Ford: So, we we we lent out some of that cash. So, now we're it earned money and now that cash is being returned to the funds. We just returned $1.4 million to the fund and around $400,000 of cash and PAX packs has millions lent out in zero interest. But so that's a very big thing and we expect that we'll be going for a permanent refi on that probably in the beginning of the process in third quarter and by the end of the year you know drop that 10 and a quarter down to maybe five and a half five and a quarter right because we'll be at 95% occupied.

Bob Irish: All Right

Justin Ford: So really exciting stuff over there. That's we have about I think it's six refies that'll total around $55 million that are going to do those three things I talked about. Recapture cash, lower the lower the interest rate, increase cash flow, then resume distributions. Um this this is one about recapturing cash. We're not lowering the interest rate yet. We'll lower the interest rate on this one probably in December.
 
Bob Irish: Hey,

Justin Ford: But so that happened. The lenders, these guys are great. I met I met the principles. Um really get along with them well. you know, kind of if we talk about something and and the term sheet comes different, they'll go, "Oh, sorry, Justin. You know, we said this, that, and the other." So, it's really good.

Justin Ford: And these are the same lenders that are going to give us a loan on on Monarch, which is across which is across town. So, yeah. So,

Bob Irish: All right.

Justin Ford: we can talk about Monarch. So, Monarch, Monarch is the last uh conversion. We're we're finishing construction now. It's got two buildings. The front one has something like 30 units and the back has 105. Um, so we finished the the front building, you know, I'd say, I don't know, a month and a half, two months ago. And, uh, and we already have seven tenants in there and we have two pre-leasased and we're finishing the back building.

 
Justin Ford: We're shooting to finish the back building this month. Um, but, you know, it could be mid April, too. But, but we're we're getting very very close. We it's punching out the last few details, some some important stuff on the electric, but uh but we have that that gives us a month and a half to lease up the front building. And if we can release of those 30 uh units by the end of April, we're doing really really well there. So now that building um we're refinancing as well. We're putting on a new loan around $9 million. um was say $8.9 million with the same same property and that will return another 700,000 to the fund and it'll return something like million and a half or something like that to pack again liquidity that's really needed um as we go through all this process. So so so Monarch looks like um our our our goal there is to be stabilized by the end of the year. Yeah, that's but we think so. And we're entering a leasing season now,
 
Bob Irish: Okay.

Justin Ford: so that that that could be it could be where we make a lot of progress right now

Bob Irish: Okay. Good deal.

Bob Irish: Um, let's go across the street and talk about Renaissance. Anything uh noteworthy there?

Justin Ford: Renaissance, you know, 168 units bought in mid 2017. So, we're coming up on our nth anniversary there. Um, you know, it's that's been a great performer. We finished the year at with like 1.54 million in NOI, but if you look at our trailing three months, right, we're on track for 1.7 million this year,

Bob Irish: Are we?

Justin Ford: which is really really strong. So, you know, when we bought that thing was like $4500,000. So,

Bob Irish: Yeah.

Justin Ford: that was so um of course we put a lot of into it to to create the better community and the better uh financial results. Um but interestingly there, we applied for a tax abatement. We also did it at Swan, but it's going to have a bigger impact at Renaissance.
 
Justin Ford: So, the tax abatement um what it's based on how many of your tenants make a certain amount of money. So, if they make like over a certain amount, they're out of the equation. And then how how your units are priced, right? And and our a lot of our units fall into what's called naturally occurring affordable. You know, we don't do subsidized. We're not trying to bring down the rents because of this that and the other, but just happens to be that our onebedroom whatever at let's say 1095 or whatever it is, you know, base that happens to fit right under the the radar for it's affordable to a person making either 80% of the AMI, which is area median income or 120. If it fits at 80%, you get 100% of the tax credit. If you're up to 120, you get 75% of the tax credits. I know it's a lot of numbers, but the long and the short is we have about 88 of the units qualify out of 168 and our $220,000 tax bill might go down to $120,000.

 
Bob Irish: Wow.

Justin Ford: That's real big. That's real big. And um we will know.

Bob Irish: Yeah.

Justin Ford: So we we got the primary we got the sort of the approval from the Florida uh Housing Finance Corporation, I think is the uh what it's called. Now, we have to get that signed off by the local uh county property appraiser and u that should happen by mid this March. Um so that's a big impact. We have the same thing going on Swan, but at Swan the taxes are relatively low. They're like 55,000. So it'll bring it down to like 55 to I don't know, let's say 35. You know, we're not going to sneeze at that. That's great. But to go from 220 to 120 is huge, right?

Bob Irish: weird.

Justin Ford: And at the same time, since we got that top line growing,

Bob Irish: Yeah.

Justin Ford: we're on an annual basis of 1.7 million NOI, we got the tax abatement, maybe now we can go back and see if we can qualify for that supplemental.

 
Justin Ford: We have about $1.3 million in secondary debt that we want to pay off for the new supplemental Fanny loan and maybe return a little bit of uh the equity there, too. We've already returned like 60% of investor equity there uh a while ago, a few years ago, 55 or 60%. and we've been paying 10% cash on cash uh basically since inception cumulatively. Um but uh but we'll know that whether that that's a small refi. That's not one of the big strategic refers I'm talking about. That's sort of like icing on the cake type of refi. So So you don't we don't replace the first debt.

Bob Irish: Yeah.

Justin Ford: The first debt is 16.6 million at 4% interest only. So we're fine with that. Uh but it's a little additional slice they give you with Fanny May as the as is the lender that you can actually recapitalize and continue to bring down your overall cost of capital. So good things good things at Renaissance. Um and um we'll see what goes what happens going on to the third quarter if we get that
 

 
Bob Irish: Okay,

Justin Ford: supplemental.

Bob Irish: great. Let's uh let's go to Tulsa. Let's talk about

Justin Ford: Perfect. So uh Apex uh you know that dipped down into the high 80s for a little while.

Bob Irish: Apex.

Justin Ford: Um, it's it's 91 units, which is an interesting I'm talking about occupancy, but now we're back up into the low to mid 90s. Um, so 91 units is an interesting size because we run that with one manager and one maintenance guy, right? And so, finally, we insisted, you know, let's get you let's get you a part-time leasing agent. It's admirable that we're that you're um you know that you're efficient, but let's get you a part-time leasing agent because we don't want to be, you know, pennywise and pound foolish as far as that goes, you know, and and sure enough, uh we got a part-timer. Uh actually, she lasted a little while. Then she got another opportunity moving out of state, so we got another part-time, but it's now in the mid 90s. We were going for a refi there.

 
Justin Ford: So, that's one of our refies. That was a small ref. So, we have a $3.8 $8 million loan there, first mortgage, and it was um it was at uh you know a good rate, five and a half% or something like that, but it lasted for three years and then it started floating last year. So now it's around 9% something like that. Um so we're going we were going for a Fanny last quarter and Fanny first of all Fanny is has what Tulsa is what's called a pre-review market. So they're only going to land up to 60 65% instead of typically 70 75% you might get. So, that was one issue running into. The other one is they're underwriting. Even though, let's say we're making $500,000 in NOI on an annual basis because they'll say, "Oh, your maintenance is not high enough. We're going to budget this for your maintenance. Oh, your taxes are not high enough." Like real estate taxes because when you sell a property, it gets assessed at a higher level, right?

 
Justin Ford: The the the taxes, if we sold that property, let's say for $9 million, the taxes would double from wherever they are, right? Because we bought it at like four and we put a couple into it. But but we're not selling it. We're refinancing it.

Bob Irish: Right.

Justin Ford: We're holding it. So why are you why are you Anyhow, so they have all these very particular underwriting approaches that created very small proceeds and a lot of hoops and all this stuff. So now we're we're switching tracks there and we're going to go uh Greystone is a lender we've done a couple loans with at at Renaissance in fact. So instead of doing agency with Greystone, we're going to do an in-house uh deal with Greystone. the the loan will cost us a little bit more, maybe 60 basis points more. Um, but also will be interest only and because of the underwriting different uh protocols I have, instead of getting a $4.2 million loan, we'll get around a $5.1 million loan. And we will still be responsibly financing that our debt coverage will still be north of like5, meaning for every dollar in debt we have to pay every month, we're making a $150 in operating income.

 
Justin Ford: So there's plenty. and that'll return, you know,

Bob Irish: Right.

Justin Ford: about a million dollars to the fund, about one 1.1 million. And that loan, we're shooting to close that um in April, right? So,

Bob Irish: Okay.

Justin Ford: that's going to be the first of the of the of the refies in the fund.

Bob Irish: Okay.

Justin Ford: That's Well,

Bob Irish: Uh let's go to more Oklahoma and talk about Ascend.

Justin Ford: I'm going to go to OKC first since we bought that one uh after apex.

Bob Irish: Okay.

Justin Ford: So, that's Elevate. Yeah. So, Elevate is like doing very well the last few months.
Bob Irish: Yeah.

Justin Ford: um the woman who manages that you know when we bought that property she had been managing that property for five years before that as well and she said she's never experienced consistently achieving such high occupancy for so so long so then that means like she used to be in the low 90s occasionally she'd dip in the 80s and then but now she's been we've been working with her a lot she's been in the high 90s like 97 98 for probably like three months in a row so we're really performing well there and of course we invested a lot there we turned into a really great property it's an amazing

 
Bob Irish: What?

Justin Ford: location. There's a lot of traffic, a lot going on there, a lot of development nearby. Um, so that property we're going for like a $9 million loan. Again, we're running to u we're going with an agency because typically they they give you really good rates. I mean, you know, 50 a half point maybe threequarters of a point better than you might find with other types of lenders, but their but their underwriting uh standards create these issues that that that lower the amount of the loan. And we have about $9 million in debt there. Uh call it something like seven seven in first mortgage and like a million three in secondary debt. So we're shooting for a $9 million loan. If we get an $8 half million loan, that's okay because we we'll have the cash to to bring the other $500,000 to pay the rest off, right? To put equity in to pay the rest off. That's called a cash in refi. A cash out refi is like what we talked about at Apex where you pay off the mortgage and you get to pull some cash out.
 
Justin Ford: So, we can do that, but we think we can legitimately get a good good $9 million loan,

Bob Irish: Right.

Justin Ford: right? And just pay that debt off, bring everything down from an average cost of debt from around five to I'm sorry, from around 10 to around, you know, five and a half, right? Big big difference.

Bob Irish: Yeah.

Justin Ford: And and that one we're we're targeting to close by miday. Um we may work on that with Greystone as well. Um but uh we're early in that process there. Um, so May, so right now we just closed two weeks ago the loan that we talked about. So one in February, we're closing one in March and then two in April and the two in April should be Apex,

Bob Irish: All

Justin Ford: I'm sorry, Apex and Ocala, which we talked about that refi and then in May closing ele the elevate loan.
Bob Irish: right.

Justin Ford: Yeah. Performing well and ready to bring that interest rate significantly down and fix it for at least 5 years.
 
Bob Irish: Wow. Great, great work.

Justin Ford: Thank you.

Bob Irish: Exciting stuff. Uh,

Justin Ford: Yeah.

Bob Irish: do we want to talk a little bit about Ascend?

Justin Ford: Yes. Let's talk about more. So more is uh more is where we are going with agency. It's not Fanny, it's not Freddy, it's um HUD. So HUD is the most aggressive lender there is out there. They'll give you amortization terms. Typically a bank will advertise at 25 to 30 years. Fanny or Fred will give you a schedule of 30 years. HUD can go 35 or 40 years, right? So they're giving us a 35 year schedule.

Bob Irish: Wow.

Justin Ford: and um and and up to 87% LTV, right? So, we were talking about Apex, they were constrained at 65% loan to value. Here, they'll give us up to 87% loan to back and we're going for it because we have like a $9.8 million first mortgage out there right now. It's it's investors uh that formed that first mortgage and then we have around about 3 million in secondary debt.

 
Justin Ford: This will give us to pay off all that and our average cost out there first and secondary debt again is around 10 10 and a half%. But because we we came off the construction then we had to get lease up to a performance where we have the numbers to achieve the perm loan we want right and um so that one will be

Bob Irish: Right.

Justin Ford: between 13.4 4 million and 14.1 million uh loan which will and we'll bring it down our cost of debt from let's say 10 10 and a half to probably five right because we can we can also do what's called buy down a rate. So even in today's market we can get that rate down as low as four and a half%. But you do the math whether it might be worth it to buy down a quarter of a point or half a point, but a full point maybe not because you get paid back for buying back that rate the way it works the longer you own it, right? Because you you're you're benefiting from the lower interest rate for a longer time, right?
 
Justin Ford: Um so there's there's a way to look at that math, but I I five is probably where we'll be give or take 10 basis points, right? That's right. So again, we're going to bring that down by half. Now, the way to look about it on those three properties, Apex, Elevate, and Ascend, we have around $27 million in debt, right? We're going to pull out maybe a million from Apex. So, we'll go from $27 million in debt to about $28 million in debt. But that $27 million in debt right now has around an average cost around 10%. So, we'll go from around $2.7 million in interest a year to 28 to about $1.5 million in interest,

Bob Irish: Wow.

Justin Ford: right? So, so you save on your on your interest 1.3 million for the sake of argument 1.2 to and

Bob Irish: Yeah.

Justin Ford: after ammonization you increase your cash flow 700 to $800,000 right because part of that's going to pay down mortgages right so these this is these and and ascend that loan we've already gone through the appraisal we appraised at a good number that'll give us those that number we just talked about uh that's a loan where most loans take 60 to 75 days or 60 to 90 days close HUD because it's super government you know backed and all that uh that takes six to seven months and and because of the again the government shutdown probably eight months but we're we're more than halfway through the process

Bob Irish: Yeah.

Justin Ford: we got the appraisal back the number came in right got the phase one environmental back got the property condition assessment report back we submitted all our numbers to an independent auditor to audit the numbers and those numbers come back uh mid this month the audit numbers they check it out once they give it the stamp of approval then it goes to the uh the committee again and then they issue a commit commment letter. So, what we're shooting for and hoping for is by the end of this month to have a commitment letter and then uh or early April and then close um you know, mid May, early June. So, again, all the way by June, all these are in motion. We already closed one last week. We're closing one this month. We're going to close the SBA at that time and then Apex Ascend and Elevate. So, it's um it's a very exciting time. Um but you know between uh you know horse ecquinine herpes virus and and all these other things coming out of the woodwork um we we we we stay on our toes.

 
Justin Ford: Let's put it that way.

Bob Irish: Wow, man.

Justin Ford: Yeah.

Bob Irish: You've been

Justin Ford: Yes, I have.

Bob Irish: busy.

Justin Ford: And I I need to apologize to investors where I was a little late in my quarter reports but like sometimes I like you know I just I don't want to write about this right now. I I want to make it happen. I'll write about this in a moment or two, but we're getting out our last reports uh today actually. We got everything else. We're writing monarchs and swans today. Um but yeah, no, it's it's been it's been it's been a very tough three, four years, right? Ever since all that stuff happened and we're we we're resolving it.

Bob Irish: Yeah,

Justin Ford: And in the case of, you know, Monarch and Swan, it's been a tough six years, you know, ever since ever since CO hit.
Bob Irish: sure.

Justin Ford: But we're wrapping them all up and we're we're uh operationally we're we're really in a good spot and we're about to be really in a good spot financially.

 
Bob Irish: So, let's finish up and talk uh about Port St.

Justin Ford: Port St. John. Um,

Bob Irish: John.

Justin Ford: oh yeah, that that might be a little cash back to the fund, too. We we signed a contract, as you'll remember, we had this out parcel that basically is serves as storm water overflow.

Bob Irish: Right.

Justin Ford: And we figured out a way with engineers that we could redirect it. And so Murphy's Oil stepped in and they given us they offered us a million dollars for that out parcel. Again, we weren't using it. It wasn't creating income. So it's found money. So we accepted it. We were at contract now for like three months. We know we know that's going to take like six months because they have to do all their due diligence, all that kind of stuff. They could bail at it any moment. But recently they asked for confirmation from Aldi's or anchor that they're okay with the Murphy's Oil being there. Murphy's Oil sells, you know, gas and stuff like that, but they also have, you know, coolers with with beer and wine.
 

 
Justin Ford: So they got to make sure that doesn't conflict with Aldi's which is the anchor which says you know has a lot of that sort of preemptive uh ability to preemptively say no.

Bob Irish: Right.

Justin Ford: But Aldi's already gave us a confirmation via email and formally now I'm getting the formal one. But that should it close which I think is you know better than a 50/50 that it will yeah that'll return $900,000 to the phone after fees you know uh the broker fees and the legal stuff which is a great little boon. And uh and the property itself only has one vacant space. It's uh 5,800 square ft. It's that haunted space where we where we had these arcades, two different arcades. It's right next to Aldi's, the new Aldi's. And New Aldi is operating and they just brought in their subtenant which is going to be a Dollar Tree or a Dollar General. So the traffic there is going to be amazing. Everything else is full. Tenants we've had mostly for a very long time.
 
Justin Ford: And um the new we we're getting inquiries on that 5800 square feet. One was from Goodwill and the other is from a restaurant right called Tequila or something like tequila barn or something like that which I think would be a perfect place for that. So I believe we have really good prospects by the second half of this year to be 100% occupied there. cut off that out parcel. Cast, you know, cast in a nice chunk of change there. And uh again, it's just it's it's one of um it's the closest thing to mailbox money I've ever experienced. Though we do work, we do have to you know, we've replaced the roof, but I it's I really like that.

Bob Irish: Right.

Justin Ford: Yeah,

Bob Irish: Okay.

Justin Ford: it's a good good investment.

Bob Irish: Great.

Justin Ford: Yep.

Bob Irish: Hey, Justin, before we sign off, anything else you want to

Justin Ford: No, you know, I put out in our reports that uh I had a one of our great investors who always communicates with me.
Bob Irish: add?

Justin Ford: He said, "Hey, why don't you ask people if they can send in questions, you do a Q&A?" So, I said, "So, anyone who wants to send a question for the next one, you can just email me and my son Chris and and uh we can answer for for the whole group, right?" Awesome. Sounds great, Bob. Great to speak with you.